Exhibit 10.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this “Agreement”) is entered into on August 16,
2010 (the “Effective Date”), by and among U.S. Aerospace, Inc., a Delaware
corporation formerly known as New Century Companies, Inc. (the “Seller”), and
David Duquette and Joseph Czikmantori, individuals residing in Los Angeles,
California (each, a “Buyer” and collectively, the “Buyers”).
RECITALS
A. Seller owns all of the outstanding capital stock of New Century
Remanufacturing, Inc., a California corporation (the “Company”).
B. Company is operated by Buyers as the sole officers and directors of the
Company, and is engaged in the business of manufacturing and remanufacturing
specialized machining tools, vertical boring mills, Vertical Turning Centers,
lathes and attachments under the trade name Century Turn, including acquiring,
re-manufacturing and selling pre-owned CNC machines and providing rebuilt,
retrofit and remanufacturing services for machine tools (collectively, the
“Business”), at 9831 Romandel Avenue, Santa Fe Springs, California 90670 (the
“Premises”).
C. Subject to the terms and conditions set forth herein, Seller desires to sell
to Buyers, jointly, and Buyers desire to acquire from Seller, the Company, and
jointly and severally to assume all of the liabilities in connection with the
ownership of the Company, the operation of the Business, and the occupation of
the Premises.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements set forth herein, the parties, intending to be legally bound, hereby
agree to the foregoing and as follows:
ARTICLE 1
SALE AND PURCHASE
1.1 Stock Purchase. As of the Effective Date, Buyers hereby purchase and
acquire, and Seller hereby quit claims, sells, transfers and assigns to Buyers,
jointly, all interests of Seller in all capital stock of the Company, and all
associated goodwill.
1.2 Files and Records. Buyers shall retain possession of all files and other
records of Company (collectively, the “Records”), and at any time on or after
the Effective Date shall make all such Records available to Seller for
inspection and copying upon reasonable notice. For the sake of clarity, such
Records shall not include any and all corporate books and records of the Seller,
its minute book, records of directors’ and stockholders’ actions, stock transfer
records, governmental and regulatory filings, tax returns and correspondence
with any taxing agencies, corporate seal, accounting records, bank statements,
and all other records of Seller.

 

 

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1.3 Liabilities. The Company shall be sold and conveyed to Buyers inclusive of
all liabilities arising out of or relating to the ownership of the Company, the
operation of the Business, and the occupation of the Premises (collectively, the
“Liabilities”) and of all related liens, security interests, restrictions, prior
assignments, claims and encumbrances of any kind or type (collectively, the
“Liens”). It is expressly understood and agreed that the Liabilities shall
include, without limitation, and that the Buyers shall be solely and completely
responsible, jointly and severally, and the Seller shall not be liable, for any
of the obligations or liabilities of Company of any kind or nature, including,
without limitation, any of the following debts, duties, liabilities, or
obligations, that arose with regard to Seller prior to the Effective Date, or
arose or will arise out of or relating to the Company, the Business and/or the
Premises at any time before or after the Effective Date: (i) payroll expenses or
liabilities; (ii) any tax whatsoever, including, without limitation, any
withholding obligation, tax liability, fees or other assessments owed to the
U.S. Internal Revenue Service, the California Franchise Tax Board, the State of
California, or any other local, state, federal, or other government or
governmental agency; (iii) product liability; (iv) loans secured by Company
assets or any portion thereof; (v) any liability whatsoever to current or former
employees, including, without limitation, sick leave, vacation benefits, health
care benefits (including under the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended), other accrued employee benefits, or employee liability
claims, all of which shall be included within the definition of Liabilities;
and/or (vi) rent, damages, attorney fees or any obligation whatsoever to the
landlord of the Premises.
1.4 Purchase Price. The purchase price (the “Purchase Price”) paid by Buyers for
the Company shall be:
(a) the sum of $1.00;
(b) the assumption by the Buyers of all of Seller’s duties and obligations under
or associated with the Company, the Business and/or the Premises; and
(c) the defense and indemnification of the Seller by the Buyers, jointly and
severally, from and against any and all of the Liabilities.
ARTICLE 2
RESTRICTIONS ON TRANSFER
Each of the Buyers agrees as follows:
2.1 Restrictions. For a period of one year from the Effective Date, each Buyer
will not, and will cause any affiliate not to, without the prior written consent
of Seller, which consent may be withheld in its sole discretion, directly or
indirectly, sell, transfer, offer to sell or transfer, contract or grant any
option to sell (including without limitation any short sale), pledge, transfer,
establish an open “put equivalent position” within the meaning of Rule 16a-1(h)
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or
otherwise dispose of any shares of common stock of Seller, options or warrants
to acquire shares of common stock of Seller, or securities exchangeable or
exercisable for or convertible from the shares of common stock of Seller,
currently or hereafter owned either of record or beneficially (as defined in
Rule 13d-3 under the Exchange Act), by Buyers or their affiliates (collectively,
“Shares”), or publicly announce an intention to do any of the foregoing. Buyers
also agree and consent to the entry of stop transfer instructions with the
Seller’s transfer agent and registrar against the transfer of Shares except in
compliance with the foregoing restrictions.

