EXHIBIT 2.1
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT"), NOR REGISTERED UNDER ANY
STATE SECURITIES LAW, AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN
RULE 144 UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANS FERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
AGREEMENT FOR THE EXCHANGE OF COMMON STOCK
AGREEMENT made this 6th day of March 2001, by and between FAIRFAX
GROUP, INC., a Florida corporation, (the "ISSUER") and for the benefit of the
individual shareholders, (the "SHAREHOLDERS"), which SHAREHOLDERS own of all the
issued and outstanding shares of DIVERSIFIED PRODUCT INVESTIGATIONS, INC. a
Florida corporation. ("DPI")
In consideration of the mutual promises, covenants, and representations
contained herein, and other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. EXCHANGE OF SECURITIES. Subject to the terms and conditions of this
Agreement, ISSUER agrees to issue to SHAREHOLDERS, a total of 10,327,420 shares
of the common stock of ISSUER, $0.01 par value (the "Shares"), in exchange for
the issued and outstanding shares of DPI, such that DPI shall become a wholly
owned subsidiary of the ISSUER.
2. REPRESENTATIONS AND WARRANTIES. ISSUER represents and warrants to
SHAREHOLDERS and DPI the following:
i. Organization. ISSUER is a corporation duly organized,
validly existing, and in good standing under the laws of Florida, and has all
necessary corporate powers to own properties and carry on a business, and is
duly qualified to do business and is in good standing in Florida. All actions
taken by the Incorporators, directors and shareholders of ISSUER have been valid
and in accordance with the laws of the State of Florida.
ii. Capital. The authorized capital stock of ISSUER consists
of 50,000,000 shares of common stock, $0.01 par value, of which 16,150,000 are
issued and outstanding. All outstanding shares are fully paid and nonassessable,
free of liens, encumbrances, options, restrictions (with the exception of Rule
144 requirements) and legal or equitable rights of others not a party to this
Agreement. Following this closing, there shall be a total of 12,277,420 shares
of common stock of ISSUER issued and outstanding and there will be no
outstanding subscriptions, options, rights, warrants, convertible securities, or
other agreements or commitments obligating ISSUER to issue or to transfer from
treasury any additional shares of its capital stock. None of the outstanding
shares of ISSUER are subject to any stock restriction agreements. All of the
shareholders of ISSUER have valid title to such shares and acquired their shares
in a lawful transaction and in accordance with the laws of Florida.
iii. Financial Statements. The financial statements of the
Company have been prepared in accordance with generally accepted accounting
principles consistently followed by ISSUER throughout the periods indicated, and
fairly present the financial position of ISSUER as of the date of the balance
sheet and the financial statements, and the results of its operations for the
periods indicated. ISSUER is current in its filings with the Securities and
Exchange Commission.
iv. Absence of Changes. Since the date of the financial
statements filed with the Securities and Exchange Commission, there has not been
any change in the financial condition or operations of ISSUER, except changes in
the ordinary course of business, which changes have not in the aggregate been
materially adverse.
v. Liabilities. ISSUER does not have any debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that is not reflected on the ISSUERS'
financial statement. ISSUER is not aware of any pending, threatened or asserted
claims, lawsuits or contingencies involving ISSUER or its common stock. There is
no dispute of any kind between the ISSUER and any third party, and no such
dispute will exist at the closing of this Agreement. At closing, ISSUER will be
free from any and all liabilities, liens, claims and/or commitments.
vi. Ability to Carry Out Obligations. ISSUER has the right, power,
and authority to enter into and perform its obligations under this Agreement.
