STOCK EXCHANGE AGREEMENT
STOCK EXCHANGE AGREEMENT (the "Agreement") dated as of April 19, 2000 by and
between Xxxxxxx Media International, Inc., a Nevada corporation ("BMII" or the
"Company"), MNS Eagle Equity Group I, Inc. ("MNS") and those shareholders of MNS
who have executed a counterpart of this Agreement (the "MNS Holders").
WITNESSETH:
WHEREAS, BMII wishes to acquire all of the issued and outstanding stock of
MNS (the "MNS Shares") in exchange for total consideration of 50,000 shares of
common stock of BMII and $100,000 in cash; and
WHEREAS, BMII and the MNS Holders are entering into this Agreement to
provide for the acquisition by BMII of the 613,794 shares of MNS held by the MNS
Holders (the "MNS Control Shares"), which today do and as of the closing of the
transactions herein contemplated shall constitute 89.933% of the total MNS
Shares, in exchange for payment to them of their prorata share of the total
consideration; and
WHEREAS, it is the intention of the parties that (i) MNS be operated as a
wholly owned subsidiary with its own board of directors but including
representatives of BMII; and that (ii) the transaction be tax free under either
Section 368 or Section 351 of the Internal Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the sufficiency of which is acknowledged, the parties
hereto hereby agree that:
1. Purchase and Sale of Securities.
1.1 Purchase and Sale of Shares. On the terms and subject to the
conditions set forth in this Agreement, BMII hereby purchases all of the 613,794
MNS Control Shares from the MNS Holders, and the MNS Holders hereby sell the MNS
Control Shares to BMII (the "Exchange").
1.2 Purchase Price. In payment for the MNS Control Shares, BMII hereby
agrees to ratably pay and deliver to the MNS Holders at closing their respective
prorata shares of the total consideration, amounting to a total of US$89,933.00
in cash and 44,967 shares of the common stock of BMII (the "BMII Shares") in the
proportions set forth on SCHEDULE 1.2; and the MNS Holders hereby agree to
convey and deliver all of the MNS Control Shares to BMII at closing. All of the
MNS Control Shares and the BMII Shares must at closing be duly authorized, fully
paid and validly issued, free of all liens, claims and encumbrances. The MNS
Control Shares, and the cash and BMII Shares payable to the MNS Holders, shall
be delivered to Xxxxxxx & Company, Attorneys at Law, 00 Xxxxxxx Xxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxx 00000, for delivery to the proper parties, and delivery to
such firm shall constitute delivery to the parties. The "Closing" shall be the
date the MNS Control Shares, cash and BMII Shares are delivered to such firm.
2. Company's Representations and Warranties. The Company represents and
warrants to MNS and the MNS Holders that:
2.1 Due Organization. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation, and has all requisite corporate power and authority to own,
operate, and lease its respective properties and assets and to conduct its
respective businesses as now conducted, and is qualified to do business in the
state or other jurisdiction where the nature of its properties, assets, or
businesses as now conducted, and is qualified to do business in the state or
other jurisdiction where the nature of its properties, assets, or businesses
requires such qualification other than where the failure to be so qualified
would not, individually or in the aggregate, have a material adverse effect on
the condition, financial or otherwise, of the business, operations, affairs,
properties, or assets. This shall be referred to as the "Condition of the
Company."
2.2 Compliance with Law. The Company has obtained and maintains in
full force and effect all permits, licenses, consents, approvals, registrations,
memberships, authorizations, and qualifications under all federal, state, local,
and foreign laws and regulations, and with all federal, state, local, and
foreign governmental or regulatory authorities ("Authority") required for the
conduct by it of its businesses and the ownership or possession by it of its
properties and assets other than where the failure to obtain or maintain such
permits, licenses, consents, approvals, registrations, memberships,
authorizations, or qualifications could not, individually or in the aggregate,
have a material adverse effect on the Condition of the Company. The Company is
in compliance with all laws, regulations, ordinances, orders, and decrees
(including, without limitation, all environmental and occupational, health, and
safety laws) of any Authority applicable to the conduct by the Company of its
business and to its ownership and possession of its properties and assets other
than where the failure so to comply would not, individually or in the aggregate,
have a material adverse effect on the Condition of the Company.
