EXHIBIT 10.1
CAPITAL STOCK EXCHANGE AGREEMENT
THIS AGREEMENT is made this 21st day of January, 2004, by and between the
stockholders of ENVIRONMENTAL TECHNOLOGIES, INC., a Nevada corporation
("Entech"), the Entech stockholders being more fully described on the signature
page hereof (the "Entech Stockholders"), and CYBER PUBLIC RELATIONS, INC., a
Florida corporation (the "Company").
WHEREAS, the Entech Stockholders are the owners of all of the issued and
outstanding shares of the common stock of Entech, par value $0.001 per share
(the "Entech Stock"); and
WHEREAS, the Entech Stockholders desire to transfer all of their shares of
the Entech Stock to the Company in exchange for shares of the common stock of
the Company, par value $0.001 per share (the "Company Common Stock") as
hereinafter provided; and
WHEREAS, the Company's shareholders have agreed to help restructure the
Company's share capital by canceling 1,884,000 of their 2,199,000 shares,
leaving 315,000 shares issued and outstanding, and canceling any debts, to
facilitate the transaction described herein in exchange for a total of
US$275,000 to paid by the Entech Stockholders; and
WHEREAS, the Company has agreed to issue 9,550,000 of the Company Common
Stock on a one for one basis with the Entech Stockholders to acquire 100 percent
of Entech, which will represent 96.81 percent of the 9,865,000 shares of the
Company Common Stock to be issued and outstanding after the issuance of the
Company Common Stock to the Entech Stockholders as described herein;
NOW, THEREFORE, in consideration of the foregoing and the following mutual
covenants and agreements, the Entech Stockholders and the Company agree as
follows:
1. Exchange of the Entech Stock. Upon the terms and conditions set
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forth in this Agreement the Entech Stockholders shall exchange, sell, assign,
and transfer to the Company at the closing of this Agreement (the "Closing"),
free and clear of all liens and encumbrances, and the Company shall accept from
the Entech Stockholders at the Closing 9,550,000 shares of the Entech Stock
owned by the Entech Stockholders. In consideration therefor, the Company shall
deliver to the Entech Stockholders, in exchange for the Entech Stock at the
Closing, 9,550,000 shares of the Company Common Stock.
2. Restrictive Legend. All shares of the Company Common Stock to be
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delivered to the Entech Stockholders hereunder shall be issued pursuant to an
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act"), inasmuch such shares to be issued to the Entech
Stockholders will be issued for investment purposes without a view to
distribution. In addition, all of the Entech Stockholders will have had access
to information concerning the Company and its business prospects, as required by
the Securities Act. Furthermore, there will be no general solicitation or
advertising for the purchase of the shares of the Company Common Stock covered
by this Agreement. The securities are to be issued to the Entech Stockholders
after thorough discussions that comprise less than 35 Non-Accredited Investors
as defined in the Securities Act. Finally, the Company's stock transfer agent
will be instructed not to transfer any of such shares, unless such shares are
registered for resale or there is an exemption with respect to their transfer.
All shares of the Company Common Stock to be delivered to the Entech
Stockholders hereunder shall bear a restrictive legend in substantially the
following form:
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN
MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES
ACT
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AND ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT."
3. Additional Consideration. As additional consideration, the Entech
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Stockholders will cause Entech to deliver to the Company the sum of US$50,000 at
the Closing. At the closing of an investment in Entech by Barron Partners LP,
pursuant to that certain Stock Purchase Agreement dated January 13, 2004, by and
between Entech and Barron Partners LP, as amended (the "Barron Partners LP Stock
Purchase Agreement") the Entech Stockholders will cause Entech to deliver the
sum of US$225,000. The Barron Partners LP Stock Purchase Agreement is expressly
incorporated herein by reference for all purposes.
4. Issuance of Shares and Warrants to Barron Partners LP. Pursuant to
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the Barron Partners LP Stock Purchase Agreement, the Company will cause the
issuance of 2,000,000 shares of the Company Common Stock and the Warrants as
described in the Barron Partners LP Stock Purchase Agreement to be delivered to
Barron Partners LP upon the closing of the Barron Partners LP Stock Purchase
Agreement. Such 2,000,000 shares of the Company Common Stock and the Warrants
will be delivered to Bruce Smith at Harbour, Smith, Harris & Merritt, 404 N.