The execution and delivery of this Agreement by Issuer and the performance by
ISSUER of its obligations hereunder will not cause, constitute, or conflict with
or result in (a) any breach or violation or any of the provisions of or
constitute a default under any license, indenture, mortgage, charter,
instrument, articles of incorporation, bylaw, or other agreement or instrument
to which ISSUER or its shareholders are a party, or by which they may be bound,
nor will any consents or authorizations of any party other than those hereto be
required, (b) an event that would cause ISSUER to be liable to any party, or (c)
an event that would result in the creation or imposition or any lien, charge or
encumbrance on any asset of ISSUER or upon the securities of ISSUER to be
acquired by SHAREHOLDERS.
vii. Full Disclosure. None of the representations and warranties
made by the ISSUER, or in any certificate or memorandum furnished or to be
furnished by the ISSUER, contains or will contain any untrue statement of a
material fact, or omit any material fact the omission of which would be
misleading.
viii. Contract and Leases. ISSUER is not currently carrying on
on any business and is not a party to any contract, agreement or lease. No
person holds a power of attorney from ISSUER.
ix. Compliance with Laws. ISSUER has complied with, and is not in
violation of any federal, state, or local statute, law, and/or regulation
pertaining to ISSUER. ISSUER has complied with all federal and state securities
laws in connection with the issuance, sale and distribution of its securities.
x. Litigation. ISSUER is not (and has not been) a party to any
suit, action, arbitration, or legal, administrative, or other proceeding, or
pending governmental investigation. To the best knowledge of the ISSUER, there
is no basis for any such action or proceeding and no such action or proceeding
is threatened against ISSUER and ISSUER is not subject to or in default with
respect to any order, writ, injunction, or decree of any federal, state, local,
or foreign court, department, agency, or instrumentality.
xi. Conduct of Business. Prior to the closing, ISSUER shall
conduct its business in the normal course, and shall not (1) sell, pledge, or
assign any assets (2) amend its Articles of Incorporation or Bylaws, (3) declare
dividends, redeem or sell stock or other securities, (4) incur any liabilities,
(5) acquire or dispose of any assets, enter into any contract, guarantee
obligations of any third party, or (6) enter into any other transaction.
xii. Documents. All minutes, consents or other documents
pertaining to ISSUER to be delivered at closing shall be valid and in accordance
with the laws of Florida.
xiv. Title. The Shares to be issued to SHAREHOLDERS will be,
at closing, free and clear of all liens, security interests, pledges, charges,
claims, encumbrances and restrictions of any kind, shall be issued pursuant to
Regulation D, Section 506 and 4(2)of the Act and shall bear a Rule 144 legend.
None of such Shares are or will be subject to any voting trust or agreement. No
person holds or has the right to receive any proxy or similar instrument with
respect to such shares, except as provided in this Agreement, the ISSUER is not
a party to any agreement which offers or grants to any person the right to
purchase or acquire any of the securities to be issued to SHAREHOLDERS. There is
no applicable local, state or federal law, rule, regulation, or decree which
would, as a result of the issuance of the Shares to SHAREHOLDERS, impair,
restrict or delay SHAREHOLDERS' voting rights with respect to the Shares.
3. SHAREHOLDERS and DPI represent and warrant to ISSUER the following:
i. Organization. DPI is a corporation duly organized, validly
existing, and in good standing under the laws of Florida, has all necessary
corporate powers to own properties and carry on a business, and is duly
qualified to do business and is in good standing in Florida. All actions taken
by the Incorporators, directors and shareholders of DPI have been valid and in
accordance with the laws of Florida.
ii. Shareholders and Issued Stock. Exhibit A annexed hereto
sets forth the names and share holdings of 100% of DPI shareholders.
iii. General Obligations. Following the closing, ISSUER shall
comply with applicable federal and state securities laws.
iv. Counsel. SHAREHOLDERS and DPI represent and warrant that
prior to Closing, that they are represented by independent counsel or have had
the opportunity to retain independent counsel to represent them in this
transaction.
4. INVESTMENT INTENT. SHAREHOLDERS agree that the shares being issued
pursuant to this Agreement may be sold, pledged, assigned, hypothecate or
otherwise transferred, with or without consideration (a "Transfer"), only
pursuant to an effective registration statement under the Act, or pursuant to an
exemption from registration under the Act, the availability of which is to be
established to the satisfaction of ISSUER. SHAREHOLDERS agree, prior to any
transfer, to give written notice to ISSUER expressing his desire to effect the
transfer and describing the proposed transfer.
