<PAGE> 1
PAGE 1
As filed with the United States Securities and Exchange Commission on
December 16, 1996
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of Earliest Event Reported): November 20, 1966
HIGHTEC, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
0-27344 52-0894692
(Commission File Number) (IRS Employer ID No.)
99 Marinero Circle, # 201
Tiburon, CA 94920
(Address of Principal Executive Offices)
(415) 435-1445
(Registrant's Telephone Number, Including Area Code)
1
<PAGE> 2
PAGE 2
This Current Report on Form 8-K is filed by Hightec, Inc., a Delaware
corporation (the "Company"), in connection with the matters described herein.
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) CHANGE OF CONTROL OF REGISTRANT
On November 20, 1996 the controlling shareholders of the
Company entered into an agreement for the private sale of 6,793,243 shares of
common stock of Hightec, Inc., personally owned by the sellers. A promissory
note for $160,000 secured by a lockup and escrow agreement for the shares being
purchased was the consideration. 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 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.
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. Mr. Stockett became the beneficial
owner of 60% of the outstanding shares of the Company, and designated accredited
investors became the beneficial owners of the remaining 25% of the outstanding
shares purchased. No additional investor owns 5% or more of the outstanding
shares. All shares were acknowledged in the agreement as restricted shares. No
new shares were issued by 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. 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 7.12.
Mr. Stockett's personal background, business and regulatory
matters are described in Attachment 7.5.
b. RESIGNATIONS OF FORMER OFFICERS AND DIRECTORS AND APPOINTMENT OF NEW
OFFICERS & DIRECTORS
Concurrent with the execution of the agreement, the Board
accepted the resignations of Barry D. Russell and Arlen O. Barksdale, and the
Sole Director, Malcolm D. Campbell appointed the following persons to fill the
vacancies on the Board of Directors:
Christophar Bonvini
Larry Stockett
Jeffrey Petty
Upon acceptance by the new members Mr. Campbell resigned as a
Director, President and Chief Financial Officer.
On November 21, 1996, the Board of Directors of the Company
met by telephone and approved a resolution to appoint Larry Stockett as
President and Chief Financial Officer, and Jeffrey Petty as Secretary. The Board
also approved the change of address of the primary executive offices of the
Company to 99 Marinero Circle #201, Tiburon, CA. 94920.
2
<PAGE> 3
PAGE 3
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) OPTION TO PURCHASE COMPANY SUBSIDIARY GRANTED TO SELLERS
OF HIGHTEC, INC.
An option was granted to the sellers of the Company, referenced in
paragraph 2.11 of the Stock Purchase and Escrow Agreement, Exhibit 7.1, to
purchase all of the issued and outstanding shares of the Company Subsidiary,
Navmatic Corporation, for $10,000 cash. Exercise of the option would represent a
disposal of virtually all of the Company's former assets (and liabilities).
(b) OPTION TO ACQUIRE 100% OF THE STOCK OF IPO NETWORK, INC.
On December 6, 1996 an option to acquire 100% of the issued and
outstanding stock of the IPO Network, Inc. was granted to the Company by Larry
Stockett, President, sole Director, and controlling shareholder of OTC Emerging
Fund, Inc., owner of 80% of IPO Network, Inc. shares, and by Larry Stockett,
personally, and ten other accredited investors who collectively own 20% of the
shares of IPO Network, Inc., collectively referred to as the IPO Network
Sellers. Other than Mr. Stockett who is the beneficial owner of approximately
67% of OTC Emerging Growth Fund, and 5% of IPO Network personally, none of the
other 9 accredited investors owns more than 5% of IPO Network, Inc. Under the
terms of the option, the OTC Emerging Growth Fund would receive 1,600,000
million shares and the 10 accredited investors would receive a total of 400,000
shares collectively. IPO Network Sellers would receive 2 million new shares to
be issued by Hightec, Inc., and the IPO Network would become a wholly owned
subsidiary of Hightec, Inc. in a stock-for-stock exchange. The primary assets
owned by IPO Network to be acquired upon exercise of the stock options are
itemized below and described in detail in Exhibit 7.6
a. IPO television show, all rights.
b. S.M.A.R.T. Money Workshops Television Infomercial, all rights
c. S.M.A.R.T. Money Workshop training curricula
d. IPO Network hard copy library and data base of IPOs from 1973
to present
e. IPO Network Internet World Wide Web Site (on line service)
f. IPO Network and S.M.A.R.T. Money Workshop trade marks, trade
names,, logos, and intellectual property rights associated
with IPO Network, and S.M.A.R.T. Money Workshops.