2.3 Authorization, Execution, and Delivery of Agreement. (a) The
execution and delivery of this Agreement, the issuance and sale of the Shares to
MNS, and the consummation of the transactions contemplated hereby (i) are within
the corporate power and authority of the Company, (ii) do not require the
approval or consent of any stockholders of the Company, and (iii) have been duly
authorized by all necessary corporate power on the part of the Company. This
Agreement has been duly authorized by all necessary corporate power on the part
of the Company. This Agreement has been duly executed and delivered by the
company, and this Agreement constitutes the legal, valid, binding, and
enforceable obligation of the Company, subject to applicable bankruptcy,
insolvency, and similar laws affecting creditors' rights generally, and subject
as to enforceability under general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(b) The Shares have been duly authorized by all necessary
corporate action on the part of the Company and are validly issued, fully paid,
and nonassessable, and MNS will acquire valid title to such shares, free and
clear of any encumbrances.
2.4 Financial Statements. The Company's audited financial statements
for the periods ending December 31, 1998 and 1999 are true, correct and
complete, and have been prepared in accordance with generally accepted
accounting principles and standards and all applicable SEC rules.
2.5 No Misrepresentation. This Agreement and the Company's Form 8-K
report previously furnished contain no untrue statement of a material fact, nor
omit to state a material fact about the Company necessary to make the statements
contained herein and therein not misleading.
2.6 Capitalization. The Company has authorized 50,000,000 shares of
common stock of which 12,600,000 are issued and outstanding and 5,000,000 shares
of Preferred Stock of which 600,000 shares of Series A Preferred Stock are
issued and outstanding. The Board of Directors has the right to issue preferred
stock in series with the relative rights, designations and preferences
determined by the Board of Directors from time to time.
3. Representations and Warranties of MNS and the MNS HOLDERS. MNS and the
MNS Holders severally represent and warrant to the Company that:
3.1 Execution and Deliver of Agreement. This Agreement has been duly
executed and delivered by and constitutes a legal, valid, binding, and
enforceable obligation of MNS and each of the MNS Holders, subject to applicable
bankruptcy, insolvency, and similar laws affecting creditors' rights generally,
and subject as to enforceability under general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law).
3.2 Purchase Entirely for Own Account. The MNS Holders each confirm
that they are acquiring the BMII Shares for their respective own accounts and
not as a nominee or agent for any person, and each is acquiring the BMII Shares
for investment and not with a view to the resale or distribution of any part
thereof, other than as permitted by applicable federal and state securities
laws, and no MNS Holder is a party to any contract, undertaking, agreement, or
arrangement with any person to sell, transfer, or grant participation to such
person or to any third person with respect to any of the BMII Shares.
3.3 Representations and Warranties Correct. To the best knowledge of
each of the MNS Holders, the representations and warranties of MNS herein are
true and correct, and MNS has full power and authority to enter into this
Agreement.
3.4 Receipt of Documents. The MNS Holders each acknowledge that his,
her or its investment is based solely on the description of the Company given by
the agents of the Company without any written disclosures, but also by inviting
the MNS Holders to discuss the Company with the Company's officers or its
professional advisors.
3.5. Access to Information about Company. The MNS Holders each have
had the opportunity to discuss the Company's business and affairs with such
officers or other officials of the Company and/or agents as they have deemed
necessary or appropriate, and each believes that he, she or it has received all
the information considered necessary or appropriate for deciding whether to
purchase the BMII Shares. Notwithstanding the foregoing, MNS and the MNS Holders
represent and warrant that MNS has no assets or liabilities, no contracts or
agreements respecting MNS or the MNS Control Shares, MNS has engaged in no
business of any kind since its inception, there are no preemptive rights as to
the MNS Control Shares, and no options or other rights exist whereby any person
is entitled to buy or acquire the MNS Controll Shares or any other shares of
MNS.
3.6 Restricted Securities. Each MNS Holders understands and
acknowledges that the BMII Shares he or she is purchasing are characterized as
restricted securities under the U.S. federal securities laws because they were
acquired from the Company in a transaction not involving a public offering, and
that under such laws and applicable regulations the securities may be resold or
otherwise transferred without registration under the Securities Act of 1933 and
other applicable laws only in certain limited circumstances.
3.7 Legend. The MNS Holders each understand and acknowledge that all
certificates evidencing the BMII Shares shall, unless and until removed in
accordance with law, bear a legend in substantially the following form:
"These securities have not been registered under the Securities Act of
1933. They may not be sold, offered for sale, pledged, or hypothecated in the
absence of a registration statement in effect with respect to the securities
under such Act or an opinion of counsel satisfactory to Company that such
registration is not required or unless sold under Rule 144 of the Securities
Act."
3.8 Ownership of MNS Control Shares; Etc. Each MNS Holder owns good
and merchantable title to the MNS Control Shares, free and clear of all liens,
claims and encumbrances of third persons, and each owns the number of shares set
forth next to his, her or its respective name.