Green Street, Longview, Texas 75601, to be held in escrow until the closing of
the Barron Partners LP Stock Purchase Agreement and the payment of the
US$225,000 described in Paragraph 3 hereof.
5. Tax Treatment. The exchange described herein is intended to comply
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with all of the provisions of Section 351 of the Internal Revenue Code of 1986,
as amended and all applicable regulations thereunder. In order to ensure
compliance with said provisions, the parties agree to take whatever steps may be
necessary, including, but not limited to, the amendment of this Agreement.
6. Representations and Warranties of the Company. The Company hereby
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represents and warrants to the Entech Stockholders as follows:
(a) Power and Authority. The Company has full corporate power and
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authority to execute, deliver and perform this Agreement and any other agreement
to be executed in connection herewith (the "Other Agreements").
(b) Authorization. The execution, delivery and performance of
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this Agreement and the Other Agreements by the Company have been duly authorized
by all requisite corporate action.
(c) Binding Effect. Upon execution and delivery by the Company,
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this Agreement and the Other Agreements shall be and constitute the valid,
binding and legal obligations of the Company enforceable against the Company in
accordance with the terms hereof and thereof, except as the enforceability
hereof and thereof may be subject to the effect of (i) any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting creditors' rights generally, and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(d) Trading Status. The Company is a fully reporting company
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under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the Company Common Stock is registered under Section 12(g) of the Exchange Act.
Further, the Company Common Stock is traded on the Over the Counter Bulletin
Board maintained by the Nasdaq Stock Market, Inc. (the "OTCBB").
(e) No Default. Neither the execution and delivery of this
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Agreement or the Other Agreements nor full performance by the Company of its
obligations hereunder or thereunder will violate or breach, or otherwise
constitute or give rise to a default under, the terms or provisions of the
Articles of Incorporation or Bylaws of the Company or, subject to obtaining any
and all necessary consents, of any contract, commitment or other obligation of
the Company or necessary for the operation of the Company's business following
the Closing or any other material contract, commitment, or other obligation to
which the Company is a party, or create or result in the creation of any
encumbrance on any of the Company's assets.
(f) No Consents. No consent, approval or authorization of, or
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registration, declaration or filing with any third party, including, but not
limited to, any governmental department, agency, commission or other
instrumentality, will, except such consents, if any, delivered or obtained on or
prior to the Closing, be obtained or
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made by the Company prior to the Closing to authorize the execution, delivery
and performance by the Company of this Agreement or the Other Agreements.
(g) Organization and Standing of the Company. The Company is a
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duly organized and validly existing Florida corporation in good standing, with
all requisite corporate power and authority to carry on its business as
presently conducted.
(h) No Subsidiaries. The Company has no subsidiaries.
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(i) Capitalization of the Company. The Company is authorized by
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its Articles of Incorporation to issue 100,000,000 shares of the Company Common
Stock, 315,000 shares of which will be duly and validly issued and outstanding,
fully paid, and non-assessable as of the Closing, and 10,000,000 shares of
preferred stock, none of which are issued or outstanding. There are no
outstanding options, contracts, commitments, warrants, preemptive rights,
agreements or any rights of any character affecting or relating in any manner to
the issuance of the Company Common Stock or other securities or entitling anyone
to acquire the Company Common Stock or other securities of the Company.
(j) No Debts. The Company will have as of the Closing no
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outstanding debt or obligations whatsoever, including, but not limited to, any
income, real or personal property taxes.
(k) No Assets. The Company will have no assets as the Closing.
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(l) No Litigation. The Company is not now and will not be at the
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Closing subject to any pending or threatened litigation, claims or lawsuits from
any party.
(m) No Contracts. The Company is not a party to any contract,
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lease or agreement which would subject it to any performance or business
obligations after the Closing.
(n) No Employees. The Company does not now have and will not have
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at the Closing any employees.
(o) No Employment Contracts. The Company has no employment
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contracts or agreements with any of its officers, directors, or with any
consultants, employees or other such parties.
(p) No Benefit Plans. The Company has no insurance or employee
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benefit plans whatsoever.
