STOCK PURCHASE AGREEMENT
This Agreement is entered into this 10th day of December, 1999, by and
between ONLINE GAMING SYSTEMS, LTD (f/k/a ATLANTIC INTERNATIONAL ENTERTAINMENT,
LTD.), a Delaware corporation with offices at 000 X. Xxxxxxxx Xxxx Xxxx, Xxxxx
000, Xxxx Xxxxx, XX 00000 (hereinafter referred to as "Seller") and ATLANTIC
INTERNET HOLDINGS, INC., a Florida corporation, with offices at 000 X. Xxxx
Xxxxxx, Xxxx Xxxxx, XX 00000, (hereinafter referred to as the "Purchaser").
RECITALS:
Seller owns One Hundred (100%) Percent of the issued and outstanding
stock of THE EMINET DOMAIN, INC., a Delaware corporation (the "Corporation").
Purchaser desires to acquire One Hundred (100%) Percent of the issued
and outstanding stock of the Corporation and Seller desires to sell One Hundred
(100%) Percent of its stock of the Corporation ("Stock") to the Purchaser upon
the terms and conditions set forth herein.
NOW, THEREFORE, for the mutual consideration set out herein, the
parties agree as follows:
1. ASSETS OF THE CORPORATION. Seller hereby represents and warrants
that the Corporation owns the following, all of which shall hereinafter be
collectively referred to as the "Assets":
a. That certain lease of real property located at 000 XX 00xx
Xxxxxx, Xxxxx 000, Xxxx Xxxxx, XX 00000 and a copy of which is attached hereto
as Exhibit "A", hereinafter referred to as the "Premises";
b. All of the personal property of the Corporation including without
limitation, customer lists, insurance policies, residuals, furniture,
furnishings, fixtures and items located in or on the Premises and as described
and listed in Exhibit "B", and made a part hereof by reference. Said personal
property shall also include cash and inventory. All of the above items
hereinafter collectively referred to as the "Personal Property", and Seller will
not remove any Personal Property from the Premises prior to the Closing
hereunder unless replaced in kind and value.
c. All right, title, and interest in all intangible property now or
hereafter owned or held by Seller or the Corporation in connection with the
Corporation's business now or hereafter conducted or with the use thereof,
including, but not limited to any leases, contracts, customer lists, telephone
exchange numbers relating to the Corporation's business.
2. SALE OF STOCK.
a. Transfer of Stock. Subject to the terms and conditions of this
Agreement, the Seller shall sell, convey, transfer and assign to Purchaser the
Stock.
b. Liabilities. Purchaser shall not assume any of Seller's
liabilities which may in any manner encumber the Stock.
3. PURCHASE PRICE: MANNER OF PAYMENT
In consideration of the aforesaid sale and transfer, the Purchaser
shall pay to the Seller, and Seller shall accept as the purchase price for the
Stock at the Closing, the sum of TWO MILLION FIVE HUNDRED THOUSAND
($2,600,000.00) DOLLARS ("Purchase Price"), to be paid $100,000.00 in cash and
by the delivery of Five Hundred Thousand (500,000) shares of the Purchaser's
Convertible Preferred Stock as more fully described in the Articles of Amendment
of the Purchaser attached hereto as Exhibit "C" ("Convertible Preferred Stock").
4. DELIVERY OF STOCK. On or before the Closing Date, Seller will
deliver certificates representing all of the Stock duly endorsed, so as to make
the Purchaser the sole holder thereof, free and clear of all claims and
encumbrances in exchange for the delivery of the Convertible Preferred Stock.
