SECURITIES PURCHASE AGREEMENT
AND PLAN OF REORGANIZATION
THIS SECURITIES PURCHASE AGREEMENT AND PLAN OF REORGANIZATION (the
"Agreement") is entered into effective as of January 1, 2004 by and among First
Deltavision, Inc. a Nevada corporation (the "Company"), Xxxxx Management Group,
Inc., a Nevada corporation (the "Target"), and the stockholders of Target (the
"Selling Stockholders") listed on Exhibit A attached hereto.
R E C I T A L S
A. The Company has authorized capital stock consisting of 50,000,000
shares of common stock ("Common Stock"), $0.001 par value, of which 17,920,000
shares are issued and outstanding.
B. Target has authorized capital stock consisting of 200,000,000 shares of
common stock, $0.0001 par value of which 48,000,000 shares (the "Target Shares")
are issued and outstanding and held by the Selling Stockholders, and 50,000,000
shares of undesignated preferred stock, $0.0001 par value, of which none are
issued and outstanding.
C. The Selling Stockholders wish to sell, and the Company wishes to
purchase, all of the Target Shares on the Closing Date (as defined below), in
exchange for 6% promissory notes in the aggregate principal amount of $60,000.00
(the "Notes") in the form attached hereto as Exhibit B, subject to and upon the
terms hereinafter set forth.
A G R E E M E N T
It is agreed as follows:
1. Securities Purchase and Reorganization
1.1 Agreement to Exchange Securities. Subject to the terms and upon
the conditions set forth herein, each Selling Stockholder agrees to sell,
assign, transfer and deliver to the Company, and the Company agrees to purchase
from each Selling Stockholder, the Target Shares owned by the respective Selling
Stockholder as set forth on Exhibit A attached hereto, in exchange for the
issuance, at the Closing, by the Company to each Selling Stockholder a Note in
the principal aggregate amount of $20,000.00 for all of the Target Shares owned
by the Selling Stockholder at the Closing.
1.2. Instruments of Transfer.
(a) Target Shares. Each Selling Stockholder shall deliver to
the Company original certificates evidencing the Target Shares along with
executed stock powers, in form and substance satisfactory to the Company, for
purposes of assigning and transferring all of their right, title and interest in
and to the Target Shares. From time to time after the Closing Date, and without
further consideration, the Selling Stockholders will execute and deliver such
other instruments of transfer and take such other actions as the Company may
reasonably request in order to facilitate the transfer to the Company of the
securities intended to be transferred hereunder.
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(b) The Notes. The Company shall deliver to the Selling Stockholders
on the Closing Date original Notes, in form and substance satisfactory to the
Selling Stockholders, in order to effectively vest in the Selling Stockholders
all right, title and interest in and to the Notes. From time to time after the
Closing Date, and without further consideration, the Company will execute and
deliver such other instruments and take such other actions as the Selling
Stockholders may reasonably request in order to facilitate the issuance to them
of the Notes.
1.3 Closing. The closing ("Closing") of the exchange of the Target Shares
and the Notes shall take place at the offices of Spectrum Law Group, LLP, 0000
Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000 concurrently with the execution of this
Agreement. The date on which the Closing takes place is referred to herein as
the "Closing Date." The Closing shall be effective as of the execution of this
Agreement.
2. Representations, Warranties and Covenants of the Selling Stockholders.
Each Selling Stockholder severally represents, warrants and covenants to and
with the Company with respect to himself, as follows:
2.1. Title to Shares. Each Selling Stockholder is the sole record
and beneficial owner of the Target Shares held by such Selling Stockholder, free
and clear of all liens, encumbrances, equities, assessments and claims, and that
there are no warrants, options, subscriptions, calls, or other similar rights of
any kind for the issuance or purchase of any of the Target Shares or other
securities of the Target held by such Selling Stockholder. Upon delivery of the
Target Shares by each Selling Stockholder and payment of the Notes in full by
the Company pursuant to this Agreement, each Selling Stockholder will transfer
to the Company valid legal title to the Target Shares held by such Selling
Stockholder, free and clear of all restrictions, liens, encumbrances, equities,
assessments and claims (other than any restrictions, liens, encumbrances,
equities, assessments or claims as may arise from or as a result of (i)
restrictions under applicable Federal and state securities laws, and (ii) any
act or omission of the Company).
