<PAGE> 1
CUSIP NO. 431155 10 0 13D PAGE 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
HIGHTEC, INC.
(Name of Issuer)
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $0.001 per share
Securities registered pursuant to Section 12(g) of the Act:
None
----
(Title or Class of Securities)
431155 10 0
-----------
(CUSIP Number)
Larry A. Stockett
President
Hightec, Inc.
99 Marinero Circle #201
Tiburon, CA 94920
-----------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
November 20, 1996
-----------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement of Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d1(b) (3) or (4), check the following box
[ ].
Check the following box if a fee is being paid with this statement [x].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of less than five percent of
such class. See Rule 13d-7)
The information required in the remainder of this cover page (the page numbered
2 herein) shall not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities
of that section of the Act but shall be subject to all other provisions of the
Act.
<PAGE> 2
CUSIP NO. 431155 10 0 13D PAGE 2
- --------------------------------------------------------------------------------
- ---
1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Larry A. Stockett
I.R.S. Identification No.: ###-##-####
- --------------------------------------------------------------------------------
- ---
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
- ---
3 SEC USE ONLY
- --------------------------------------------------------------------------------
- ---
4 SOURCE OF FUNDS
PF, OO
- --------------------------------------------------------------------------------
- ---
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
- ---
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- --------------------------------------------------------------------------------
- ---
NUMBER OF 7 SOLE VOTING POWER
SHARES 4,793,243
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 4,793,243
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
- --------------------------------------------------------------------------------
- ---
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,793,243
<PAGE> 3
CUSIP NO. 431155 10 0 13D PAGE 3
- --------------------------------------------------------------------------------
- ---
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- --------------------------------------------------------------------------------
- ---
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
60%
- --------------------------------------------------------------------------------
- ---
14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
- ---
ITEM 1. SECURITY AND ISSUER
The class of equity securities to which this Statement relates is the common
stock, $.001 par value per share (the "Common Stock"), of Hightec, Inc., a
Delaware corporation (the "Issuer"). The principal executive offices of the
Issuer are located at 99 Marinero Circle #201, Tiburon, CA 94920.
ITEM 2. IDENTITY AND BACKGROUND
(a) This Statement is being filed by Larry A. Stockett.
(b) 99 Marinero Circle, Tiburon, CA 94920
(c) President, IPO Network, Inc. President and majority shareholder of
venture capital company engaged in publishing, software, internet related
businesses. 99 Marinero Circle #201, Tiburon, CA 94920.
(d) During the last five years, neither the Reporting Person nor (to the
knowledge of the Reporting Person) any executive officer, director, or
controlling person of the Reporting Person has been convicted in a criminal
proceeding (excluding traffic violations and similar misdemeanors).
(e) Mr. Stockett has been an entrepreneur and venture capitalist for over 30
years. He has been involved in hundreds of projects and personally conducted 12
mergers and acquisitions. He has been involved in a number of projects which
have not achieved their projected goals and has a regulatory history which has
included a federal injunction and two state consent decrees for allegedly
violating the disclosure and exemption requirements of complex federal and state
securities laws. A summary of these regulatory matters follows. At all times,
Mr. Stockett believed that he was complying with securities laws, and relied on
a series of corporate counsel opinions for each of the transactions in which he
received regulatory complaints
A complaint was filed alleging Mr. Stockett violated securities laws in
1983 relating to the $5 million Initial Public Offering of his first public
company, PC Telemart. A litigation naming Prescott Ball and Turbin (subsidiary
of Fireman's Fund) and Mr. Stockett as co-defendants was commenced and he was
released as a defendant after the discovery stage. Subsequently a similar
complaint was filed by the SEC and Mr. Stockett chose not to defend the law suit
since the company's assets had been sold to Xerox
<PAGE> 4
CUSIP NO. 431155 10 0 13D PAGE 4
Corporation and PC Telemart was no longer in business. Mr. Stockett had
exhausted his financial resources in his successful legal defense of the first
law suit. In order to avoid the additional time and legal expense associated
with another potential litigation, Mr. Stockett settled the Government's
complaint by accepting a consent decree and permanent injunction from violating
securities laws, without admitting or denying that he had violated them in the
first place. Mr. Stockett had not sold any of his personal shares and had lost
his entire investment along with other shareholders. Mr. Stockett did not
receive any fine or restriction from serving as an officer or director of a
public company in the future.
A complaint filed by the California Securities Commission alleged that Mr.
Stockett's company sold securities without a registration statement or exemption
in the State of California in conjunction with the acquisition of three long
distance telephone companies in 1987, made by his company, Fibernet
Communications Corporation. Mr. Stockett relied on opinion of counsel that each
of the acquisitions was exempt from registration. The California Corporation
Commission claimed that the offerings should be integrated, thus exceeding the
number of shareholders that could be solicited in a single exempt transaction.
Since the transactions involved a stock for stock exchange with no cash sales
and all shareholders desired to complete the transactions after being offered
the right to rescind, Mr. Stockett agreed to a $1,000 fine and consent decree in
which he agreed not to violate California Securities Regulations in the future,
without admitting or denying that he violated such regulations in the first
place.
In 1991, Mr. Stockett filed a personal bankruptcy after receiving
a default judgment of $5 million in conjunction with a real estate transaction
which he personally guaranteed in 1987. Mr. Stockett's bankruptcy was brought
about by the collapse in real estate values of the real estate purchased in the
transaction and the collapse in value of his collateral stock.
In April, 1996 Mr. Stockett entered a consent decree with the
State of Oregon relating to OTC Emerging Growth Fund. The State of Oregon
alleged that the private placement offering memorandum omitted material
disclosures and was advertised on the nationally syndicated IPO Television and
Radio Shows causing them to disallow the private placement exemption. Mr.