5. REPRESENTATIONS OF SELLER.The Seller hereby represents and warrants
that effective this date and the Closing Date, the representations listed below
are true and correct:
a. The Seller is the owner of 100 percent of the issued and
outstanding shares of stock of Corporation; such shares are free from claims,
liens, or other encumbrances; and the Seller has the unqualified right to
transfer and dispose of such shares.
b. The shares of Stock constitute validly issued shares of the
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Corporation, fully paid and non-assessable.
c. The Seller has provided the Purchaser with the complete and
accurate financial statements of the Corporation for the years 1996, 1997 and
1998 and the results of its operations for the periods covered. There are no
liabilities, either fixed or contingent which are not disclosed therein.
d. Neither the Seller nor the Corporation is involved in any pending
litigation or governmental investigation or proceeding and, to the best
knowledge of Seller, no litigation, claims assessments, or governmental
investigation or proceeding is threatened against the Seller, the Corporation or
its properties, except that certain litigation entitled Axxsys International,
Inc. vs. Atlantic International Entertainment, Ltd., in the Palm Beach Circuit
Court, Case No. 98-10286 AD, for which the Seller agrees to continue to pay for
the cost of defense of said action.
e. As of the Closing Date, the Corporation will be in good standing
in its state of incorporation, and will be in good standing and duly qualified
to do business in each state where required to be so qualified.
f. To the best of Seller's information, the Corporation has complied
with all state, federal and local laws in connection with its formation,
issuance of securities, organization, capitalization and operations, and no
contingent liabilities have been threatened or claims made, and no basis for the
same exists with respect to said operations, formation or capitalization,
including claims for violation of any state or federal securities laws.
g. The Corporation has filed all governmental, tax or related
returns and reports due or required to be filed and has paid all taxes or
assessments which have become due as of closing.
h. The Corporation has not breached any agreement to which it is a
party.
i. The Corporation has no subsidiary or affiliated corporations with
which it engages in business or which directly or indirectly compete with the
Corporation.
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j. The execution of this Agreement will not violate or breach any
agreement, contract, or commitment to which the Corporation or Seller is a party
and has been duly authorized by all appropriate and necessary action.
k. At the date of this Agreement Seller has, and at the Closing
Date, will have to the best of their knowledge, disclosed all events, conditions
and facts materially affecting the business and prospects of the Corporation.
Seller has not now and will not have, at the Closing Date, withheld knowledge of
any such events, conditions, and facts which she knows, or has reasonable
grounds to know, may materially affect the business and prospects of the
Corporation.
6. REPRESENTATIONS OF PURCHASER. The Purchaser hereby represents and
warrants that effective this date and the Closing Date, the representations
listed below are true and correct:
a. The Purchaser has the unqualified right to transfer and dispose
of the Convertible Preferred Stock.
b. The shares of Convertible Preferred Stock constitute validly
issued shares of the Purchaser, fully paid and non-assessable.
c. The Purchaser has provided the Seller with the complete and
accurate financial statements of the Purchaser from its inception until the date
of this Agreement. There are no liabilities, either fixed or contingent which
are not disclosed therein.
d. The Purchaser is involved in any pending litigation or
governmental investigation or proceeding and, to the best knowledge of
Purchaser, no litigation, claims assessments, or governmental investigation or
proceeding is threatened against the Purchaser or its properties.
e. As of the Closing Date, the Purchaser will be in good standing in
its state of incorporation, and will be in good standing and duly qualified to
do business in each state where required to be so qualified.
f. To the best of Purchaser's information, the Purchaser has
complied with all state, federal and local laws in connection with its
formation, issuance of securities, organization, capitalization and operations,
and no contingent liabilities have been
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threatened or claims made, and no basis for the same exists with respect to said
operations, formation or capitalization, including claims for violation of any
state or federal securities laws.
g. The Purchaser and its subsidiaries has filed all governmental,
tax or related returns and reports due or required to be filed and has paid all
taxes or assessments which have become due as of closing.
h. The Purchaser has not breached any agreement to which it is a
party.
i. The Corporation has subsidiary with which it engages in business.
j. The execution of this Agreement will not violate or breach any
agreement, contract, or commitment to which the Purchaser is a party and has
been duly authorized by all appropriate and necessary action.
k. At the date of this Agreement Purchaser has, and at the Closing
Date, will have to the best of their knowledge, disclosed all events, conditions
and facts materially affecting the business and prospects of the Purchaser.