Approximately $2 million in cash and $4 million in television air time
were expensed over the past two years by Larry Stockett personally, the OTC
Emerging Growth Fund, and the IPO Network to develop the above assets and
business relationships. The assets will be written down to the par value of the
Hightec, Inc. shares received by the OTC Emerging Growth Fund upon the exchange
of shares with the IPO Network. The value of these assets will be carried on the
books of Hightec, Inc. at $2,000 which represents the $ .001 par value of the
2,000,000 shares of Hightec stock to be exchanged for 100% of the IPO Network
stock upon exercise of the option.
3
<PAGE> 4
PAGE 4
(c) CAPITALIZATION PLAN TO PAY FOR ASSETS TO BE ACQUIRED UPON EXERCISE
OF OPTIONS AND ACCEPTANCE OF ACQUISITION PROPOSAL.
The Company plans to undertake one or more private placements by
offering to sell up to five (5) million shares of its stock for up to $5 million
in aggregate from accredited investors in order to implement the proposed
acquisitions of the IPO Network, Inc. Some or all of theses may be offered to
foreign investors using a Regulation S offering.
The use of proceeds would be to expand the marketing, distribution, and
licensing of the IPO Network products and services upon completion of the
acquisition.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
No Change
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
No Change
ITEM 5. OTHER EVENTS
4
<PAGE> 5
PAGE 5
On December 6, 1996 the Company issued a press release announcing that
it had distributed the first edition of Winners magazine to 8,000 members of
WIN. A copy of the press release is attached as Exhibit 7.7.
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 7.8.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
(a) The resignation of former officers and directors and appointment of
new officers and directors is reported in Item 1(b) above.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) 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 Larry A. Stockett, Background and Regulatory History
7.6 Stock Option Agreement, IPO Network, Dec. 6, 1996 - Description
of Assets
7.7 Press Release, December 6, 1996 Winner's is a Winner
7.8 Escrow instructions releasing a portion of sellers shares dated
December 16, 1996.
5
<PAGE> 6
PAGE 6
ITEM 8. CHANGE IN FISCAL YEAR
No Change
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: December 18, 1996 Hightec, Inc.
by: /s/ Larry A. Stockett
Name: Larry A. Stockett
Title: President
6
<PAGE> 7
PAGE 7
Exhibit Index
EXHIBIT DESCRIPTION PAGE NUMBER
7.1 Stock Purchase and Escrow 8
Agreement, November 20, 1996
7.2 Security Agreement, Promissory 19
Note, November 20, 1996
7.3 Stock Escrow Agreement, November 23
20, 1996
7.4 Promissory Note, November 20, 29
1996
7.5 Larry A. Stockett, Background 31
and Regulatory History - Track
record of accomplishments
7.6 Stock Option Agreement, IPO 34
Network, Dec. 6, 1996 -
Description of Assets
7.7 Press Release, December 6, 1996 38
Winner's is a Winner
7.8 Escrow Instructions Releasing a 39
Portion of Sellers Shares,
effective December 16, 1996
7
<PAGE> 1
PAGE 8
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
PAGE 9
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
PAGE 10
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
PAGE 11
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
PAGE 12
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
PAGE 13
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
PAGE 14
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
PAGE 15
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 anyaction (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
PAGE 16
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
PAGE 17
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
PAGE 18
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
PAGE 19
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
PAGE 20
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
PAGE 21
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
PAGE 22
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
PAGE 23
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
PAGE 24
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
PAGE 25
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
PAGE 26
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
PAGE 27
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
PAGE 28
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
PAGE 29
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
PAGE 30
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
PAGE 31
Exhibit 7.5 - Brief History of Mr. Stockett's Background and Regulatory History
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 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.
<PAGE> 2
PAGE 32
Set forth below is a description of Mr. Stockett's Background.
LARRY A. STOCKETT has been Chairman of the Board, President and Chief
Executive Officer of the IPO Network, Inc. since founding the Company in 1994.