2.2. Authority Relative to this Agreement. Each Selling Stockholder
has all requisite individual power and authority to enter into and to carry out
all of the terms of this Agreement and all other documents executed and
delivered in connection herewith (collectively, the "Documents"). All individual
action on the part of each Selling Stockholder necessary for the authorization,
execution, delivery and performance of the Documents by such Selling Stockholder
has been taken and no further authorization on the part of such Selling
Stockholder is required to consummate the transactions provided for in the
Documents. When executed and delivered by each Selling Stockholder, the
Documents shall constitute the valid and legally binding obligation of such
Selling Stockholder, enforceable in accordance with their respective terms,
except as limited by applicable bankruptcy, insolvency reorganization and
moratorium laws and other laws affecting enforcement of creditor's rights
generally and by general principles of equity.
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3. Representations, Warranties and Covenants of the Target and the Selling
Stockholders. The Target and each Selling Stockholder jointly and severally
represents, warrants and covenants to the Company as follows:
3.1. Authority Relative to this Agreement. The Target has all
requisite corporate power and authority to enter into and to carry out all of
the terms of this Agreement and all other documents executed and delivered in
connection herewith (collectively, the "Documents"). All corporate action on the
part of the Target necessary for the authorization, execution, delivery and
performance of the Documents by the Target has been taken and no further
authorization on the part of the Target is required to consummate the
transactions provided for in the Documents. When executed and delivered by the
Target, the Documents shall constitute the valid and legally binding obligation
of the Target, enforceable in accordance with their respective terms, except as
limited by applicable bankruptcy, insolvency reorganization and moratorium laws
and other laws affecting enforcement of creditor's rights generally and by
general principles of equity.
3.2. Capitalization of the Target. The authorized capital stock of
the Target consists of 200,000,000 shares of common stock, $0.0001 par value
(the "Target Common Stock"), of which 48,000,000 shares are issued and
outstanding, and 50,000,000 shares of undesignated preferred stock, $0.0001 par
value, of which none are issued and outstanding. All issued and outstanding
shares of Target Common Stock are duly authorized, validly issued, fully paid
and nonassessable, and are held of record by the Selling Stockholders. There are
no outstanding options, warrants, rights, subscriptions, calls, contracts or
other agreements to issue, purchase or acquire, or securities convertible into,
shares of capital stock or other securities of any kind representing an
ownership interest in the Target other than a warrant to purchase 941,173 shares
of Target Common Stock, which is assumed by the Company pursuant to Section 6.2,
and no Selling Stockholder is a party to any proxy, voting trust or other
agreements with respect to the voting of the Target Common Stock.
3.3. Organization and Standing. The Target is a corporation duly
organized, validly existing and in good standing under the laws of its state or
jurisdiction of incorporation and is duly qualified or registered to do business
as a foreign corporation and is in good standing in each jurisdiction in which
the character of the business conducted by it or the location of the properties
owned or leased by it makes such qualification necessary and where the failure
to be so qualified would have a material adverse effect on the Target. The
Target has the full corporate power and authority to own or lease and operate
its properties and to carry on its business as now being conducted.
3.4. No Default or Legal Restrictions. The Target is not in
violation of its articles of incorporation, bylaws or other governing documents.
The execution and delivery of this Agreement by the Target and the Selling
Stockholders and the consummation of the transactions contemplated hereby do not
and will not violate the articles of incorporation, bylaws or other governing
documents of the Target.
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3.5. Financial Statements.
(a) The Target is currently having an accounting firm
authorized to practice before the Securities and Exchange Commission conduct an
audit of the balance sheet of the Target, including its Subsidiaries, as of
December 31, 2003 and the related statements of operations, shareholders' equity
and cash flows for the period from inception through December 31, 2003 (the
"Target Audited Financial Statements"), and such audit shall be completed in
sufficient time to have the Target Financial Statements to be filed as an
exhibit to the amendment of the Current Report on Form 8-K described in Section
6.1 hereof. The Target Audited Financial Statements will be true and accurate,
in accordance with the books and records of Target. Except as disclosed therein,
the Target Financial Statements (i) will be in accordance with the books and
records of the Target and will be prepared in conformity with generally accepted
accounting principles ("GAAP") consistently applied for all periods, and (ii)
will fairly present the financial position of the Target as of the respective
dates thereof, and the results of operations, and changes in shareholders'
equity and changes in cash flow for the periods then ended, all in accordance
with GAAP consistently applied for all periods.