Purchaser has not now and will not have, at the Closing Date, withheld knowledge
of any such events, conditions, and facts which it knows, or has reasonable
grounds to know, may materially affect the business and prospects of the
Corporation.
7. CLOSING DATE. The Closing Date herein referred to shall be upon such
date as the parties hereto may mutually agree upon but is expected to be on or
about December 15, 1999 and closing shall take place in the office of Seller's
counsel at 10:00 a.m.
8. CONDITIONS PRECEDENT TO THE PURCHASE. All obligations of Purchaser
under this Agreement are subject to the fulfillment, prior to or as of the
Closing Date, of each of the following conditions:
a. The representations and warranties by or on behalf of the parties
hereto contained in this Agreement or in any certificate or documents pursuant
to the provisions hereof shall be true in all material respects at and as of the
time of Closing as though such representations and warranties were made at and
as of such time.
b. The parties hereto shall have performed and complied with all
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covenants, agreements, and conditions required by this Agreement to be performed
or complied with by it prior to or at the Closing on the Closing Date.
c. All current officers and directors of the Corporation shall
tender their resignations as an officer and director of the Corporation.
d. The Corporation's business shall be conducted only in the
ordinary course, which shall include the maintenance of all insurance policies,
but which shall not include the making of any single commitment of any type for
more than $1,000.00 or involve any single payment by the Corporation of more
than $1,000.00, except for those normal trade accounts generally payable in
amounts in excess of $1,000.00. The Corporation shall not merge or consolidate
with any other corporation; nor shall the Corporation sell or lease all or
substantially all of its assets and business or acquire all or substantially all
of the stock or the business or assets of any other person, firm, association,
corporation or business organization or agree to do any of the foregoing.
e. The Corporation shall not sell or lease any capital assets with
an original cost or current market value in excess of $1,000.00 for any single
item, or mortgage or pledge any of its properties or assets, or borrow any
money, or incur, assume or guarantee or otherwise become directly or indirectly
responsible for the payment of any indebtedness or any other obligation of any
other person, firm, association, corporation or business organization (other
than the endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business).
f. Seller shall use its best efforts to preserve the Corporation's
business organization intact, to keep available to Purchaser the services of the
Corporation's employees and to preserve existing business relations with
suppliers, customers and others.
g. The Corporation shall use its best efforts to comply with all
laws applicable to it and to the conduct of its business and shall conduct its
business in such a manner that the representations and warranties contained in
this Agreement shall be true as though such representations and warranties were
made continuously.
h. The Seller shall enter into an agreement for the use of redundant
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internet connectivity for two years commencing April 1, 1999 at the monthly rate
of $2,000.00.
i. Purchaser shall have received an opinion of counsel for the
Seller that as of the Closing Date that the Corporation is duly incorporate and
in good standing under the laws of Delaware with a capitalization as represented
by the Corporation's articles of incorporation and that the Corporation is
licensed or qualified to do business in the State of Florida.
9. RISK OF LOSS. In the event that damage, destruction, or other
casualty to the Premises or the Assets, either partial or total, which results
in reconstruction costs required to be expended in excess of $20,000.00, occurs
prior to the Closing, Purchaser will, at his option, elect to proceed under one
of the following subparagraphs:
a. To cancel this Agreement, in which event any deposit paid by
Purchaser hereunder will be returned to it and all parties to this Agreement
will be relieved of further responsibilities hereunder; or
b. To accept an assignment of all insurance proceeds relating to
such damage, destruction, or other casualty, and to accept the Premises and
Assets in their then existing condition.
10. TERMINATION. In the event of the institution of any proceedings,
judicial, administrative or otherwise, relating to the taking or to a proposed
taking of any portion of the Assets or Premises by eminent domain, condemnation,
or otherwise, prior to Closing, Purchaser will have the right and option to
terminate this Agreement by giving Seller written notice to such effect at any
time after receipt of it of notification of such occurrence or occurrences.
