STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of August 2, 2000, (the
"Agreement") by and among Pacific Charter Financial Services Corporation, a
Nevada corporation, hereinafter referred to as "Buyer" and Industrial Rubber
Innovations, Inc., a Florida corporation (the "Company"), hereinafter referred
to as "Seller"; and David Foran, Nancy Sheo and Steven Tieu, hereinafter
referred to as " Individual Sellers".
RECITALS
WHEREAS, the Company has been unable to raise funds to keep the business
operating, as can be noted in the Company minutes, attached hereto in Schedule
F, and incorporated by this reference,
WHEREAS, the January 10, 2000 Independent Auditors Report to the Company
stated "unless the Company attains future profitable operations and/or obtains
financing there is substantial doubt about the Company's ability to continue as
a going concern."
WHEREAS, management desires to transfer control of the Company in order that
funds may be obtained to continue the business.
WHEREAS, the Company sought the assistance of Pacific Charter Financial
Services Corporation (Buyer) to reorganize and restructure the corporation.
WHEREAS, The Company offers 43,704,773 shares to Buyer of its Common Stock
(the Common"Shares"), which will constitute 87.4% Percent of Fifty Million
(50,000,000) authorized stock, for the assumption of one half of the Company's
debt (approximately $303,000) and $22,000 cash by Buyer.
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller the Shares upon the terms and subject to the conditions of this
Agreement.
NOW, THEREFORE, in consideration of the above, and of the mutual covenants
herein contained and other good and valuable considerations, it is agreed as
follows:
SECTION ONE
Sale of Stock, Employment of Officers,
Additional Members to be Elected to the Board
1.01 Seller hereby agrees to sell, assign and transfer to Buyer 87.4% of the
authorized shares of Industrial Rubber Innovations, Inc. common stock under the
terms and conditions of this Stock Purchase Agreement.
1.02 Seller agrees to the following:
1. To cancel all options and warrants outstanding; there being no preferred
stock,
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2. Thereafter, to offer for sale to Buyer 43,704,773 shares of its common
stock in exchange for cash of $22,000 and the assumption of one half of its
approved debt (not to exceed $303,000) by Buyer.
i. Thereafter, upon stockholder approval of the authorization of additional
shares, Buyer to receive from Seller 6,000,000 shares of the Company's common
stock in exchange for the assumption of the balance of approved Company's debt
(not to exceed $303,000, including the Buyer's prior assumption of $303,000, for
a total of $606,000):
A. Such shares of the Company shall be issued under S.E.C. Rule 144 with a
legend for one (1) year.
B. Such shares shall be non-diluted for a term of three years.
C. Should a registration of stock be undertaken by the Company, the Company
herewith agrees to include such shares as Buyer may want to register from those
received pursuant to this Agreement.
3. Buyer may provide additional cash as may be required to operate the
Company until either (1) there is sufficient revenue from product sales, or (2)
the Company has obtained sufficient debt or equity capital.
1.03 This Agreement is contingent upon the purchase of the assets of Century
Rubber, LLC. by the Company, as stated in the enclosed Asset Purchase
Agreement, attached hereto and incorporated herein by this reference.
1.04 Seller will use its best effort to provide buyer approximately
2,100,000 free trading shares from the Individual Sellers, pursuant to 1.07
below at no additional consideration,
1.05 Buyer agrees to the continuation of the employment for 5 years of
Steven Tieu, Nancy Sheo and Dave Foran (including yearly renewal of NAFTA TN
Permit of Dave Foran), pursuant to their existing employment agreements with the
Company with the following amendments:
1. Each of these persons will receive two (2%) percent of Company's
outstanding stock (non diluted for a term of two years) within 30 days from the
consummation of this Stock Purchase Agreement.
2. Future salaries and perks shall be set by the Company's Compensation
Committee and approved by the Company's Board of Directors. Salaries and perks
shall be set in accordance with industry standards and tied to the Company's
profitability.