Stockett relied on the advice of experienced securities counsel who also served
on the Board of Directors and prepared the offering memorandum. The State of
Oregon subsequently determined that no exemption was available under Oregon
securities law and that the investors were not provided with adequate disclosure
of Mr. Stockett's prior regulatory history or personal financial bankruptcy. Mr.
Stockett was fined 15,000 with $10,000 waived.
(f) U.S.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
A promissory note for $160,000 secured by a lockup and escrow agreement for the
shares being purchased was the consideration. Mr. Stockett plans to pay for the
promissory note with the proceeds of a personal loan from a private source to be
secured by a portion of the shares to be released from escrow at the close of
escrow.
ITEM 4. PURPOSE OF TRANSACTION
The purpose of the transaction was to permit the Reporting Person to acquire 60%
ownership interest of Hightec, Inc. and to allow designated accredited investors
to acquire 25% ownership interest. No designated accredited investor acquired
more than 5% ownership interest. No designated investor acted as a member of a
group or had any affiliation with the Reporting Person.
<PAGE> 5
CUSIP NO. 431155 10 0 13D PAGE 5
Under the terms of the agreements, the Buyer, Larry A. Stockett and his
designees, collectively purchased 85% of the outstanding stock of the Company
from EFM Venture Group, Inc., and Complete Security Service Defined Benefits
Pension Trust, the Sellers.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) The Reporting Person has been informed by the Issuer that there
were 7,992,000 issued and outstanding shares of Common Stock as of November 20,
1996. The Reporting Person is the beneficial owner as of November 20, 1996 of
4,793,243 shares of Common Stock, which represents approximately 60% of the
issued and outstanding shares of Common Stock .
(b) The Reporting Person has the sole power to vote 4,793,243 shares, which
represents approximately 60% of the issued and outstanding shares of Common
Stock.
(c) Not applicable
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
A copy of the Stock Purchase and Escrow Agreement, Security Agreement,
Promissory Note, and Stock Escrow Agreement, all dated November 20, 1996 are
attached as exhibits 7.1, 7.2, 7.3, and 7.4 respectively.
Mr. Stockett signed a promissory note to purchase the stock. Mr. Stockett
is the beneficial owner of 60% of the previously issued and outstanding
shares of the Company. The selling shareholders also agreed to a lock up
agreement for the remaining shares which they personally retained (with the
certificates to be held in escrow) limiting the number of remaining shares
owned by them which could be sold during any 90 day period following the
payment of the promissory note and close of escrow without the express written
permission of Mr. Stockett. On December 16, 1996 Mr. Stockett permitted the
release of 112,000 shares from the escrow because of the limited float
available in the market. A copy of the escrow instructions is attached as
Exhibit 7.5.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
7.1 Stock Purchase and Escrow Agreement, November 20, 1996 between
EFM Venture Group, Inc., Complete Security Service Defined
Benefits Pension Trust, collectively referred to as "Sellers",
and Larry A. Stockett and his designees collectively referred
to as Buyers, and Hightec, Inc.
7.2 Security Agreement, Promissory Note, November 20, 1996
7.3 Stock Escrow Agreement, November 20, 1996
7.4 Promissory Note, November 20, 1996
7.5 Escrow Instructions, effective December 16, 1996
<PAGE> 1
CUSIP NO. 431155 10 0 13D PAGE 6
Exhibit 7.1 Stock Purchase and Escrow Agreement
3248
STOCK PURCHASE AND ESCROW AGREEMENT
THIS STOCK PURCHASE AND ESCROW AGREEMENT (the "Agreement") is entered
into and effective as of November 20, 1996 by and between EFM VENTURE GROUP,
INC., a California corporation ("EFM"), COMPLETE SECURITY SERVICE DEFINED
BENEFITS PENSION TRUST ("CSS") with EFM and CSS also being collectively referred
to herein as the "SELLERS", LARRY A. STOCKETT and his designees collectively
referred to herein as "STOCKETT", and HIGHTEC, INC., a Delaware corporation
("HIGHTEC" or the "COMPANY").
1. RECITALS
This Agreement is entered into with reference to and in contemplation
of the following facts, circumstances and representations:
1. The SELLERS desire to sell a collective total of 6,793,243
shares of common stock of HIGHTEC (the "Shares") to the BUYER
and the BUYER desires to purchase said Shares.
2. There are a total of 7,992,050 shares of the COMPANY's common
stock issued and outstanding.
3. The COMPANY desires that this transaction be consummated.
4. The parties hereto agree to the sale, retention and release of
the Shares in accordance with the terms and conditions set
forth herein in this Agreement.
2. SALE AND PURCHASE OF SHARES
2.1 PURCHASE PRICE: The purchase price for the Shares shall be ONE
HUNDRED SIXTY THOUSAND DOLLARS ($160,000.00) and shall be payable in the form of
a Promissory Note and as more specifically described below in Paragraph 2.3.
2.2 ALLOCATION OF PURCHASE PRICE: The purchase price shall be allocated
on a pro-rata basis between the SELLERS with EFM selling a total of 3,203,596 of
the Shares and CSS selling a total of 3,589,647 of the Shares. Notwithstanding
this pro-rata ownership of the Shares, the disposition of the purchase price
funds pursuant to Paragraph 3.7 shall be done in accordance with the specific
direction of the SELLERS.
2.3 PROMISSORY NOTE: STOCKETT shall execute a Promissory Note (the
"Note") payable to the SELLERS in the form of the attached Exhibit "A". the Note
shall be all due and payable in ninety (90) days from the closing of the
transaction and shall bear interest at the rate off ten percent (10%) per annum.
<PAGE> 2
CUSIP NO. 431155 10 0 13D PAGE 7
2.4 PRIVATE SALE ACKNOWLEDGMENT: The parties acknowledge and agree that
the sale of the Shares is being undertaken as a private sale pursuant to Section
4 of the Securities Act of 1933, as amended, and is not being transacted via a
broker-dealer and/or in the public market place.