4. Covenants.
4.1 BMII's Right to Unwind Exchange. BMII shall have the right to
rescind and unwind the Exchange within 30 days following the Closing (the date
all items needed for closing have been delivered to Xxxxxxx & Company, Attorneys
at Law), if it has not by then received all desired approvals from the SEC and
NASD. Notice of unwinding must be given in writing to Xxxxxxx & Company on
behalf of the MNS Holders no later than the 30th day following Closing.
Unwinding shall be accomplished as follows: (i) the MNS Holders shall return the
BMII Shares to BMII and shall also return to BMII all of the cash portion of the
Exchange price except for the sum of $25,000.00, which the MNS Holders shall
retain as damages and which amount shall be distributed prorata to the MNS
Holders , and (ii) BMII shall return the MNS Control Shares to the MNS Holders.
All such shares must be free of all liens, claims and encumbrances of third
persons. Except for such deliveries, no party shall have any liability to any
other party if the Exchange is rescinded.
4.2 Covenants of MNS. MNS hereby covenants and agrees to perform or do
after Closing the following: (i) nominate and elect a board of directors wherein
Xxxxxx Xxxxxxx will serve as Chairman and there shall be two directors
designated by Xxxxxx Xxxxxxx; (ii) MNS shall cooperate with BMII in any respect
required to carry out the purposes of this Agreement, including the execution
and delivery of any additional documents deemed by counsel to the Company to be
required.
5. General Provisions.
5.1 Survival of Representations, Warranties and Agreement.
Notwithstanding any investigation conducted or notice or knowledge obtained by
or on behalf of any party hereto, the representation and warranty in this
Agreement shall survive the sale of the BMII Shares under the terms of this
Agreement.
5.2 Expenses. Each party hereto shall pay its, his or her own expenses
incidental to the preparation of this Agreement, the carrying out of the
provisions hereof, and the consummation of the transaction contemplated hereby.
5.3 Laws. This Agreement shall be governed and interpreted in
accordance with the laws of the State of California, United States of America.
5.4. Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties, and supersedes and integrates
all prior oral or written agreements, if any, and may only be modified by
written amendment signed by an authorized representative of each party.
5.5. No Conflicting Agreements. Each party states that there is no
agreement between itself and any other person, firm, or corporation which would
cause this Agreement not to have full force and effect.
Remainder of page intentionally left blank - Signature Page follows
IN WITNESS WHEREOF, the parties have duly executed this Agreement, all as
of the date first written above.
XXXXXXX MEDIA INTERNATIONAL INC. MNS Eagle Eguity Group I, Inc. ("MNS")
("Company")
By By
------------------------------- --------------------------------------
Chief Executive Officer Xxxxxxx X. Xxxxxx, Pres., CEO
SIGNATURES of the MNS HOLDERS:
Xxxxxxx X. Xxxxxx (269,689) Xxxx X. Xxxxxxx Xx. (246,689)
X X
------------------------------- --------------------------------------
Signature Signature
Xxxxx X. Xxxxxx (12,500) Xxxxxx X. Xxxxxx (5,000)
X X
------------------------------- --------------------------------------
Signature Signature
Xxxxx X. Xxxxxx CF Xxxxx X. Xxxxxx CF
Xxxxxxx X. Xxxxxx (5,000) Xxxxxxx X. Xxxxxx (5,000)
X X
------------------------------- --------------------------------------
Signature Signature
Xxxx X. Xxxxxxx (10,000) Xxxx X. Xxxxxxx Children's Trust
(5,000)
X X
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Signature Signature
MNS Eagle Equity Group, Inc. YAKIMA CORP. (20,000)
(34,916)
By By
------------------------------- --------------------------------------
Xxxxxxx X. Xxxxxx, Pres. Xxxx Xxxxxxx, Vice Pres.
SCHEDULE 1.2
DELIVERIES TO THE MNS HOLDERS
Cash BMII Shares
---- -----------
Xxxxxxx X. Xxxxxx $ 39,514.78 19,758
Xxxx X. Xxxxxxx Xx $ 36,144.83 18,073
Xxxxx X. Xxxxxx $ 1,831.50 916
Xxxxxx X. Xxxxxx $ 732.60 366
Xxxxx X. Xxxxxx CF Xxxxxxx X. Xxxxxx $ 732.60 366
Xxxxx X. Xxxxxx CF Xxxxxxx X. Xxxxxx $ 732.60 366
Xxxx X. Xxxxxxx $ 1,465.20 733
Xxxx X. Xxxxxxx Children's Trust $ 732.60 366
MNS Eagle Equity Group, Inc. $ 5,115.89 2,558
YAKIMA CORP $ 2,930.40 1,465
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TOTALS $ 89,933.00 44,967
