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EXHIBIT 99.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into
this 27th day of November, 2000, by and between XXXXXXXXXX.XXX, INC., a Utah
corporation ("Company"), and METROPOLITAN CAPITAL PARTNERS, LLC, a California
limited liability company ("Purchaser").
In consideration of the mutual promises contained herein, the parties
hereto agree as follows:
2. Purchaser hereby agrees to purchase from the Company, and the Company
hereby agrees to sell and issue to Purchaser, (a) twenty-five million
(25,000,000) shares of the Company's common stock, $0.001 par value
("Common Shares"), and (b) one thousand (1,000) shares of the Company's
Series C Convertible Stock ("Series C Shares"). The Series C Shares
shall have those rights, preferences and privileges as are specified in
Exhibit A hereto. The purchase and sale shall occur on December 1, 2000.
3. In consideration for the sale and issuance of the Common Shares and
Series C Shares, respectively, Purchaser agrees to:
(a) Pay to the Company the sum of One Hundred Thousand Dollars
($100,000.00) for the Common Shares, which shall be paid by way of cancelling
$100,000.00 of indebtedness owing by the Company to Purchaser.
(b) Pay to the Company, on December 1, 2000, the sum of Ten
Thousand Dollars ($10,000.00) for the Series C Shares.
(c) Continue to assist the Company in its negotiations with
potential merger candidates during the six (6) month period following the date
of this Agreement, it being understood and agreed that the cash prices referred
to in Section 2(a) and Section 2(b) hereof have been established in
consideration of the valuable and vital assistance heretofore rendered by
Purchaser to the Company in connection with the Company's discussions with
potential merger candidates and Purchaser's agreement to continue to provide
such valuable and vital assistance contained in this Section 2(c).
4. The cash proceeds of the purchase prices paid by Purchaser to the
Company for the Common Shares and Series C Shares shall be used by the
Company for general working capital purposes.
5. In order to induce the Company to sell and issue the Common Shares and
Series C
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Shares to Purchaser pursuant to this Agreement, Purchaser hereby
represents and warrants to, and covenants with, the Company as follows
(for purposes of this Section 4, the term "Securities" shall mean the
Common Shares, the Series C Shares and any securities into which such
Series C Shares may be converted as more fully contemplated by Exhibit A
hereto):
(a) Purchaser has been given reasonable opportunity to ask
questions of, and receive answers from, representatives of the Company
concerning the business prospects and financial condition of the Company and to
obtain any additional information it desires, to the extent available; and
Purchaser has received from the Company all of the information that it has
requested and that it considers necessary or appropriate for purposes of
deciding whether to purchase the Securities.
(b) Purchaser believes that an investment in the Securities is
suitable for it based upon its investment objectives and financial needs.
Purchaser (i) has adequate means for providing for its current financial needs
and contingencies; (ii) has no need for liquidity in such investment; (iii) can
afford a complete loss of such investment; and (iv) does not have an overall
commitment to investments which are not readily marketable that is
disproportionate to its net worth.
(c) Purchaser has such knowledge and experience in financial and
business matters that it is capable of reading and interpreting financial
statements and evaluating the merits and risk of an investment in the
Securities; and Purchaser has the net worth to undertake such risks. Purchaser
was not organized for purposes of investing in the Securities.
(d) Purchaser acknowledges that the Securities have not been
registered under the Securities Act of 1933, as amended ("Act"), or registered
or qualified under any applicable state securities laws; and that the Securities
are being offered by the Company to Purchaser in reliance upon exemptions from
the registration and qualification requirements of the Act and such state laws.
Purchaser understands that the Securities are "restricted securities" under the
Act, and that, as such, the Securities may not be resold without registration
under the Act and registration or qualification under applicable state
securities laws or an applicable exemption therefrom. Purchaser acknowledges
that the certificates evidencing the Securities will bear a legend indicating
that the Securities are subject to restrictions on resale under the Act and
applicable state securities laws.
(e) Purchaser is an "accredited investor" within the meaning of
Rule 501(a) of Regulation D as promulgated under the Act.