(q) No Powers of Attorney. The Company has no outstanding powers
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or attorney and no obligations concerning its performance hereunder.
(r) The Company's Representations and Warranties True and
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Complete. All representations and warranties of the Company in this Agreement
and the Other Agreements will be true, accurate and complete in all material
respects as of the Closing.
(s) No Untrue Statements. No representation or warranty by the
----------------------
Company in this Agreement or in any writing furnished or to be furnished
pursuant hereto, contains or will contain any untrue statement of a material
fact, or omits, or will omit to state any material fact required to make the
statements herein or therein contained not misleading.
(t) Reliance. The foregoing representations and warranties are
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made by the Company with the knowledge and expectation that the Entech
Stockholders are placing complete reliance thereon.
7. Covenants of the Company. From the date of this Agreement to the
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Closing, the Company covenants as follows:
(a) It will to the best of its ability preserve intact the current
status of the Company and the trading capacity of the Company on the OTCBB.
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(b) It will furnish the Entech Stockholders with whatever
corporate records and documents are available, such as Articles of Incorporation
and Bylaws.
(c) It will not enter into any contract or business transaction,
merger or business combination, or incur any further debts or obligations
without the express written consent of the Entech Stockholders.
(d) It will not amend its Articles of Incorporation or Bylaws, or
issue any further shares of the Company Common Stock without the express written
consent of the Entech Stockholders.
(e) It will not issue any stock options, warrants or other rights
or interests in or to its shares of the Company Common Stock without the express
written consent of the Entech Stockholders.
(f) It will not encumber or mortgage any right or interest in the
shares of the Company Common Stock being cancelled as described in this
Agreement, and it will not transfer any rights to such shares of the Company
Common Stock to any third party whatsoever.
(g) It will not declare any dividend in cash or stock, or any
other benefit.
(h) It will not institute any bonus, benefit, profit sharing,
stock option, pension retirement plan or similar arrangement.
(i) It will elect prior to the Closing Steven D. Rosenthal, Robert
K. Christie, Barbara Tainter, Bret Covey, Douglas L. Parker, and Burr Northrop
as officers of the Company, as directed by the Entech Stockholders.
(j) It will obtain and submit to the Entech Stockholders at the
Closing resignations of its current officers other than Steven D. Rosenthal,
Robert K. Christie, Barbara Tainter, Bret Covey, Douglas L. Parker, and Burr
Northrop.
(k) It agrees to indemnify the Entech Stockholders against and to
pay any loss, damage, expense or claim or other liability incurred or suffered
by the Entech Stockholders by reason of the inaccuracy of any warranty or
representation contained in this Agreement.
8. Conditions Precedent to Obligations of the Entech Stockholders. All
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obligations of the Entech Stockholders under this Agreement are subject to the
fulfillment, prior to or at the Closing, of the following conditions which must
be satisfied as herein specified:
(a) Representations and Warranties True at the Closing. The
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representations and warranties of the Company herein shall be deemed to have
been made again at the Closing, and then be true and correct, subject to any
changes contemplated by this Agreement. The Company shall have performed all of
the obligations to be performed by it hereunder on or prior to the Closing.
(b) Resolutions. The counsel for the Entech Stockholders shall
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have received certified resolutions of a meeting of the Board of Directors of
the Company pursuant to which this Agreement and the transactions contemplated
hereby were duly and validly approved, adopted and ratified by the Company all
in form and content satisfactory to such counsel, authorizing (i) the execution,
delivery and performance of this Agreement, (ii) such other documents and
instruments as shall be necessary to consummate the transactions contemplated
hereby and thereby, and (iii) all actions to be taken by the Company hereunder.
(c) Other Matters. All corporate and other proceedings and
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actions taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments and documents mentioned herein
or incident to any such transaction shall be satisfactory in form and substance
to the Entech Stockholders and their counsel, whose approval shall not be
unreasonably withheld.
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9. Access to Records. Between the date of this Agreement and the
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Closing, the Company will afford any representative of the Entech Stockholders
free and full access to all premises, properties, books, accounts and other
records of the Company in order to provide the Entech Stockholders full
opportunity make whatever investigations of the Company as the Entech
Stockholders shall desire. If any such investigation or inquiry gives the
Entech Stockholders reason to believe that the Company may have breached any
term or condition of this Agreement, the Entech Stockholders shall so advise the
Company in writing and this Agreement will be terminated at the option of the
Entech Stockholders.
