Exhibit 10.13
AGREEMENT
This AGREEMENT ("Agreement"), dated as of October 11, 2002 is by and
between each of the Shareholders listed on Exhibit A hereto (collectively, the
"Shareholders" and individually, a "Shareholder") and DWC Installations, Inc., a
Nevada corporation (the "Company"). The Shareholders and the Company are
sometimes hereinafter collectively referred to as the "Parties."
W I T N E S S E T H
WHEREAS, each of the Shareholders owns that certain number of shares of
common stock (the "Shares") of DWC Installations, Inc., a Nevada corporation
(the "Company") pursuant to the Stock Purchase Agreement dated October 11, 2002.
In the aggregate, such shares amount to 1,118,500 shares.
WHEREAS, each of the Shareholders acting individually and not in
concert has agreed to offer his, her or its Shares for sale to unrelated third
parties, either in reliance upon an exemption from registration pursuant to
Section 4(1) of the Securities Act of 1933 or in connection with a registered
offering of securities by the Company.
WHEREAS, each of the Shareholders is not an officer, director or
otherwise affiliated with the Company.
WHEREAS, each of the Shareholders warrants that his, her or its Shares
are freely tradable in the open market without restriction.
WHEREAS, each of the Shareholders has agreed to loan a portion of the
proceeds received from the sale of its Shares to Two Dog Net, Inc. (a related
party) who in turn will loan proceeds to the Company's parent company, to be
used to finance the ongoing operations of the Company.
WHEREAS, the Company has agreed to issue each of the Shareholders or
their designees four restricted shares of its common stock for every one freely
tradable share, a 4:1 ratio allocated accordingly to the current position each
Shareholder holds. In the aggregate, such freely tradable shares amount to
1,118,500 and therefore the Company will issue 4,474,000 of its common shares to
the Shareholders and their designees listed on Exhibit B. The Shareholders will
receive their shares from the Company in reliance on the exemption from
registration pursuant to Section 4(2) of the Securities Act of 1933.
NOW THEREFORE, in consideration of the promises and respective mutual
agreements herein contained, it is agreed by and between the Parties hereto as
follows:
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A G R E E M E N T
1. AGREEMENT TO ISSUE SHARES
1.1 Authorization of Shares. On or prior to the Closing (as
defined in Section 2 below), the Company shall have authorized the sale and
issuance of the Shares to Shareholders. The Shares shall have the rights,
preferences, privileges and restrictions set forth in the Amended Articles of
Incorporation of the Company.
1.2 Issuance of Shares. Subject to the terms and conditions
hereof, at the Closing (as hereinafter defined) the Company hereby agrees to
issue to each Shareholder, severally and not jointly, and each Shareholder
agrees to acquire from the Company, severally and not jointly, the number of
Shares set forth opposite such Shareholder's name on Exhibit A.
2. CLOSING, DELIVERY AND PAYMENT.
2.1 Closing. The closing of the issuance of the Shares under
this Agreement (the "Closing") shall take place at 1:00 p.m. on October 11,
2002, at the offices of the Company located at 2401 Crow Canyon Road, Suite 201,
San Ramon, California 94583 or at such other time or place as the Company and a
majority in interest of the Shareholders may mutually agree (such date is
hereinafter referred to as the "Closing Date").
2.2 Delivery. At the Closing, subject to the terms and
conditions hereof, the Company will deliver to each Shareholder a certificate
representing the number of Shares to be acquired at the Closing by such
Shareholder.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on a Schedule of Exceptions delivered by
the Company to the Purchasers at the Closing, the Company hereby represents and
warrants to each Purchaser as of the date of this Agreement as follows:
3.1 Organization, Good Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, to issue the Shares and to carry out the provisions of this
Agreement and to carry on its business as presently conducted and as presently
proposed to be conducted. The Company is duly qualified and is authorized to do
business and is in good standing as a foreign corporation in all jurisdictions
in which the nature of its activities and of its properties (both owned and
leased) makes such qualification necessary, except for those jurisdictions in
which failure to do so would not have a material adverse effect on the Company
or its business.