2.5 NATURE OF SHARES: STOCKETT acknowledges and agrees that the Shares
are considered "restricted shares" and can only be sold in the public market
place in accordance with the conditions and limitations of SEC Rule 144 and only
after the expiration of the statutory restricted period.
2.6 REPRESENTATIONS AND WARRANTIES OF STOCKETT: STOCKETT hereby
represents and warrants to SELLERS as follows with respect to its purchase of
the Shares:
1. That it is financially responsible, able to meet
its obligations and acknowledges that this investment
will be speculative.
2. That it has had experience in the business of
investments in one or more of the following:
(i) investment experience with securities such
as stock and bonds; (ii) ownership of interests
in partnerships, new ventures and start-up companies;
(iii) experience in business and financial dealings;
and that it can protect its own interest in an
investment of this nature and does not have an
"Investor Representative", as that term is defined
in Regulation D of the Securities Act of 1933 and
does not need such an Investor Representative.
<PAGE> 3
CUSIP NO. 431155 10 0 13D PAGE 8
3. That it is capable of bearing the high degree of economic
risks and burdens of this investment, including but not
limited to the possibility of complete loss of all its
investment capital and the lack of a liquid market, such
that it may not be able to liquidate readily the investment
whenever desired or at the then current asking price.
4. That it has had access to the information regarding
the financial conditions of the COMPANY, including
but not limited to the COMPANY's SEC Form 10-KSB for
the fiscal year ending June 30, 1996 and SEC Form
10-QSB for the period ending September 30, 1996, and
it was able to request copies of such information, ask
questions of and receive answers from the COMPANY
regarding such information and any other information
it desires concerning the Shares, and all such questions
have been answered to its full satisfaction.
5. That at no time was it presented with or solicited by any
leaflet, public promotional meeting, circular, newspaper or
magazine article, radio or television advertisement or any
other form of general advertising.
6. The Shares are not being purchased with a view to or for the
resale or distribution thereof and it has no present plans
to enter into any contract, undertaking, agreement or
arrangement for such resale or distribution.
2.7 REPRESENTATIONS AND WARRANTIES OF SELLERS: The SELLERS hereby
represent and warrant to STOCKETT as follows with respect to their sale of the
Shares:
1. That the SELLERS are the owners, beneficially and of record,
of all of the Shares free and clear of all liens,
encumbrances claims, charges and restrictions.
2. That the SELLERS have full power to transfer the Shares to
STOCKETT without obtaining the consent or approval of any
other person or governmental authority.
<PAGE> 4
CUSIP NO. 431155 10 0 13D PAGE 9
3. That the Shares are validly authorized and issued, fully
paid, and nonassessable, and the Shares have been so issued
in full compliance with all federal and state securities
laws.
2.8 REPRESENTATIONS AND WARRANTIES OF COMPANY: The COMPANY hereby
represents and warrants to both STOCKETT and the SELLERS as follows with respect
to the Shares:
1. That the Shares are validly authorized and issued by the
COMPANY, they are fully paid and non-assessable and that the
Shares have been issued in full compliance with all federal
and state securities laws.
2. That the Shares have a restrictive legend imposed thereon
identifying them as "restricted shares" which are subject to
the conditions and limitations of SEC Rule 144 with respect
to the sale of the Shares in the public market place.
3. That the COMPANY has not received a notice of any
assignment, lien, encumbrance, claim or charges against
the Shares.
2.9 REPRESENTATIONS, WARRANTIES AND COVENANTS OF COMPANY AND STOCKETT:
The COMPANY and STOCKETT collectively and individually hereby represent and
warrant to the SELLERS as follows and further agree as follows that until such
time as payment for the Shares is made in full:
1. That they will cause to be filed any and all reports and
filings required to be filed by the COMPANY pursuant to
Section 13 or 15(d) of the Securities and Exchange Act of
1934.
2. That any shares to be issued by the COMPANY in addition to
the Shares are to be issued for cash only and such issuance
shall be supported by a legal opinion from CARMINE J. BUA,
ESQ.
3. That they hereby agree to indemnify the SELLERS, hold them
harmless and defend them with respect to any claim, demand,
arbitration, litigation or judgment resulting from the
issuance of any such additional shares.
<PAGE> 5
CUSIP NO. 431155 10 0 13D PAGE 10
4. That the issuance of any additional shares in excess of
twenty five percent (25%) of the presently issued and
outstanding shares shall require the written consent of the
SELLERS.
2.10 CORPORATE AUTHORITY: The officers or representatives of the
corporate parties executing this Agreement represent that they have been
authorized to execute this Agreement pursuant to resolutions of their respective
Boards of Directors.
2.11 OPTION TO PURCHASE COMPANY SUBSIDIARY: The COMPANY hereby grants
to the SELLERS the option to purchase all of the outstanding and issued shares
(the "Navmatic Shares") of its wholly owned subsidiary NAVMATIC CORPORATION, a
Nevada corporation ("NAVMATIC") for a total cash price of TEN THOUSAND DOLLARS
($10,000.00). This option shall be exercisable for a period of two (2) years
from the close of escrow.
2.12 DISPOSITION OF NAVMATIC SHARES: The Navmatic Shares are to be
delivered to the below described ESCROW HOLDER upon execution of this Agreement.
The retention, release and payment for the Navmatic Shares shall be in
accordance with the same terms and conditions as set forth below in Paragraphs
3.8 and 3.9.
2.13 DISPOSITION OF COMPANY SHARES RETAINED BY SELLERS: The SELLERS
agree that with respect to those shares of the COMPANY not sold to STOCKETT and
retained by the SELLERS (the "Retained Shares") shall be deposited with the
ESCROW HOLDER. The Retained Shares shall be subject to an agreement separate and
apart from this Agreement which shall limit the amount and timing of the sale of
the Retained Shares.
3. ESCROW TERMS AND CONDITIONS
3.1 APPOINTMENT OF ESCROW HOLDER: The SELLERS, STOCKETT and the
COMPANY hereby appoint CARMINE J. BUA, ESQ. of San Diego, California as the
ESCROW HOLDER for this Agreement.