 

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2.2 Sales. Notwithstanding the foregoing paragraph, after December 31, 2010,
Buyers may sell up to a total of $10,000.00 in Shares each calendar month on a
non-cumulative basis.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyers as follows:
3.1 Status. Seller is a corporation validly existing and in good standing under
the laws of the State of Delaware. Seller has the requisite power to enter into
and complete the transactions contemplated by this Agreement, except as may be
limited by principles of equity, applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance or other similar laws relating to
or affecting the rights and remedies of creditors generally.
3.2 Authority. All corporate actions necessary to be taken by or on the part of
Seller in connection with the transactions contemplated by this Agreement have
been duly and validly taken, and this Agreement has been duly and validly
authorized, executed, and delivered by Seller and constitutes the legal, valid
and binding obligation of Seller, enforceable against Seller in accordance with
its terms.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYERS
Each Buyer, jointly and severally, represents and warrants to Seller as follows:
4.1 Status. The Buyers are individuals with all requisite capacity, power and
authority to execute and deliver this Agreement, to perform their respective
obligations hereunder and to consummate the transactions contemplated hereby.
4.2 Enforceability. This Agreement has been duly and validly executed and
delivered by the Buyers. This Agreement and all other agreements and obligations
entered into and undertaken in connection with the transactions contemplated
hereby to which the Buyers are a party constitute the valid and legally binding
obligations of the Buyers, enforceable against the Buyers in accordance with
their respective terms, except as may be limited by principles of equity,
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance or other similar laws relating to or affecting the rights and
remedies of creditors generally. The execution, delivery and performance by the
Buyers of this Agreement and the agreements provided for herein, and the
consummation by the Buyers of the transactions contemplated hereby and thereby,
will not, with or without the giving of notice or the passage of time or both,
violate the provisions of any law, rule or regulation applicable to the Buyers;
(b) violate any judgment, decree, order or award of any court, governmental body
or arbitrator; or (c) conflict with or result in the breach or termination of
any term or provision of, or constitute a default under, or cause any
acceleration under, or cause the creation of any lien, charge or encumbrance
upon the properties or assets of the Buyers or Seller pursuant to, any
indenture, mortgage, deed of trust or other instrument or agreement to which the
Buyers are a party or by which the Buyers may be bound, or any indenture,
mortgage, deed of trust or other instrument or agreement to which Seller is a
party on or before the Effective Date and by which Seller may be bound after the
Effective Date.

 