3.2 Capitalization; Voting Rights. The authorized capital
stock of the Company, immediately prior to the Closing, will consist of Seventy
Five Million (75,000,000) shares of Common Stock, (par value $.001 per share),
Two Million Two Hundred Eighty Seven Thousand Seven Hundred Fifty Five
(2,287,755) shares of which are issued and outstanding and Ten Million
(10,000,000) shares of Preferred Stock, (par value $.001 per share), none of
which are issued and outstanding. All issued and outstanding shares of the
Company's Common Stock (a) have been duly authorized and validly issued, (b) are
fully paid and nonassessable, and (c) were issued in compliance with all
applicable state and federal laws concerning the issuance of securities. The
rights, preferences, privileges and restrictions of the Shares are as stated in
the Amended Articles of Incorporation. The Series A Preferred Stock is
convertible into Common Stock on a one-for-one basis. When issued in compliance
with the provisions of this Agreement and the Restated Articles, the Shares will
be validly issued, fully paid and nonassessable, and will be free of any liens
or encumbrances other than liens and encumbrances created by or imposed upon the
Shareholders; provided, however, that the Shares may be subject to restrictions
on transfer under state and/or federal securities laws as set forth herein or as
otherwise required by such laws at the time a transfer is proposed.
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3.3 Authorization; Binding Obligations. All corporate action
on the part of the Company, its officers, directors and shareholders necessary
for the authorization of this Agreement, the performance of all obligations of
the Company hereunder and thereunder at the Closing and the authorization,
issuance and delivery of the Shares pursuant has been taken or will be taken
prior to the Closing. The Agreement, when executed and delivered, will be valid
and binding obligations of the Company enforceable in accordance with their
terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights, and (b) as limited by general principles of
equity that restrict the availability of equitable remedies. The issuance of the
Shares is not and will not be subject to any preemptive rights or rights of
first refusal that have not been properly waived or complied with.
3.4 Title to Properties and Assets; Liens, Etc. The Company
has good and marketable title to its properties and assets, and good title to
its leasehold estates, in each case subject to no mortgage, pledge, lien, lease,
encumbrance or charge, other than (a) those resulting from taxes which have not
yet become delinquent and, (b) minor liens and encumbrances which do not
materially detract from the value of the property subject thereto or materially
impair the operations of the Company. The Company is in compliance with all
material terms of each lease to which it is a party or is otherwise bound.
3.5 Patents and Trademarks. To the best of its knowledge the
Company owns or possesses sufficient legal rights to all patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information and
other proprietary rights and processes necessary for its business as now
conducted and as presently proposed to be conducted, without any known
infringement of the rights of others. There are no outstanding options, licenses
or agreements of any kind relating to the foregoing, nor is the Company bound by
or a party to any options, licenses or agreements of any kind with respect to
the patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and other proprietary rights and processes of any other
person or entity other than such licenses or agreements arising from the
purchase of "off the shelf" or standard products. The Company has not received
any communications alleging that the Company has violated or, by conducting its
business as presently proposed, would violate any of the patents, trademarks,
service marks, trade names, copyrights or trade secrets or other proprietary
rights of any other person or entity. The Company is not aware that any of its
employees is obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere with
their duties to the Company or that would conflict with the Company's business
as presently proposed to be conducted. Neither the execution nor delivery of
this Agreement, nor the carrying on of the Company's business by the employees
of the Company, nor the conduct of the Company's business as presently proposed,
will, to the Company's knowledge, conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any employee is now obligated.
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3.6 Litigation. There is no action, suit, proceeding or
investigation pending or to the Company's knowledge currently threatened against
the Company that questions the validity of this Agreement or the right of the
Company to enter into this Agreement, or to consummate the transactions
contemplated hereby, or which might result, either individually or in the
aggregate, in any material adverse change in the assets, condition, affairs or
prospects of the Company, financially or otherwise, or any change in the current
equity ownership of the Company, nor is the Company aware that there is any
basis for any of the foregoing. The Company is not a party or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality.
