SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14c-5(d)(2))
[ [ Definitive Information Statement
FLEXXTECH CORPORATION
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party: FLEXXTECH CORPORATION
4) Date Filed:
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
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ITEM 1: INFORMATION REQUIRED BY ITEMS OF SCHEDULE 14C
1. Date, Time and Place of Meeting:
(a) Action by Written Consent of Shareholders on or about December 6,
2002, at the Company's headquarters.
Principal Executive Office of the Registrant:
20902 Bake Parkway, Suite 112
Lake Forest, California 92630
Telephone: (949) 460-7744
(b) Approximate date on which the Written Consent was given to security
holders:
On or about December 6, 2002
6. VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Company reported in its Form 10-QSB Quarterly Report dated June 30,
2002 that it had approximately 28,266,425 shares of Common Stock
outstanding, each of which was entitled to one vote on all matters to
come before the stockholders. On November 6, 2002, the Company had
82,186,807 shares of Common Stock outstanding, each of which was
entitled to one vote on all matters to come before the stockholders.
The Company will solicit a written consent of shareholders from the
seven larger shareholders of the Company who in the aggregate hold more
than 50% of the Company's outstanding Common Stock, seeking their
approval to amend the Company's Articles of Incorporation to change the
Company's name to Paradigm Holdings, Inc. and to provide for 100,000
Shares of Preferred Stock, to be issued in series with such rights and
preferences as may be set from time to time by the Board of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT
The following table sets forth, as of November 6, 2002, the amount and
nature of beneficial ownership of each person known to be a beneficial
owner of more than five percent of the issued and outstanding shares of
our Company. The following information is based on 82,186,807 shares
issued and outstanding as of November 6, 2002:
(1) (2) (3)
Name and Address Amount and Nature
Title of of Beneficial of Beneficial Percent
Class Owner Owner of Class
-----------------------------------------------------------------------------------------
Common VLK Capital Corp. (1) 3,025,000 3.681%
3620 NW Westside Road
McMinnville, OR 97128
Common Gregport Land and 650,000 0.791%
Investment (2)
3620 NW Westside Road
McMinnville, OR 97128
Common Greg Mardock (1)(2) 2,283,000 2.778%
3620 NW Westside Road
McMinnville, OR 97128
2
Common Delaware Charter (IRA) 10,272,144 12.499%
FBO Greg Mardock
3620 NW Westside road
McMinnville, OR 97128
Common Edward Fearon 6,979,250 8.492%
14908 Havenshire Place
Dallas, TX 75250
Common Western Cottonwood Corp. 20,000,000 24.335%
5777 W. Century Blvd., Ste. 767
Los Angeles, CA 90045
-----------------
(1) Greg Mardock is a shareholder, officer and director of VLK Capital
Corp.
(2) Greg Mardock is a shareholder, officer and director of Gregport Land
and Investment. The shares are owned by Gregport Land and Investment.
The following table sets forth the amount and nature of beneficial
ownership of each of the executive officers and directors of our
Company. The information below is based on 82,186,807 shares issued and
outstanding as of November 6, 2002.
SECURITY OWNERSHIP OF MANAGEMENT
Name and Amount and
Address of Nature of
Title of Beneficial Beneficial Percent
Class Owner Owner of Class
-----------------------------------------------------------------------
NOT AN OFFICER OF THE COMPANY
-----------s------------------
Common Greg Mardock (1) 16,230,144 19.748%
3620 NW Westside Road
McMinnville, OR 97128
---------------------------
Officers & Directors as a Group 16,230,144 19.748%
Greg Mardock is a shareholder, officer and director of Gregport Land and
Investment and VLK Capital Corp. The shares are owned by Gregport Land and
Investment and VLK Capital Corp.
11. AUTHORIZATION OR ISSUANCE IF SECURITIES OTHERWISE THAN FOR EXCHANGE
(a) 1 FOR 200 REVERSE STOCK SPLIT. The company's management seeks
authorization through the use of Shareholders' Written Consents,
to amend the Company's Articles of Incorporation to reverse
split the Company's outstanding Common Stock on a one new common
share for each 200 old common shares basis. All fractional
shares resulting from such reverse stock split would be rounded
up to the next whole common share.
At November 6, 2002, the Company had 82,186,807 common shares
outstanding. If the 1 for 200 reverse stock split were
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effectuated based on this number of shares outstanding, it
would result in the reverse split of said 82,186,807 old
common shares, into approximately 410,935 shares of reverse
split new common shares.
(b) AUTHORIZATION FOR 100,000 PREFERRED SHARES TO BE ISSUED IN
SERIES FROM TIME TO TIME BY THE BOARD OF DIRECTORS. The
Company's management seeks authorization through the use of
Shareholders' Written Consent, to amend the Company's Articles
of Incorporation to add a new provision authorizing the Company
to issue up to 100,000 shares of Preferred Stock, said shares to
be divided into such number or series as the Board of Directors
may determine. The Board of Directors will be authorized by the
amendment to determine and alter the rights, preferences,
privileges and restrictions granted to or imposed upon any
wholly unissued series of preferred stock, and to fix the number
of shares of any series of preferred stock and the designation
of any such series of preferred stock. The Board of Directors,
within the limits and restrictions stated in any resolution or
resolutions of the Board of Directors originally fixing the
number of shares constituting any series, will have the power to
increase or decrease (but not below the number of shares of such
series then outstanding) the number of shares of any series,
subsequent to the issue of shares of that series.
Upon amendment of the Company's Articles of Incorporation, the Board of
Directors plans to authorize and create a class of Series A Convertible
Preferred Stock, providing for the issuance of up to 1000 Series A
Convertible Preferred Shares. The Series A Convertible Preferred Stock
will not have any voting rights. There is no restriction on the
repurchase or redemption of Series A Convertible Preferred Shares by
the Company.
The Series A Preferred will be convertible, in whole or in part at the
option of the holder, into shares of the Common Stock of Flexxtech.
Each one share of Series A Preferred will be convertible into the
number of shares of Flexxtech Common Stock obtained by dividing $10,000
by 85% of the average of the lowest three intra day bids for
Flexxtech's Common Stock on the primary exchange or public market in
what Flexxtech's Common Stock is listed, over the ten trading days
immediately preceding the conversion date, and multiplying the result
by 120%. Fractional common shares on conversion will be rounded to the
nearest whole share.
The Series A Preferred will have a liquidation preference equal to
$15,000 per Series A share, after which each share will share on a pro
rata basis with the Common Stock, based upon the number of shares into
which the Series A Preferred would have been convertible on the date of
liquidation, distribution of assets, dissolution or winding up. The
Series A Preferred will also have various other anti-dilution
protections.
The Company at its sole discretion, will have the option to redeem all
of part of the Series A Preferred at a redemption price equal to the
greater of $12,000 per share, or the market value of the Common Stock
into which the Series A Preferred is convertible on the date of
redemption. 142.50 of these Series A Convertible Preferred Shares will
be issued to two shareholders of Paradigm Cabling Systems, Inc., in
acquisition of an 80% interest in Paradigm, and 200 of these Series A
Convertible Preferred Shareholders will be issued to Western Cottonwood
Corporation, in conversion and liquidation of $2,000,000 in outstanding
company debt.
The Company hereby incorporates by reference its Form 8K/A filing on
November 7, 2002, which describes in detail these two transactions.