(f) Purchaser is acquiring the Securities solely for its own
account, for investment purposes only, and the Securities are not being acquired
for the account of any other person or entity or with a view to or for resale in
connection with any distribution of all or any part of the Securities that might
be deemed to violate the Act or applicable state securities laws.
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6. Purchaser acknowledges and agrees that Exhibit A (or other appropriate
documents evidencing the terms of the Series C Shares) may not yet have
been filed in the State of Utah; and, if so, agrees that the Company
need not physically issue to Purchaser the certificate(s) evidencing
such Series C Shares until such filing has occurred. Similarly, if such
filing has not yet occurred, the Company agrees to effect such filing
promptly.
7. The parties agree to execute such further instruments and to take such
further actions as may reasonably be necessary to carry out the intent
of this Agreement.
8. This Agreement (including Exhibit A hereto) constitutes the entire
agreement between the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by both of the
parties.
9. This Agreement shall be construed in accordance with and be governed by
the laws of the State of Utah.
10. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall
constitute one and the same instrument. This Agreement may be executed
by facsimile, and, upon such execution, shall have the same force and
effect as an original.
11. This Agreement (including Exhibit A hereto) shall be binding upon and
inure to the benefit of the parties and their respective successors and
assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
XXXXXXXXXX.XXX, INC.
By:
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Its:
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METROPOLITAN CAPITAL PARTNERS, LLC
By:
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Its:
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ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
XXXXXXXXXX.XXX, INC.
* * * * * * * * * * * * * * * * * * * * * *
Xxxxxxxxxx.xxx, Inc. (the "Corporation"), by and through the undersigned
President and Secretary of the Corporation, executes these Articles of Amendment
of the Articles of Incorporation pursuant to Section 16-10a-1002 and -1006 of
the Utah Revised Business Corporation Act (the "Act"), and certify to the truth
of the matters as stated herein on November 27, 2000:
1. The name of the corporation is XxxxxXxxxx.xxx, Inc.
2. The Corporation's Articles of Incorporation were originally
filed on March 28, 1985 and the Corporation was assigned
registration number 895925-0142 by the Utah Division of
Corporations.
3. The attached Certificate of Designation, Powers, Preferences and
Rights of the Series C Convertible Preferred Stock (the
"Certificate") is filed pursuant to Article 4 of the Company's
Articles of Incorporation, as amended.
4. The attached Certificate shall, and hereby does, amend such
Article 4 by adding to the end of such Article 4 a caption
entitled "Series C Convertible Preferred Stock" followed
immediately by the numbered paragraphs of the Certificate.
5. The foregoing amendments were adopted on November 27, 2000 by
unanimous approval of the Corporation's Board of Directors. As
contemplated by Sections 16-10a-1002 and -602 of the Act,
approval of the Corporation's shareholders was not required.
XXXXXXXXXX.XXX, INC.
By:
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Xxxxxx Xxxx, President
By:
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Xxxxx Xxxxx, Secretary
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CERTIFICATE OF DESIGNATION, POWERS,
PREFERENCES AND RIGHTS OF THE
SERIES C CONVERTIBLE PREFERRED STOCK
OF
XXXXXXXXXX.XXX, INC.
Pursuant to Sections 16-10a-1002 and 16-10a-602 of the Utah Revised
Business Corporation Act , we, the undersigned, Xxxxxx Xxxx, being the
President, and Xxxxx Xxxxx, being the Secretary, of XxxxxXxxxx.xxx, Inc., a
corporation organized and existing under the Utah Revised Business Corporation
Act (this "Corporation"), DO HEREBY CERTIFY that the following resolutions were
duly adopted by the Board of Directors of this Corporation by unanimous written
consent:
RESOLVED, that, pursuant to the authority expressly granted to and
vested in the Board of Directors by the provisions of the Articles of
Incorporation, as amended, of this Corporation, the Board of Directors hereby
creates a series of the preferred stock, $0.001 par value, of this Corporation,
which series shall be designated "Series C Convertible Preferred Stock", shall
consist of one thousand (1,000) shares, and shall have the following powers,
preferences and relative, participating, optional and other rights,
qualifications, limitations, or restrictions (in addition to those provisions
set forth in the Articles of the Incorporation, as amended, which are applicable
to the Series C Convertible Preferred Stock):
d. Certain Definitions. Unless the context otherwise requires, the terms
defined in this Section 1 shall, for all purposes of this resolution,
have the meanings herein specified.