(b) Except as set forth on the Target Financial Statements,
the Target has no debt, liability or obligations of any nature, whether accrued,
absolute, contingent, or otherwise, whether due or to become due and whether or
not the amount hereof is readily ascertainable, that will not be reflected as a
liability in the Target Financial Statements or except for liabilities incurred
by the Target in the ordinary course of business, consistent with past practices
which are not otherwise prohibited by, or in violation of, or which will not
result in a breach of, the representations, warranties, and covenants of the
Target contained in this Agreement. There will be no material loss contingencies
(as such term is used in Statement of Financial Accounting Standards No. 5 ("FAS
No. 5") issued by the Financial Accounting Standards Board (the "FASB") which
will not be adequately provided for in the Target Financial Statements as
required by FAS No. 5.
4. Representations, Warranties and Covenants of the Company. The Company
represents, warrants and covenants to Target and each of the Selling
Stockholders as follows.
4.1. Organization and Good Standing. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Nevada and has full corporate power and authority to enter into and
perform its obligations under this Agreement.
4.2. Capitalization. The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock, $0.001 par value, of which
17,920,000 shares are issued and outstanding. All issued and outstanding shares
of Common Stock immediately prior to the Closing are duly authorized, validly
issued, fully paid and nonassessable. Except with respect to the Warrant
described in Section 3.2 and assumed pursuant to Section 6.2, immediately prior
to the Closing, there were no outstanding options, warrants, rights,
subscriptions, calls, contracts or other agreements to issue, purchase or
acquire, or securities convertible into, shares of capital stock or other
securities of any kind representing an ownership interest in the Company.
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4.3. Authority Relative to this Agreement. The Company has all
requisite corporate power and authority, to enter into and to carry out all of
the terms of the Documents. All corporate action on the part of the Company
necessary for the authorization, execution, delivery and performance of the
Documents by the Company has been taken and no further authorization on the part
of the Company is required to consummate the transactions provided for in the
Documents. When executed and delivered by the Company, the Documents shall
constitute the valid and legally binding obligation of the Company, enforceable
in accordance with their respective terms, except as limited by applicable
bankruptcy, insolvency reorganization and moratorium laws and other laws
affecting enforcement of creditor's rights generally and by general principles
of equity.
4.4. No Default or Legal Restrictions. The Company is not in
violation of its articles of incorporation, bylaws or other governing documents.
The execution and delivery of this Agreement by the Company and the consummation
of the transactions contemplated hereby do not and will not violate the articles
of incorporation, bylaws or other governing documents of the Company.
5. Deliveries at Closing.
5.1 Company's Deliveries at Closing. At the Closing, the Company
shall deliver or cause to be delivered to Target and the Selling Stockholders
all of the following:
(a) The Notes, registered in the names of the Selling
Stockholders;
(b) Such other documents and instruments as shall be
reasonably necessary to effect the transactions contemplated hereby.
5.2. Selling Stockholders' and Target's Deliveries at Closing. At
the Closing, the Selling Stockholders shall deliver or cause to be delivered to
the Company all of the following:
(a) Original certificates representing the Target Shares to be
exchanged pursuant to this Agreement;
(b) Stock Assignments Separate from Certificate in the form
and substance satisfactory to the Company and duly executed by each of the
Selling Stockholders regarding the Target Shares;
(c) Such other documents and instruments as shall be
reasonably necessary to effect the transactions contemplated hereby.
6. Covenants.
6.1. Form 8-K - Acquisition. The Company shall prepare a Current
Report on Form 8-K regarding the acquisition contemplated herein and cause such
Current Report to be filed with the Securities and Exchange Commission no later
than fifteen (15) days following the Closing Date. The Company shall prepare an
amendment to Current Report on Form 8-K containing the Target Financial
Statements described in Section 3.5 herein and cause such amendment to be filed
with the Securities and Exchange Commission no later than seventy-five (75) days
following the Closing Date.
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6.2 Target Warrants. On the Closing Date, each outstanding warrant
to purchase shares of Target Common Stock (a "Warrant") shall be assumed and
shall constitute an option to aqcuire, on the same terms and conditions as were
applicable under such Warrant, the same number of shares of Company Common
Stock, as the holder of such Warrant would have been entitled to receive
pursuant to the Warrant had such holder exercised such Warrant (including any
unvested portion thereof) in full (disregarding any limitation on exercisability
thereof) immediately before the Closing Date, except that, to the extent any
Warrant had an exercise price lower than the par value per share of Company
Common Stock, then such exercise price shall be deemed to be the par value per
share of Company Common Stock.