Attached hereto is a copy of said Form 8K/A filing of November 7, 2002.
The terms of the future series of the Preferred Stock to be authorized,
including dividend or interest rates, conversion prices, voting rights,
redemption prices, maturity dates and similar matters will be
determined by the Board of Directors.
(c) CHANGE OF NAME TO PARADIGM HOLDINGS, INC. The Company will also
seek approval from a majority of the shareholders through the
use of such written consents to amend the Company's Articles of
Incorporation to change the name of the Company to Paradigm
Holdings, Inc.
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19. AMENDMENT OF CHARTER, BYLAWS OR OTHER DOCUMENTS
(a) The Company's management believes the Company has too many
shares of Common Stock outstanding, which impacts negatively in
management's view on the trading range in public markets for the
Company's Common Stock. The Company proposes to amend its
Articles of Incorporation to effectuate a 1 for 200 reverse
split of the Company's Common Stock.
(b) The Company has acquired an 80% interest in Paradigm Cabling
Systems, Inc., a privately held company, on terms which require
the Company to amend its Articles to create a class of Preferred
Stock. At the same time, management believes there will be
opportunities for the Company to acquire additional business in
the future, and therefore is seeking an amendment to the
Articles of Incorporation that provide for the issuance of
additional series of Preferred Stock in the future. As a result,
management has determined that the Company should amend its
Articles of Incorporation to provide for the issuance of up
100,000 shares of Preferred Stock, in series and with such terms
as may be set from time to time by the Board of Directors, and
also to change the name of the corporation to Paradigm Holdings,
Inc.
(c) Management has elected to obtain shareholder approval of a
proposed amendment to its Articles of Incorporation to this
effect, by obtaining the Written Consent of 7 Shareholders who
in the aggregate own more than 50% of the Company's Common
Stock, and can thereby provide the necessary consent of a
majority in interest of the shareholders to the proposed
amendment.
21. VOTING PROCEDURES
Management plans to contact 7 Shareholders who in the aggregate hold more than
50% of the Company's outstanding stock, and obtained the Written Consent from
each to amend the Articles of Incorporation to reverse split outstanding Common
Stock on a 1 new share for each 200 old shares of Common Stock basis, to provide
authorization for 100,000 shares of Preferred Stock, and to change the Company's
name to Paradigm Holdings, Inc..
ITEM 2. STATEMENT THAT PROXIES ARE NOT SOLICITED
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
ITEM 3. INTEREST OF CERTAIN PERSONS IN OPPOSITION TO MATTERS TO BE ACTED UPON.
(a) No substantial interest, direct or indirect, by security
holdings, or otherwise, is held by any director of officer of
the Company, or any nominee for election as a director, or any
associate of any said persons, with respect to the matters to
be acted upon, except as follows: Michael Cummings, the
President of Paradigm, and newly appointed to the Board of
Directors of the Company will be 71.25 shares of Series A
Convertible Preferred Stock in exchange for his prior transfer
to the Company shares of the outstanding stock of Paradigm
which 40% of Paradigm's outstanding stock.
(b) No director of the Company is opposed to the proposed
amendments to Articles to increase authorized capital.
ITEM 5. DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
If one annual report or information statement is being delivered to two or more
security holders who share an address, furnish the following information in
accordance with Sec. 240.14a-3(e)(1):
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(a) Only one annual report or information statement, as
applicable, is being delivered to multiple security holders
sharing an address, unless the Company has received contrary
instructions from one or more of the security holders;
(b) The Company undertakes to deliver promptly upon written or
oral request , a separate copy of this Schedule 14C
Information Statement, to a security holder at a shared
address to which a single copy of the documents was delivered.
A security holder may notify the Company that the security
holder wishes to receive a separate copy of this Schedule 14C
Information Statement by calling telephone (949) 460-7744, or
sending a written request to the Company at 20902 Bake
Parkway, Suite 112, Lake Forest, California 92630, Attention ,
Michael Cummings, Chief Executive Officer, Paradigm Cabling
Systems.
(c) The above phone number and mailing address can be used by a
security holder to notify the Company that the security holder
wishes to receive a separate annual report or proxy statement,
as applicable, in the future;
(d) Security holders sharing an address can request delivery of a
single copy of annual reports or information statements if
they are receiving multiple copies of annual reports or
information statements, by use of the above telephone or
address.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: October 15, 2002
FLEXXTECH CORPORATION
-----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada
-----------------------------------------------------------------------
(State or other jurisdiction of incorporation)
000-25499 88-0390360
------------------------ ---------------------------------
(Commission File Number) (IRS Employer Identification No.)
20902 Bake Parkway, Suite 12
Lake Forest, California
------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(949) 460-7740
----------------
(Registrant's telephone number, including area code)
Infinite Technology Corporation
-------------------------------
(Registrant's Former name)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
I ACQUISITION OF W3M, INC. (dba "Paradigm Cabling Systems")
---------------------------------------------------------
On October 1, 2001, the Company acquired 80% of the outstanding Common
Shares of W3M, Inc. (dba "Paradigm Cabling Systems"), a privately held
California corporation ("Paradigm"), in a stock for stock exchange.
Pursuant to the terms of the acquisition, 80% of the outstanding
capital stock of Paradigm was transferred to the Company on said date.
In exchange, the Company agreed as soon as practical to issue shares of
a new Series A Convertible Preferred Stock of Flexxtech Corporation
(hereinafter the "Series A Preferred"), to the exchanging shareholders
of Paradigm as follows:
Name No. Of Shares of Series A Convertible Preferred
-----------------------------------------------------------------------
Michael Cummings 71.25 shares
Ashford Capital 71.25 shares
---------------
Total 142.50 shares
The Series A Preferred is to be convertible, in whole or in part at the
option of the holder, into shares of the Common Stock of Flexxtech.
Each one share of Series A Preferred is to be convertible into the
number of shares of Flexxtech Common Stock obtained by dividing $10,000
by 85% of the average of the lowest three intra day bids for
Flexxtech's Common Stock on the primary exchange or public market in
what Flexxtech's Common Stock is listed, over the ten trading days
immediately preceding the conversion date, and multiplying the result
by 120%. Fractional common shares on conversion are rounded to the
nearest whole share.
The Series A Preferred is to have a liquidation preference equal to
$15,000 per Series A share, after which each share will share on a pro
rata basis with the Common Stock, based upon the number of shares into
which the Series A Preferred would have been convertible on the date of
liquidation, distribution of assets, dissolution or winding up. The
Series A Preferred is to also have various other anti-dilution
protections.
The Company at its sole discretion, has the option to redeem all or
part of the Series A Preferred at a redemption price equal to the
greater of $12,000 per share, or the market value of the Common Stock
into which the Series A Preferred is convertible on the date of
redemption.
Because Flexxtech's Articles of Incorporation do not provide for
Preferred Stock, before the Series A Preferred can be authorized and
issued, the shareholders of Flexxtech, by majority in capital interest,
must adopt amendments to the company's Articles of Incorporation. In
the event Flexxtech has not obtained the necessary shareholder
approvals amending its Articles to create the class of Series A
Preferred Stock, and is unable to issue the required Series A Preferred
shares and deliver the certificates evidencing said shares to the
Paradigm exchanging shareholders by the close of business at 5 p.m.