Board of Directors. The term "Board of Directors" shall mean the
Board of Directors of this Corporation.
Common Stock. The term "Common Stock" shall mean the common
stock, $0.001 par value, of this Corporation.
Conversion Date. The term "Conversion Date" shall mean the day
on which shares of Series C Convertible Preferred Stock are converted into
shares of Common Stock as provided for herein.
Conversion Ratio. The term "Conversion Ratio" shall mean the
ratio used to determine the number of shares of Common Stock into which each
full share of Series C Convertible Preferred Stock is convertible on any
Conversion Date. The Conversion Ratio shall, except to the extent otherwise
provided for in this resolution, be that number of shares of Common Stock
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computed by (i) determining that number of shares of Common Stock, which, after
the issuance thereof on the Conversion Date, would be equal to 11.5% of the then
issued and outstanding Common Stock of this Corporation (computed on a fully
diluted basis, assuming the prior exercise of all outstanding options, warrants
and other rights exercisable for the purchase or other acquisition of Common
Stock and the prior conversion of all convertible securities or other
instruments that are convertible into Common Stock), and (ii) dividing the
number of shares so determined by 1,000, which determination and computation
shall be made by the Board of Directors in good faith. The Conversion Ratio from
time-to-time in effect shall be equitably and proportionately adjusted from
time-to-time as determined by the Board of Directors in good faith to the extent
necessary to take into account stock splits, reverse stock splits, stock
dividends, recapitalizations, reclassifications and similar events of dilution.
Equity Interests: The term "Equity Interests" shall mean Junior
Stock, or warrants, options or other rights to acquire such Junior Stock.
Junior Stock. The term "Junior Stock" shall mean Common Stock,
all shares hereafter authorized of any other class of common stock, and any
other class or series of stock of this Corporation that is not Senior Stock or
Parity Stock.
Liquidation Price. The term "Liquidation Price" shall mean $10
per full share of Series C Convertible Preferred Stock. The Liquidation Price
from time-to-time in effect shall be equitably and proportionately adjusted from
time-to-time as determined by the Board of Directors in good faith to the extent
necessary to take into account stock splits, reverse stock splits, stock
dividends, recapitalizations, reclassifications and similar events of dilution.
Parity Stock. The term "Parity Stock" shall mean any class or
series of stock of this Corporation entitled to receive assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of this Corporation on a parity with the Series C Convertible Preferred Stock.
Preferred Stock. The term "Preferred Stock" shall mean the
preferred stock, $0.001 par value, of this Corporation.
Senior Stock. The term "Senior Stock" shall mean any class or
series of stock of this Corporation ranking senior to the Series C Convertible
Preferred Stock in respect of the right to participate in any distribution upon
the voluntary or involuntary liquidation, dissolution or winding up of the
affairs of this Corporation.
Subsidiary. The term "Subsidiary" shall mean any entity of which
at least a majority of the capital stock or equivalent securities having
ordinary voting power for the election of directors or other governing body of
such entity is owned by this Corporation directly, or indirectly through one or
more Subsidiaries.
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e. Dividends. The holders of outstanding shares of Series C Convertible
Preferred Stock shall have no dividend rights in respect of such shares;
provided, however, that this Corporation shall not, without the
affirmative vote or consent of the holders of at least a majority of the
outstanding shares of Series C Convertible Preferred Stock (voting as a
separate class and given in person or by proxy, either in writing or at
a meeting), at any time that shares of Series C Convertible Preferred
Stock are outstanding, (i) declare or pay or set aside for payment any
dividend on, or any other distributions on, any Junior Stock (other than
dividends or distributions payable in Equity Interests of this
corporation); or (ii) purchase, redeem or otherwise acquire or retire
for value, or permit any Subsidiary to purchase, redeem or otherwise
acquire for value, any Equity Interests of this Corporation.
f. Conversion.