Seller hereby agrees to furnish Purchaser with written notice in respect thereof
within Forty Eight (48) Hours from Seller's receipt of knowledge or notification
of such an occurrence. In the event Purchaser elects to terminate this Agreement
under this provision, the total deposit will be returned to Purchaser and
thereafter the parties hereto will be released from their respective obligations
hereunder. The term "eminent domain, condemnation or otherwise" will be deemed
to include, without limitation, such damage to the Premises or the Assets as is
caused by a change of
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grade of any street or road serving or adjacent to the Premises as well as any
inverse condemnation.
11. NATURE AND SURVIVAL OF REPRESENTATIONS. All representations,
warranties and covenants made by any party in this Agreement shall survive the
Closing hereunder and the consummation of the transactions contemplated hereby
for two years from the date hereof. All of the parties hereto are executing and
carrying out the provisions of this Agreement in reliance solely on the
representations, warranties and covenants and agreements contained in this
Agreement or at the Closing of the transactions herein provided for and not upon
any investigation upon which it might have made or any representations,
warranty, agreement, promise or information, written or oral, made by the other
party or any other person other than as specifically set forth herein.
12. DOCUMENTS AT CLOSING. At the Closing, the following transactions
shall occur, all of such transactions being deemed to occur simultaneously:
a. Seller will deliver, or cause to be delivered, to Purchaser the
following:
(1) stock certificates for the Stock, duly endorsed and
guaranteed in blank.
(2) all corporate records of the Corporation, including without
limitation corporate minute books (which shall contain copies of the Articles of
Incorporation and Bylaws, as amended to the Closing), stock books, stock
transfer books, corporate seals, and other such corporate books and records as
may reasonably requested for review by Purchaser and its counsel; and
(3) such other instruments, documents and certificates, if any,
as are required to be delivered pursuant to the provision of this Agreement or
which may be reasonably requested in furtherance of the provision of this
Agreement.
(4) an agreement between the Seller and the Purchaser requiring
the Seller to provide to the Purchaser accounting, legal, auditing and related
services for the Purchaser through the end of the audit and filing of the
federal tax return for the calendar year 1999.
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b. Purchaser will deliver the Convertible Preferred Stock as
provided hereinabove.
12. MISCELLANEOUS
a. Further Assurances. At any time and from time to time, after the
effective date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this Agreement.
b. Waiver. Any failure on the part of any party hereto to comply
with any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
c. Brokers. Neither party has employed any brokers or finders with
regard to this Agreement unless otherwise described in writing to all parties
hereto.
d. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have given if delivered in person or sent by
prepaid first class registered or certified mail, return receipt requested.
e. Headings. The section and subsection heading in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
f. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
g. Governing Law. This Agreement was negotiated and is being
contracted for in the State of Florida, and shall be governed by the laws of the
State of Florida, and the securities being issued herein are being issued and
delivered in the State of Florida in accordance with isolated transaction and
non-public offering exemption.
h. Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
i. Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and supersedes any and all prior agreements,
arrangements or understandings between the parties relating to the subject
matter hereof. No oral understandings, statements, promises or inducements
contrary to the terms of this Agreement exist. No representations, warranties,
covenants or conditions, express or implied, other than as set forth herein,
have been made by any party.
j. Time. Time is of the essence.
k. Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force and
effect.
l. Default Costs. In the event any party hereto has to resort to
legal action to enforce any of the terms hereof, such party shall be entitled to
collect attorneys fees and other costs from the party in default.
m. This Agreement and the transactions contemplated herein is
subject to the approval of the Seller's and Purchaser's Board of Directors,
which approval shall be obtained no later than Ten (10) business days after the
execution of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
WITNESSES: SELLER
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President
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PURCHASER
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President
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