3.2 DELIVERY OF SHARES: Upon execution of this Agreement, the SELLERS
shall deliver to the ESCROW HOLDER the HIGHTEC share certificates representing
the Shares (the "Certificates") along with properly endorsed and signature
guaranteed stock powers.
<PAGE> 6
CUSIP NO. 431155 10 0 13D PAGE 11
3.3 DELIVERY OF NOTE: Further upon execution of this Agreement,
STOCKETT shall deliver to the ESCROW HOLDER the signed Note as described in
Exhibit "A".
3.4 DELIVERY OF OFFICERS AND DIRECTORS RESIGNATIONS: Still further upon
execution of this Agreement, the SELLERS and the COMPANY shall cause to be
delivered to the ESCROW HOLDER the resignations of all of the present officers
and directors of the COMPANY.
3.5 DISPOSITION OF SHARES: The parties agree that the Shares shall be
retained and released by the ESCROW HOLDER in accordance with the following
instructions, terms and conditions:
1. RETENTION OF SHARES: STOCKETT hereby grants a security
interest in the Shares for the benefit of the SELLERS
and directs the ESCROW HOLDER to retain the Shares as
and for the security for the payment of the Note.
2. VOTING RIGHTS: Notwithstanding the retention of the
Shares by the ESCROW HOLDER, STOCKETT shall have all
of the voting rights associated with the Shares.
3. RELEASE OF SHARES: Upon the payment of the purchase
price into the Client Trust Account of the ESCROW HOLDER,
the Certificates shall be released to STOCKETT.
4. FAILURE TO PAY NOTE WHEN DUE: In the event STOCKETT fails to
pay the Note in full by its due date, then and in that event
the SELLERS shall have the sole option to cancel the
transaction and direct the ESCROW HOLDER to return their
respective Shares. The SELLERS shall have the further sole
option to extend the payment due date or otherwise modify
the payment terms of the Note.
3.6 FUNDS FOR PAYMENT OF NOTE: Until such time as the Note is paid in
full, STOCKETT and the COMPANY agree that all funds obtained by the COMPANY from
the sale of any equity or debt securities, from loans or other financing and
from the sale of its products and services (the "Funds") shall be deposited in
the Client Trust Account of the ESCROW HOLDER.
<PAGE> 7
CUSIP NO. 431155 10 0 13D PAGE 12
3.7 DISPOSITION OF FUNDS: Upon receipt of a sufficient amount of the
Funds to pay the principal and accumulated interest on the Note (the "pay-off"),
the COMPANY shall direct the ESCROW HOLDER to establish a credit for the benefit
of parties to be designated by the COMPANY (the "Payees"). The Payees shall then
have the right to direct the application of their credit to the pay-off and the
distribution of the remainder, if any, of the Funds.
3.8 RETENTION OF FUNDS FOR EXERCISE OF OPTION TO PURCHASE NAVMATIC
SHARES: The ESCROW HOLDER is directed to retain $10,000.00 of the Funds which
are to be released to the COMPANY in the event the SELLERS exercise their option
to purchase the Navmatic Shares. In the event the SELLERS fail to exercise their
option, the $10,000.00 is to be released to the STOCKETT.
3.9 SPECIAL PAYMENT PROVISIONS FOR NAVMATIC SHARES: The ESCROW HOLDER
is further directed to retain still an additional portion of the Funds for the
benefit of the COMPANY as and for the payment of the unpaid principal and
interest of that certain Promissory Note in the principal amount of $5,000.00
payable to the COMPANY by CSS which shall be credited to the purchase price of
the Navmatic Shares in the event the SELLERS exercise their option to purchase
said shares.
3.10 PAYMENT OF ESCROW FEES: The SELLERS agree to pay all fees and
expenses charged and incurred by the ESCROW HOLDER for the preparation of this
Agreement and related documents and in carrying out his duties and obligations
pursuant to this Agreement (collectively the "Escrow Fees"). The Escrow Fees are
to be paid to the ESCROW HOLDER from the funds deposited with the ESCROW HOLDER
pursuant to Paragraph 3.7.
3.11 OBLIGATIONS OF ESCROW HOLDER: The obligations of the ESCROW HOLDER
shall be governed by and subject to the following provisions and conditions:
1. The ESCROW HOLDER shall not be required to give
security nor shall the ESCROW HOLDER be responsible
for the acts, omissions, faults, errors, fraud,
failure or misconduct of any agent whom it may
reasonably employ in the exercise of the powers
conferred upon the ESCROW HOLDER hereunder, nor for
any loss occasioned by the acts, omissions, or
defaults by the ESCROW HOLDER, unless such acts,
<PAGE> 8
CUSIP NO. 431155 10 0 13D PAGE 13
omissions or defaults constitute a breach of trust knowingly
and intentionally committed by the ESCROW HOLDER.
2. The ESCROW HOLDER shall not in any way be bound or affected
by any notice of modification or of cancellation of this
Agreement unless such notice is in writing and signed by all
parties hereto, nor shall the ESCROW HOLDER be bound by any
modification hereof unless the same shall be satisfactory to
him.
3. The ESCROW HOLDER may act in reliance upon any document,
instrument or signature believed by him to be genuine and
the ESCROW HOLDER may assume that any person purporting to
give any notice or instruction in accordance with the
provisions hereof has been duly authorized to do so.
4. This Agreement sets forth exclusively the ESCROW HOLDER's
duties with respect to any and all matters pertinent hereto.
The ESCROW HOLDER shall not be bound by the provisions of
any agreement other than the terms of this Agreement.