3.7 Compliance with Laws; Permits. To its knowledge, the
Company is not in violation of any applicable statute, rule, regulation, order
or restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties which violation would materially and adversely affect the business,
assets, liabilities, financial condition, operations or prospects of the
Company. No governmental orders, permissions, consents, approvals or
authorizations are required to be obtained and no registrations or declarations
are required to be filed in connection with the execution and delivery of this
Agreement and the issuance of the Shares, except such as has been duly and
validly obtained or filed, or with respect to any filings that must be made
after the Closing, as will be filed in a timely manner. The Company has all
franchises, permits, licenses and any similar authority necessary for the
conduct of its business as now being conducted by it, the lack of which could
materially and adversely affect the business, properties, prospects or financial
condition of the Company and believes it can obtain, without undue burden or
expense, any similar authority for the conduct of its business as planned to be
conducted.
3.8 Full Disclosure. The Company has provided the Shareholders
with all information requested by the Shareholders in connection with their
decision to acquire the Shares, including all information the Company believes
is reasonably necessary to make such investment decision. Neither this Agreement
nor any other statements or certificates made or delivered in connection
herewith contains any untrue statement of a material fact or knowingly omits to
state a material fact necessary to make the statements herein or therein not
misleading.
3.9 Compliance with Other Instruments, None Burdensome, etc.
The Company is not in violation of any term of its Articles of Incorporation or
Bylaws, nor is the Company in violation of or in default in any material respect
under the terms of any mortgage, indenture, contract, license, agreement,
instrument, judgment or decree to which it is a party or by which it or its
assets is bound and, is not in violation of any order, statute, law, rule or
regulation applicable to the Company, its assets or its activities, nor has it
received any information which would indicate such a violation or default. The
execution, delivery and performance of and compliance with this Agreement,
including the consummation of the transactions set forth herein will not (a)
result in any violation or default in any material respect under the terms of
any mortgage, indenture, contract, license, agreement, instrument, judgment or
decree to which it is a party or by which it or its assets is bound or (b) be in
conflict with or constitute a default under any such term or provision, or (c)
result in the creation of any mortgage, pledge, lien, encumbrance or charge upon
any of the properties or assets of the Company pursuant to any such term or
provision.
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3.10 Private Placement. Subject in part to the truth and
accuracy of the Shareholders' representations set forth in this Agreement, the
offer and issuance of the Shares as contemplated by this Agreement is exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"), and neither the Company nor any authorized agent acting
on its behalf will knowingly take any action hereafter that would cause the loss
of such exemption.
4. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS.
Each Shareholder hereby represents and warrants, with regard
to itself only, to the Company as follows (such representations and warranties
do not lessen or obviate the representations and warranties of the Company set
forth in this Agreement):
4.1 Requisite Power and Authority. Shareholder has all
necessary power and authority under all applicable provisions of law to execute
and deliver this Agreement and to carry out its provisions. All action on
Shareholder's part required for the lawful execution and delivery of this
Agreement have been or will be effectively taken prior to the Closing. Upon its
execution and delivery, this Agreement will be valid and binding upon
Shareholder, enforceable in accordance with its terms, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights, and (b) general
principles of equity that restrict the availability of equitable remedies.
4.2 Investment Representations. Shareholder understands that
the Shares have not been registered under the Securities Act. Shareholder also
understands that the Shares are being offered and sold pursuant to an exemption
from registration contained in the Securities Act based in part upon
Shareholder's representations contained in the Agreement. Shareholder hereby
represents and warrants as follows:
1. Purchaser Bears Economic Risk. Purchaser has
substantial experience in evaluating and investing in
private placement transactions of securities in
companies similar to the Company so that it is
capable of evaluating the merits and risks of its
investment in the Company and has the capacity to
protect its own interests. Purchaser must bear the
economic risk of this investment indefinitely unless
the Shares (or the Conversion Shares) are registered
pursuant to the Securities Act, or an exemption from
registration is available. Purchaser understands that
the Company has no present intention of registering
the Shares, the Conversion Shares or any shares of
its Common Stock. Purchaser also understands that
there is no assurance that any exemption from
registration under the Securities Act will be
available and that, even if available, such exemption
may not allow Purchaser to transfer all or any
portion of the Shares or the Conversion Shares under
the circumstances, in the amounts or at the times
Purchaser might propose.