5. CLOSING. The closing of this transaction shall take place at the
offices of the Company.
6. DOCUMENTS TO BE DELIVERED AT CLOSING.
i. By the ISSUER
(1) Board of Directors Minutes authorizing the issuance of a
certificate or certificates for 10,327,420 Shares, registered in the names of
the SHAREHOLDERS equal to their pro-rata holdings in DPI. All certificates shall
be delivered promptly after closing.
(2) The resignation of all officers of ISSUER.
(3) A Board of Directors resolution appointing such person as
SHAREHOLDERS designate as a director(s) of ISSUER.
(4) The resignation of all the directors of ISSUER, except
that of SHARE HOLDER'S designee, dated subsequent to the resolution described in
3, above.
(5) Current SEC filings of the ISSUER, which shall include a
current balance sheet and statements of operations, stockholders equity and cash
flows for the twelve month period then ended.
(6) All of the business and corporate records of ISSUER,
including but not limited to correspondence files, bank statements, checkbooks,
savings account books, minutes of shareholder and directors meetings, financial
statements, shareholder listings, stock transfer records, agreements and
contracts.
(7) Such other minutes of ISSUER's shareholders or directors
as may reasonably be required by SHAREHOLDERS.
(8) An Opinion Letter from ISSUER's Attorney attesting to the
validity and condition of the ISSUER.
ii. By SHAREHOLDERS AND DPI:
(1) Delivery to the ISSUER, or to its Transfer Agent, a
Resolution cancelling the issued and outstanding stock of DPI.
(2) Consents signed by Xxxx Xxx Xxxx, Xxxxxx Xxxxx and Xxx
Xxxxxxx consenting to the terms of this Agreement.
7. REMEDIES.
i. Arbitration. Any controversy or claim arising out of, or
relating to, this Agreement, or the making, performance, or interpretation
thereof, shall be settled by arbitration in Oak Ridge, Tennessee in accordance
with the Rules of the American Arbitration Association then existing, and
judgment on the arbitration award may be entered in any court having
jurisdiction over the subject matter of the controversy.
8. MISCELLANEOUS.
i. Captions and Headings. The Article and paragraph headings
throughout this Agreement are for convenience and reference only, and shall in
no way be deemed to define, limit, or add to the meaning of any provision of
this Agreement.
ii. No oral change. This Agreement and any provision hereof,
may not be waived, changed, modified, or discharged orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, or discharge is sought.
iii. Non Waiver. Except as otherwise provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (I) the failure of any party to insist
in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future of
any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision hereof
shall not be deemed a waiver of such breach or failure, and (iii) no waiver by
any party of one breach by another party shall be construed as a waiver with
respect to any other or subsequent breach.
iv. Time of Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
v. Entire Agreement. This Agreement contains the entire
Agreement and understanding between the parties hereto, and supersedes all prior
agreements and understandings.
vi. Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
vii. Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party to
whom notice is to be given, or on the third day after mailing if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed, and by fax, as follows:
ISSUER: Xxxxxx X. Xxxxxxxx, Esq.
Mintmire & Associates
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
DPI: Xxxx Xxxxxx, Esq.
Xxxxxxxx Xxxxxx & Xxxxx, PLLC
Bank of America Center
000 Xxxx Xxxxxx Xxxxx 000
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
IN WITNESS WHEREOF, the undersigned has executed this Agreement this
6th day of March 2001.
FAIRFAX GROUP, INC.
/s/ Xxxxxxx Xxxxx
By: ____________________________________
Xxxxxxx Xxxxx, Sole Officer and Director
DIVERSIFIED PRODUCT
INVESTIGATIONS, INC.
/s/ Xxxx Xxx Xxxx
By: ___________________________________
Xxxx Xxx Xxxx, President and CEO
