EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement"), is made and
entered into effective as of June ____, 1999 by and between National Capital
Management Corporation, a Delaware corporation (the "Company"), and Resource
Holding Associates, a Delaware limited partnership or its assigns (the
"Purchaser").
A. The Company is the sole owner of all of the outstanding
shares of capital stock of National Capital Benefits Corporation, a Delaware
corporation ("NCBC").
B. The Company desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Company, all of the outstanding
capital stock of National Capital Benefits Corporation.
ACCORDINGLY, the parties hereby agree as follows:
1. SALE AND PURCHASE OF SHARES AND WARRANT.
1.1 Subject to the terms and conditions of this Agreement, the
Company agrees to sell to the Purchaser, and the Purchaser agrees to
purchase from the Company all outstanding shares of capital stock of
NCBC consisting of 500 shares of Common Stock and 519 shares of Series
A Preferred Stock (collectively the "Shares").
1.2 Subject to the terms and conditions of this Agreement, the
Company agrees to sell, assign or otherwise transfer any and all rights
or options it may have pursuant to the Senior Subordinated Note and
Warrant Purchase Agreement dated as of December 29, 1995, as amended
(the "Purchase Agreement") by and between NCBC and Banc One Capital
Partners V, Ltd. ("BOCP V"), pursuant to which NCBC has an option to
purchase the warrant held by BOCP V for the purchase of shares of
common stock of NCBC (the "Warrant").
1.3 At Closing, or as soon as is feasible thereafter, Company
shall deliver to Purchaser all contracts, books and records of NCMC, if
any, which are in Seller's possession and which have not been
previously delivered to or in the possession of NCMC. Seller, may,
however, retain copies of such contracts, books and records. Purchasers
agree that the Company may, for a period of ten (10) years, have access
to business records necessary for the Company to respond to inquiries,
examinations, claims, reviews or audits from appropriate taxing or
other governmental authorities and Purchaser agrees to maintain records
for the purpose of assuring the Company's ability to comply with the
requirements of such authorities. For documents requested by the
Company, the Company shall reimburse NCBC at a reasonable hourly rate
for time spent by NCBC personnel to construct or create
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documents (but not for providing then existing documents) and actual
out-of-pocket expenses incurred by NCBC in responding to all such
requests. The parties also agree to provide to the other, documents,
information and access to employees or agents regarding litigation or
claims asserted by third parties against the Company or NCBC, and the
party seeking such documents, information or access agrees to
reimburse the other for its reasonable out-of-pocket expenses.
2. CONSIDERATION. The Purchaser agrees that in
consideration, and as payment of the purchase price, for the Shares and the
rights to the Warrant, the Purchaser shall at Closing:
2.1 Take such actions as may be necessary or desirable to
assume, or otherwise relieve the Company of, all of the Company's
obligations, to Bank One, N.A. (f/n/a Bank One Columbus, N.A.) ("Bank
One") under the Validity and Support Agreement and Guaranty dated as of
December 29, 1995, by and between the Company and Bank One.
2.2 Assume the NCBC obligation to pay $20,000 to BOCP V in
consideration for the extension of the loan by BOCP V to NCBC under the
Purchase Agreement.
2.3 Assume all outstanding obligations of NCBC to (i) Bank One
under the Loan Agreement dated as of December 29, 1995, as amended, and
(ii) BOCP V under the Purchase Agreement.
3. CLOSING. The closing of the sale to, and purchase by,
the Purchaser of the Shares and the rights with respect to the Warrant (the
"Closing") shall occur simultaneously with the execution of this Agreement
(the "Closing Date"), but in no event shall such Closing occur before
Purchaser provides the Company with evidence satisfactory to the Company that
Purchaser has assumed or provided the consideration as described in paragraph
2 hereof.
4. PURCHASER'S EXPERTISE. It is hereby acknowledged that
Purchaser (and its principal)is very familiar with and has detailed
information and sophisticated knowledge and expertise regarding the plans,
operations, finances and assets of NCBC and its subsidiaries and the business
risks associated with acquiring and conducting the business of NCBC and its
subsidiaries. The Purchaser is relying on the knowledge and expertise of its
principals regarding the operations of NCBC and its subsidiaries in
Purchaser's decision to acquire NCBC.
