STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of February 21, 2003 ("Effective Date"), by and among TMI Holdings, Inc., a
Florida corporation, ("TMI"), Xxxx X. Xxxxxx, an individual ("Xxxxxx"), and
Xxxxxxx Xxxxxxx Xxxxxxxx, an individual ("Sessions" who shall, along with TMI
and Xxxxxx, be called the "Sellers"), on the one hand, and Xxxxx Xxxxxx, an
individual ("Xxxxxx"), on the other hand.
R E C I T A L S
A. TMI is a Florida corporation with a wholly owned subsidiary,
Kina'ole, which is a seller of manufactured homes in Hawaii.
B. Sessions and Xxxxxx each own 125,000 shares of TMI's Series A
Preferred Stock, which is 100% of the Series A Preferred Stock.
X. Xxxxxx wishes to pay off certain outstanding debts of TMI and
Sessions and Xxxxxx in exchange for 1,050,000 shares of TMI common stock
("Common Stock"), which will be issued by TMI, and all 250,000 shares of TMI's
Series A Preferred Stock ("Series A Preferred Stock"), which is owned by
Sessions and Xxxxxx.
X. Xxxxxxx wish to sell the Common Stock and the Series A Preferred
Stock on the terms and conditions set forth in this Agreement.
X. Xxxxxx acknowledges that he has had an opportunity to ask questions
of appropriate persons, including Sessions and Xxxxxx, concerning the business,
financial condition and results of operations of TMI.
NOW, THEREFORE, in reliance on the foregoing recitals and in consideration
of and for the mutual covenants contained herein, the parties hereto agree as
follows:
A G R E E M E N T
1. CONSIDERATION OF SELLERS. In exchange of certain obligations of the
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Sellers being paid by Xxxxxx, the Sellers agree to sell and transfer to Xxxxxx
the following:
1.1 TMI will issue and grant to Xxxxxx 1,050,000 shares of TMI's common
stock, with restrictive legend, free and clear of all security interests,
liens, encumbrances, claims, charges, assessments and restrictions other than
restrictions on transfer under federal and state securities laws.
1.2 Sessions and Xxxxxx will each transfer to Xxxxxx 125,000 shares of
Series A Preferred Stock, with restrictive legend, free and clear of all
security interests, liens, encumbrances, claims, charges, assessments and
restrictions other than restrictions on transfer under federal and state
securities laws. These 250,000 shares of Series A Preferred Stock represent 100%
of the authorized and outstanding Series A Preferred Stock of TMI.
2. CONSIDERATION OF XXXXXX. In exchange for the Common Stock from TMI
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and the Series A Preferred Stock from Sessions and Xxxxxx, Xxxxxx agrees to pay
the following:
2.1 Xxxx Xxxxxxx - $150,000
2.2 The Lebrecht Group, APLC - $15,000
2.3 Broad & Xxxxxx - $38,000
2.4 Xxxxxxx X. Xxxxxxxx, CPA - $7,500
2.5 Xxxxxxxxx, Xxxx, Xxxxxxx, Xxxxxx - $12,000
3. CLOSING.
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3.1 Closing of the transactions contemplated hereby ("Closing") shall take
place upon satisfaction of the following conditions, but in no event later than
21 days following the Effective Date.
3.2 At Closing, Sellers shall deliver certificates evidencing the Common
Stock and the Series A Preferred Stock to Xxxxxx, with duly executed stock
powers by Sessions and Xxxxxx, for transfer to Xxxxxx, and Xxxxxx shall deliver
to the Sellers proof of payment of the amounts listed in Section 2, above.
4. SELLERS' REPRESENTATIONS, WARRANTIES AND COVENANTS.
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4.1 As of the Closing, TMI will issue to Xxxxxx the Common Stock, and,
except with respect to the restrictions on transfer under federal and state
securities laws specified in this Agreement, there are no security interests,
liens, encumbrances, claims, charges, assessments or restrictions or any other
defects in title of any nature whatsoever on the Common Stock.