He is also the President, Chairman of the Board and majority shareholder of OTC
Emerging Growth Fund, which is the parent company of the IPO Network, Inc. He
has been engaged in venture capital financing, mergers and acquisitions and
consulting businesses since 1984. Since 1984 Mr. Stockett has conducted 12
mergers and acquisitions in which he was the majority shareholder. These
companies comprised a wide diversity of industries including office automation,
telecommunications, publishing, and real estate industries. Mr. Stockett is
widely recognized as a leading authority of initial public offerings. He has
published research on over 10,000 IPO stocks and produced an IPO television and
radio show. Mr. Stockett has developed an innovative S.M.A.R.T. Money workshop
which teaches investors the fundamental and technical principals of investing in
initial public offerings. Mr. Stockett holds a Business Economics degree from
the University of California, Santa Barbara.
TRACK RECORD OF ACCOMPLISHMENTS: CEO of IPO company underwritten by Prescott
Ball and Turben with venture capital provided by Allen & Company. President of
venture capital company. Conducted 12 mergers and acquisitions as principal
shareholder of three public companies. Published first magazine on California
State Legislature, 1968. Invented portable computer for Navy, 1969. Founded
world's first Paperless Office written about in Alvin Toffler's Best Seller, The
Third Wave", 1987. Editor and publisher of 7 editions of personal computer
software directories. Founded first national software library, 1984. Director of
special projects marketing for IBM RealCom partnership, 1987. Chairman of Board
responsible for eight acquisitions of long distance telephone resellers and
established first coast to coast fiber optics resale network. Conducted largest
merger in self-storage real estate industry. Published research on first two
year after market performance of over 10,000 IPOs offered since 1973.
EDUCATION: University of California. Bachelor of Business Administration, 1970.
EMPLOYMENT HISTORY:
California Digest, Editor, 1968-69
General Research Corporation, Project Manager, 1970-73
Science Applications, Inc., Vice President, 1973-75
Logicon, Inc. Assistant to President, 1975-76
Micronet, The Paperless Office, President, 1976-83
PC Telemart, The National Software Library, Chairman of the Board, 1983-45
IBM RealCom, Director of Marketing, 1986-87
Fibernet Communications Corp., Chairman of the Board, 1987-89
Austin Equities, (National Self-Storage & U-Lock-It), Chairman of the
Board, 1989-91
Northwest Investment Brokers, Chairman of the Board, 1991-94
IPO Network, President, 1994-96
OTC Emerging Growth Fund, President, 1994-96
<PAGE> 3
PAGE 33
IPO PROJECTS CONDUCTED PERSONALLY BY LARRY STOCKETT:
Developed proprietary model to predict after market performance of IPOs from
prospectus fundamental financial data
Back tested model against 20 years of IPO prospectus summaries
Charted over 10,000 IPOs and developed monthly performance patterns of top and
bottom 10% since 1973
Drafted prospectus for IPO Mutual fund
Drafted prospectus for IPO Hedge Fund Management Company
Wrote investment training curricula to teach investors in invest in IPOs
Developed World Wide Web Site containing prospectus summary financial
information on all IPOs since January 1995.
Contracted for fantasy stock game to allow investors to simulate IPO investing
Produced television show to promote awareness of IPO Research Produced weekly
live radio show to promote awareness of IPO research.
Produced infomercial to attract investors to seminar sponsored by venture
capital fund
Conducted over 50 workshops, training classes, and investment club meetings for
over two years.
Published IPO calendar & recent performance results in national and
international publication every two weeks (the New Industrialist)
Distributed IPO Newsletter which provides one page prospectus summaries on 40-50
IPOs per month for the past two years (New Issues Outlook)
Distributed best selling book on investing in new public offerings (Step By Step
Guide to Investing in New Issues)
<PAGE> 1
PAGE 34
Exhibit 7.6 Stock Purchase Option Agreement
STOCK PURCHASE OPTION AGREEMENT
This Stock Purchase Option Agreement is entered into this 6th day of
December, 1996 by and between OTC Emerging Growth fund and its subsidiary, IPO
Network, Inc., Larry Stockett and , collectively referred to hereinafter as
"Sellers"), located at 99 Marinero Circle, #201, Tiburon, CA 94920, and Hightec,
Inc. as ("Buyer")..