Pacific Standard Time, on January 31, 2003, then in such event the
Paradigm exchanging shareholders' entitlement to Series A Preferred
Shares converts automatically and without further action on their part,
into a right to immediately receive in lieu of said Series A Preferred
Stock, that number of shares of Flexxtech Common Stock to which the
Paradigm exchanging shareholders would have been entitled had they been
previously issued the Series A Preferred Stock, and then elected on
January 31, 2003 to have all of their Series A Preferred Stock
converted into Flexxtech's Common Stock in accord with the above
described Series A Preferred conversion provisions.
As part of the transaction, the Company agreed to use its best efforts
to arrange in the future for an infusion of $250,000 in additional
capital, either as debt or equity or some combination of both, to
Paradigm, in order to increase its working capital.
On September 16, 2002, Michael Cummings, the President and CEO of
Paradigm, and one of the two Paradigm shareholders exchanging shares,
was elected to fill one of the existing vacancies on the Board of
Directors of Flexxtech.
As a result of this transaction, Flexxtech acquired Paradigm as an
80%-owned subsidiary. The remaining 20% of Paradigm's outstanding stock
continues to be held Greg Wilber, Mondo Marshall and Sandra Stewart,
the original Paradigm shareholders.
II. BUSINESS OF PARADIGM
--------------------
As a result of its acquisition of 80% of Paradigm, and its previous
sale on September 13, 2002 of its former wholly-owned subsidiary, North
Texas Circuit Board Corp., the sole business of the Company as of
November 1, 2001, became the business carried on by its 80%-owned
subsidiary, Paradigm.
PRIOR HISTORY OF PARADIGM. Paradigm was incorporated in California in
May of 1998, under its current corporate name, W3M, Inc., to establish
a business of providing equipment, contract installation and technical
consulting in connection with the establishment of cable systems for
larger industrial and educational complexes.
CURRENT BUSINESS. Paradigm is a full service computer cabling,
networking and telecommunications integrator contractor, providing
networks from stem to stern in house, for larger, medium and smaller
industrial, educational and residential complexes. During the 9-1/2
months through October 14, 2002, Paradigm booked in excess of
$1,000,000 in sales of products and services.
A. PRODUCTS. The Company designs and installs voice, video/audio, and
data networks utilizing copper and fiber optic products for its
customers. The Company's services include:
Project management
Data communications services
Structured cabling design
Planning
Installation and support services
Hardware maintenance/installation
Equipment installation and relocation services
Training
Electrical installations
Conduit design and installation
B. SERVICES. Paradigm's engineers design, install and service
Communication Infrastructure for Voice and Data; including Copper,
Fiber and Wireless Systems. The Company's staff has an aggregate of
over 235 years of telecommunications experience, and management prides
itself on providing a turn-key solution to meet the customer's
technology needs.
Paradigm Cabling Systems' professional infrastructure services include:
Category 3, 5, 5e and 6 twisted pair cable installation
Single-mode/Multi-mode fiber optics installation
RG6, 8, 58, 59, and 62 coaxial cable, and .500 series
broadband coax installation
Networking equipment sales, service, and installation
Phone switch sales, service, and programming, and installation
Wireless LAN/WAN installation
Electrical installations
OSP trenching/backfill and conduit installations
Full service 24-hour Service Department
Technicians Certified for work with Asbestos and Lead,
Firestop Certified, Fiber Certified, Copper Solution
certified.
C. ORGANIZATION - PARADIGM'S THREE DIVISIONS
Paradigm's services and products have been sub-divided into
three divisions:
Electrical Division:
--------------------
In-House Wiring
Main & Sub Panel Addition/Replacement
Additional Power Circuits (IG & Isolated)
Un-interruptable Power Systems (UPS)
Re-locatable Building Power Hookup
Construction Division:
----------------------
Conduit Distribution Systems Design & Installation (EMT, IMC,
RIGID, PVC)
Concrete Cutting, Coring & Replacement
Asphalt Cutting & Replacement
Voice Division:
---------------
Installation and Maintenance of Telephone Switching Equipment
Certified Technicians from Nortel Meridian, Lucent, Telrad,
Panasonic, Com-Dial, Mytel
Complete design and relocation service
Structured Cabling Design, Planning, Installation and
Maintenance Services
Network Analysis, Design, Troubleshooting, and Support
Project Management
System Integration & Hardware Maintenance
Equipment Installation and Relocation Services
Site Surveys and Construction Planning
Documentation/Auto CAD
Underground & Aerial Cable Installation
24 Hour/7Day-A-Week Support
D. CUSTOMERS. Paradigm's customers range from small organizations to
very large corporations, and are in a diversity of industries, from
manufacturing, retail and financial to education and government.
Complexes undertaken by Paradigm over the past four years have included
the following projects:
1. WARNER BROTHERS - Installation of 51 Category 6 stationers and (2)
6-strand multimode fiber optic cables to the 3rd and 4th floor IDF's.
(2002)
2. VERIZON - Authorized Structured Cabling Partner. (1999)
3. UPS - Installation of OSP fiber and Copper throughout campus.
Installation of 150 locations (600 Cables) in a 150,000 square foot
student recreation center. Work also includes installation of fiber
background to (7) IDF closets. (2001)
4. NEXTEL - Installation of 1,000 voice and data stations (4,000 Cables)
in two 40,000 square foot office buildings. Work included high count
OSP Fiber and copper cables. (2001)
5. UCLA - Designated Installation Contractor for UCLA Medical Center Voice
and Data Communications infrastructure. (2002)
6. UNIVERSITY OF CALIFORNIA, IRVINE - Installation of OSP fiber and Copper
throughout campus. Installation of 150 locations (600 Cables) in a
150,000 square foot student recreation center. Work also includes
installation of fiber and copper backbone able. (2000)
7. LUCENT TECHNOLOGIES - Installation of 1,000 voice and data stations
(4000 Cables) in an 180,000 square foot laser manufacturing facility.
Design and install MDF, splicing 1200 pair cable, and conduit
horizontal pathways. (2000)
8. PACIFIC SUNWEAR - Installation of (750) duplex category 6 voice and
Data Work Area Outlets, Optical Fiber riser and paging system in two
buildings totaling 320,000 square feet of clothing distribution and
office space. Build-out Pacific Sunwear Corporate Data Center.
Other customers over the past four years have included the following
companies:
Loma Linda University Intel
K-Love SBC
Kaiser Permanente Union Bank of California
Veterinary Pet Insurance Pacsun.com
City of Hope Wells Fargo Bank
As a total telecommunications services provider, Paradigm has network
systems integration and installation experience with Bay Networks,
3Com, and Cisco Systems.
E. WARRANTIES. Paradigm typically guarantees its materials and
workmanship for 15 years. The Company also registers its installed
systems with the manufacturer and will extend the manufacturers'
warranty for the customers where applicable.
Paradigm is an authorized Commscope, Panduit, Leviton, Ortronics,
Nordx, General/Brand-Rex BICC Company, Siemon and Tyco/Amp Certified
Installations Company. This enables the Company to maintain
manufacturers extended performance and product warranties for its
registered projects.
F. VENDORS. Paradigm utilizes a network of manufacturers and suppliers
throughout the world. Each supplier is monitored for quality, delivery
performance and cost through a well-established certification program.