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4.3 Private Placement. Buyers are purchasing the stock of Company for their own
account, and not with a view toward resale or distribution thereof. At the time
Buyers were offered the stock of Company they were, and at the Effective Date
the Buyers are “accredited investors” as defined in Rule 501(a) under the
Securities Act of 1933, as amended (the “Securities Act”). Buyers have such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the prospective investment
in the Company, and has so evaluated the merits and risks of such investment.
Buyers are able to bear the economic risk of an investment in the Company and,
at the present time, are able to afford a complete loss of such investment. No
registration under the Securities Act is required for the offer and sale of the
capital stock of the Company by Seller to Buyers as contemplated hereby. Buyers
are not purchasing the stock of Company as a result of any advertisement,
article, notice or other communication regarding the Company published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.
4.4 SEC Reports. The Seller has filed all reports required or permitted to be
filed with the U.S. Securities and Exchange Commission (“SEC”) under the
Securities Act or the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the five years preceding the Effective Date, (collectively, the
“SEC Reports”). As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the SEC promulgated thereunder, as
applicable, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of the Company included or consolidated in the SEC Reports comply in
all material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of filing.
The financial statements of the Company were prepared in accordance with GAAP,
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit adjustments.
4.5 Material Changes. Since the date of the latest audited financial statements
included within the SEC Reports, except as disclosed in writing to Seller,
(i) there has been no event, occurrence or development that has had, or that
could reasonably be expected to result in, a material adverse effect, (ii) the
Company has not incurred any liabilities (contingent or otherwise) other than
(A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice, and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or required to
be disclosed in filings made with the SEC, (iii) the Company has not altered its
method of accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer,
director or affiliate, except as disclosed in the SEC Reports.

 

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4.6 Litigation. Except as disclosed in writing to Seller, there is no action,
suit, inquiry, notice of violation, proceeding or investigation pending or, to
the knowledge of the Company, threatened against or affecting the Seller, the
Company, or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign), which could, if there were an
unfavorable decision, have or reasonably be expected to result in a material
adverse effect. Neither the Company nor the Seller, nor to the knowledge of the
Company any director or officer thereof, is or has been the subject of any
action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been, and
to the knowledge of the Company, there is not pending or contemplated, any
investigation by the SEC involving the Company, the Seller or the Buyers.
4.7 Regulatory Approvals. All consents, approvals, authorizations or other
requirements prescribed by any law, rule or regulation that must be obtained or
satisfied by the Buyers and that are necessary for the execution and delivery by
the Buyers of this Agreement or any documents to be executed and delivered by
the Buyers in connection therewith have been, or prior to the Effective Date
will be, obtained and satisfied.
4.8 No Brokers. No broker or finder has acted for the Buyers in connection with
this agreement or the transactions contemplated hereby, and no broker or finder
is entitled to any brokerage or finder’s fee or other commissions in respect of
such transactions based upon agreements, arrangements, or understandings made by
or on behalf of the Buyers.
4.9 Compliance with the Law. To the best of each Buyer’s knowledge, the
operations of the Company have been conducted in accordance with all applicable
laws, regulations, and other requirements of the United States of America and of
all states, municipalities, and other political subdivisions and agencies
thereof, having jurisdiction over the Company. No Buyer has any knowledge of any
notice of any asserted present or past violation of any applicable federal,
state or local statute, law, or regulation (including, without limitation, OSHA
and environmental laws, any applicable building, zoning or other law, ordinance
or regulation) with respect to the Business, the Company of the Premises prior
to the Effective Date.
4.10 No Representation. Buyers have served as the sole officers and directors of
Company since August 2001, are intimately familiar with the Company, its asset,
liabilities, finances, business and operations, and are relying solely on their
own personal experience with the Company in making their decision to enter into
this Agreement. Buyers acknowledge and agree that Seller does not make and has
not made any representations or warranties whatsoever with respect to the
Company or the Business.

 