5. INVESTIGATION AND REVIEW. Prior to Closing under this
Agreement, Company and Purchaser have had and shall each provide to the other
reasonable access to all records and information necessary to conduct a due
diligence investigation to determine to each party's satisfaction, the
condition of the business of NCBC.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the Purchaser that:
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6.1 ORGANIZATION; STANDING. The Company is a corporation and
has been duly organized and is validly existing and in good standing
under the laws of the State of Delaware. NCBC is a corporation and has
been duly organized and is validly existing and in good standing under
the laws of the State of Delaware and has the requisite corporate
power and authority to own its properties and to carry on its business
in all material respects as it is now being conducted.
6.2 CAPITAL STOCK; GOOD TITLE. At the date hereof, the
authorized capital stock of NCBC consists of 1,450 shares of capital
stock, of which 519 shares of Series A Preferred Stock are issued and
outstanding and 500 shares of Common Stock are issued and outstanding
as of the close of business on the day preceding the Closing Date.
Except for the Warrant, there are no outstanding subscriptions,
options, warrants, calls, contracts, demands, commitments, convertible
securities or other agreements or arrangements of any character or
nature whatever, under which NCBC is obligated to issue any securities
of any kind representing an ownership interest in NCBC. The Company
owns the Shares free and clear of any liens, claims, encumbrances, or
restrictions and the Company has good and marketable title to the
Shares and the absolute right, power and capacity to sell, assign and
deliver the Shares to the Purchaser, free and clear of all liens,
claims, encumbrances and restrictions.
6.3 VALIDITY OF AGREEMENT. This Agreement, when executed, will
constitute the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms (except as
the enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws affecting
creditors' rights generally from time to time in effect and by
equitable principles of general application).
6.4 AUTHORITY; NO CONFLICT. The Company has full right and
power to enter into, execute, deliver and perform its obligations under
this Agreement. The Company has duly authorized this Agreement and each
other document contemplated herein to which it will be a party. The
Company has duly executed and delivered this Agreement, and neither the
execution, delivery or performance of this Agreement by it or any other
document contemplated hereby to which it is or will be a party, nor the
consummation of the purchase of the Shares contemplated hereby, does or
will, after the giving of notice or the lapse of time or otherwise,
conflict with, result in a breach or violation of, or constitute a
default under, the charter or other governing documents of the Company,
or any federal, foreign, state or local law, statute, ordinance, rule
or regulation, or any court or administrative order, writ, judgment,
injunction, award or decree, or any contract, agreement, commitment or
plan to which it is a party or by which its rights, properties or
assets are subject or bound (except for the respective lending
arrangements with each of Bank One and BOCP V for which consents have
been requested).
6.5 NO BROKERS. No person, corporation or firm has or will
have, as a result of any act or omission of the Company, any right,
interest or valid claim against the Company
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for any commission, fee or other compensation as a finder or broker
in connection with the transactions contemplated by this Agreement.
6.6 NO LITIGATION. There is no pending or threatened action or
proceeding that seeks to or might prevent or interfere with the
consummation of the transactions contemplated by this Agreement or
litigation which does or might adversely affect the Shares.
6.7 ASSETS. As a result of the sale of the Shares, all assets
of NCBC shall be transferred to Purchaser on an "as is," "where is"
basis. The Company hereby disclaims any and all warranties or
representations as to the quantity, quality or suitability of any of
the assets and the entire risk as to their quality and performance is
with the Purchaser.
6.8 CANCELLATION. Any and all obligations from NCBC to the
Company are hereby cancelled.
7. REPRESENTATIONS OF THE PURCHASER. The Purchasers jointly
and severally represent that:
7.1 INVESTMENT INTENT. The Shares being acquired by the
Purchaser are being purchased for the investment for the Purchaser's
own account and not with the view to, or for resale in connection with,
any distribution or public offering thereof. The Purchaser understands
that the Shares are illiquid and have not been registered under the
Securities Act or any state securities laws by reason of their
contemplated issuance in transactions exempt from the registration
requirements of the Securities Act and applicable state securities
laws, and that the reliance of the Company and others upon these
exemptions is predicated in part upon this representation and warranty.