Whereas Seller desires to sell and Buyer desires to buy an option to acquire
100% of the issued and outstanding shares owned by Sellers of the IPO Network,
Inc. including the assets more fully described herein,
Now therefore, for valuable consideration, the parties hereby agree as follows:
1. SELLER'S AGREEMENT TO SELL AND BUYER'S AGREEMENT TO PURCHASE 100% OF THE
ISSUED AND OUTSTANDING STOCK OF THE IPO NETWORK, INC., INCLUDING THE FOLLOWING
ASSETS OF IPO NETWORK INC., DESCRIBED MORE FULLY IN THE PARAGRAPHS BELOW.
a. IPO television show, all rights.
b. S.M.A.R.T. Money Workshops Television Infomercial, all rights
c. S.M.A.R.T. Money Workshop training curricula
d. IPO Network hard copy library and data base of IPOs from 1973 to
present
e. IPO Network Internet World Wide Web Site (on line service)
f. IPO Network and S.M.A.R.T. Money Workshop trade marks, trade names,,
logos, and intellectual property rights associated with IPO Network,
and S.M.A.R.T. Money Workshops.
a. IPO TELEVISION SHOW DEFINED. The IPO Television Show is a 1/2 hour show,
produced in January 1995, as the first in a series of periodic television
specials which feature the top ten best performing IPOs of 1994 ranked by the
performance of their stock price from the day after their IPO date (when any
investor could purchase them) until December 31, 1994. The IPO Show features
statistics as to the number of IPOs during the year, the number of. winners and
losers, and the risks and rewards of investing in IPOs. The IPO show includes 8
advertisements from the pilot Show's sponsors. The show has aired 26 times on
the American Independent Television Network from January 14, 1995 through June
30, 1995 every Saturday at 6:00 p.m. The IPO show television commercials were
designed to get viewers to call for a free list of the top 100 IPOs and a free
copy of a reprint of a research report published in the Opportunist Magazine.
The IPO Television Show generated over 4,000 investor leads which in turn
generated sales of products from the sponsors. Video footage from the show was
also digitized and archived on the Company's Internet World Wide Web Site in
MPEG compressed video.
b. S.M.A.R.T. MONEY WORKSHOP TELEVISION INFOMERCIAL DEFINED. The S.M.A.R.T.
Money Workshop Television Infomercial is a 1/2 hour television show produced in
February, 1995 using footage from the IPO Show video library. The entire show is
formatted as an infomercial designed to get viewers to attend a
<PAGE> 2
PAGE 35
free seminar at local hotels featuring the Show's IPO expert, Larry Stockett.
The IPO Show Infomercial aired in Las Vegas, Nevada on March 26th and 27th on
the local NBC and Fox Television affiliate stations. Approximately 500 viewers
attended a series of four free seminars held at Alexis Park Hotel and Arizona
Charlies Hotel on March 29th and 30th. Approximately 20% of the attendees paid
$1,000 to attend the S.M.A.R.T. Money Workshop held at Alexis Park Hotel on
April 30, 1995.
c. S.M.A.R.T. MONEY WORKSHOP TRAINING CURRICULA DEFINED. The S.M.A.R.T. Money
Workshop Training Curricula is an educational curricula and a series of
workbooks, briefing charts, electronic spreadsheets, computer software and other
components developed by the IPO Network, Inc., to teach investors to be better
investors using "play money" accounts called "Simulated Market Account Reality
Training". The S.M.A.R.T. Money accounts are used to educate investors as to the
principals of stock market investing without investing real money. Attendees may
use play money accounts which allow them to execute fictitious transactions for
real stocks, using real time quotes, and confirmation statements which itemize
all stock trades, commissions and expenses, portfolio value, and ranking of the
customer's relative performance against other S.M.A.R.T. Money Workshop
attendees. The S.M.A.R.T. money accounts are used in conjunction with financial
newsletters, educational books, stock charting software and data bases,
electronic mail, and the IPO Network Internet world wide web site for delivery
of current information on all members accounts, IPO research services and other
related services. Numerous products and services may be developed using any
components of the S.M.A.R.T. Money Workshop Training Curricula including
seminars, workshops, video training tapes, software, newsletters, and consulting
services.
