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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into this 16th
day of August, 2000, by and among XXXXXXXXXX.XXX a Delaware corporation
(hereinafter referred to as "Buyer"); and XXXXXXX XXXXXX, an individual
resident of North Carolina and XXXXX CHILDRESS, an individual resident of
Florida (hereinafter referred to as "Sellers"), being the sole shareholders of
DM MARKETING, INC., a Delaware corporation (hereafter referred to as
"Company").
WHEREAS, Sellers are the owners of record and beneficially own One
Thousand Five Hundred (1,500) shares (the "Shares") of the issued and
outstanding shares of the Company's common stock par value $0.10 per share (the
"Common Stock") representing 100% of the Capital Stock of the Company; and
WHEREAS, Sellers desire to sell the Shares to Buyer, and Buyer desires
to purchase the Shares, upon the terms and conditions set forth herein;
NOW, THEREFORE in consideration of the mutual promises and covenants
contained herein, and for other good valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:
I.
SALE AND PURCHASE OF THE SHARES
1.1 SALE AND PURCHASE. Subject to the terms and conditions
hereof, at the Closing (as defined in paragraph 1.2 below), Sellers agree to
sell, assign, transfer, convey and deliver to Buyer, and Buyer agrees to
purchase from Sellers, the Shares.
1.2 CLOSING. The purchase shall be consummated at a closing
("Closing") to take place at 9:00 o'clock a.m., at the offices of Buyer's
counsel on August 30, 2000 or within 3 days after the receipt of any
shareholder approval if required by the rules and regulations of the American
Stock Exchange but no later than October 31, 2000 ("Closing Date").
1.3 PURCHASE PRICE. The purchase price ("Purchase Price") for the
Shares shall be Eight Million Four Hundred Fifty Thousand (8,450,000) shares of
Common Stock of the Buyer ("Buyer's Shares"). The purchase price shall be paid
at Closing, by issuance and delivery of Buyer's Shares to Sellers against
receipt of certificates representing the Shares, duly endorsed for transfer to
Buyer.
1.4 OTHER AGREEMENTS. At the Closing, the indicated parties shall
execute and deliver the following additional agreements in substantially the
form attached hereto:
(a) Stock certificates representing all of the Shares,
duly endorsed to Buyer and in blank or assignments separate from the
certificates, transferring the Shares from Sellers to Buyer.
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(b) Employment Agreement between Xxxxxxx Xxxxxx and
xxxxxxxxxx.xxx in the form attached hereto as Exhibit "B".
(c) Investment Representation Letter to the Buyer from
Sellers.
1.5 BASIC AGREEMENTS AND TRANSACTION DEFINED. This Agreement and
other agreements listed in paragraph 1.4, are sometimes referred to as the
"Basic Agreement". The transactions contemplated by the Basic Agreement are
sometimes referred to as the "Transactions".
II.
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY.
Sellers represent and warrant to Buyer as follows:
(a) TITLE TO THE SHARES. At Closing, Sellers shall own
of record and beneficially the number of the Shares listed on Exhibit
"A", of the Company, free and clear of all liens, encumbrances,
pledges, claims, options, charges and assessments of any nature
whatsoever, with full right and lawful authority to transfer the
Shares to Buyer. No person has any preemptive rights or rights of
first refusal with respect to any of the Shares. There exists no
voting agreement, voting trust, or outstanding proxy with respect to
any of the Shares. There are no outstanding rights, options, warrants,
calls, commitments, or any other agreements of any character, whether
oral or written, with respect to the Shares.
(b) ORGANIZATION. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of
the state of Delaware. The Company has all requisite corporate power
and authority to own, lease and operate its properties and to carry on
its business. The Company is duly qualified and in good standing as a
foreign corporation in each jurisdiction where its ownership of
property or operation of its business requires qualification.
(c) AUTHORIZED CAPITALIZATION. The authorized
capitalization of the Company consists of One Thousand Five Hundred
(1,500) shares of Common Stock, no par, of which One Thousand Five
Hundred (1,500) shares have been issued and are outstanding. The
Shares have been duly authorized, validly issued, are fully paid and
nonassessable with no personal liability attaching to the ownership
thereof and were offered, issued, sold and delivered by the Company in
compliance with all applicable state and federal laws. The Company
does not have any outstanding rights, options, warrants, calls,
commitments, conversion or any other agreements of any character,
whether oral or written, obligating it to issue any shares of its
capital stock, whether authorized or not. The Company is not a party
to and is not bound by any agreement, contract, arrangement or
understanding, whether oral or written, giving any person or entity
any interest in, or any right to share, participate in or receive any
portion of, the
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Company's income, profits or assets, or obligating the Company to
distribute any portion of its income, profits or assets.
