SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) FEBRUARY 3, 1999
CAPITAL RESERVE CORPORATION
(Exact name of registrant as specified in its charter)
COLORADO 0-17232 84-0888594
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
#11-1861 BEACH AVENUE, VANCOUVER, BRITISH COLUMBIA V6G 1Z1 CANADA
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (604) 687-4828
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(Former name or former address, if changed since last report)
Exhibit index on consecutive page 2 Consecutive page 1 of 6
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On October 6, 1998, Ralph W. Newton, Jr. and Patricia L. Newton entered
into a Stock Purchase Agreement to sell their combined 140,000 shares
of Class B Preferred Stock to Glen C. Loder. A copy of the Stock
Purchase Agreement is filed as an exhibit to this report. The
transaction closed on February 3, 1999. Mr. Loder owns a majority of
the outstanding shares of Class B Preferred Stock and as a class, the
holders of Class B Preferred Stock have the right to elect a majority
of the directors.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Not applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Not applicable.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
Not applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired: Not applicable
(b) Pro forma financial information: Not applicable
(c) Exhibits:
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REGULATION CONSECUTIVE
S-K NUMBER DOCUMENT PAGE NUMBER
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99.1 Stock Purchase Agreement dated October 6, 1998. 4
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ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
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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.
CAPITAL RESERVE CORPORATION
February 16, 1999 By: /S/GLEN C. LODER
----------------------------
Glen C. Loder
President
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EXHIBIT 99.1
STOCK PURCHASE AGREEMENT
4
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STOCK PURCHASE AGREEMENT
Agreement, made this 6th day of October, 1998, by and between RALPH W.
NEWTON, JR. and PATRICIA L. NEWTON ("Sellers") and GLEN C. LODER ("Buyer").
In consideration of the mutual promises and covenants herein contained,
the parties hereto agree as follows:
ARTICLE I
PURCHASE
1.01 PURCHASE OFFER. Subject to the terms and conditions hereof, Buyer
hereby agrees to purchase 140,000 Shares of Class B Preferred Stock (the
"Shares") of Capital Reserve Corporation, a Colorado corporation (the
"Company"), for an aggregate purchase price of $40,000 and the stock options
described in Section 1.04 below. Buyer shall cause the Company to engage in a
private placement of its common stock. Buyer is to receive the first $40,000 of
the proceeds of such offering and shall use such proceeds to pay the purchase
price.
1.02 BUYER'S ACKNOWLEDGMENTS. Buyer acknowledges that since the Shares
are "restricted securities" as that term is defined in Rule 144 of the General
Rules and Regulations under the Act, Buyer will not offer, sell, transfer or
otherwise dispose of the Shares except in a transaction which does not violate
the Securities Act of 1933, as amended (the "Act").
1.03 BUYER'S COVENANTS. Buyer acknowledges that the Shares may be
deemed to be "control shares" of the Company and that the Company, whose Common
Stock is registered under the Securities Exchange Act of 1934, is subject to
certain reporting obligations to the United States Securities and Exchange
Commission (the "Reporting Obligations"). Buyer agrees that it will comply with
all such applicable Reporting Obligations in connection with this purchase and
that it will cause the Company to comply with such Reporting Obligations as
well.
1.04 STOCK OPTIONS. As additional consideration for the Shares, Buyer
shall cause the Company to issue to the Sellers options to purchase up to
200,000 shares of Common Stock at a price of $0.25 per share. The options shall
be exercisable for a two-year period. Buyer agrees to cause the Company to
register the shares issuable upon exercise of the options. Appropriate
adjustment shall be made in the case of stock splits, reverse stock splits,
other recapitalizations, or the exchange of securities to effect a merger or
acquisition of the Company. Further, the options shall contain the same type of
anti-dilution provisions typically found in underwriter's warrants (a sample of
which is attached hereto as Exhibit A), which will protect Sellers in the event
of the sale by the Company of shares of its common stock at a price below the
exercise price.
1.05 SELLERS' COVENANTS. Ralph W. Newton Jr. is presently the President
and a director of the Company. Mr. Newton acknowledges that ownership of the
Shares will give Buyer the power to elect a majority of the board of directors
of the Company. Mr. Newton agrees to voluntarily submit his resignation as an
officer and director of the Company, and agrees to obtain the resignation of
Linda M. Opfer. Further, Mr. Newton agrees to appoint Buyer and his designees as
officers and directors of the Company. In addition, Sellers agree to cause the
Class B Preferred Stock of the Company to be convertible if Buyer so desires.
1.06 VOTING RIGHTS. Sellers agree to execute proxies naming Buyer as
their proxy to vote the Shares. The proxies shall be in effect until the earlier
of (i) the termination of this Agreement, or (ii) December 31, 1998.
[initials]
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ARTICLE II
INDEMNIFICATION
2.01 BUYER'S INDEMNIFICATION. Buyer shall indemnify Ralph W. Newton,
Jr. and hold him harmless from and against any and all claims arising out of or
in connection with Buyer's ownership of the Shares and management of the Company
after the date of this Agreement.
2.02 NEWTON'S INDEMNIFICATION. Ralph W. Newton, Jr. shall indemnify
Buyer and hold him harmless from and against any and all claims arising out of
or in connection with Mr. Newton's ownership of the Shares and management of the
Company prior to the date of this Agreement.
ARTICLE III
CLOSING AND TERMINATION
3.01 CLOSING. The closing of this transaction shall be held at the
offices of Dill Dill Carr Stonbraker & Hutchings, P.C., Denver, Colorado, no
later than December 31, 1998. Upon execution of this Agreement, Sellers shall
deposit the certificates representing the Shares and signed stock powers. Upon
the delivery of $40,000 for the Shares by Buyer, Dill Dill Carr Stonbraker &
Hutchings, P.C. shall release the stock certificate and stock powers to Buyer.
If Buyer shall not have delivered $40,000 to Dill Dill Carr Stonbraker &
Hutchings, P.C. by December 31, 1998, the stock certificates and stock powers
shall be returned to Sellers and this Agreement shall be deemed terminated.
3.02 MUTUAL TERMINATION. This Agreement may be terminated prior to
December 31, 1998 by the mutual agreement of the parties.
3.03 CHANGE OF MANAGEMENT UPON TERMINATION. Should this Agreement
terminate, Buyer agrees to cooperate with Sellers in effecting a change in the
management of the Company. Such cooperation shall include tendering resignations
and appointing new officers and directors if requested by Sellers.
3.04 COSTS. Buyer shall bear the cost of any transfers of the stock
certificates after closing and the expenses incurred in connection with this
Agreement.
3.05 TIME OF THE ESSENCE. Buyer acknowledges that time is of the
essence with respect to the closing of this purchase.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
"Sellers" "Buyer"
/S/RALPH W. NEWTON, JR. /S/GLEN C. LODER
Ralph W. Newton, Jr. Glen C. Loder
/S/RALPH W. NEWTON, JR.
Patricia L. Newton by Ralph W. Newton, Jr.
As her Attorney-in-Fact
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