d. IPO NETWORK HARD COPY LIBRARY AND ELECTRONIC DATA BASE DEFINED. The IPO
Network Hard Copy Library contains approximately 10,000 pages of proprietary
newsletters, print outs of 10,000 stock charts, and print outs of computer
spread sheets for over 10,000 IPO stocks from 1973 to present. The library is
believed to be the largest collection of research data and statistical analysis
on IPOs anywhere in the world. The newsletters contain prospectus summaries on
over 10,000 IPOs. The hard copy spreadsheets contain financial data on the IPO
Companies, offering prices, shares offered, and stock ticker symbols. The
library may be used to track gains and losses of nationally listed stocks (NYSE,
AMEX, and NASDAQ) from their IPO date to present.
The Electronic Data Base is a series of software, data files, spreadsheets, and
ticker symbol lists which create charts, and financial perforce rankings of all
nationally listed stocks from 1973 to present. Thousands of man-hours of data
entry and analysis have been conducted to create, organize and maintain the data
base, and to create output reports for the Internet World Wide Web Site and the
IPO Network Hard Copy Library.
e. IPO NETWORK INTERNET WORLD WIDE WEB SITE (ON LINE SERVICE) DEFINED: The IPO
Network World Wide Web Site is a commercial information service maintained on
the Internet World Wide Web. Approximately 300,000 accesses to the Web Site were
made in 1996. The Web Site contains summary information on approximately 1,000
IPOs conducted in 1995 and 1996. It also maintains information on new issues in
registration which plan to conduct IPOs within the next few months. The summary
information includes prospectus summary financial information including up to
five years sales and earnings history of each IPO, if available. The Web Site
also contains links to stock charts, and a stock quote service, FLEXQUOTE which
lets users calculate the theoretical gains of a fantasy stock account, and links
to other stock market financial sites, including the SEC EDGAR files.
<PAGE> 3
PAGE 36
f. TRADE MARKS, TRADE NAMES, LOGOS, AND INTELLECTUAL PROPERTY RIGHTS DEFINED:
The assets being sold include all trade names, logos, and intellectual property
rights associated with IPO Network, IPO Show, S.M.A.R.T. Money Workshops,
Internet Preview Channel, IPO Fund Managers, and IPO Investment Partnership. The
trade names, and logos have been used in the workbooks, television shows, and
printed brochures and materials, and in proposals, briefing charts, and Internet
World Wide Web Site demonstrations.
<PAGE> 4
PAGE 37
2. ASSETS FREE OF LIENS AND ENCUMBRANCES. Seller represents and warrants that
the assets being sold are free of any liens, encumbrances and sale and
conveyance of such assets will not breach any agreements to which the seller is
a party.
3. CONSIDERATION. The consideration to be paid to OTC Emerging Growth Fund, Inc.
and the other selling shareholders for the sale of assets defined above shall be
as follows:
a. This option agreement. $1.
b. To exercise this option agreement: 2,000,000 shares of common stock of
Hightec, Inc. to be exchanged for 100% of the issued and outstanding shares of
IPO Network, Inc. distributed as follows:
OTC Emerging Growth Fund - 80% 1,600,000 shares
10 additional designees none of which own 5% or more of the outstanding shares:
20% 400,000 shares
4. POTENTIAL CONFLICT OF INTEREST - NON ARMS LENGTH AGREEMENT. It is recognized
and agreed between the parties that a potential conflict of interest arises out
of the fact that Larry Stockett is the controlling shareholder of both the Buyer
and the Seller. As such the terms and conditions of the sale were not negotiated
in an arms length agreement. The determination of the amount of shares to be
issued, the book value per share, and any other relationship to measures of
value are arbitrary. The asset will be booked at $ .001 per share par value. By
expensing the research and development expense of the assets rather than
capitalizing the expenses of their development cost, the company will be able to
recognize a profit in the future much sooner because it will not have to
depreciate the asset over their useful life.
5. ARBITRATION. Any dispute arising from this agreement shall be settled by
arbitration under the rules of the American Arbitration Association, San
Francisco, California.
6. ENTIRE AGREEMENT. This represents the entire agreement between the parties
with regards to the subject matter.