5. In the event that the ESCROW HOLDER shall be uncertain
as to its duties or rights hereunder, or should it
receive instructions, claims or demands from any other
parties hereto or from third parties with respect to
the Shares held hereunder which, in his opinion, are
in conflict with any provisions of this Agreement,
it shall be entitled to refrain from taking any action
(other than to keep safely the Shares) until it shall
be directed or otherwise in writing by all of the parties
hereto, and the said third parties, if any, or by final
order, or judgment of a court of competent jurisdiction.
6. The ESCROW HOLDER shall not be required to institute, defend
or intervene in any legal action to enforce the terms and
conditions of this Agreement, nor to take any other action
until the ESCROW HOLDER has been indemnified to his
satisfaction against all expenses and liabilities incurred
and to be incurred by the ESCROW HOLDER.
<PAGE> 9
CUSIP NO. 431155 10 0 13D PAGE 14
7. The ESCROW HOLDER shall not be liable for anything
done or permitted by him to be done in good faith.
3.12 INDEMNIFICATION OF ESCROW HOLDER: The SELLERS, STOCKETT and the
COMPANY jointly and severally, release, indemnify and hold harmless the ESCROW
HOLDER from all costs, charges, claims, demands, damages, losses and expenses
resulting from the ESCROW HOLDER's compliance in good faith with this Agreement.
4. COOPERATION, ARBITRATION, INTERPRETATION,
MODIFICATION AND ATTORNEY FEES
4.1 COOPERATION OF PARTIES: The parties further agree that they will do
all things necessary to accomplish and facilitate the purpose of this Agreement
and that they will sign and execute any and all documents necessary to bring
about and perfect the purposes of this Agreement.
4.2 ARBITRATION: The parties hereby submit all controversies, claims
and matters of difference arising out of this Agreement to arbitration in San
Diego, California according to the rules and practices of the American
Arbitration Association from time to time in force. This submission and
agreement to arbitrate shall be specifically enforceable. The Agreement shall
further be governed by the laws of the State of California.
4.3 INTERPRETATION OF AGREEMENT: The parties agree that should any
provision of this Agreement be found to be ambiguous in any way, such ambiguity
shall not be resolved by construing such provisions or any part of or the entire
Agreement in favor of or against any party herein, but rather by construing the
terms of this Agreement fairly and reasonable in accordance with their generally
accepted meaning.
4.4 MODIFICATION OF AGREEMENT: This Agreement may be amended or
modified in any way at any time by an instrument in writing stating the manner
in which it is amended or modified and signed by each of the parties hereto. Any
such writing amending or modifying this Agreement shall be attached to and kept
with this Agreement.
4.5 ATTORNEY FEES: If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of the Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs
<PAGE> 10
CUSIP NO. 431155 10 0 13D PAGE 15
incurred in that action or proceeding, in addition to any other relief to which
it may be entitled.
4.6 ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement
and understanding of the parties hereto with respect to the matters herein set
forth, and all prior negotiations, writings and understandings relating to the
subject matter of this Agreement are merged herein and are superseded and
canceled by this Agreement.
4.7 COUNTERPARTS: This Agreement may be signed in one or more
counterparts.
4.8 FACSIMILE TRANSMISSION SIGNATURES: A signature received pursuant
to a facsimile transmission shall be sufficient to bind a party to this
Agreement.
EFM VENTURE GROUP, INC.
DATED: November 20, 1996 BY: /s/ BETTY N. MYERS
___________________________
BETTY N. MYERS
President
COMPLETE SECURITY
SERVICE DEFINED BENEFITS
PENSION TRUST
DATED: November 20, 1996 BY: /s/ MALCOLM D. CAMPBELL
___________________________
MALCOLM D. CAMPBELL
Trustee
<PAGE> 11
CUSIP NO. 431155 10 0 13D PAGE 16
DATED: November 20, 1996 /s/ LARRY STOCKETT
___________________________
LARRY STOCKETT
HIGHTEC, INC.
DATED: November 20, 1996 BY: /s/ MALCOLM D. CAMPBELL
___________________________
MALCOLM D. CAMPBELL
President
ACCEPTANCE BY ESCROW HOLDER
I, CARMINE J. BUA, III, ESQ., do hereby accept this appointment as
ESCROW HOLDER herein and agree to abide by the terms and directions set forth in
this Agreement.
ESCROW HOLDER
DATED: November 20, 1996 /s/ CARMINE J. BUA, III
__________________________
CARMINE J. BUA, III
<PAGE> 1
CUSIP NO. 431155 10 0 13D PAGE 17
Exhibit 7.2 Security Agreement
3248
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement") is entered into and effective
as of November 20, 1996 by and between LARRY A. STOCKETT (the "DEBTOR"), EFM
VENTURE GROUP, INC., a California corporation ("EFM") and COMPLETE SECURITY
SERVICE DEFINED BENEFITS PENSION TRUST ("CSS") (collectively the "SECURED
PARTY") and CARMINE J. BUA, III, ESQ. ("ESCROW HOLDER").
1. RECITALS
This Agreement is entered into with reference to and in contemplation
of the following facts, circumstances and representations:
1. DEBTOR is desirous of obtaining financing in the amount of ONE
HUNDRED SIXTY THOUSAND DOLLARS ($160,000.00) from the SECURED
PARTY as evidenced by that certain Promissory Note attached
hereto as Exhibit "A" (the "Note").
2. In consideration of the Note, the DEBTOR agrees to grant to
the SECURED PARTY a security interest in the property
described herein in this Agreement and hereinafter referred to
as the "Collateral".
3. The parties further desire to direct the ESCROW HOLDER to
retain the Collateral pursuant to the terms of this Agreement.
2. CREATION OF SECURITY INTEREST
2.1 GRANT OF SECURITY INTEREST: The DEBTOR hereby grants to the SECURED
PARTY a security interest in the Collateral in the 6,793,243 shares of common
stock of HIGHTEC, INC., a Delaware corporation (the "Shares").
