EXHIBIT 2.1
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT ("Agreement") is entered into on
January 15, 2003 by and between MAGNOLIA VENTURES, INC., a Nevada corporation
("Magnolia"), and XXXXXXX XXXXX ("Selling Stockholder"), the sole stockholder of
XX XXXXXXXXX GROUP, a Nevada corporation ("XX Xxxxxxxxx").
R E C I T A L S
A. Magnolia has authorized capital stock consisting of 25,000,000
shares of common stock, $.001 par value ("Magnolia Common Stock"), of which
21,000,000 shares are issued and outstanding, and 10,000,000 shares of blank
check preferred stock, $.01 par value, none of which is outstanding.
B. XX Xxxxxxxxx has an authorized capitalization consisting of
5,000,000 shares common stock, $.001 par value ("XX Xxxxxxxxx Common Stock"), of
which 10,000 shares ("XX Xxxxxxxxx Shares") are issued, outstanding and held by
the Selling Stockholder.
C. The Selling Stockholder wishes to sell, and Magnolia wishes to
acquire, all of the XX Xxxxxxxxx Shares on the Closing Date (as defined below),
in exchange for the issuance of 3,000,000 shares of Magnolia Common Stock.
subject to and upon the terms and conditions hereinafter set forth.
A G R E E M E N T
It is agreed as follows:
1. SECURITIES PURCHASE.
1.1 AGREEMENT TO TRANSFER SECURITIES. Subject to the terms and
upon the conditions set forth herein, the Selling Stockholder agrees to sell,
assign, transfer and deliver to Magnolia, and Magnolia agrees to purchase from
Selling Stockholder, at the Closing, the XX Xxxxxxxxx Shares owned by the
Selling Stockholder in exchange for 3,000,000 shares of Magnolia Common Stock
("Magnolia Shares").
1.2 INSTRUMENTS OF TRANSFER.
(a) XX XXXXXXXXX SHARES. The Selling Stockholder
hereby endorses, assigns and transfers to Magnolia all of his right and interest
in and to the XX Xxxxxxxxx Shares. From time to time after the Closing Date, and
without further consideration, the Selling Stockholder will execute and deliver
such other instruments of transfer and take such other actions as Magnolia may
reasonably request in order to more effectively transfer to Magnolia the
securities intended to be transferred hereunder.
(b) MAGNOLIA SHARES. Magnolia shall deliver to
the Selling Stockholder on the Closing Date an original certificate evidencing
Magnolia Shares, in form and substance satisfactory to the Selling Stockholder,
in order to effectively vest in the Selling Stockholder all right, title and
interest in and to the Magnolia Shares. From time to time after the Closing
Date, and without further consideration, Magnolia will execute and deliver such
other instruments and take such other actions as the Selling Stockholder may
reasonably request in order to more effectively issue to him Magnolia Shares.
-1-
1.3 CLOSING. The closing ("Closing") of the transactions
contemplated by Section 1.1 of this Agreement shall take place at the offices of
Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP, located at 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx
000, Xxxxxxx Xxxxx, Xxxxxxxxxx, at 4:00 p.m., local time, on January 15, 2003,
or at such other time and place as may be agreed to by the Selling Stockholder
and Magnolia ("Closing Date").
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDER.
The Selling Stockholder hereby represents, warrants and covenants to and with
Magnolia as follows:
2.1 POWER AND AUTHORITY. The 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 the Selling Stockholder necessary for the authorization, execution,
delivery and performance of the Documents by the Selling Stockholder has been
taken and no further authorization on the part of the Selling Stockholder is
required to consummate the transactions provided for in the Documents. When
executed and delivered by the Selling Stockholder, the Documents shall
constitute the valid and legally binding obligation of the Selling Stockholder
enforceable in accordance with their respective terms.
2.2 OWNERSHIP OF AND TITLE TO SECURITIES. The Selling
Stockholder represents that he is the sole owner of all of the issued and
outstanding shares of XX Xxxxxxxxx Common Stock and that there are no warrants,
options, subscriptions, calls, or other similar rights of any kind for the
issuance or purchase of any securities of XX Xxxxxxxxx held by the Selling
Stockholder or any other persons. The Selling Stockholder represents that the
Selling Stockholder has and will transfer to Magnolia good and marketable title
to the XX Xxxxxxxxx Shares, free and clear of all pledges, security interests,
mortgages, liens, claims, charges, restrictions or encumbrances.
2.3 NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION. The
Selling Stockholder represents that, to his best knowledge, no order of any
court or administrative agency is in effect which restrains or prohibits the
Selling Stockholder from consummating the transactions contemplated hereby, and
no suit, action, investigation, inquiry or proceeding by any governmental body
or other person or legal or administrative proceeding has been instituted or
threatened which questions the validity or legality of the Selling Stockholder's
consummation of the transactions contemplated hereby.
2.4 APPROVALS AND CONSENTS. The Selling Stockholder represents
that, to his best knowledge, there are no permits, consents, mandates or
approvals of public authorities, either foreign, federal, state or local, or of
any third party necessary for the Selling Stockholder's consummation of the
transactions contemplated hereby.
2.5 INVESTMENT AND RELATED REPRESENTATIONS. The Selling
Stockholder is aware that neither the Magnolia Shares nor the offer or sale
thereof to the Selling Stockholder has been registered under the U.S. Securities
Act of 1933, as amended ("Securities Act"), or under any foreign or state
securities law. The Selling Stockholder acknowledges that the Magnolia Shares
are being offered pursuant to Section 4(2) of the Securities Act and that the
Magnolia Shares will be characterized as "restricted" securities under U.S.
-2-
federal securities laws inasmuch as they are being acquired in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances. The Selling Stockholder agrees that the
Selling Stockholder will not sell all or any portion of the Magnolia Shares
except pursuant to registration under the Securities Act or pursuant to an
available exemption from registration under the Securities Act. The Selling
Stockholder understands that the certificate for Magnolia Shares issued to the
Selling Stockholder or to any subsequent transferee shall be stamped or
otherwise imprinted with an appropriate legend summarizing the restrictions
described in this Section 2.5 and that Magnolia shall refuse to transfer the
Magnolia Shares except in accordance with such restrictions.
3. MISCELLANEOUS.
3.1 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 cumulative and not alternatively.
3.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, 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 successors and assigns of the parties hereto whether so expressed or
not.
3.3 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.
3.4 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.
3.5 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.
3.6 GOVERNING LAW. The validity, meaning and effect of this
Agreement shall be determined in accordance with the laws of California
applicable to contracts made and to be performed in California. In the event of
any dispute under this Agreement, the parties agree that the jurisdiction for
the resolution of any such dispute will be any appropriate court located in Los
Angeles, California.
-3-
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.
"Magnolia"
MAGNOLIA VENTURES, INC.,
a Nevada corporation
By: /s/ XXXXXXX XXX
__________________________________________
Xxxxxxx Xxx, Assistant Secretary
"Selling Stockholder"
By: /s/ XXXXXXX XXXXX
__________________________________________
Xxxxxxx Xxxxx
-4-