1. First Compensation Committee to include Dave Foran and Steven Tieu.
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1.05 After the Closing, Buyer agrees to cause the Company to pay fifty
percent (50%) of the overdue salaries of Nancy Sheo, Steven Tieu and David
Foran, totaling $45,747.42 within twenty (20) days from, and to the extent, that
monies are raised from the Company's Regulation D, Rule 506 Private Placement
Offering Memorandum.
The Company shall keep the remaining Fifty Percent (50%) of the overdue salaries
of Nancy Sheo, Steven Tieu and David Foran as a reserve against claims by the
Federal Government and State of California that payroll taxes should have been
deducted from the compensation paid to such officers and other Company
personnel. The reserve shall be kept until the earlier of (i) the expiration of
the statute of limitations on such claims or (ii) the final settlement of such
claims and payment of all amounts due, if any. The Company to retain an
accounting firm as soon as possible to ascertain taxes due, upon settlement, if
any, The balance of the reserved funds shall then be released to the above
individuals.
1.06 Immediately after the Closing, Buyer shall cause the election of Alan
Painter, Helen Gibbel and John Mills to the Company's Board of Directors.
1.07 The Individual Sellers Nancy Sheo, Steven Tieu and David Foran, hereby
agree to use their best efforts to sell, assign and transfer to Buyer
approximately 2,100,000 (before the 100 to1 reverse split) "free trading"
Company shares belonging to themselves as well other stockholders, within (30)
days after the Closing, without any additional consideration.
The Individual Sellers Nancy Sheo, Steven Tieu and David Foran, represent and
warrant that the approximately 2,100,000 shares of the Seller will have good and
marketable title to such, when they are transferred to Buyer by such Individual
Sellers, and that there will be no liens of encumbrances on such shares.
1.08 Buyer shall acquire from the Seller, and Seller shall deliver to Buyer,
87.4% of the 50,000,000 authorized shares of Industrial Rubber Innovations,
Inc., and all documents necessary, in the opinion of Buyer's counsel, to effect
transfer of control of such shares, and the books, records, inventory (and all
other assets of the Company pursuant to this Purchase Agreement) to Buyer.
1.09 Buyer shall assume in the two stages set forth in Sections 1.02 and
1.02b.i. the liabilities as listed in Schedule "D" herein.
1.10 Due Diligence. Each Company has undertaken its respective due
diligence.
1.11 Closing. The Closing shall take place as stated below between Buyer
and Sellers, and may be extended by agreement in writing by the parties. The
closing ("Closing") of the transaction contemplated by this Agreement shall be
upon execution of this agreement which date shall then be the Closing Date
("Closing Date") and the following:
1. Seller shall provide to Buyer certificates as listed on Schedule B in the
total amount of 43,704,773 Shares of the Company's common stock, together
with all documents required to effect transfer of control, books, records
(effective as of the closing Date), and
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2. Seller shall provide the opinion of counsel of the Company's corporate's
status and shall transfer all books and records held by Company to Buyer.
3. Upon Closing, the $22,000 of funds advanced by Buyer to the Company shall
be considered the total cash portion of the purchase price.
SECTION TWO
Representations and Warranties
2.01 Seller represents and warrants as follows:
2.02 The Corporation is a duly organized, validly existing corporation in
good standing under the laws of the State of Florida.
2.03 The shares authorized and issued and presently outstanding of each
class of stock of the corporation are correctly listed in Schedule "A" and in
the minute book of the corporation.
2.04 The warrants, options rights, bonds and debentures presently
outstanding have been canceled except those listing in Schedule "C" herein.
2.05 It has not entered into any agreements or contracts, nor created any
obligation
or lien on behalf of the Company, except in the regular course of business, and
all such contracts and obligations are reflected in the books and records of the
Company
and in Exhibit D, attached hereto and incorporated herein by this reference, if
applicable.
2.06 It is authorized to issue the Shares which are being issued free and
clear of any liens or hypothecation whatsoever.