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ARTICLE 5
CONDITIONS TO SELLER’S OBLIGATIONS AT CLOSING
The obligations of the Seller to consummate the transaction contemplated hereby
on the Effective Date is subject to the satisfaction on or before the Effective
Date of the following conditions by Buyers:
5.1 Representations and Warranties. All representations and warranties of Buyers
made herein are true and correct as of the Effective Date.
5.2 Release of Claims. Each Buyer, and substantially all employees of Company
since April 1, 2010, shall execute and deliver a General Release, the form of
which is attached hereto as Exhibit A, that releases Seller from any and all
claims relating to the Company. Notwithstanding the foregoing, the Buyers shall
not waive any statutory rights to which they are entitled as former officers or
directors of the Seller.
5.3 Shares. All Shares shall be held in record name and certificated form, and
no such Shares shall be held in “street name” or electronic form other than at
accounts with BMA Securities, or another brokerage acceptable to Seller in its
sole discretion, pursuant to irrevocable instructions to comply with the
restrictions on transfer set forth in Article 2 of this Agreement. Buyers
understand and agree that Seller would be irreparably harmed by violation of
this provision, and entitled to immediate and permanent injunctive relief
without the necessity of posting any bond
5.4 Resignations. Each Buyer shall resign from any and all capacities with
Seller, including without limitation as an officer or director thereof.
ARTICLE 6
INDEMNIFICATION
6.1 Indemnification. From and after the Effective Date, each Buyer, jointly and
severally, shall fully, completely and unconditionally indemnify, defend, and
hold harmless Seller, its subsidiaries and affiliates, and each of their
shareholders, officers, directors, managers, members, partners, employees,
representatives, agents, attorneys and assigns, in their individual and
representative capacities, (collectively, “Indemnified Parties”), from and
against any and all claims, demands, actions, causes of action, judgments,
settlements, losses, damages, liabilities, compromises, injuries, lawsuits,
deficiencies, obligations, costs, and expenses, including without limitation
reasonable attorneys’ fees, expert witness fees, and related costs and expenses
as incurred by any Indemnified Party, including any and all costs associated
with defense of any Indemnified Party, or any other claim before a bankruptcy
court or other court, trustee, or receiver (collectively, “Claims”), whether
such Claims are fixed or contingent, that any Indemnified Party shall incur or
suffer, that arise out of, result from, or relate to:
(a) any breach of, or failure by any Buyer to perform, any of its
representations, warranties, covenants, or agreements set forth in this
Agreement;
(b) any liability or claim which may be asserted against Seller arising out of,
relating to, or in connection with Sellers’s ownership of the Company prior to
the Effective Date, or the Company’s activities, the operation of the Business,
or the occupation of the Premises prior to or after the Effective Date;

 

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(c) any of the Liabilities and/or Liens;
(d) Any taxes arising out of or relating to the transaction contemplated by this
Agreement; and/or
(e) All actions, suits, investigations, proceedings, demands, assessments,
judgments, reasonable attorneys’ fees, costs and expenses incident to the
foregoing, including, but not limited to, any audit or investigation by any
governmental entity.
6.2 Failure to Defend. If Buyers fail to fulfill their indemnity obligations
hereunder in connection or to pay for the defense thereof, the Indemnified Party
may engage counsel of its choice, defend and/or settle such Claim, and shall be
entitled to be indemnified for the full amount of such claim and all costs and
expenses, including attorneys’ fees, incurred in connection therewith.
6.3 Unlawful Detainer. Notwithstanding the foregoing, Seller shall be
responsible for the costs of its own counsel to defend Seller only for a period
of up to 60 days with regard to the unlawful detainer action filed by the
landlord of the Premises; provided, however, that Buyers (a) shall use their
best efforts to cause Seller to be dismissed from such litigation as soon as
possible, and (b) shall be solely responsible for obtaining counsel to defend
Company and Buyers, for all defense costs relating to Company and Buyers, and
for all damages or any judgment against any party including Seller.
ARTICLE 7
SURVIVAL
7.1 Survival. The representations, warranties, and indemnifications contained in
this Agreement, or in any certificate, agreement, or other document or
instrument delivered pursuant thereto, shall survive the Effective Date, any
investigation conducted by any party hereto, and any information which any party
may receive.
ARTICLE 8
MISCELLANEOUS
8.1 Non-Disparagement. Each of the Buyers agrees that they shall not at any
time, in any written or communications with the press or other media, any
customer, client, stockholder, investor or supplier of Seller or any of its
affiliates, or any other person, criticize, ridicule, or make or encourage any
other person to make any statement which disparages, is derogatory of, or is
negative toward the personal or business reputation, conduct or practices of
Seller, any of its affiliates, or any of their then current or former officers,
directors, employees, representatives, agents or attorneys. Buyers understand
and agree that Seller would be irreparably harmed by violation of this
provision, and entitled to immediate and permanent injunctive relief without the
necessity of posting any bond.