10. Expenses. Each party hereto shall pay such party's personal
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expenses and legal fees in connection with this transaction.
11. The Nature and Survival of Representations, Covenants and
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Warranties. All statements and facts contained in any memorandum, certificate,
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instrument, or other document delivered by or on behalf of the parties hereto
for information or reliance pursuant to this Agreement, shall be deemed
representations, covenants and warranties by the parties hereto under this
Agreement. All representations, covenants and warranties of the parties shall
survive the Closing and all inspections, examinations, or audits on behalf of
the parties, shall expire one year following the Closing.
12. Cooperation. The Company and the Entech Stockholders will each
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cooperate with the other, at the other's request and expense, in furnishing
information, testimony, and other assistance in connection with any actions,
proceedings, arrangements, disputes with other persons or governmental inquiries
or investigations involving the Entech Stockholders or the Company or the
transactions contemplated hereby.
13. Further Conveyances and Assurances. After the Closing, the Entech
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Stockholders and the Company, each, will, without further cost or expense to, or
consideration of any nature from the other, execute and deliver, or cause to be
executed and delivered, to the other, such additional documentation and
instruments of transfer and conveyance, and will take such other and further
actions, as the other may reasonably request as more completely to sell,
transfer and assign to and fully vest in the other ownership of the Entech Stock
or the Company Common Stock, as the case may be.
14. Closing. The date of the Closing hereunder (the "Closing Date")
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shall be on or before January 21, 2004, subject to acceleration or postponement
from time to time as the Entech Stockholders and the Company mutually agree.
The Closing shall be held at the law offices of Braun & Company, No. 702, 777
Hornby Street, Vancouver, British Columbia, Canada at 2:00 p.m., Pacific time,
on the Closing Date unless another hour or place is mutually agreed upon by the
Entech Stockholders and the Company.
15. Deliveries at the Closing by the Entech Stockholders. At the
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Closing, the Entech Stockholders shall deliver or caused to the Company the
following:
(a) Certificates representing 9,550,000 shares of the Entech
Common Stock, duly endorsed in favor of the Company.
(b) The sum of US$50,000 to be delivered by Entech in cash or by
wire transfer to an account to be designated by the Company.
(c) Any other document which may be necessary to carry out the
intent of this Agreement.
All documents reflecting any actions taken, received or delivered by or
caused to be delivered by the Entech Stockholders pursuant to this Paragraph 15
shall be reasonably satisfactory in form and substance to the Company and its
counsel.
16. Delivery Following the Closing. Following the Closing, at the
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closing of the Barron Partners LP Stock Purchase Agreement, the Entech
Stockholders will cause Entech to deliver to the Company the sum of US$225,000.
In addition, at the closing of the Barron Partners LP Stock Purchase Agreement,
the Company authorizes the delivery by Bruce Smith of the 2,000,000 shares of
the Company Common Stock and the Warrants in favor of Barron Partners LP as
described in Paragraph 4 hereof.
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17. Deliveries at the Closing by the Company. At the Closing, the
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Company shall deliver to the Entech Stockholders the following:
(a) Certificates representing 9,550,000 shares of the Company
Common Stock, duly endorsed in favor of the Entech Stockholders in the names and
amounts with respect to each of the Entech Stockholders as described herein,
each such certificate containing the restrictive legend described herein.
(b) A certificate executed by an officer of the Company with
knowledge of the facts to the effect that:
(i) All corporate and other proceedings or actions required
to be taken by the Company in connection with the transactions contemplated by
this Agreement have been taken, including, but not limited to, the election of
Steven D. Rosenthal, Robert K. Christie, Barbara Tainter, Bret Covey, Douglas L.