4.2 As of the Closing, Sessions and Xxxxxx each have and will transfer to
Xxxxxx all their interest in the Series A Preferred Stock, and, except with
respect to the restrictions on transfer under federal and state securities laws
specified in this Agreement, after Xxxxxx pays the amounts listed in Sections
2.1-2.5, above, there will not be any security interests, liens, encumbrances,
claims, charges, assessments or restrictions or any other defects in title of
any nature whatsoever on any of the Shares. Notwithstanding the above, Sessions
and Xxxxxx do not possess the Series A Preferred Stock certificates, since those
were misplaced, but they represent and warrant that they possess an affidavit
signed by Xxxx Xxxxxxx (individual Sessions and Xxxxxx purchased Series A
Preferred Stock from) on December 17, 2002, under penalty of perjury, admitting
there is no stock certificate representing the Series A Preferred Stock. In
reliance on the affidavit, Sessions and Xxxxxx further represent and warrant
that they do own 100% of the Series A Preferred Stock and are transferring that
interest to Xxxxxx under this Agreement.
4.3 Sellers have the right, power, legal capacity and authority to enter
into and perform Sellers' obligations under this Agreement.
4.4 Except as set forth herein, Sellers make no representations or
warranties with respect to TMI or the Common Stock or Series A Preferred Stock
and Xxxxxx is purchasing the Common Stock and Series A Preferred Stock "as is".
4.5 Sellers will not assign, sell, mortgage, lease, transfer, pledge, grant
a security interest in or lien upon, encumber, or otherwise dispose if or
abandon, nor will the Sellers suffer or permit any of the same to occur with
respect to, any part or all of the Common Stock or Series A Preferred Stock,
without the prior written consent of Xxxxxx; Sellers have made, and will
continue to make until the Closing or termination of this Agreement, payment or
deposit or otherwise provide for the payment, when due, of all taxes,
assessments or contributions required by law which have been or may be levied or
assessed against the Sellers with respect to the Common Stock or the Series A
Preferred Stock.
5. XXXXXX'X REPRESENTATIONS AND WARRANTIES.
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Xxxxxx hereby represents and warranties as follows:
5.1 Xxxxxx is an "accredited investor" as such term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act of 1933, as amended
(the "Securities Act").
5.2 Xxxxxx has the right, power, legal capacity and authority to enter
into and perform his obligations under this Agreement.
5.3 Xxxxxx has received, read carefully and is familiar with this
Agreement. With respect to TMI, Xxxxxx is familiar with TMI's business, plans
and financial condition, and any other matters relating to TMI; Xxxxxx has
received all materials that have been requested by Xxxxxx; Xxxxxx has had a
reasonable opportunity to ask questions of TMI and its representatives; and TMI
has answered all inquiries that Xxxxxx or his representatives have put to it.
Xxxxxx has had access to all additional non-confidential information necessary,
in Xxxxxx'x judgment, to evaluate the merits and risks of an investment in TMI.
Xxxxxx acknowledges that Sellers have made no representations or warranties of
any kind to Xxxxxx regarding TMI, its business, finances or prospects.
5.4 Xxxxxx has such knowledge and experience in finance, securities,
investments and other business matters so as to be able to protect his interests
in connection with this transaction, and Xxxxxx'x investment in TMI hereunder is
not material when compared to Xxxxxx'x total financial capacity.
5.5 Xxxxxx understands the various risks of an investment in TMI and can
afford to bear such risks, including, without limitation, the risks of losing
the entire investment.
5.6 Xxxxxx acknowledges that no liquid market for the Series A Preferred
Stock currently exists and none may develop in the future and that Xxxxxx may
find it impossible to liquidate the investment at a time when it may be
desirable to do so, or at any other time.
5.7 Xxxxxx will acquire the Common Stock and the Series A Preferred Stock
for Xxxxxx'x own account for investment and not with a view to the sale or
distribution thereof or the granting of any participation therein, and has no
present intention of distributing or selling to others any of such interest or
granting any participation therein.