 

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8.2 Expenses. Each party hereto shall bear all of his, her, or its expenses
incurred in connection with the transactions contemplated by this Agreement,
including, without limitation, accounting, and legal fees incurred in connection
herewith.
8.3 Further Assurances. From time to time prior to, on and after the date
hereof, each party hereto will execute all such instruments and take all such
actions as any other party shall reasonably request, without payment of further
consideration, in connection with carrying out and effectuating the intent and
purpose hereof and all transactions contemplated by this Agreement, including,
without limitation, the execution and delivery of any and all confirmatory and
other instruments in addition to those to be delivered on the date hereof, and
any and all actions which may reasonably be necessary to complete the
transactions contemplated hereby. The parties hereto shall cooperate fully with
each other and with their respective counsel and accountants in connection with
any steps required to be taken as part of their respective obligations under
this Agreement.
ARTICLE 9
GENERAL PROVISIONS
9.1 Successors and Assigns. Except as otherwise expressly provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective representatives, successors and permitted assigns. Neither
party may assign any of its rights or delegate any of its obligations hereunder
without the prior written consent of the other party hereto. In the event of any
such assignment by either party, such assignee shall assume in writing, in form
and substance reasonably acceptable to the other party hereto, all of the
obligations of such assigning party hereunder. For purposes of this Agreement,
“Buyers” or “Seller,” as the case may be, shall be deemed to include such
assignee and in furtherance thereof, such assignee shall be deemed to have made
all of such assigning party’s representations, warranties, covenants, and
agreements in this Agreement. Nothing in this Agreement is intended to confer on
any person or entity not a party hereto any rights or remedies by reason of this
Agreement.
9.2 Amendments; Waivers. The terms, covenants, representations, warranties, and
conditions of this Agreement may be changed, amended, modified, waived, or
terminated only by a written instrument executed by the party waiving
compliance. The failure of any party at any time or times to require performance
of any provision of this Agreement shall in no manner affect the right of such
party at a later date to enforce the same. No waiver by any party of any
condition or the breach of any provision, term, covenant, representation or
warranty contained in this Agreement, whether by conduct or otherwise, in any
one or more instances shall be deemed to be or construed as a further or
continuing waiver of any such condition or of the breach of any other provision,
term, covenant, representation or warranty of this Agreement.
9.3 Notices. All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly made and received (i) when personally served, (ii) when received by
facsimile transmission, or (iii) when delivered by Federal Express or a similar
overnight courier service, expenses prepaid. Any party may alter the address to
which communications are to be sent by giving notice of such change of address
in conformity with the provisions of this Section providing for the giving of
notice.

 

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9.4 Captions; Number and Gender. The captions of Articles and Sections of this
Agreement are for convenience only and shall not control or affect the meaning
or construction of any of the provisions of this Agreement. In this Agreement,
words importing the singular number only shall include the plural and vice versa
and words importing gender shall include all genders.
9.5 Governing Law. This Agreement and all questions relating to its validity,
interpretation, performance and enforcement shall be governed by and construed
in accordance with the laws of the State of California, without giving effect to
principles of conflicts of laws.
9.6 Arbitration. Any disputes, controversies or claims arising out of or
relating to this Agreement, or otherwise involving Buyer and Seller, shall be
resolved by binding arbitration before a retired judge at JAMS (www.jamsadr.com)
or its successor in Los Angeles, California pursuant to its streamlined
arbitration rules and procedures. The prevailing party shall be awarded its
arbitration, attorney and expert fees, costs and expenses. Judgment on any
interim or final award may be entered in any court of competent jurisdiction.
9.7 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original as against any party whose
signature appears thereon, and all of which shall together constitute one and
the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as the signatories.
9.8 Severability. If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
such determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct.
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9.9 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties, and supersedes all prior
agreements, understandings, inducements or conditions, express or implied, oral
or written, which the parties acknowledge have been merged into this Agreement.
The express terms hereof control and supersede any course of performance and/or
usage of trade inconsistent with any of the terms hereof. This Agreement has
been prepared by all of the parties hereto, and no inference of ambiguity
against the drafter of a document therefore applies against any party hereto. No
party, representative, attorney or agent has relied upon any collateral
contract, agreement, assurance, promise, understanding or representation not
expressly set forth herein. The parties hereby expressly waive all rights and
remedies, at law and in equity, directly or indirectly arising out of or
relating to, or which may arise as a result of, any person’s reliance on any
such assurance.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.

         
Buyers:
       
 
       
 
       
 
David Duquette
       
 
       
 
       
 
Joseph Czikmantori
       
 
            Seller:
 
            U.S. AEROSPACE, INC.
 
       
 
  By:    
 
       
 
  Its:    
 
       

 

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