This network has manufacturing and engineering capabilities to
customize products for specialized applications. Paradigm believes that
the loss of any single source of supply would not adversely affect its
business.
G. COMPETITION. Paradigm competes with other technical service
companies, many of whom have more experience and are better
capitalized. Management believes it compares favorably to competitors
because of Paradigm's broad suite of high quality technical services,
product quality and selection, and its superior customer service.
H. EMPLOYEES. As of November 1, 2002, the Company had 18 full time
employees and no part time employees. None of the Company's employees
belong to a union.
I. PATENTS, COPYRIGHTS AND TRADEMARKS. Paradigm holds no copyrights,
patents or trademarks.
J. CAPITAL. Paradigm's capital is currently sufficient to maintain, but
not to expand its business. Flexxtech, as part of the transaction
whereby it acquired 80% of the outstanding stock of Paradigm, has
committed to raise a total of $250,000 in additional capital for
Paradigm, through the private sale of debt or equity, or perhaps a
combination thereof. Whether Flexxtech will be successful in raising
this capital, or over what period and at what cost, is uncertain at
this time. As a result, the sources, availability and terms for
additional capital to expand Paradigm's business are unknown at this
date, and there is no assurance the Company will be able to obtain
sufficient capital to expand its business and further implement its
business plan.
K. CAUTION REGARDING FORWARD-LOOKING STATEMENTS. Certain of the
statements contained in this Form 8-K Report are not historical facts,
but are "forward-looking statements". They can be identified by the use
of forward-looking terminology such as "believes", "expects", "may",
"will", "should", "intends" or "anticipates" or the negative thereof or
other variations thereon or comparable terminology, or by discussions
of strategy that involve risks and uncertainties. Such forward-looking
information involves important risks and uncertainties that could
significantly affect otherwise expected results in the future.
The Company does not promise to update forward-looking information to
reflect actual results or changes in assumptions or other factors that
could affect those statements. Persons reading this Form 8-K Report are
cautioned that such statements are only predictions and that actual
events or results may differ materially. In evaluating such statements,
readers should specifically consider all the various factors which
could cause actual events or results or differ materially from those
anticipated by such forward-looking statements.
ITEM 5. OTHER EVENTS.
I. ELECTION OF MICHAEL CUMMINGS TO THE BOARD OF DIRECTORS
------------------------------------------------------
In connection with the acquisition by Flexxtech of Paradigm, one of the four
existing vacancies on the Board of Directors of Flexxtech was filled by the
appointment on September 16, 2002, of Michael Cummings to the Board of Directors
of Flexxtech to fill one of the existing Board vacancies.
Michael Cummings, age 39, began serving as President of Paradigm in 2002. He has
previously served as the President of Network Installation Corp from 1996 to
2001. During his tenure, Network Installation Corp, increased its sales from
$400,000 per year to over $7 million per year. Prior to that, he was the Vice
President of Sales for LAN-LAB Communications. During his tenure there, LAN-LAB
Communications increased sales from $1.0 million to $6.0 million. Mr. Cummings
holds the following degrees and licenses: C-7 Low Voltage License
III. CONVERSION OF CERTAIN EXISTING DEBT INTO SERIES A PREFERRED STOCK
-----------------------------------------------------------------
On October 30, 2002, Western Cottonwood Corporation, the holder of $2,000,000 in
Flexxtech long term debt, which with accrued interest, totaled $2,638,275.33 in
total debt at October 31, 2002, entered into a binding agreement with the
Company, whereby Western Cottonwood Corporation agreed to exchange $2,000,000 in
existing debt principal, in exchange for 200 Shares of new Series A Convertible
Preferred Stock to be issued by the Company. The terms for the Series A
Preferred Stock to be issued are the same as for the Series A Preferred to be
issued by Flexxtech to the shareholders of Paradigm in exchange for the
acquisition of their Paradigm shares, as set forth in Item 1 herein. The
remaining $638,275.33 would remain as a debt of the Company.
Because Flexxtech's Articles of Incorporation do not provide for Preferred
Stock, before the Series A Preferred can be authorized and issued, the
shareholders of Flexxtech, by majority in capital interest, must adopt
amendments to the company's Articles of Incorporation. In the event Flexxtech
has not obtained the necessary shareholder approvals amending its Articles to
create the class of Series A Preferred Stock, and is unable to issue the
required Series A Preferred shares and deliver the certificates evidencing said
shares to the exchanging debt holders by the close of business at 5 p.m. Pacific
Standard Time, on January 31, 2003, then in such event Western Cottonwood
Corporation`s entitlement to Series A Preferred Shares converts automatically
and without further action on the debt holder's part, into a right to
immediately receive in lieu of said Series A Preferred Stock, that number of
shares of Flexxtech Common Stock to which Western Cottonwood Corporation would
have been entitled had it been previously issued the Series A Preferred Stock,
and then elected on January 31, 2003 to have all of its Series A Preferred Stock
converted into Flexxtech's Common Stock in accord with the Series A Preferred
conversion provisions.
Western Cottonwood Corporation may be deemed to be an affiliate of the Company,
since its principal shareholders in the aggregate currently own in excess of
7.3% of Flexxtech's outstanding Common Stock.
ITEM 7. EXHIBITS
EXHIBITS
10.1. Stock Purchase Agreement between the Buyer Flexxtech Corporation and
the Sellers W3M, Inc., dba Paradigm Cabling Systems, Michael Cummings
and Ashford Capital dated August 20, 2002. *
10.2. Flexxtech Corporation Series A Convertible Preferred Stock Purchase
Agreement, dated August 20, 2002.
10.3. Amendment to Closing Certificate for Flexxtech Corporation and W3M,
Inc. dated September 13, 2002.
10.4. 2nd Amendment to Stock Purchase Agreement Between Flexxtech Corporation
(Buyer") and W3M, Inc., dba Paradigm Cabling Systems, Michael Cummings
and Ashford Capital, dated August 27, 2002.
10.5. Agreement with Western Cottonwood Corporation Re Conversion of Debt
into Equity.
* Supplied as an Exhibit to original filing of Form 8-K on August 20, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K/A to be signed on its
behalf by the undersigned hereunto duly authorized.
By /s/ Greg Mardocks
-----------------------------
Greg Mardock,
President
Date: October 31, 2002
EXHIBIT 10.2
FLEXXTECH CORPORATION
SERIES A CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT
This Agreement is made as of October 9, 2002, by and between Flexxtech
Corporation, a Nevada corporation (the "Company"), and W3M, Inc. (dba Paradigm
Cabling Systems), Michael Cummings, an indvidual, and Ashford Capital, LLC. (the
"Purchasers"), pursuant to the Stock Purchase Agreement between the Buyer
Flexxtech Corporation and the Sellers W3M, Inc., Michael Cummings and Ashford
Capital, LLC, dated August 20, 2002.
RECITALS
On the terms and conditions set forth herein, the Company desires to
sell to the Purchasers, and the Purchasers desires to purchase from the Company,
shares of the Company's Series A Convertible Preferred Stock (the "Series A
Preferred Stock") which are convertible into shares of the Company's common
stock (the "Common Stock"), on the terms and conditions set forth in the
Certificate of Designation of Series A Convertible Preferred Stock in the form
attached hereto as Exhibit A (the "Designation");
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
AGREEMENTS
SECTION 1
AUTHORIZATION AND SALE OF THE SHARES
1.1 Authorization of the Shares.
(a) The Company has authorized, or before the Closing (as
defined in Section 2.1 below) will have authorized, a new series of preferred
stock, designated as "Series A Convertible Preferred Stock", which shall have
the rights, preferences and privileges provided for in the Designation.