3.1 Voluntary Conversion. Each holder of outstanding shares of
Series C Convertible Preferred Stock shall have the option, at any time, to
convert all, but not less than all, of such holder's shares of Series C
Convertible Preferred Stock into that number of shares of Common Stock
determined by applying the then applicable Conversion Ratio, by delivering to
this Corporation at its principal offices, Attention: Secretary, a notice
stating that such holder desires to convert such shares into shares of Common
Stock at such Conversion Ratio (a "Conversion Notice"), which Conversion Notice
shall be accompanied by the certificates evidencing such holder's shares of
Series C Convertible Preferred Stock (the "Series C Convertible Preferred
Certificates"). On the day of receipt by this Corporation of such Conversion
Notice and Series C Convertible Preferred Certificates, such shares of Series C
Convertible Preferred Stock shall automatically be converted into and become
shares of Common Stock at such Conversion Ratio; and this Corporation shall
issue certificate(s) evidencing the number of shares of Common Stock into which
such shares of Series C Convertible Preferred Stock have been converted within
30 days following such Conversion Date.
3.2 Mandatory Conversion. All of the outstanding shares of
Series C Preferred Stock shall automatically be converted into and become shares
of Common Stock at the applicable Conversion Ratio on the earliest to occur of
(i) December 31, 2001, or (ii) immediately prior to the consummation by this
Corporation of the (a) sale, lease or exchange of all or substantially all of
its assets, or (b) concurrently with a merger, consolidation or similar business
combination of this Corporation with or into any other corporation in a context
in which this Corporation is not the surviving corporation, or (c) concurrently
with a merger, consolidation or similar business combination of this Corporation
or a Subsidiary with or into any other corporation in a context in which the
corporate existence of this Corporation survives such transaction and the
stockholders of such other corporation, by virtue of such transaction, become
entitled to receive shares of Common Stock and/or Preferred Stock sufficient to
elect at least a majority of the Board of Directors; and this Corporation shall
deliver written notice of such conversion to all holders of the Series C
Convertible Preferred Stock, and, in connection therewith, issue certificates
evidencing the number of shares of Common Stock into which such shares of Series
C Convertible Preferred Stock have been converted, in each case, within 30 days
following such Conversion Date.
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3.3 Fractional Shares Upon Conversion. Notwithstanding anything to the
contrary contained in this Section 3, this Corporation shall have no obligation
(but shall have the right) to issue fractions of shares of Common Stock upon the
conversion of shares of Series C Convertible Preferred Stock pursuant to this
Section 3. In lieu thereof, at its election, this Corporation shall be entitled
to issue to the holders of the theretofore outstanding shares of Series C
Convertible Preferred Stock in respect of which such fractions otherwise would
be deliverable the number of whole shares of Common Stock to which such holders
are entitled on account of their respective aggregate holdings of such
theretofore outstanding shares of Series C Convertible Preferred Stock (as
determined by the Board of Directors in good faith). If, notwithstanding the
issuance of whole shares in lieu of fractional shares pursuant to the preceding
sentence, fractional shares remain, this Corporation, in lieu of issuing the
same, shall be entitled, at its election, to deliver to the holders who
otherwise would receive such fractional shares cash in an amount equal to the
fraction of a share of Common Stock involved multiplied by the Liquidation
Price.
3.4 Reservation of Common Stock. This Corporation shall at all times use
its best efforts to have a sufficient number of authorized but unissued shares
of Common Stock , and to reserve and keep available out of such authorized but
unissued shares a sufficient number of such shares, to permit the conversion of
all of the issued and outstanding shares of Series C Convertible Preferred Stock
into shares of Common Stock in accordance with this Section 3.
3.5 Effect of Conversion. Upon the conversion of shares of Series C
Convertible Preferred Stock pursuant to this Section 3, (i) all such shares
shall cease to be outstanding as of the relevant Conversion Date, (ii) all of
such converted shares shall be restored to the authorized but unissued shares of
Series C Convertible Preferred Stock of this Corporation as of such Conversion
Date, and (iii) the holders of such shares shall have no further rights in
respect thereof (other than their rights under this Section 3).