6.3. Filings; Consents; Removal of Objections. Subject to the terms
and conditions herein provided, the parties hereto will use their best efforts
to take or cause to be taken all actions and do or cause to be done all things
necessary, proper or advisable under applicable laws to consummate and make
effective, as soon as reasonably practicable, the transactions contemplated
hereby, including without limitation obtaining all consents of any person or
entity, whether private or governmental, required in connection with the
consummation of the transactions contemplated herein. In furtherance, and not in
limitation of the foregoing, it is the intent of the parties to consummate the
transactions contemplated herein at the earliest practicable time, and they
respectively agree to exert their best efforts to that end, including without
limitation: (i) the removal or satisfaction, if possible, of any objections to
the validity or legality of the transactions contemplated herein; and (ii) the
satisfaction of the conditions to consummation of the transactions contemplated
hereby.
6.4. Further Assurances; Cooperation; Notification.
(a) Each party hereto will, at and after the Closing, execute
and deliver such instruments and take such other actions as the other party or
parties, as the case may be, may reasonably require in order to carry out the
intent of this Agreement. Without limiting the generality of the foregoing, at
any time after the Closing, at the request of the Company and without further
consideration, the Target and the Selling Stockholders will execute and deliver
such instruments of sale, transfer, conveyance, assignment and confirmation and
take such action as the Company may reasonably deem necessary or desirable in
order to more effectively transfer, convey and assign to the Company, and to
confirm the Company's title to, the Target Shares.
(b) At all times from the date hereof until the Closing, each
party will promptly notify the other in writing of the occurrence of any event
which it reasonably believes will or may result in a failure by such party to
satisfy the conditions and covenants specified in Articles 5 and 6 hereof.
7. Miscellaneous.
7.1. Cumulative Remedies. Any person having any rights under any
provision of this Agreement will be entitled to enforce such rights
specifically, to recover damages by reason of any breach of any provision of
this Agreement, and to exercise all other rights granted by law, which rights
may be exercised cumulatively and not alternatively.
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7.2. Successors and Assigns. Except as otherwise expressly provided
herein, this Agreement and any of the rights, interests or obligations hereunder
may not be assigned by any of the parties hereto. All covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto will
bind and inure to the benefit of the respective permitted successors and assigns
of the parties hereto whether so expressed or not.
7.3. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement or the other documents.
7.4. Counterparts. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts when taken together will constitute one and the
same agreement.
7.5. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties with respect to the subject matter
thereof, and supersedes all prior and contemporaneous agreements and
understandings.
7.6. Waiver of Conditions. At any time or times during the term
hereof, the Company may waive fulfillment of any one or more of the conditions
to its obligations in whole or in part, and Target or the Selling Stockholders
may waive fulfillment of any one or more of the foregoing conditions to their
obligation, in whole or in part, by delivering to the other party a written
waiver or waivers of fulfillment thereof to the extent specified in such written
waiver or waivers. Any such waiver shall be validly and sufficiently authorized
for the purposes of this Agreement if, as to any party, it is authorized in
writing by an authorized representative of such party. The failure of any party
hereto to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.
7.7. Law Governing. This Agreement shall be construed and
interpreted in accordance with and governed and enforced in all respects by the
laws of the State of Nevada
7.8. Attorneys' Fees. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs and disbursements in addition
to any other relief to which such party may be entitled.
7.9. Delivery by Fax. Delivery of an executed counterpart of the
Agreement or any exhibit attached hereto by facsimile transmission shall be
equally as effective as delivery of an executed hard copy of the same. Any party
delivering an executed counterpart of this Agreement or any exhibit attached
hereto by facsimile transmission shall also deliver an executed hard copy of the
same, but the failure by such party to deliver such executed hard copy shall not
affect the validity, enforceability or binding nature effect of this Agreement
or such exhibit.
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7.10. Gender Neutral Pronouns. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine or neuter, singular
or plural, as the identity of the referenced person, persons, entity or entities
may require.
IN WITNESS WHEREOF, each of the parties to this Agreement has executed or
caused this Agreement to be executed as of the date first above written.
"COMPANY"
FIRST DELTAVISION, INC.,
a Nevada corporation
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxx, President
"TARGET" "SELLING STOCKHOLDERS"
XXXXX MANAGEMENT GROUP, INC. Signatures Appear on Exhibit A
a Nevada corporation
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxx, President
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EXHIBIT A
SELLING STOCKHOLDERS
Signature of Selling Stockholder Principal Amount of Note
-------------------------------- ------------------------
/s/ Xxxxx Xxxxx $20,000.00
-----------------------------------
Xxxxx Xxxxx
/s/ Xxxxx X. Xxxxxxxx $20,000.00
-----------------------------------
Xxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxx $20,000.00
-----------------------------------
Xxxxx X. Xxxxx
A-1