2.2 PERFECTION OF SECURITY INTEREST: In order to perfect the security
interests with respect to the Collateral and to comply with the terms and
conditions of this Agreement with respect to the obligations of the ESCROW
HOLDER, the DEBTOR agrees to deposit with the ESCROW HOLDER: (1) the HIGHTEC,
INC. Share Certificates, evidencing the Shares and (2) duly endorsed and
signature guaranteed stock powers with respect to the Shares (the "Stock
Powers").
3. PAYMENT AND DEFAULT ON NOTE
3.1 PAYMENT OF NOTE: Upon payment of the Note in full, the ESCROW
HOLDER shall return the Shares and the Stock Powers to the DEBTOR.
<PAGE> 2
CUSIP NO. 431155 10 0 13D PAGE 18
3.2 DEFAULT REMEDIES WITH RESPECT TO THE SHARES: In the event that the
DEBTOR defaults in the performance of any of the terms of this Agreement, or in
the payment at maturity of the principal or interest of the Note, the SECURED
PARTY shall have in addition to the specific remedies enumerated in this
Agreement, all of the rights and remedies provided in the California Commercial
Code.
3.3 REQUIREMENT TO PAY NOTE: The SECURED PARTY shall have the sole
option in the event the DEBTOR fails to pay the Note in full by its due date to
legally enforce payment of the Note without looking to or utilizing the
collateral for satisfaction of the Note obligation.
3.4 ADDITIONAL SPECIFIC REMEDY FOR DEFAULT: In the event the DEBTOR
fails to pay the Note in full by its due date, then and in that event the
SECURED PARTY shall have the sole option to cancel the underlying transaction
that gave rise to the Note and direct the ESCROW HOLDER to return the Shares to
the SECURED PARTY. The SECURED PARTY shall have the further sole option to
extend the payment due date or otherwise modify the payment terms of the Note.
4. COOPERATION, ARBITRATION, INTERPRETATION,
MODIFICATION AND ATTORNEY FEES
4.1 COOPERATION OF PARTIES: The parties further agree that they will do
all things necessary to accomplish and facilitate the purpose of this Agreement
and that they will sign and execute any and all documents necessary to bring
about and perfect the purposes of this Agreement.
4.2 ARBITRATION: The parties hereby submit all controversies, claims
and matters of difference arising out of this Agreement to arbitration in San
Diego, California according to the rules and practices of the American
Arbitration Association from time to time in force. This submission and
agreement to arbitrate shall be specifically enforceable. The Agreement shall
further be governed by the laws of the State of California.
<PAGE> 3
CUSIP NO. 431155 10 0 13D PAGE 19
4.3 INTERPRETATION OF AGREEMENT: The parties agree that should any
provision of this Agreement be found to be ambiguous in any way, such ambiguity
shall not be resolved by construing such provisions or any part of or the entire
Agreement in favor of or against any party herein, but rather by construing the
terms of this Agreement fairly and reasonable in accordance with their generally
accepted meaning.
4.4 MODIFICATION OF AGREEMENT: This Agreement may be amended or
modified in any way at any time by an instrument in writing stating the manner
in which it is amended or modified and signed by each of the parties hereto. Any
such writing amending or modifying this Agreement shall be attached to and kept
with this Agreement.
4.5 ATTORNEY FEES: If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of the Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it may be
entitled.
4.6 ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement
and understanding of the parties hereto with respect to the matters herein set
forth, and all prior negotiations, writings and understandings relating to the
subject matter of this Agreement are merged herein and are superseded and
canceled by this Agreement.
4.7 COUNTERPARTS: This Agreement may be signed in one or more
counterparts.
4.8 FACSIMILE TRANSMISSION SIGNATURES: A signature received pursuant
to a facsimile transmission shall be sufficient to bind a party to this
Agreement.
DATED: November 20, 1996 /s/ LARRY A. STOCKETT
---------------------
LARRY A. STOCKETT
<PAGE> 4
CUSIP NO. 431155 10 0 13D PAGE 20
EFM VENTURE
GROUP, INC.
DATED: November 20, 1996 BY: /s/ BETTY N. MYERS
------------------------------
BETTY N. MYERS President
COMPLETE SECURITY SERVICE
DEFINED BENEFITS PENSION TRUST
DATED: November 20, 1996 BY: /s/ MALCOLM D. CAMPBELL
-------------------------------
MALCOLM D. CAMPBELL
Trustee
ACCEPTANCE BY ESCROW HOLDER
I, CARMINE J. BUA, III, ESQ., do hereby accept this appointment as
ESCROW HOLDER herein and agree to abide by the terms and directions set forth in
this Agreement.
ESCROW HOLDER
DATED: November 20, 1996 /s/ CARMINE J. BUA, III
------------------------------
CARMINE J. BUA, III
<PAGE> 1
CUSIP NO. 431155 10 0 13D PAGE 21
Exhibit 7.3 Stock Escrow Agreement
3248
STOCK ESCROW AGREEMENT
THIS STOCK ESCROW AGREEMENT (the "Agreement") is entered into and
effective as of November 20, 1996 by and between EFM VENTURE GROUP, INC., a
California corporation ("EFM"), COMPLETE SECURITY SERVICE DEFINED BENEFITS
PENSION TRUST ("CSS"), STOCKWORKS USA, INC. a Delaware corporation
("STOCKWORKS"), with EFM, CSS and STOCKWORKS also being collectively referred to
herein as the "SHAREHOLDERS", LARRY A. STOCKETT and his designees collectively
referred to herein as "STOCKETT", and HIGHTEC, INC., a Delaware corporation
("HIGHTEC" or the "COMPANY") and CARMINE J. BUA, III, ESQ., ("ESCROW HOLDER").
1. RECITALS
This Agreement is entered into with reference to and in contemplation
of the following facts, circumstances and representations:
1. The SHAREHOLDERS will collectively own a total of 799,602
shares of the COMPANY's common stock (the "Shares") pursuant
to that certain "Stock Purchase and Escrow Agreement"
between the parties (the "Purchase Agreement") which is
separate and apart from this Agreement.