(d) AUTHORITY. Sellers have full power and lawful
authority to execute and deliver the Basic Agreements and to
consummate and perform the Transactions contemplated thereby. The
Basic Agreements constitute (or shall, upon execution, constitute)
valid and legally binding obligations upon Sellers, enforceable in
accordance with their terms. Neither the execution and delivery of the
Basic Agreements by Sellers, nor the consummation and performance of
the transactions contemplated thereby, conflict with, requires the
consent, waiver or approval of, results in a breach of or default
under, or gives to others any interest or right of termination,
cancellation or acceleration in or with respect to, any agreement by
which Sellers or the Company is a party or by which Sellers or the
Company or any of their respective properties or assets are bound or
affected.
(e) COMPANY FINANCIAL STATEMENTS. The financial
statements of the Company delivered to Buyer (the "Company Financial
Statements") are complete, were prepared in accordance with generally
accepted accounting principles applied on a basis consistent with
prior periods and fairly present the financial position of the Company
as of July 31, 2000 and there have been no material changes
thereafter.
(f) NO UNDISCLOSED LIABILITIES. Except as set forth on
Exhibit "C", the Company is not aware of any liabilities for which the
Company currently is liable or will become liable in the future.
(g) COMPLIANCE WITH LAWS. The Company is not in
violation of any federal, state, local or other law, ordinance, rule
or regulation applicable to its business, and have not received any
actual or threatened complaint, citation or notice of violation or
investigation from any governmental authority.
(h) NO LITIGATION. There are no actions, suits, claims,
complaints or proceedings pending or threatened against the Company,
at law or in equity, or before or by any governmental department,
commission, court, board, bureau, agency or instrumentality; and there
are no facts which would provide a valid basis for any such action,
suit or proceeding. There are no orders, judgments or decrees of any
governmental authority outstanding which specifically apply to the
Company or any of its assets.
(i) DISCLOSURE. All statements of Sellers contained in
the Basic Agreements and in any other written documents delivered by
or on behalf of the Company or Sellers to Buyer are true, and correct
in all material respects and do not omit any material fact necessary
to make the statements contained therein not misleading in light of
the circumstances under which they were made. There are no facts known
to Sellers which could have a materially adversely affect upon the
business, financial condition, results of operations, assets,
liabilities, or prospers of the Company, which have not been disclosed
to Buyer in the Basic Agreements.
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(j) MATERIAL CONTRACTS. The Company has in all material
respect performed all of its obligations required to be performed by
it through the date hereof, and is not in default or alleged to be in
default in any material respect, under any contract and to the
Company's knowledge, there exists no event, condition or occurrence
which, after notice or lapse of time or both, which constitutes such a
default.
2.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Sellers as follows:
(a) ORGANIZATION. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of
the state of Delaware. Buyer has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business. Buyer is duly qualified and in good standing as a foreign
corporation in each jurisdiction where its ownership of property or
operation of its business requires qualification.
(b) AUTHORIZED CAPITALIZATION. The authorized
capitalization of the Buyer consists of One Hundred Million
(100,000,000) shares of Common Stock, of which Thirty-three Million
One Hundred Eighteen Thousand Six Hundred Fifty-four (33,118,654)
shares have been issued and are outstanding as of August 9, 2000. At
Closing, the Shares will have been duly authorized, validly issued,
are fully paid and nonassessable with no personal liability attaching
to the ownership thereof and were offered, issued, sold and delivered
by the Buyer in compliance with all applicable state and federal laws.
In addition, Buyer has entered into a broker services agreement with
RichMark Capital Corporation for the private placement of up to
6,600,000 shares of Common Stock at $0.375 per share on a best efforts
basis and Buyer has entered into a letter of intent for the
acquisition of Internet Aviation Services, Ltd. for 1,750,000 shares
of Common Stock.
(c) AUTHORITY. Buyer has full power and lawful authority
to execute and deliver the Basic Agreements and to consummate and
perform the Transactions contemplated thereby. The Basic Agreements
constitute (or shall, upon execution, constitute) valid and legally
binding obligations upon Buyer, enforceable in accordance with their
terms. Neither the execution and delivery of the Basic Agreements by
Buyer, nor the consummation and performance of the Transactions
contemplated thereby, conflicts with, requires the consent, waiver or
approval of, results in a breach of or default under, or gives to
others any interest or right of termination, cancellation or
acceleration in or with respect to, any agreement by which Buyer is a
party or by which Buyer or any of its properties or assets are bound
or affected.
(d) NO UNDISCLOSED LIABILITIES. Except as set forth in
the Buyer Financial Statements previously delivered to Sellers and as
set forth on Exhibit "D" or as otherwise disclosed in Buyer's filings
with the Securities and Exchange Commission, Buyer is not aware of any
material liabilities for which the Buyer is liable or will become
liable in the future.