2. Acquisition for Own Account. Purchaser is acquiring
the Shares and the Conversion Shares for Purchaser's
own account for investment only, and not with a view
towards their distribution.
3. Purchaser Can Protect Its Interest. Purchaser
represents that by reason of its, or of its
management's, business or financial experience,
Purchaser has the capacity to protect its own
interests in connection with the transactions
contemplated in this Agreement, and the Investor
Rights Agreement. Further, Purchaser is aware of no
publication of any advertisement in connection with
the transactions contemplated in the Agreement.
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4. Accredited Investor. Purchaser represents that it is
an accredited investor within the meaning of
Regulation D under the Securities Act.
5. Company Information. Purchaser has received and read
the Financial Statements and Business Plan and has
had an opportunity to discuss the Company's business,
management and financial affairs with directors,
officers and management of the Company and has had
the opportunity to review the Company's operations
and facilities. Purchaser has also had the
opportunity to ask questions of and receive answers
from, the Company and its management regarding the
terms and conditions of this investment.
6. Rule 144. Purchaser acknowledges and agrees that the
Shares, and, if issued, the Conversion Shares must be
held indefinitely unless they are subsequently
registered under the Securities Act or an exemption
from such registration is available. Purchaser has
been advised or is aware of the provisions of Rule
144 promulgated under the Securities Act as in effect
from time to time, which permits limited resale of
shares purchased in a private placement subject to
the satisfaction of certain conditions, including,
among other things: the availability of certain
current public information about the Company, the
resale occurring following the required holding
period under Rule 144 and the number of shares being
sold during any three-month period not exceeding
specified limitations.
7. Residence. If the Purchaser is an individual, then
the Purchaser resides in the state or province
identified in the address of the Purchaser set forth
on Exhibit A; if the Purchaser is a partnership,
corporation, limited liability company or other
entity, then the office or offices of the Purchaser
in which its investment decision was made is located
at the address or addresses of the Purchaser set
forth on Exhibit A.
B. Transfer Restrictions. Each Purchaser acknowledges
and agrees that the Shares and, if issued, the Conversion
Shares are subject to restrictions on transfer as set forth in
the Investor Rights Agreement.
ARTICLE 2
REPRESENTATIONS AND COVENANTS OF SHAREHOLDERS
2.1 Each of the Shareholders for himself, herself or itself alone
hereby represents and warrants that:
(a) The Shares owned by such Shareholder have been duly
authorized by the appropriate corporate action of the Company and are validly
outstanding and issued for lawful and proper consideration.
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(b) The Shares which he, she or it is selling and transferring
are free and clear of all liens, security interests, pledges, encumbrances,
charges, restrictions, demands and claims, of any kind and nature whatsoever,
whether direct or indirect or contingent.
(c) He, she or it is not now an officer, director or other
affiliate of the Company, as that term is defined within the meaning of the
federal securities laws.
(d) He, she or it has no equitable or beneficial interest in
the ownership of or proceeds from sales of the Shares owned by other
Shareholders.
(e) There are no "stop transfer" or similar instructions on
file with the Company's transfer agent concerning the Shares of such Shareholder
and, as to such Shareholder, his or its Shares may be freely traded in the
over-the-counter markets.
(f) He, she or it is acting alone for his, her or its own
benefit in connection with the sale of his, her or its Shares under this
Agreement.