The Purchaser further understands that the Shares may not be
transferred or resold without (a) registration under the Securities Act
and any applicable state securities laws, or (b) an exemption from the
requirements of the Securities Act and applicable state securities
laws. The Purchaser understands that it may not sell any securities
pursuant to Rule 144 prior to the expiration of a one-year period after
such Purchaser has acquired the securities. The Purchaser understands
that any sales pursuant to Rule 144 may only be made in full compliance
with the provisions of Rule 144.
7.2 LOCATION OF PRINCIPAL OFFICE AND QUALIFICATION AS AN
ACCREDITED INVESTOR. The Purchaser's principal office is located in the
State of Delaware. The Purchaser qualifies as an accredited investor
within the meaning of Rule 501 under the Securities Act. The Purchaser
has such knowledge and experience in financial and business matters
that the Purchaser is capable of evaluating the merits and risks of the
investment to be made hereunder by the Purchaser. The Purchaser has an
intimate knowledge of the business and affairs of NCBC and has had full
access to all of the Company's books and records and to the Company's
executive officers.
7.3 VALIDITY OF AGREEMENT. This Agreement, when executed, will
constitute the legal, valid and binding obligation of the Purchaser
enforceable against the Purchaser in accordance with its terms (except
as the enforcement thereof may be limited by applicable
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bankruptcy, reorganization, insolvency, moratorium and similar laws
affecting creditors' rights generally from time to time in effect and
by equitable principles of general application).
7.4 AUTHORITY; NO CONFLICT. The Purchaser has full right and
power to enter into, execute, deliver and perform its obligations under
this Agreement. The Purchaser has duly authorized this Agreement and
each other document contemplated herein to which it will be a party.
The Purchaser has duly executed and delivered this Agreement, and
neither the execution, delivery or performance of this Agreement by it
or any other document contemplated hereby to which it is or will be a
party, nor the consummation of the purchase of the Shares contemplated
hereby, does or will, after the giving of notice or the lapse of time
or otherwise, conflict with, result in a breach or violation of, or
constitute a default under, the charter or other governing documents of
the Purchaser, or any federal, foreign, state or local law, statute,
ordinance, rule or regulation, or any court or administrative order,
writ, judgment, injunction, award or decree, or any contract,
agreement, commitment or plan to which it is a party or by which its
rights, properties or assets are subject or bound.
7.5 NO BROKERS. No person, corporation or firm has or will
have, as a result of any act or omission of the Company, any right,
interest or valid claim against the Company for any commission, fee or
other compensation as a finder or broker in connection with the
transactions contemplated by this Agreement.
7.6 FINANCIAL STATEMENTS. The Purchasers, through Xx. Xxxx,
have delivered to the Company the balance sheet of NCBC. The Purchaser
represents that such balance sheet is true and correct and a fair and
accurate representation of the financial condition and assets and
liabilities (whether accrued, absolute, contingent or otherwise) of
NCBC as of the date thereof in accordance with generally accepted
accounting principles, consistently applied and that there have been no
material changes in the financial condition of NCBC since March 31,
1999, other than in the ordinary course of business.
7.7 CONSENTS. As of the Closing, Purchaser has obtained
consents from Bank One and BOCP V with respect to the purchase of the
Shares pursuant to the terms of this Agreement. As of the Closing,
Purchaser has obtained a termination of the Validity and Support
Agreement and Guaranty dated as of December 29, 1995, which the Company
executed for the benefit of Bank One, and (ii) the Validity and Support
Agreement dated as of December 29, 1995, which the Company executed for
the benefit of BOCP V.
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8. COVENANT NOT TO XXX. Purchaser acknowledges that Xx.
Xxxx is an officer of and has been involved with NCBC for several years and
is familiar with all its activities and operations. Purchaser hereby
covenants and agrees that except as described in this Agreement, Purchaser,
and its successor or assigns, shall not, directly or indirectly, through NCBC
or any other entity, make a claim against or file litigation naming the
Company or any of its directors, officers, employees or agents for any
matters arising out of or directly or indirectly related to the operations of
NCBC and its subsidiaries prior to or as of Closing and Purchaser hereby
releases the Company and its directors, officers, employees and agents from
any liability for any mater arising out of or related directly or indirectly
to NCBC's or its subsidiaries' operations prior to and as of Closing,
PROVIDED, HOWEVER, that the covenant not to xxx shall not in any way limit
Purchaser from enforcing its rights under or compliance with the terms of
this Agreement.