(b) In addition, prior to the Closing, the Company shall have
authorized the issuance and sale to the Purchasers of a total of (142.5) shares
(the "Shares"), of which (71.25) shall be issued to Michael Cummings and (71.25)
shall be issued to Ashford Capital, of the Series A Preferred Stock, which shall
have the rights, preferences and privileges provided for in the Designation.
1.2 Sale of the Shares. Subject to the terms and conditions hereof, at
the Closing, the Company will issue and sell the Shares to the Purchasers and
the Purchaser will purchase such Shares from the Company for an aggregate
purchase price of, pursuant to the Stock Purchase Agreement dated August 20,
2002, One million four hundred twenty five Thousand Dollars ($1,425,000)(the
"Purchase Price"). The Common Stock issued or issuable upon conversion of the
Shares is referred to as the "Conversion Stock." The Shares, the Conversion
Stock and any other securities issued or issuable in respect of the Shares are
sometimes collectively referred to herein as the "Securities."
SECTION 2
CLOSING DATE; DELIVERY
2.1 Closing Date. The closing date shall be the date upon which this
Agreement is executed by the parties to this Agreement (the "Closing Date"),
subject to the approval of this Agreement and the Designation, by the Company's
board of directors and shareholders which the Company shall use its best efforts
to obtain by October 25, 2002.
2.2 Delivery. On the Closing Date, the Company shall deliver to the
Purchaser a certificate registered in the Purchaser's name and representing the
Shares, against delivery to the Company of eighty percent (80%) of the shares of
W3M, Inc. to the Company. The Shares from both parties shall be delivered free
of any claims, liens or encumbrances.
SECTION 3
COMPANY REPRESENTATIONS AND WARRANTIES
Except as disclosed in the Schedules attached hereto, the Company makes
the following representations and warranties to the Purchaser:
3.1 Organization and Standing. Each of the Company and its subsidiaries
(i) is a corporation duly organized and validly existing under the laws of its
respective jurisdiction of incorporation and is in good standing as a domestic
corporation under the laws of said state or country, (ii) has all requisite
corporate power and authority to own and lease its properties and to conduct its
business as presently conducted, and (iii) is duly qualified or licensed to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified does
not and is not reasonably expected to (x) individually or in the aggregate, have
a material adverse effect on the properties, business, results of operations,
condition (financial or otherwise), affairs or prospects of the Company and its
subsidiaries, taken as a whole, (y) interfere with or impair the Company's
ability to perform its obligations under this Agreement, or (z) interfere with
or prevent the consummation of any of the transactions contemplated by said
instruments (any of the events set forth in clauses (x), (y) or (z), a "Material
Adverse Effect").
3.2 Corporate Power. The Company has all requisite legal and corporate
power to execute and deliver this Agreement, to sell and issue the Shares, to
issue the Conversion Stock issuable upon conversion of the Shares, and to carry
out and perform its obligations under the terms of this Agreement and under the
terms of all other agreements and other documents executed in connection
herewith.
3.3 Capitalization. The authorized capital stock of the Company upon
the filing of the Designation with the Secretary of State of the State of Nevada
will consist of (a) 100,000,000 shares of Common Stock of which shares are
issued and outstanding, and (i) 1,000 shares which shall be designated as
"Series A Convertible Preferred Stock", One hundred forty two and one half
(142.5) of which shall be issued and sold to the Purchaser at the Closing. All
of the outstanding shares of Common Stock have been, and all of the shares of
Series A Preferred Stock when issued and sold, will be, validly issued, fully
paid and non-assessable, and free of any liens or encumbrances. The Series A
Preferred Stock shall have the rights, preferences, privileges and restrictions
set forth in the Designation. Except as set forth in Schedule 3.3, no
subscription, warrant, option or other right to purchase or acquire any shares
of any class of capital stock of the Company or securities convertible into or
exchangeable for such capital stock are outstanding. Except as set forth in
Schedule 3.3, no securities of the Company have any anti-dilution rights,
preemptive rights or rights of first refusal.
3.4 Authorization. The execution, delivery and performance of this
Agreement, and any other agreements related to this Agreement, by the Company
have been properly and duly authorized by all requisite corporate action. In
addition, all other actions taken by the Company in connection with the
transactions contemplated by this Agreement were properly and duly authorized by
all requisite corporate action. This Agreement and all documents and agreements
executed in connection herewith, constitute valid and binding obligations of the
Company. The issuance and sale of the Shares will not give rise to any
preemptive rights or rights of first refusal on behalf of any person in
existence on the date hereof.
3.5 Conversion Stock. The Conversion Stock has been duly and validly
reserved for issuance.
2
3.6 Accuracy of Reports. All reports (the "SEC Reports") required to be
filed by the Company during the period from January 1, 1999 to the date of this
Agreement under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), have been duly filed, complied in all material respects with the Exchange
Act and the requirements of their respective forms (as of their respective
filing dates), were complete and correct in all material respects as of the
dates at which the information was furnished, and none contains (as of their
respective dates of filing) any untrue statement of a material fact nor omitted
to state a material fact necessary in order to make the statements made therein,
in light of the circumstances in which made, not misleading.
3.7 Financial Statements and Changes. Since January 1, 1999, the
financial statements of the Company included in the SEC Reports (the "Financial
Statements") comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with U.S. generally accepted
accounting principles ("GAAP") (except, in the case of unaudited statements as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows (or changes in financial position prior to the
approval of Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 95) for the periods then ending in accordance with GAAP
(subject, in the case of the unaudited statements, to normal year end audit
adjustments). Except as set forth in the filed SEC Reports, neither the Company
nor any of its subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) required by GAAP to be set
forth on a consolidated balance sheet of the Company and its consolidated
subsidiaries or in the notes thereto and which could reasonably be expected to
have a Material Adverse Effect.
3.8 No Conflict. The provisions of each of this Agreement and the
Designation do not constitute any violation, or conflict with or constitute a
default under, any indenture, mortgage, deed of trust or other agreement,
instrument, court order, judgment, decree, statute, rule or regulation (each
a"Term" and collectively the "Terms") to which the Company or any of its
subsidiaries is a party or by which it is bound. The execution, delivery and
performance of and compliance with this Agreement, the issuance of the
Securities pursuant to the terms hereof and the performance of the Company's
obligations hereunder and thereunder (i) will not result in any violation or be
in conflict with or constitute a default under any Term, (ii) will not result in
the creation of any mortgage, pledge, lien, encumbrance or charge upon any of
the properties or assets of the Company or its subsidiaries pursuant to any such
Term, and (iii) will not conflict with or violate any applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court having jurisdiction over the Company, any of its
subsidiaries, or any of the Company's or subsidiaries' assets or properties,
subject to such exceptions as would not have a Material Adverse Effect.