2.07 All of the Company's books and records, fees and taxes have been
brought current, and the cash in all accounts totals $17,961.50. Seller has
caused an unaudited balance sheet dated July 31, 2000 to be completed and signed
by all Directors and Officers as of the Closing and attached hereto as Schedule
"E".
2.08 The Company is currently in good standing with all regulatory agencies
and is listed as a publicly traded corporation on the NASDAQ Bulletin Board,
listed under the symbol IRIB.
2.09 Has satisfied the "good standing" requirements of the State of Florida
and has obtained their current certificate of good standing authorizing doing
business.
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2.10 This Agreement constitutes a valid and binding agreement of the Seller,
enforceable against the Seller, in accordance with its terms. In this regard,
Seller represents and warrants that (i) pursuant to Florida Statutes 607.0621,
607.0902(1)(d) 7, 607.0902(5), and Article IX, 9.2 of the Company's Articles of
Incorporation, the Company's issued to Buyer of 43,704,773 shares of the
Company's stocks pursuant to this agreement is not subject to approval by the
shareholders of the Company, and (ii) the Company's Board of Directors has
determined that the consideration received, or to be received, pursuant to this
Agreement for the shares of the Company stock to be issued, is adequate. Seller
has completed all corporate or other proceedings necessary to authorize this
Agreement.
2.11 The Buyer hereby represents and warrants to the Seller as follows:
a. The Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of its incorporation and has the corporate
power to enter into this Agreement and the other documents and instruments to be
executed and delivered by it pursuant hereto and thereto, and to carry out the
transactions contemplated hereby and thereby.
2. This Agreement constitutes a valid and binding agreement of the Buyer
enforceable against the Buyer in accordance with its terms. Buyer has completed
all corporate or other proceedings necessary to authorize this Agreement.
3. After the Closing, Buyer agrees to provide corporate finance services
under a Consulting Agreement upon the issuance and transfer of additional
Company shares, pursuant to Rule 506 Private Placement Offering Memorandums in
such amounts as approved by the Company's Board of Directors to attempt to
secure additional capital for the Company. Corporate finance services shall be
provided on a best efforts basis. All legal, accounting, travel and marketing
expenses relating to the Offering will be paid by the Company.
SECTION THREE
Confidentiality
3.01 Seller agrees that unless and until the Closing has been consummated,
Seller and its representatives will hold in strict confidence, and will not use
to the detriment of the Company or its shareholders (e.g. Buyer herein), all
data and information with respect to the business of the Buyer obtained in
connection with this agreement. If the transaction contemplated by this
agreement is not consummated, Sellers will return to Buyer all the data and
information that Buyer may reasonably request, including, but not limited to,
worksheets, manuals, lists, memoranda, and other documents prepared, or made
available to Sellers by Buyer in connection with this transaction.
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SECTION FOUR
Delivery, Purchase, Loan, and
Regulation D, Rule 506, Private Offering Memorandum
4.01 Seller shall deliver at time of closing to Buyer, free and clear of
all liens, encumbrances and restrictions on transfer, certificates for the
shares of stock sold, pursuant to this Stock Purchase Agreement, and accompanied
by all other documents necessary, in the opinion of Buyer's counsel, for the
effective transfer of ownership of the Corporation, including, but not limited
to, minutes of the Company's Board of Directors approving this Agreement, and
determining that the consideration to be received from Buyer for the Company's
shares to-be-issued to Buyer, is adequate.
4.02 The Purchase Price will be the assumption of the liabilities listed in
Schedule "D", attached hereto and incorporated herein by this reference, at time
of closing to Sellers.
4.03 Buyer has loaned funds in the amount of $22,000 in cash prior to
closing to Sellers, evidenced by a Demand Promissory Note, secured by the assets
of the Company.
4.04 Buyer will assist the Company to prepare and market one or more
Regulation D, Rule 506 Private Placement Offering Memorandum to raise $1,000,000
or as agreed upon by the newly elected Board of Directors.
4.05 Buyer may advance additional funds to the Company while the Regulation
D, Rule 506 Offering Memorandums are being prepared and marketed.