9. RESTRICTION ON TRANSFER OF THE SECURITIES.
9.1 RESTRICTIONS. The Shares will be transferable only
pursuant to (a) a public offering registered under the Securities Act
of 1933, as amended (the "Securities Act"), or (b) Rule 144 (or any
similar rule then in effect) adopted under the Securities Act, if such
rule is available, and subject to the conditions elsewhere specified in
this Agreement.
9.2 LEGEND. Each certificate representing the Shares shall be
endorsed with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933
OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD,
TRANSFERRED OR PLEDGED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE APPLICABLE FEDERAL AND STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT THE TRANSFER IS EXEMPT FROM REGISTRATION UNDER
THE APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
10. INDEMNIFICATION.
10.1 OBLIGATION OF THE COMPANY TO INDEMNIFY. The Company
agrees to indemnify, defend and hold harmless the Purchaser from and
against all losses, liabilities, damages, deficiencies, costs or
expenses (including interest, penalties and reasonable attorneys' fees
and disbursements) (the "Losses") based upon, arising out of or
otherwise in respect of any material inaccuracy or any material breach
of any representation, warranty, covenant or agreement of the Company
contained in this Agreement or in any document delivered by the Company
pursuant to this Agreement.
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10.2 OBLIGATION OF THE PURCHASER TO INDEMNIFY. The Purchaser
agrees to indemnify, defend and hold harmless the Company from and
against any Losses based upon, arising out of or otherwise in respect
of any material inaccuracy in or any material breach of any
representation, warranty, covenant or agreement of the Purchaser
contained in this Agreement or in any document delivered by the
Purchaser pursuant to this Agreement.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties in this Agreement and the applicable
indemnifications thereto made by the Company and the Purchaser shall survive
the execution and delivery of this Agreement.
12. GENERAL.
12.1 ACTIONS AFTER THE CLOSING. After the date of this
Agreement, the parties shall execute and deliver such other and further
instruments and perform such other and further acts as may reasonably
be required to fully consummate the transactions contemplated hereby.
12.2 EXECUTION IN COUNTERPARTS. For the convenience of the
parties, this Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same document.
12.3 NOTICE. Any notice, request or other communication
required or permitted under this Agreement shall be in writing and
given or made by physical delivery, electronic transmission or by
registered or certified mail, postage prepaid, return receipt requested
or by overnight courier addressed to the other party.
12.4 APPLICABLE LAWS. This Agreement shall be construed,
governed, enforced and venued in and under the laws of the State of
Delaware.
12.5 ENTIRE AGREEMENT. This Agreement shall constitute the
entire agreement between the parties hereto. Any prior written
agreements or letters of intent between the parties, relating to the
subject matter of this Agreement, shall, upon execution of this
Agreement, be null and void.
12.6 REPORTING FOR TAX PURPOSES. The parties agree that the
payment of the purchase price provided for herein is solely for the
Shares and each party shall so report such payments for tax purposes.
12.7 WAIVERS AND AMENDMENTS; NONCONTRACTUAL REMEDIES;
PRESERVATION OF REMEDIES. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only
by a written instrument signed by each of the parties hereto or, in the
case of a waiver, by the party waiving compliance. No delay on the
part of any party in exercising any right, power or privilege hereunder
shall operate as a
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waiver thereof, nor shall any waiver on the part of any party of any
such right, power or privilege, nor any single or partial exercise of
any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege.
12.8 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
legal representatives.
12.9 SEPARABILITY. If any provision of this Agreement or the
application thereof shall for any reason be invalid or unenforceable,
such provision shall be limited only to the extent necessary in the
circumstances to make such provisions valid and enforceable and its
partial or total invalidity or unenforceability shall in any event not
affect the remaining provisions of this Agreement which shall continue
in full force and effect.
* * * * * * *
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
THE "COMPANY":
NATIONAL CAPITAL MANAGEMENT
CORPORATION
By:
--------------------------------
Xxxxx X. Xxxxx
Director
THE "PURCHASER":
RESOURCE HOLDINGS ASSOCIATES
By:
--------------------------------
Xxxx X. Xxxx
Its:
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