Parker, and Burr Northrop as officers of the Company as directed by the Entech
Stockholders and the resignations of all of the officers of the Company other
than Steven D. Rosenthal, Robert K. Christie, Barbara Tainter, Bret Covey,
Douglas L. Parker, and Burr Northrop;
(ii) All requisite governmental approvals and authorizations
necessary for consummation by the Company of the transactions contemplated
hereby have been duly issued or granted; and
(iii) There has not been issued, and there is not in effect,
any injunction or similar legal order prohibiting or restraining consummation of
any of the transactions herein contemplated, and no legal or governmental
action, proceeding or investigation which might reasonably be expected to result
in any such injunction or order is pending.
(c) Any other document which may be necessary to carry out the
intent of this Agreement.
All documents reflecting any actions taken, received or delivered by the
Company pursuant to this Paragraph 17 shall be reasonably satisfactory in form
and substance to the Entech Stockholders and their counsel.
18. Assignment. This Agreement shall be binding upon and inure to the
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benefit of the successors of each of the parties hereto, but shall not be
assignable by any party without the prior written consent of all of the other
parties, which consent shall be subject to any such other party's sole, absolute
and unfettered discretion.
19. Notices. All notices, requests, demands, and other communications
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hereunder shall be in writing and delivered personally or sent by registered or
certified United States mail, return receipt requested with postage prepaid, by
facsimile, or by e-mail, if to the Entech Stockholders, addressed to Dr. Steven
D. Rosenthal at 8513 Rochester Avenue, Rancho Cucamonga, California 91730,
telecopier (909) 477-3031, and e-mail steve@cpidevelopment.com; and if to the
Company, addressed to Mr. Thomas Braun at Braun & Company, No. 702, 777 Hornby
Street, Vancouver, British Columbia, Canada V6Z 1S2, telecopier (604) 733-7410,
and e-mail tbraun@telus.net. Any party hereto may change its address upon 10
days' written notice to any other party hereto.
20. Construction. Words of any gender used in this Agreement shall be
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held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise.
21. Waiver. No course of dealing on the part of any party hereto or
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its agents, or any failure or delay by any such party with respect to exercising
any right, power or privilege of such party under this Agreement or any
instrument referred to herein shall operate as a waiver thereof, and any single
or partial exercise of any such right, power or privilege shall not preclude any
later exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
22. Cumulative Rights. The rights and remedies of any party under this
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Agreement and the instruments executed or to be executed in connection herewith,
or any of it, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
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23. Invalidity. In the event any one or more of the provisions
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contained in this Agreement or in any instrument referred to herein or executed
in connection herewith shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect the other provisions of this Agreement or any such other
instrument.
24. Time of the Essence. Time is of the essence of this Agreement.
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25. Multiple Counterparts. This Agreement may be executed in one or
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more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. A facsimile transmission
of this signed Agreement shall be legal and binding on all parties hereto.
26. Controlling Agreement. In the event of any conflict between the
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terms of this Agreement, the Barron Partners LP Stock Purchase Agreement, or any
other agreement referred to herein, the terms of the Barron Partners LP Stock
Purchase Agreement shall control.
27. Law Governing. This Agreement shall be construed and governed by
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the laws of the Province of British Columbia, and all obligations hereunder
shall be deemed performable in Vancouver, British Columbia. The parties agree
to submit to the exclusive jurisdiction of British Columbia.
28. Entire Agreement. This instrument contains the entire
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understanding of the parties with respect to the subject matter hereof and may
not be changed orally, but only by an instrument in writing signed by the party
against whom enforcement of any waiver, change, modification, extension, or
discharge is sought.
IN WITNESS WHEREOF, this Agreement has been executed in multiple
counterparts on the date first written above.
CYBER PUBLIC RELATIONS, INC.
By
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Maria Trinh, President
THE ENTECH STOCKHOLDERS
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Name Common Signature
- ------------------------------ ----------- -----------------------------------
Stock Owned
- ------------------------------ ----------- -----------------------------------
Steven D. Rosenthal, Ph.D. 1,000,000
Robert K. Christie 3,750,000
Barbara Tainter 250,000
Bret Covey 650,000
Burr Northrop 500,000
Douglas L. Parker 1,250,000
Grover G. Moss 910,000
James R. Christ 200,000
Donald G. St. Clair 40,000
San Diego Torrey Hills Capital 375,000
Clayton Chase 375,000
Norman T. Reynolds 250,000
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Total 9,550,000
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