7. AUTHORIZATION, SUBJECT TO APPROVALS, DEADLINE. The undersigned represent and
warrant that they are authorized to enter into this agreement on behalf of their
respective organizations. They shall cause all acts, and execute all documents
necessary to implement the intent of this agreement. This agreement is subject
to approval of the Boards of Directors and majority shareholders of each
company, prior to being effective. Such approval shall immediately be sought,
and shall be completed no later than December 31, 1996.
15. EFFECTIVE DATE. The effective date of this agreement shall be upon approval
of the Boards of Directors of each company.
For IPO Network, Inc.
OTC Emerging Growth Fund
/S/ Larry Stockett
- -------------------------------------------
Larry Stockett, President and Sole Director
Hightec, Inc.
Larry Stockett, President and majority shareholder
<PAGE> 1
PAGE 38
Exhibit 7.7 Press Release, Winners Magazine December 6, 1996
FOR IMMEDIATE RELEASE
CONTACT: IPO NETWORK
HIGHTEC, INC.
LARRY STOCKETT
(800) 928-0058
WINNERS IS A WINNER
STOCK MARKET NEWS/MAGAZINE OFFERS UNBIASED, COMPUTER GENERATED BUY, SELL, HOLD
COMMENTARIES ON OVER 7,000 U.S. STOCKS.
Tiburon, California (December 6, 1996) Hightec, Inc., (OTC-Bulletin Board- HTEH)
announced today that it had reached agreements with The IPO Network, Inc.,
Tiburon, CA, Wealth International Network, LLC. (WIN), Atlanta GA, and The New
Industrialist, Barnegat, NJ, to market and distribute a semi-monthly publication
customized for WIN members to be called WINNERS.. The first edition of Winners
was mailed to 8,000 members of WIN this week. Winners predicts stock market
winners (and losers) using a proprietary artificial intelligence software
technology known as "neuropro pattern recognition software". The New
Industrialist has been publishing Neuropro predictions for the past two years.
It's audited track record of 69% accuracy is reportedly the highest accuracy
rating of any published system that tracks the majority of stocks on the US and
Canadian stock exchanges. The company is now positioned to begin an aggressive
marketing campaign that will significantly increase the subscriber and
distributor base over the coming months. "Our goal is take Wall Street to The
Street, and to make the stock market an easier place for the average investor to
become a winner", according to WIN Chairman, Andre Brady.
The New Industrialist currently distributes over 100,000 copies in only 23
cities, but with the help of WIN the goal is to be in hundreds of cities by the
end of the year.
Why has there been so much interest in a new stock market publication? Because
Winners is based upon a new type of software which attempts to predict the price
changes of individual stocks using fundamental financial and technical trading
patterns to provide automatically updated buy, sell, hold and avoid
commentaries. Winners is not an ordinary stock market newspaper or magazine. IN
FACT, IT IS THE MOST EXTRAORDINARY STOCK MARKET PUBLICATION EVER OFFERED TO
INDIVIDUAL INVESTORS. The primary difference between Winners and every other
stock market publication in the world, is that Winners gives the answer to
virtually every investor's question...What will happen to the price of the stock
after I buy it?
Winners gives its unbiased, computer generated buy, sell, hold, and avoid
predictions and computer generated commentaries as to the basis of its
predictions, on the majority of U.S. and Canadian stock listed on the national
exchanges. Winners updates its predictions by monitoring over 60 financial and
news data bases 24 hours per day and it makes the answers available over the
Internet (http://www.ipo-network.com) to provide rapidly changing predictions
between the printed editions of the publication. How good are the predictions?
So good that the answers for the past 18 months have been audited with
approximately 70% accuracy. Considering the odds in Las Vegas are rarely greater
than 48% in your favor, a portfolio in which 70% of the stocks change in the
price direction predicted by the computer with designated exit prices, these
results are sufficient to improve the profits of almost every active investor.
Winners highly accurate predictions are generated using sophisticated artificial
intelligence software systems which scan and digest data twenty four hours per
day from over 60 data bases to reach its predictive conclusions. The software
determines and evaluates specific entry and exit points, the impact of
fundamental changes in financial conditions of each company, and the technical
trading patterns of each stock. The computer generated results are unbiased and
the predictions speak for themselves
<PAGE> 1
PAGE 39
Exhibit 7.8 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