ARTICLE 3
MISCELLANEOUS
3.1 Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the Parties hereto with respect to the transactions
contemplated hereby, and supersedes all prior agreements, arrangements and
understandings related to the subject matter hereof. No understanding, promise,
inducement, statement of intention, representation, warranty, covenant or
condition, written or oral, express or implied, whether by statute or otherwise,
has been made by any party hereto which is not embodied in this Agreement or the
written statements, certificates, or other documents delivered pursuant hereto
or in connection with the transactions contemplated hereby, and no Party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not so set forth.
3.2 Notices. Any notice, request, instruction, or other document
required by the terms of this Agreement, or deemed by any of the Parties hereto
to be desirable, to be given to any other Party hereto shall be in writing and
shall be given by facsimile, personal delivery, overnight delivery, or mailed by
registered or certified mail, postage prepaid, with return receipt requested, to
the following addresses:
To Shareholders: At the address set forth below each name on Exhibit A
hereto
The persons and addresses set forth above may be changed from time to time by a
notice sent as aforesaid. If notice is given by facsimile, personal delivery, or
overnight delivery in accordance with the provisions of this Section, said
notice shall be conclusively deemed given at the time of such delivery. If
notice is given by mail in accordance with the provisions of this Section, such
notice shall be conclusively deemed given five (5) days after deposit thereof in
the United States mail.
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3.3 Waiver and Amendment. Any term, provision, covenant,
representation, warranty or condition of this Agreement may be waived, but only
by a written instrument signed by the Party entitled to the benefits thereof.
The failure or delay of any Party at any time or times to require performance of
any provision hereof or to exercise its rights with respect to any provision
hereof shall in no manner operate as a waiver of or affect such Party's right at
a later time to enforce the same. No waiver by any Party of any condition, or of
the breach of any term, provision, covenant, representation or warranty
contained in this Agreement, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such condition or breach
or waiver of any other condition or of the breach of any other term, provision,
covenant, representation or warranty. No modification or amendment of this
Agreement shall be valid and binding unless it be in writing and signed by all
Parties hereto.
3.4 Choice of Law. This Agreement and the rights of each Seller and of
each Purchaser hereunder shall be governed by and construed in accordance with
the laws of the State of California, including all matters of construction,
validity, performance, and enforcement and without giving effect to the
principles of conflict of laws.
3.5 Jurisdiction. Each of the Sellers and the Company submit to the
jurisdiction of the Courts of the County of Alameda, State of California or a
Federal Court empaneled within the County of Alameda, State of California for
the resolution of all legal disputes arising under the terms of this Agreement.
3.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
3.7 Attorneys' Fees. Except as otherwise provided herein, if a dispute
should arise between the Parties hereto, including, but not limited to
arbitration, the prevailing party shall be reimbursed by the non-prevailing
party for all reasonable expenses incurred in resolving such dispute, including
reasonable attorneys' fees exclusive of such amount of attorneys' fees as shall
be a premium for result or for risk of loss under a contingency fee arrangement.
3.8 Taxes. Any income taxes required to be paid in connection with the
payments due hereunder, shall be borne by the Party required to make such
payment. Any withholding taxes in the nature of a tax on income shall be
deducted from payments due, and the Party required to withhold such tax shall
furnish to the Party receiving such payment all documentation necessary to prove
the proper amount to withhold of such taxes and to prove payment to the tax
authority of such required withholding.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first written hereinabove.
DWC INSTALLATIONS, INC.,
a Nevada corporation
/s/ Sholeh Hamedani
- -----------------------------------
BY: Sholeh Hamedani
ITS: President
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EXHIBIT A
"SHAREHOLDERS"
Farzin Cigarchi, an Individual
/s/ Farzin Cigarchi
- -----------------------------------
Larry Wheeler, an Individual
/s/ Larry Wheeler
- -----------------------------------
Reza Mizban, an Individual
/s/ Reza Mizban
- -----------------------------------
Lewis Wooler, an Individual
/s/ Lewis Wooler
- -----------------------------------
Ronald Jones, an Individual
/s/ Ronald Jones
- -----------------------------------
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