3.9 Governmental Consents. No consent, approval or authorization of, or
designation, declaration or filing with, any federal, state or foreign
governmental authority is required on the part of the Company in connection with
the valid execution and delivery of this Agreement, the offer, sale or the
issuance of the Securities or the consummation of any other transaction
contemplated hereby, except (i) the filing of the Designation in the office of
the State of Nevada, and (ii) if required, qualifications or filings in
connection with exemptions under any applicable state "blue sky" laws and
Federal securities laws, which qualifications or exemptions, if required, will
have been obtained and will be effective on the Closing Date, or will be
obtained or filed after the Closing Date within the prescribed time in order to
secure such exemptions or qualifications.
3.10 Patents, Trademarks, Etc. The Company and its subsidiaries own or
have the right, or prior to the Closing will own or have the right, to use all
patents, trademarks, service marks, trade names, copyrights, licenses and rights
necessary to their business as now conducted, as conducted at the time of the
Closing and as contemplated being conducted thereafter, and, are not infringing
upon any person's or company's rights under or with respect to any of the
foregoing. Neither the Company nor any of its subsidiaries has received any
written communications alleging that the Company or a subsidiary has violated
any patent, trademark, service mark, trade name, copyright or trade secret or
other proprietary right of any other person or entity.
3
3.11 Litigation. Except as set forth in the Company's public filings,
there is no suit, action or proceeding pending or affecting the Company or any
of its subsidiaries, nor is there any judgment, decree, injunction, rule or
order of any governmental entity or arbitrator outstanding against the Company
or any of its subsidiaries, to the best knowledge of the company.
3.12 Compliance with Laws. 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 could
reasonably be expected to have a Material Adverse Effect.
3.13 Offering of the Shares. Neither the Company nor any person acting
on its behalf has taken or will take any action (including, without limitation,
any offering of any securities of the Company under circumstances which would
require, under the Securities Act of 1933, as amended (the "Securities Act"),
the integration of such offering with the offering and sale of the Securities)
which might subject the offering, issuance or sale of the Securities to the
registration requirements of the Securities Act.
3.14 Finder's Fee. The Company represents and warrants that no finders
or brokers have been retained or used in connection with the transactions
contemplated by this Agreement.
3.15 Tax Matters. Except as set forth on Schedule 3.15, the Company and
each of its subsidiaries has timely filed with the appropriate taxing authority
all tax returns required to be filed by it or has timely requested extensions
and any such request has been granted and has not expired. Each such tax return
is complete and accurate in all respects. All taxes shown as owed by the Company
or any of its subsidiaries on any tax return or claimed or asserted to be due,
from or with respect to any of them, have been paid, except for taxes being
contested in good faith and for which adequate reserves have been taken. The
Company and each of its subsidiaries have properly made due and sufficient
accruals for all taxes for such periods subsequent to the periods covered by
such tax returns as required by GAAP. None of the Company or any of its
subsidiaries are being audited or examined by any taxing authority with respect
to any tax or is a party to any pending action or proceedings by any taxing
authority for assessment or collection of any tax, and no claim for assessment
or collection of any tax has been asserted against it or any of its
subsidiaries. No claim has been made by any authority in a jurisdiction where
the Company or any of its subsidiaries does not file tax returns that it is or
may be subject to taxation by that jurisdiction. There is no dispute or claim
concerning any tax liability.
3.16 Environmental Matters. Each of the Company and its subsidiaries
has obtained, and now maintains as currently valid and effective, all permits,
certificates of financial responsibility, and other governmental authorizations
(collectively, "Environmental Permits") that are required to be obtained by the
Company or any of its subsidiaries under any state, federal, municipal, foreign
or other environmental laws, rules or regulations applicable to any aspect of
the Company or such subsidiary, including, but not limited to, in connection
with the operation of its businesses and properties ("Environmental Laws"). Each
of the Company and its subsidiaries has been in compliance with all terms and
conditions of the Environmental Permits and all Environmental Laws and no
liability exists under any Environmental Laws or otherwise with respect to prior
operations or activities.
SECTION 4
PURCHASER REPRESENTATIONS AND WARRANTIES
The Purchaser represents and warrants to the Company, as follows:
4.1 Investment Intent.
(a) Purchaser has substantial experience in business and
financial matters and is capable of evaluating the merits and risks of its
investment in the Company and is able to bear the economic risks of its
investment.
4
(b) Purchaser is an "accredited investor" as defined in Rule
501(a)(3) of Regulation D of the Securities Act.
(c) Purchaser is acquiring the Securities for investment for
its own account and not with a view to, or for resale in connection with, any
distribution thereof. Purchaser understands that the Securities have not been
registered under the Securities Act by reason of a specific exemption from the
registration provisions of the Securities Act, which depends upon, among other
things, the bona fide nature of the investment intent as expressed herein.
(d) Purchaser acknowledges that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available. Purchaser is aware of the
provisions of Rule 144 promulgated under the Securities Act ("Rule 144") which
permit limited resale of securities purchased in a private placement subject to
the satisfaction of certain conditions, including the existence of a public
market for the shares, the availability of certain current public information
about the Company, the resale occurring not less than one year after a party has
purchased and paid for the security to be sold, the sale being through a
"broker's transaction" or in a transaction directly with a "market maker" (as
provided by Rule 144(f)) and the number of shares being sold during any
three-month period not exceeding specified limitations.
4.2 Corporate Power. Purchaser has all requisite legal and corporate
power to execute and deliver this Agreement and to carry out and perform its
obligations under the terms of this Agreement.
4.3 Authorization. The execution, delivery and performance of this
Agreement by the Purchaser has been duly authorized by all requisite corporate
action, and this Agreement constitutes a valid and binding obligation of
Purchaser enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors, and
rules of law governing specific performance, injunctive relief or other
equitable remedies.
4.4 Finder's Fee. Purchaser represents and warrants that no finders or
brokers have been retained or used in connection with the transactions
contemplated by this Agreement.
SECTION 5
CONDITIONS TO CLOSING
5.1 Conditions to Purchaser's Obligations. The obligation of the
Purchaser to purchase the Shares at the Closing is subject to the fulfillment to
the reasonable satisfaction of the Purchaser, on or prior to the Closing Date,
of the following conditions any of which may be waived in writing, in whole or
in part, by the Purchaser:
(a) The representations and warranties made by the Company in
Section 3 hereof shall be true and correct in all material respects when made,
and shall be true and correct in all material respects on the Closing Date;
(b) All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Closing Date shall
have been performed or complied with in all material respects; and
(c) The Designation shall have been filed with and accepted by
the Nevada Secretary of State.
5.2 Conditions to Company's Obligations. The Company's obligation to
sell and issue the Shares to the Purchaser at the Closing is subject to the
fulfillment to the Company's reasonable satisfaction, on or prior to the Closing
Date, of the following conditions, any of which may be waived in writing, in
whole or in part, by the Company:
5
(a) The representations and warranties made by the Purchaser
in Section 4 hereof shall be true and correct in all material respects when
made, and shall be true and correct in all material respects on the Closing
Date;
(b) All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchaser on or prior to the Closing Date shall
have been performed or complied with in all material respects; and
(c) The Purchaser shall have delivered the Purchase Price to
the Company.
SECTION 6
COVENANTS
6.1 Registration Rights. The Company shall prepare and file with the
SEC, as soon as practical after the Closing Date a Registration Statement on
such form as Company deems appropriate, registering for resale by the Purchaser
all of the shares of common stock designated as Base Conversion Shares under the
Designation, held by the Purchaser upon conversion of Series A Preferred Stock
(the "Registration Statement"). The Company will use its best efforts to cause
the Registration Statement to be declared effective no later than One hundred
eighty days (180) days after the Closing Date.