2. As an inducement for STOCKETT and the COMPANY to enter into
the Purchase Agreement, the SHAREHOLDERS have agreed to
deposit the Shares with the ESCROW HOLDER pursuant to the
terms and conditions of this Agreement.
2. ESCROW TERMS AND CONDITIONS
2.1 APPOINTMENT OF ESCROW HOLDER: The parties hereby appoint CARMINE J.
BUA, III, ESQ, of San Diego, California as the ESCROW HOLDER for this Agreement.
<PAGE> 2
CUSIP NO. 431155 10 0 13D PAGE 22
2.2 DELIVERY OF SHARES: Upon execution of this Agreement, the
SHAREHOLDERS shall deliver to the ESCROW HOLDER the HIGHTEC share certificates
representing the Shares (the "Certificates") along with properly endorsed and
signature guaranteed stock powers.
2.3 CONDITION FOR DISPOSITION OF SHARES: The parties agree that the
Shares shall be retained and released by the ESCROW HOLDER pursuant to the
following conditions:
1. The Shares are to be held by the ESCROW HOLDER himself and
are not to be deposited with the Depository Trust
Corporation or any broker-dealer or any third party
whatsoever.
2. The ESCROW HOLDER may release for sale a maximum of 26,654
of the Shares for each SHAREHOLDER every ninety days (90)
days (the "Sale Period") commencing ninety (90) days from
the close of escrow for the Purchase Agreement.
3. The Shares to be released for sale shall be pursuant to
receipt of written confirmation by the ESCROW HOLDER from
each SHAREHOLDER's broker that such a sale has been
transacted.
4. The sale and release of the Shares for each Sale Period
shall be on a cumulative basis with respect to any allowable
but unsold Shares in any Sale Period. Accordingly, any such
unsold Shares may be cumulated, released and sold in
subsequent Sale Periods.
2.4 PAYMENT OF ESCROW FEES: The SHAREHOLDERS agree to pay all fees and
expenses charged and incurred by the ESCROW HOLDER for the preparation of this
Agreement and related documents and in carrying out his duties and obligations
pursuant to this Agreement.
2.5 OBLIGATIONS OF ESCROW HOLDER: The obligations of the ESCROW HOLDER
shall be governed by and subject to the following provisions and conditions:
<PAGE> 3
CUSIP NO. 431155 10 0 13D PAGE 23
1. The ESCROW HOLDER shall not be required to give
security nor shall the ESCROW HOLDER be responsible
for the acts, omissions, faults, errors, fraud,
failure or misconduct of any agent whom it may
reasonably employ in the exercise of the powers
conferred upon the ESCROW HOLDER hereunder, nor for
any loss occasioned by the acts, omissions, or
defaults by the ESCROW HOLDER, unless such acts,
omissions or defaults constitute a breach of trust
knowingly and intentionally committed by the ESCROW
HOLDER.
2. The ESCROW HOLDER shall not in any way be bound or affected
by any notice of modification or of cancellation of this
Agreement unless such notice is in writing and signed by all
parties hereto, nor shall the ESCROW HOLDER be bound by any
modification hereof unless the same shall be satisfactory to
him.
3. The ESCROW HOLDER may act in reliance upon any document,
instrument or signature believed by him to be genuine and
the ESCROW HOLDER may assume that any person purporting to
give any notice or instruction in accordance with the
provisions hereof has been duly authorized to do so.
4. This Agreement sets forth exclusively the ESCROW HOLDER's
duties with respect to any and all matters pertinent hereto.
The ESCROW HOLDER shall not be bound by the provisions of
any agreement other than the terms of this Agreement.
5. In the event that the ESCROW HOLDER shall be uncertain
as to its duties or rights hereunder, or should it
receive instructions, claims or demands from any other
parties hereto or from third parties with respect to
the Shares held hereunder which, in his opinion, are
in conflict with any provisions of this Agreement,
it shall be entitled to refrain from taking any action
(other than to keep safely the Shares) until it shall
be directed or otherwise in writing by all of the parties
hereto, and the said third parties, if any, or by final
order, or judgment of a court of competent jurisdiction.
<PAGE> 4
CUSIP NO. 431155 10 0 13D PAGE 24
6. The ESCROW HOLDER shall not be required to institute, defend
or intervene in any legal action to enforce the terms and
conditions of this Agreement, nor to take any other action
until the ESCROW HOLDER has been indemnified to his
satisfaction against all expenses and liabilities incurred
and to be incurred by the ESCROW HOLDER.
7. The ESCROW HOLDER shall not be liable for anything
done or permitted by him to be done in good faith.
2.6 INDEMNIFICATION OF ESCROW HOLDER: The SHAREHOLDERS, STOCKETT and
the COMPANY jointly and severally, release, indemnify and hold harmless the
ESCROW HOLDER from all costs, charges, claims, demands, damages, losses and
expenses resulting from the ESCROW HOLDER's compliance in good faith with this
Agreement.
2.7 CORPORATE AUTHORITY: The officers or representatives of the
corporate parties executing this Agreement represent that they have been
authorized to execute this Agreement pursuant to resolutions of their respective
Boards of Directors.
3. COOPERATION, ARBITRATION, INTERPRETATION,
MODIFICATION AND ATTORNEY FEES
3.1 COOPERATION OF PARTIES: The parties further agree that they will do
all things necessary to accomplish and facilitate the purpose of this Agreement
and that they will sign and execute any and all documents necessary to bring
about and perfect the purposes of this Agreement.
3.2 ARBITRATION: The parties hereby submit all controversies, claims
and matters of difference arising out of this Agreement to arbitration in San
Diego, California according to the rules and practices of the American
Arbitration Association from time to time in force. This submission and
agreement to arbitrate shall be specifically enforceable. The Agreement shall
further be governed by the laws of the State of California.