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(e) INVESTMENT INTENT. Buyer is acquiring the Shares of
its own account, for investment purposes only, and not with a view to
the sale or distribution of any part thereof and Buyer has no present
intention of selling, granting participation in, or otherwise
distributing the same. Buyer understands the specific risks related to
an investment in the Shares, especially as it relates to the financial
performance of the Company.
III.
COVENANTS
3.1 COVENANTS OF SELLERS. Sellers covenant and agree that from
the date hereof to the Closing without the prior written consent of Buyer:
(a) ORDINARY COURSE OF BUSINESS. Sellers will operate
the business of the Company only in the ordinary course and will use
its best efforts to preserve the Company's business, organization,
goodwill and relationships with persons having business dealings with
them.
(b) COMPENSATION. Sellers will not permit the Company to
(1) enter into or alter any employment agreements; (2) grant any
increase in compensation other than normal merit increases consistent
with the Company's general prevailing practices to any officer or
employee; or (3) enter into or alter any labor or collective
bargaining agreement or any bonus or other employee fringe benefit.
(c) NO INDEBTEDNESS. Sellers will not permit the Company
to create, incur, assume, guarantee or otherwise become liable with
respect to any obligation for borrowed money, indebtedness,
capitalized lease or similar obligation, except in the ordinary course
of business consistent with past practices where the entire net
proceeds thereof are deposited with and used by and in connection with
the business of the Company.
(d) MAINTAIN BOOKS. Sellers will cause the Company to
maintain its books, accounts and records in the usual, regular
ordinary and soured business manner and in accordance with generally
accepted accounting principles applied on a basis consistent with past
practices.
(e) NO AMENDMENTS. Sellers will not permit the Company
to amend its corporate charter or bylaws (or similar documents)
without prior consent of Buyer and will cause the Company to maintain
their corporate existence, licenses, permits, powers and rights in
full force and effect.
(f) TAXES AND ACCOUNTING MATTERS. Sellers will cause the
Company to file when due all federal, state and local tax returns and
reports which shall be accurate and complete, including but not
limited to income, franchise, excise, ad valorem, and other taxes with
respect to its business and properties, and to pay as they become due
all taxes or assessments, except for taxes for which adequate reserves
are established and which
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are being contested in good faith by appropriate proceedings. Sellers
will not permit the Company to change their accounting methods or
practices or any depreciation, amortization or inventory valuation
policies or practices.
(g) NO SECURITIES ISSUANCES. Sellers will not permit the
Company to issue any shares of any class of capital stock, or enter
into any contract, option, warrant or right calling for the issuance
of any such shares of capital stock, or create or issue any securities
convertible into any securities of the Company except for the
transactions contemplated herein.
(h) DUE COMPLIANCE. Sellers will cause the Company to
comply with all laws, regulations, rules and ordinances applicable to
it and to the conduct of its business.
(i) CONSENTS. Sellers will use their, and will cause the
Company to use its, best good faith efforts to obtain the consent or
approval of each person or entity whose consent or approval is
required for the consummation of the Transactions contemplated hereby
and to do all things necessary to consummate the Transactions
contemplated by the Basic Agreements.
IV.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
The obligation of Buyer to close the Transactions contemplated hereby
is subject to the fulfillment by Sellers prior to Closing of each of the
following conditions, which may be waived in whole or in part by Buyer:
4.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS.
The representations and warranties of Sellers contained in this Agreement shall
have been true and correct when made and shall be true and correct as of the
Closing with the same force and effort as if made at the Closing. Sellers shall
have performed all agreements, covenants and conditions required to be
performed by Sellers prior to the Closing.
4.2 NO ADVERSE CHANGE. There shall have been no event which has
had or may have a material adverse effect upon the business, financial
condition, results of operation, assets, liabilities or prospects of the
Company.
4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
4.4 DOCUMENTS TO BE DELIVERED BY SELLERS. Sellers shall have
delivered the following documents:
(a) Stock certificates representing all of the Shares,
duly endorsed to Buyer and in blank or accompanied by duly executed
stock powers.
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(b) A copy of (i) the Certificate of Incorporation of
the Company, and (ii) the Bylaws of the Company.
(c) All agreements referred to in paragraph 1.5 above,
executed by all parties thereto other than Buyer.
(d) Such other documents or certificates as shall be
reasonably required by Buyer or its counsel in order to close and
consummate this Agreement.
4.5 SHAREHOLDER APPROVAL. Buyer shall have received any
shareholder approval required by the rules and regulations of the American
Stock Exchange.
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLERS TO CLOSE
The obligation of Sellers to close the Transactions is subject to the
fulfillment prior to Closing of each of the following conditions, any of which
may be waived in whole or in part by Sellers:
5.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS.