6.2 Reasonable Best Efforts. Subject to the terms and conditions
provided in this Agreement, each of the parties hereto shall use commercially
reasonable best efforts to promptly take, or cause to be taken, all actions, and
to promptly do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated hereby, to obtain all necessary waivers, consents and
approvals and to effect all necessary registrations and filings and to remove
any injunctions or other impediments or delays, legal or otherwise, in order to
consummate and make effective the transactions contemplated by this Agreement
for the purpose of securing to the parties hereto the benefits contemplated by
this Agreement.
6.3 Additional Documents and Further Assurances. Each party hereto, at
the request of the other party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
SECTION 7
INDEMNIFICATION
7.1 Indemnification. The parties hereby agree to indemnify, defend and
hold each other and their affiliates harmless from and against any and all
costs, losses, liabilities, damages, lawsuits, deficiencies, claims and
expenses, including without limitation, interest, penalties, reasonable
attorneys' fees and all amounts paid in investigation, defense or settlement of
any of the foregoing (incurred in connection with, arising out of, resulting
from, or incident to, any breach of any representation or warranty made by such
party in this Agreement.
6
SECTION 8
MISCELLANEOUS
8.1 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to the Company or the Purchaser, upon any breach or
default under this Agreement, shall impair any such right, power or remedy, nor
shall it be construed to be a waiver of any such breach or default, or any
acquiescence therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character by the Company or the Purchaser of
any breach or default under this Agreement, or any waiver by the Company or the
Purchaser of any provisions or conditions of this Agreement, must be in writing
and shall be effective only to the extent specifically set forth in writing, and
all remedies, either under this Agreement, or by law or otherwise afforded to
the Company or the Purchaser, shall be cumulative.
8.2 Waivers and Amendments. This Agreement and the provisions hereof
may not be waived or amended except pursuant to a written instrument signed by
the required party or parties as aforesaid.
8.3 Severability. In the event that any provision of this Agreement
shall be deemed to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby.
8.4 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
8.5 Notices, Etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be delivered either (i)
personally, (ii) by facsimile transmission, or (iii) by a nationally recognized
overnight courier, in each case with all delivery or postal charges pre-paid,
and in each case, addressed attention: President. All notices and communications
shall be sent or delivered to the address or fax number, as applicable, for the
applicable party as set forth on the signature page of this Agreement, or at
such other address or fax number as the applicable party shall have furnished in
writing to the other party (or its transferees). Each such notice or
communication, addressed and posted as aforesaid, shall for all purposes of this
Agreement be treated as effective or having been given (i) when delivered, if
delivered personally, (ii) the business day on which the notice or communication
is sent, if delivered by facsimile transmission, or (iii) upon the earlier of
its receipt or two (2) business days after the business day of deposit with a
nationally recognized overnight courier, if delivered by such means.
8.6 Entire Agreement. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement among
the parties with regard to the subject matters hereof and thereof, and supersede
any and all prior agreements and understandings among the parties.
8.7 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of California as they
apply to contracts entered into and wholly to be performed within such state,
and without reference to its principles of conflicts of law or choice of law.
8.8 Attorneys' Fees. In the event of any litigation in a court of
competent jurisdiction arising in connection with this Agreement and the
transactions contemplated hereby, the prevailing party in judgment shall be
entitled to recover reasonable legal fees and costs in connection with such
action including any appeals.
8.9 Independent Advice of Counsel. THE PARTIES REPRESENT AND DECLARE
THAT, IN EXECUTING THIS AGREEMENT, THEY RELIED SOLELY UPON THEIR OWN JUDGMENT,
BELIEF AND KNOWLEDGE, AND HAD THE ABILITY TO SEEK THE ADVICE OF THEIR OWN
INDEPENDENTLY SELECTED COUNSEL CONCERNING THE NATURE, EXTENT AND DURATION OF
THEIR DUTIES AND RIGHTS CONTAINED IN THIS AGREEMENT. THE PARTIES FURTHER
REPRESENT AND AGREE THAT THEY HAVE NOT BEEN INFLUENCED BY ANY REPRESENTATIONS OR
STATEMENTS CONCERNING ANY MATTERS MADE BY ANY OTHER PARTY OR BY ANY PERSON OR
ATTORNEY REPRESENTING ANY OTHER PARTY.
7
8.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which together shall
constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first written above.
COMPANY
FLEXXTECH CORPORATION,
a Nevada corporation
/s/ Greg Mardock
By: ------------------------------
Greg Mardock, Director
Chief Executive Officer
PURCHASERS
MICHAEL CUMMINGS, AN INDIVIDUAL
/s/ Michael Cummings
By: -----------------------------
Michael Cummings (Purchaser of
71.25 shares of Series A)
ASHFORD CAPITAL, LLC
/s/ Walter Wright
By: -----------------------------
Walter Wright, Manager (Purchaser
of 71.25 shares of Series A)
W3M, Inc. (dba Paradigm Cabling Systems)
/s/ Michael Cummings
By: -------------------------
Michael Cummings, President
8
EXHIBIT 10.3
AMENDMENT TO
CLOSING CERTIFICATE
FOR
FLEXXTECH CORPORATION AND
W3M, INC. (DBA PARADIGM CABLING SYSTEMS)
Pursuant to the Stock Purchase Agreement between Flexxtech Corporation, the
Buyer, and the Sellers, W3M, Inc. (dba Paradigm Cabling Systems), Michael
Cummings and Ashford Capital, dated August 20, 2002, and the Closing Certificate
dated September 13, 2002, this Amendment changes the closing date of the
Transaction to October 1, 2002 instead of the closing of the transaction upon
the completion of audited financial statements. The Company will continue to
prepare audited statements for the last two years.
The Seller shall deliver all necessary documents, including stock certificates
to the buyer. The Buyer shall deliver all necessary documents including an
agreement to deliver upon shareholder approval the Class A Preferred shares no
later than November 1, 2002. Should the shareholders not approve the Preferred
shares, the Buyer shall deliver common shares of the Buyer.
This Amended Closing Certificate is accepted and agreed to as of today, 1st day
of October 2002, by the parties signing below.
SELLING SHAREHOLDERS
MICHAEL CUMMINGS, AN INDIVIDUAL
/S/ MICHAEL CUMMINGS
- ------------------------------
By: Michael Cummings
Shareholder, an individual
ASHFORD CAPITAL, LLC
/S/ WALTER WRIGHT
- ------------------------------
By: Walter Wright, Manager
Shareholder and Manager
W3M,INC. (DBA PARADIGM CABLING SYSTEMS)
/S/ MICHAEL CUMMINGS
- ------------------------------
By: Michael Cummings
President, Director and Shareholder
PURCHASER
FLEXXTECH CORPORATION
/S/ GREG MARDOCK
- ------------------------------
By: Greg Mardock
Its President
EXHIBIT 10.4
SECOND AMENDMENT TO
STOCK PURCHASE AGREEMENT
BETWEEN FLEXXTECH CORPORATION (BUYER)
AND
W3M, INC. DBA PARADIGM CABLING SYSTEMS (PARADIGM),
MICHAEL CUMMINGS AND ASHFORD CAPITAL
THAT CERTAIN Stock Purchase Agreement between Flexxtech Corporation, the buyer,
and the Sellers, W3M, Inc. (dba Paradigm Cabling Systems), Michael Cummings and
Ashford Capital, dated August 20, 2002, as amended by the Closing Certificate
dated September 13, 2002, as further delineated in that certain Flexxtech
Corporation Series A Convertible Preferred Stock Purchase Agreement dated August
20, 2002, and the Amendment to Closing Certificate dated October 1, 2002, is
hereby amended as follows:
1. The Closing Date shall be October 29, 2002.
2. On the Closing Date, Sellers will transfer shares of Paradigm,
free and clear of all liens, claims and encumbrances to Buyer,
and Seller will deliver into Buyer's hands, share certificates
for 160,000 Shares of the Common Stock of Paradigm,
(hereinafter the "Paradigm Shares) which shares will represent
80% of the outstanding capital stock of Paradigm.