5.8 Xxxxxx has been advised by Sellers that neither the Common Stock nor
the Series A Preferred Stock have been registered under the Securities Act or
applicable state securities law and that they will be sold in a transaction
exempt therefrom. Xxxxxx acknowledges that he is familiar with the nature of the
limitations imposed by the Securities Act and the rules and regulations
thereunder on the transfer of the Common Stock and Series A Preferred Stock. In
particular, Xxxxxx agrees that TMI shall not be required to give any effect to a
sale, assignment or transfer of the Shares, unless (i) the sale, assignment or
transfer of such stock is registered under the Securities Act, and applicable
state securities laws, it being understood that the Common Stock and the Series
A Preferred Stock are not currently registered for sale and that TMI has no
obligation or intention to so register those shares or (ii) such sale,
assignment or transfer is otherwise exempt from registration under the
Securities Act and applicable state securities laws. Xxxxxx further understands
that an opinion of counsel and other documents may be required to transfer the
Common Stock and the Series A Preferred Stock. Xxxxxx acknowledges that Common
Stock and the Series A Preferred Stock shall be subject to stop transfer orders
and the certificate or certificates evidencing any of those shares shall bear
the following or a substantially similar legend or such other legend as may
appear on the forms of common stock and preferred stock and such other legends
as may be required by state blue sky laws:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state or foreign securities laws and neither
such securities nor any interest therein may be offered, sold,
pledged, assigned or otherwise transferred unless (1) a registration
statement with respect thereto is effective under the Securities Act
and any applicable state securities laws, or (2) the Company receives
an opinion of counsel to the holder of such securities, which counsel
and opinion are reasonably satisfactory to the Company, that such
securities may be offered, sold, pledged, assigned or transferred in
the manner contemplated without an effective registration statement
under the Securities Act or applicable state securities laws."
6. BINDING UPON SUCCESSORS AND ASSIGNS. Subject to, and unless
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otherwise provided in, this Agreement, and each and all of the covenants, terms,
provisions, and agreements contained herein, shall be binding upon, and inure to
the benefit of, the successors, executors, heirs, representatives,
administrators and assigns of the parties hereto.
7. ENTIRE AGREEMENT. This Agreement constitutes the entire understand-
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ing and agreement of the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements or under-
standings, inducements or conditions, express or implied, written or oral,
between the parties with respect hereto and thereto.
8. COUNTERPARTS. This Agreement may be executed in any number of
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counterparts, each of which shall be an original as against any party whose
signature appears thereon and all of which together shall constitute one and the
same instrument.
9. AMENDMENT AND WAIVERS. Any term or provision of this Agreement may
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be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a writing signed by the party to be bound thereby. The
waiver by a party of any breach hereof for default in payment of any amount due
hereunder or default in the performance hereof shall not be deemed to constitute
a waiver of any other default or any succeeding breach or default.
10. ATTORNEYS' FEES. Should suit be brought to enforce or interpret
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any part of this Agreement, the prevailing party shall be entitled to recover,
as an element of the costs of suit and not as damages, reasonable attorneys'
fees to be fixed by the court (including without limitation, costs, expenses and
fees on any appeal). The prevailing party shall be the party entitled to recover
its costs of suit, regardless of whether such suit proceeds to final judgment. A
party not entitled to recover its costs shall not be entitled to recover
attorneys' fees. No sum for attorneys' fees shall be counted in calculating the
amount of a judgment for purposes of determining if a party is entitled to
recover costs or attorneys' fees.
11. GOVERNING LAW. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Florida, without regard to its
choice of law principles.
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12. RELIANCE BY TMI. The parties hereto expressly authorize TMI and
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its counsel to rely upon the representations set forth herein in connection with
the transfer of the Shares.
SELLERS: XXXXXX:
/s/ W. Xxxxxxx Xxxxxxxx /s/ Xxxxx Xxxxxx
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TMI Holdings, Inc., by Xxxxx Xxxxxx, an individual
W. Xxxxxxx Xxxxxxxx, President
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, an individual
/s/ W. Xxxxxxx Xxxxxxxx
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W. Xxxxxxx Xxxxxxxx, an individual