4. Distributions Upon Voluntary or Involuntary Liquidation, Dissolution or
Winding Up. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of this Corporation, the holders of the
Series C Convertible Preferred Stock shall be entitled to receive, prior and in
preference to any distributions of the assets or surplus funds of this
corporation to the holders of Junior Stock by reason of their ownership thereof,
an amount per share equal to the Liquidation Price in cash or property at its
fair market value (as determined by the Board of Directors in good faith), or
both. Thereafter, subject to the rights of the holders of Senior Stock, all
holders of Senior Stock, Series C Convertible Preferred Stock, Parity Stock and
Junior Stock shall share ratably in the remaining assets of this Corporation in
proportion to the number of shares held by each of them. If, upon distribution
of this Corporation's assets in liquidation, dissolution or winding up, the
assets of this Corporation to be distributed among the holders of Series B
Convertible Stock and the Parity Stock shall be insufficient to permit payment
in full to such holders of the preferential amounts to which they are entitled,
then, subject to the rights of the holders of Senior Stock, the entire assets of
this corporation shall be distributed among the holders of Series C Convertible
Stock and the Parity Stock, ratably in proportion to the full amounts to which
they otherwise would be respectively entitled. Neither the sale, lease or
exchange of all or substantially all of the assets of
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this Corporation nor any event described in Section 3.2(ii)(b) or 3.2(ii)(c),
shall be deemed to be a liquidation, dissolution or winding up of the affairs of
this Corporation, voluntary or involuntary, for purposes of this Section 4.
5. Voting Rights. The holders of Series C Convertible Stock shall have
no right to vote for any purpose, except as required by the Utah Revised
Business Corporation Act or the Articles of Incorporation, as amended, of this
Corporation.
6. Rank. The Series C Convertible Preferred Stock ranks, with respect to
rights on voluntary or involuntary liquidation, dissolution or winding up of the
affairs of this Corporation, senior to any Junior Stock of this Corporation, on
a parity with any Parity Stock of this Corporation, and junior and subordinate
to any Senior Stock of this Corporation. All other provisions of this resolution
shall be construed in conformity with this Section 6.
7. Exclusion of Other Rights. Except as may otherwise be required by
law, the holders of shares of Series C Convertible Preferred Stock shall not
have any preferences or relative, participating, optional or other special
rights, other than those specifically set forth in this resolution (as such
resolution may be amended from time to time) and in the Articles of
Incorporation, as amended, of this Corporation. The shares of Series C
Convertible Preferred Stock shall have no preemptive rights.
8. Headings of Sections. The headings of the various sections hereof are
for convenience of reference only and shall not affect the interpretation of any
of the provisions hereof.
9. Severability of Provisions. If any power, preference, right,
qualification, limitation or restriction of the Series C Convertible Preferred
Stock set forth in this resolution (as such resolution may be amended from time
to time) is invalid, unlawful or incapable of being enforced by reason of any
rule of law or public policy, all other powers, preferences, rights,
qualifications, limitations and restrictions set forth in this resolution (as so
amended) which can be given effect without the invalid, unlawful or
unenforceable power, preference, right, qualification, limitation or restriction
shall, nevertheless, remain in full force and effect, and no power, preference,
right, qualification, limitation or restriction herein set forth shall be deemed
dependent upon any other such power, preference, right, qualification,
limitation or restriction unless so expressed herein.
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RESOLVED FURTHER, that the Articles of Incorporation, as amended, of the
Corporation are hereby amended to the full extent necessary to reflect the
provisions of the preceding resolutions.
IN WITNESS WHEREOF, we have subscribed this document on the date set
forth below and do hereby affirm, under the penalty of perjury, that the
statements contained therein have been examined by us and are true and correct.
Dated: November 27, 2000
XXXXXXXXXX.XXX, INC.
By:
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Name: Xxxxxx Xxxx
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Title: President
By:
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Name: Xxxxx Xxxxx
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Title: Secretary
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