3.3 INTERPRETATION OF AGREEMENT: The parties agree that should any
provision of this Agreement be found to be ambiguous in any way, such ambiguity
shall not be resolved by construing such provisions or any part of or the entire
Agreement in favor of or against any party herein, but rather by construing the
terms of this Agreement fairly and reasonable in accordance with their generally
accepted meaning.
<PAGE> 5
CUSIP NO. 431155 10 0 13D PAGE 25
3.4 MODIFICATION OF AGREEMENT: This Agreement may be amended or
modified in any way at any time by an instrument in writing stating the manner
in which it is amended or modified and signed by each of the parties hereto. Any
such writing amending or modifying this Agreement shall be attached to and kept
with this Agreement.
3.5 ATTORNEY FEES: If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of the Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it may be
entitled.
3.6 ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement
and understanding of the parties hereto with respect to the matters herein set
forth, and all prior negotiations, writings and understandings relating to the
subject matter of this Agreement are merged herein and are superseded and
canceled by this Agreement.
3.7 COUNTERPARTS: This Agreement may be signed in one or more
counterparts.
3.8 FACSIMILE TRANSMISSION SIGNATURES: A signature received pursuant to
a facsimile transmission shall be sufficient to bind a party to this Agreement.
EFM VENTURE GROUP, INC.
DATED: November 20, 1996 BY: /s/ Betty N. Myers
__________________________
BETTY N. MYERS
President
COMPLETE SECURITY
SERVICE DEFINED BENEFITS
PENSION TRUST
DATED: November 20, 1996 BY: /s/ Malcolm D. Campbell
__________________________
MALCOLM D. CAMPBELL
Trustee
<PAGE> 6
CUSIP NO. 431155 10 0 13D PAGE 26
STOCKWORKS USA, INC.
DATED: November 20, 1996 BY: /s/ Thomas D. Coldicutt
_________________________
THOMAS D. COLDICUTT
President
DATED: November 20, 1996 /s/ Larry Stockett
__________________________
LARRY STOCKETT
HIGHTEC, INC.
DATED: November 20, 1996 BY: /s/ Malcolm D. Campbell
__________________________
MALCOLM D. CAMPBELL
President
ACCEPTANCE BY ESCROW HOLDER
I, CARMINE J. BUA, III, ESQ., do hereby accept this appointment as
ESCROW HOLDER herein and agree to abide by the terms and directions set forth in
this Agreement.
ESCROW HOLDER
DATED: November 20, 1996 /s/ CARMINE J. BUA, III
________________________
CARMINE J. BUA, III
<PAGE> 1
CUSIP NO. 431155 10 0 13D PAGE 27
Exhibit 7.4 Promissory Note
3248
EXHIBIT "A"
PROMISSORY NOTE
$160,000.00 San Diego, California November 20, 1996
The undersigned, LARRY A. STOCKETT, in consideration of the purchase of
certain shares of common stock of HIGHTEC, INC., a Delaware corporation, (the
"Shares") hereby promises to pay to EFM VENTURE GROUP, INC., a California
corporation ("EFM") and COMPLETE SECURITY SERVICE DEFINED BENEFITS PENSION TRUST
("CSS") the sum of ONE HUNDRED SIXTY THOUSAND DOLLARS ($160,000.00) with
interest at the rate of ten percent (10%) per annum and which shall be all due
and payable ninety (90) days from the execution of that certain Stock Purchase
and Escrow Agreement with respect to the Shares (the "Agreement").
Interest shall commence from the date of execution of the Agreement.
The holder of this Note at his option may extend the payment due date
of the Note. The payor may prepay without penalty any part of or the
entire balance due under this Note without a prepayment penalty.
<PAGE> 2
CUSIP NO. 431155 10 0 13D PAGE 28
Should suit be commenced or an attorney employed to enforce the payment
of this Note, the undersigned agrees to pay such additional sum as the court my
adjudge reasonable as attorneys' fees in said suit.
This Note is secured by a Security/Pledge Agreement wherein the payor
has granted a security interest to the payee herein in those 6,793,243 shares of
common stock of HIGHTEC INC. R/N/O EFM and CSS.
Contemporaneously with the execution of this Note, the Shares are to be
delivered to CARMINE J. BUA, III, ESQ. as Escrow Holder for the Shares pursuant
to the Security/Pledge Agreement.
DATED: November 20, 1996 /s/ Larry A. Stockett
-------------------------
LARRY A. STOCKETT
<PAGE> 1
CUSIP NO. 431155 10 0 13D PAGE 29
Exhibit 7.5 Escrow Instructions
The undersigned, signatory to a Stock Escrow Agreement effective November 20,
1996, hereby instruct Carmine J. Bua, Esq., the Escrow Holder, as follows:
1) The Escrow Holder is to release 62,000 shares to Complete Security Service
Defined Benefits Pension Trust.
2) The Escrow Holder is to release 50,000 shares to EFM Venture Group, Inc.
3) All other provisions of the Stock Escrow Agreement are to remain unchanged.
The above instructions are in accordance with paragraphs 2.52 (Delivery of
Shares) and 3.4 (Modification of Agreement) of the Stock Escrow Agreement.
These Escrow Instructions are effective as of December 16, 1996 and may be
signed in counterparts and facsimile signatures are valid.
EFM VENTURE GROUP, INC.
/s/ Betty N. Myers
- ------------------------------
Betty N. Myers, President
COMPLETE SECURITY SERVICE DEFINED
BENEFITS PENSION TRUST
/s/ Malcolm D. Campbell
- ------------------------------
Malcolm D. Campbell, Trustee
STOCKWORKS USA, INC.
/s/ Thomas D. Coldicutt
- ------------------------------
Thomas D. Coldicutt, President
/s/ Larry Stockett
- ------------------------------
Larry Stockett
HIGHTEC, INC.
BY: /s/ Larry Stockett, President
------------------------------
Larry Stockett, President
<PAGE> 2
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
December 18, 1996
By: /s/ Larry S. Stockett
----------------------
President