3. Paradigm will continue to prepare audited statements for the
last two years.
4. On the Closing Date, or as soon thereafter as practical, the
following shares of new Series A Convertible Preferred Stock
of Flexxtech Corporation (hereinafter the "Series A
Preferred") shall be issued to the following persons, who
shall be deemed to have paid in full for said shares by their
transfer of the Paradigm Shares to Flexxtech at the Closing:
Name No. Of Shares of Series A Convertible Preferred
-----------------------------------------------------------------------
Michael Cummings 71.25 shares
Ashford Capital 71.25 shares
------
Total shares 142.50
The parties understand that Flexxtech does not currently have
authorization in its Articles of Incorporation to issue said
Series A Preferred Shares. Flexxtech has agreed to use its
best efforts to obtain necessary approvals and expedite the
amendment of its Articles of Incorporation to provide for said
class of Series A Preferred Stock.
In the event Flexxtech has not created said class of Series A
Preferred Stock and issued the required Series A Preferred
shares and delivered the certificates evidencing said shares
to Seller by the close of business at 5 p.m. Pacific Standard
Time, on January 31, 2003, then in such event Seller's
entitlement to shares shall convert automatically and without
further action on their part, into a right to immediately
receive in lieu of said Series A Preferred Stock, that number
of shares of Flexxtech Common Stock to which such Sellers
would have been entitled had they been previously issued the
Series A Preferred Stock, and then elected on January 31, 2003
to have all of said Series A Preferred Stock converted into
Flexxtech's Common Stock, said common shares being deemed paid
for in full.
5. The parties agree that the shares of Paradigm so acquired by
this Agreement shall have an aggregate "Agreed" value between
them of $1,425,000, and that the shares of Paradigm stock in
the aggregate have a like "Agreed" value between them of
$1,425,000. The parties acknowledge that this is not
necessarily the book value for the Paradigm shares acquired,
which will appear on Flexxtech's books.
6. To the extent certain conditions to "Closing" set out in
Section 5 of the Series A Purchase Agreement have not been
satisfied by the Closing Date, the parties hereto hereby waive
said conditions to closing.
7. All other provisions to the Agreement, to the extent not
modified by this Amendment No. 2 shall remain in full force
and effect.
This Amendment No. 2 is accepted and agreed to as of the 25th day of October,
2002, by the parties signing below:
SELLING SHAREHOLDERS:
MICHAEL CUMMINGS, AN INDIVIDUAL W3M, INC. (DBA PARADIGM CABLING
SYSTEMS)
/S/ MICHAEL CUMMINGS /S/ MICHAEL CUMMINGS
By ------------------------------- By ------------------------------
Michael Cummings, Shareholder, Michael Cummings, President,
an Individual Director and Shareholder
ASHFORD CAPITAL, LLC
/S/ WALTER WRIGHT
By -------------------------------
Walter Wright, Manager
Shareholder and Manager
PURCHASER:
FLEXXTECH CORPORATION
/s/ Greg Mardock
By -------------------------------
Greg Mardock, its President
EXHIBIT 10.5
EXCHANGE OF DEBT FOR
AGREEMENT TO ISSUE STOCK
WHEREAS, FLEXXTECH CORPORATION owes $2,000,000 in principal debt to (the debt),
plus accrued interest thereon; and
WHEREAS, WESTERN COTTONWOOD CORPORATION (Creditor) has agreed to transfer such
$2,000,000 in principal debt back to Flexxtech so that it may be canceled, in
consideration for the issuance to Creditor of certain shares of Flexxtech's
capital stock, in accord with the terms of this Agreement; and
WHEREAS, there is also $638,275.33 in accrued interest owed by Flexxtech to
Creditor as of this date, and the parties have agreed that said sum shall remain
outstanding as a debt of Flexxtech and shall commence to bear interest;
NOW, THEREFORE, the parties agree as follows, effective as of 31st day of
October, 2002:
1. The Closing Date shall be on October 31, 2002.
2. On the Closing Date, Creditor will transfer $2,000,000 in
principal amount of debt owed by Flexxtech back to Flexxtech,
and Flexxtech will extinguish said $2,000,000 in debt, as
consideration for the issuance to Creditor by Flexxtech of
shares of Flexxtech capital stock.
3. On the Closing Date, or as soon thereafter as practical, the
following shares of new Series A Convertible Preferred Stock
of Flexxtech Corporation (hereinafter the "Series A
Preferred") shall be issued to Creditor, who shall be deemed
to have paid in full for said shares by its transfer of the
Debt to Flexxtech at the Closing:
NUMBER OF SHARES OF SERIES A PREFERRED STOCK: 200 SHARES
4. The Series A Preferred shall have the rights, terms and
preferences set out in the Certificate of Designation of
Series A Convertible Preferred Stock for Flexxtech
Corporation, a true copy of which is attached hereto and by
this reference incorporated herein.
5. The parties understand that Flexxtech does not currently have
authorization in its Articles of Incorporation to issue said
Series A Preferred Shares. Flexxtech has agreed to use its
best efforts to obtain necessary approvals and expedite the
amendment of its Articles of Incorporation to provide for said
class of Series A Preferred Stock.
In the event Flexxtech has not created said class of Series A
Preferred Stock and issued the required Series A Preferred
shares and delivered the certificates evidencing said shares
to Creditor by the close of business at 5 p.m. Pacific
Standard Time, on January 31, 2003, then in such event
Creditor's entitlement to shares shall convert automatically
and without further action on their part, into a right to
immediately receive in lieu of said Series A Preferred Stock,
that number of shares of Flexxtech Common Stock to which such
Creditor would have been entitled had it been previously
issued the Series A Preferred Stock, and then elected on
January 31, 2003 to have all of said Series A Preferred Stock
converted into Flexxtech's Common Stock, said common shares
being deemed paid for in full.
6. The remaining sum of $638,275.33, representing accrued
interest on the Debt through this date, shall from the Closing
Date forward, bear interest at 10% per annum, and all of said
obligation and all accrued interest thereon, shall be all due
and payable on demand. The security arrangements which secure
repayment of said obligation on this date shall remain in full
force an effect as to said obligation, and all future interest
thereon, until it is paid in full.
CREDITOR
WESTERN COTTONWOOD CORPORATION
/s/ John Freeland
By
------------------------------
John Freeland
FLEXXTECH CORPORATION
/S/ GREG MARDOCK
By
-----------------------------
Greg Mardock, its President