SECTION FIVE
Closing
5.01 Closing shall take place at Los Angeles, California, on August 3, 2000,
time and place to-be-set prior to the meeting by mutual agreement, or as
mutually agreed between the parties hereto.
SECTION SIX
Post Closing
6.01 After the Closing, Buyer shall offer to provide services under Buyer's
Consulting Agreement, subject to the approval of the Company's Board of
Directors, including the preparation of one or more Regulation D, Rule 506
Offering Memorandums for the minimum amount of $1,000,000.
SECTION SEVEN
Miscellaneous
7.01 This instrument embodies the entire agreement between Buyer and
Sellers, and can not be modified or terminated, except by an agreement in
writing.
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7.02 This agreement shall be binding on, and shall inure to the benefit of,
the parties to it and their respective heirs, legal representatives, successors,
and assigns; provided, however, that Buyer may not assign any of its rights
under this Agreement, except to a wholly owned subsidiary of Buyer. No such
assignment by Buyer shall relieve Buyer of any of its obligations or duties
under this Agreement.
7.03 Any and all notices given by either party to the other pursuant to this
Agreement, at an address known by the Company or provided by a transfer agent or
such other addresses and facsimile numbers as shall be furnished by any party in
the manner for giving notices hereunder, and any such notice, demand, request,
or other communication shall be deemed to have been given as of the date so
delivered or sent by facsimile transmission, three days after the date so
mailed, or one day after the date so sent by overnight delivery to the parties
to this Stock Purchase Agreement.
7.04 Headings in this Agreement are for convenience only, and shall not be
used to interpret or construe its provisions.
7.05 This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original; but all of which together shall constitute one and
the same instrument.
7.06 Entire Agreement. This Agreement represents the entire agreement
between the parties relative to the subject matter hereof. All previous
agreements between the parties, whether written or oral, have been merged into
this Agreement. This Agreement alone fully and completely expresses the
agreement of the parties relating to the subject matter hereof.
7.08 Survival; Termination. The representations, warranties, and covenants
of the respective parties shall survive the Closing Date and the
consummation of the transaction herein contemplated.
7.09 This Agreement shall be construed according to the laws of the
State of California.
7.10 Signature may be in counterpart by facsimile, and accepted to be
binding as that of an original.
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IN WITNESS WHEREOF, the parties have executed the Stock Purchase Agreement on
the date and year first above written.
"BUYER"
Pacific Charter Financial Services Corporation,
a Nevada corporation
By: /s/ Alan Painter
____________________________
Alan Painter, Chairman & CEO
By: /s/ Helen Gibbel
____________________________
Helen Gibbel, President
"SELLER"
Industrial Rubber Innovations, Inc.,
a Florida corporation
By: /s/ Dave Foran Date: August 9, 2000
Dave Foran, President and Chairman
By: /s/ Steven Tieu Date: August 9, 2000
Steven Tieu, Director
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"INDIVIDUAL SELLERS"
/s/ Dave Foran
_______________________________________ Date: August 9, 2000
Dave Foran
/s/ Steven Tieu
_______________________________________ Date: August 9, 2000
Steven Tieu
/s/ Nancy Sheo
_______________________________________ Date: August 9, 2000
Nancy Sheo
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SCHEDULE "A"
The shares authorized and issued and presently outstanding of each class of
stock of the corporation are correctly listed in this Exhibit "A" and the minute
book of the corporation.
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EXHIBIT "B"
Pacific Charter Financial Services Corporation
Shareholder Distribution
Name Certificate No. Amount
---- ---------------- ------
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SCHEDULE "C"
The warrants, options, rights, bonds and debentures presently outstanding have
been canceled, except those listing in Schedule "C" herein.
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SCHEDULE "D"
Contracts and Obligations Reflected in the Books and Records of the Company.
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SCHEDULE "E"
Unaudited Financial Statements,
with list of personal property, equipment, molds, inventory, furniture and
fixtures
of the Company
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SCHEDULE "F"
Industrial Rubber Innovations, Inc.
Board of Director Minutes