The representations and warranties made by Buyer in this Agreement shall have
been true and correct when made and shall be true and correct in all material
respects at the Closing with the same force and effect as if made at the
Closing, and Buyer shall have performed all agreements, covenants and
conditions required to be performed by Buyer prior to the Closing.
5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
5.3 AMERICAN STOCK EXCHANGE. The Buyer's common stock shall be
listed and trading on the American Stock Exchange and shall not be subject to
any trading halt, suspension, or pending de-listing procedures.
5.4 OTHER AGREEMENTS. All parties other than Sellers and the
Company shall have executed and delivered the Basic Agreements.
5.5 PAYMENTS. Sellers shall have received from Buyer all Common
Stock to be issued at the Closing by Buyer pursuant to the Basic Agreements.
5.6 BOARD OF DIRECTORS. Xxxxxxx Xxxxxx shall have been appointed
as a director of Buyer as of the Closing.
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VI.
MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
6.1 MODIFICATION. Buyer and Sellers may amend, modify or
supplement this Agreement in any manner as they may mutually agree in writing,
6.2 WAIVERS. Buyer and Sellers may in writing attend the time for
or waive compliance by the other with any of the covenants or conditions of the
other contained heroin.
6.3 TERMINATION AND ABANDONMENT. This Agreement may be terminated
and the purchase of the Shares may be abandoned before the Closing:
(a) By the mutual consent of Sellers and Buyer;
(b) By Buyer, if the representations and warranties of
Sellers set forth herein shall not be accurate, or the conditions
precedent set forth in Article IV shall have not have been satisfied,
in all material respects on or before the Closing Date (as the same
may be extended from time to time;
(c) By Sellers, if the representations and warranties of
Buyer set forth herein shall not be accurate, or the conditions
precedent set forth in Article V shall not have been satisfied in all
material respects on or before the Closing Date (as the same may be
extended from time to time).
Termination shall be effective on the date of receipt of written
notice specifying the reasons therefor.
VII.
MISCELLANEOUS
7.1 REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise
provided, all of the representations and warranties contained in this Agreement
and in any certificate, exhibitor other document delivered pursuant to this
Agreement shall survive the Closing for a period of two (2) years. No
investigation made by any xxxxx hereto or their representatives shall
constitute a waiver of any representation or warranty, and no such
representation or warranty shall be merged into the Closing.
7.2 BINDING EFFECT OF THE BASIC AGREEMENTS. The Basic Agreements
and the certificates and other instruments delivered by or on behalf of the
parties pursuant thereto, constitute the entire agreement between the parties.
The terms and conditions of the Basic Agreements shall inure to the benefit of
and be binding upon the respective heirs, legal representatives, successor and
assigns of the parties hereto. Nothing in the Basic Agreements, expressed or
implied, confers any rights or remedies upon any party other than the parties
hereto and their respective heirs, legal representatives and assigns.
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7.3 APPLICABLE LAW. The Basic Agreements are made pursuant to,
and will be construed under, the laws of the State of Georgia.
7.4 NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and will be deemed to have been
duly given when delivered or mailed, first class postage prepaid:
(a) If to Sellers, to:
Xx. Xxxxxxx Xxxxxx, CEO
DM Marketing, Inc.
c/o G. Xxxxx Xxxxxx & Associates, P.C.
One Memorial Place
0000 Xxxx 00xx Xxxxx - Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) If to Buyer, to:
Xxxx Xxxxxxxx, President
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
These addresses may be changed from time to time by written notice to
the other parties.
7.5 HEADINGS. The headings contained in this Agreement are for
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
7.6 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which will be deemed an original and all of which together will
constitute one instrument.
7.7 SEVERABILITY. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable under applicable law this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
The remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.
7.8 FORBEARANCE; WAIVER. Failure to pursue any legal or equitable
remedy or right available to a party shall not constitute a waiver of such
right, nor shall any such forbearance, failure a actual waiver imply or
constitute waiver of subsequent default or breach.
7.9 ATTORNEYS' FEES AND EXPENSES. The prevailing party in any
legal proceeding based upon this Agreement shall be entitled to reasonable
attorneys' fees and expenses and court costs.
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7.10 EXPENSES. Each party shall pay all fees and expenses incurred
by it incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement.
7.11 INTEGRATION. This Agreement and all documents and instruments
executed pursuant hereto merge and integrate all prior agreements and
representations respecting the Transactions, whether written or oral, and
constitute the sole agreement of the parties in connection therewith. This
Agreement has been negotiated by and submitted to the scrutiny of both Sellers
and Buyer and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement on the date first written above.
"BUYER"
XXXXXXXXXX.XXX
BY:
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XXXX XXXXXXX, PRESIDENT
"COMPANY"
DM MARKETING, INC.
BY:
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XXXXXXX XXXXXX, PRESIDENT
"SELLERS"
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XXXXXXX XXXXXX
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XXXXX CHILDRESS
