STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of
September 27, 2000, by and between International Cosmetics Marketing Co., a
Florida corporation (the "Company") located at 0000 X.X. Xxxx xx Xxxxxxxx Xxxx.,
Xxxxx 000, Xxxx Xxxxx, XX 00000 and the purchasers whose names and signatures
appear on the signature page of this Agreement (collectively the "Purchasers").
RECITALS
Purchasers desire to purchase, and the Company desires to sell, upon
the terms and conditions stated in this Agreement, shares of Series A
Convertible Preferred Stock of the Company having the rights set forth in the
Certificate of Designations, Preferences and Rights attached hereto as Exhibit A
(the "Preferred Stock"), which shall be convertible into shares of the Company's
common stock, par value $.001 (the "Common Stock"). The shares of Common Stock
issuable upon conversion of or otherwise pursuant to the Preferred Stock are
referred to herein as the "Conversion Shares." The Preferred Stock and the
Conversion Shares are sometimes collectively referred to herein as the
"Securities."
NOW, THEREFORE, in consideration of their respective promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and Purchasers hereby agree as
follows:
ARTICLE I
PURCHASE AND SALE OF SECURITIES
1.1 Purchase of Preferred Stock. The Company shall authorize the
issuance and sale to Purchasers of an aggregate of up to 200,000 shares of the
Preferred Stock on or before the Closing (as defined below). The Company shall
adopt and file with the Secretary of State of Florida on or before the Closing
the all necessary documents to authorize and create the Preferred Stock. Subject
to the terms and conditions of this Agreement, each Purchaser agrees, severally
and not jointly, to purchase at the Closing and the Company agrees to sell and
issue to each Purchaser at the Closing, up to that number of shares of the
Preferred Stock set forth opposite each Purchaser's name on Exhibit B hereto at
a price of $2.50 per share of Preferred Stock. The sale of the Preferred Stock
to each Purchaser shall constitute a separate sale hereunder and the Company's
agreement with each of the Purchasers shall be a separate agreement.
1.2 Closing. Subject to the satisfaction of the conditions set forth in
this Agreement, closings of the separate purchases and sales of the Preferred
Stock shall take place on one or more occasions at such times and at such places
as mutually agreed to by the Company and the Purchasers (each a "Closing"). At
each Closing the Company shall deliver to each Purchaser a certificate
representing the Preferred Stock that such Purchaser is purchasing against
payment of the purchase price therefor by check, wire transfer, cancellation of
indebtedness or any combination thereof. If at any Closing any of the conditions
set forth in this Agreement shall not have been fulfilled or accurate, each
Purchaser shall, at its election, be relieved of all of its obligations under
this Agreement without thereby waiving any other right such Purchaser may have
by reason of such failure or such non- fulfillment.
ARTICLE II
PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchasers, severally but not jointly, represent and warrant to the
Company as set forth in this Article II. Purchasers do not make any other
representations or warranties, express or implied, to the Company in connection
with the transactions contemplated hereby and any and all prior representations
and warranties, if any, which may have been made by each Purchaser to the
Company in connection with the transactions contemplated hereby shall be deemed
to have been merged in this Agreement and any such prior representations and
warranties, if any, shall not survive the execution and delivery of this
Agreement.
2.1 Requisite Power And Authority. Each Purchaser has all necessary
power and authority under all applicable provisions of law to execute and
deliver this Agreement and to carry out the provisions of this Agreement. All
action on each Purchaser's part required for the execution and delivery of this
Agreement has been or will be effectively taken prior to any Closing. This
Agreement, when executed and delivered, will be a valid and binding obligation
of each Purchaser, enforceable in accordance with its terms, except (a) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights;
and (b) general principles of equity that restrict the availability of equitable
remedies.
2.2 Consents. All consents, approvals, orders or authorizations on the
part of each Purchaser required in connection with the consummation of the
transactions contemplated in this Agreement have been or shall have been
obtained prior to and be effective as of the Closing.
2.3 Investment Representations. Each Purchaser understands that the
Securities have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"). Purchaser also understand that the Securities are being
offered and sold pursuant to an exemption from registration contained in the
Securities Act, based in part upon each Purchaser's representations contained in
the Agreement. Each Purchaser hereby represents and warrants that: (a) Purchaser
is an "accredited investor" within the meaning of Rule 501(a) of Regulation D
under the Securities Act, (b) Purchaser must bear the economic risk of this
investment indefinitely unless such Securities are registered pursuant to the
Securities Act, or an exemption from registration is available. Purchaser also
understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such
exemption may not allow Purchaser to transfer all or any portion of such
Securities under the circumstances, in the amounts or at the times Purchaser
might propose, (c) Purchaser is acquiring such shares for Purchaser's own
account for investment only, and not with a view towards their distribution
within the meaning of the Securities Act, and (d) Purchaser has had an
opportunity to discuss the Company's business, management and financial
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affairs with directors, officers and management of the Company and has had the
opportunity to review the Company's operations and facilities.
2.4 Legends. Each certificate representing the Securities may be
endorsed with the following legends:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144 PROMULGATED
UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR
OTHERWISE DISTRIBUTED EXCEPT (I) IN CONJUNCTION WITH AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT; OR (II) IN
COMPLIANCE WITH RULE 144; OR (III) PURSUANT TO AN OPINION OF COUNSEL TO
THE CORPORATION THAT SUCH REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS
TO SUCH SALE, OFFER OR DISTRIBUTION."
2.5 Removal of Legend and Transfer Restrictions. Any legend endorsed on
a certificate pursuant to subsection 2.4 and any stop transfer instructions with
respect to such Securities shall be removed and the Company shall issue a
certificate without such legend to the holder thereof if such legend may be
properly removed under the terms of Rule 144 promulgated under the Securities
Act or if such holder provides the Company with an opinion of counsel for such
holder, reasonably satisfactory to legal counsel for the Company, to the effect
that a sale, transfer or assignment of such Securities may be made without
registration.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement for each Purchaser to enter into this
Agreement and to consummate the transactions contemplated hereby, the Company
represents and warrants to each Purchaser that as of the date hereof and as of
the date of any Closing:
3.1 Organization and Qualification. The Company is a corporation duly
organized, validity existing and in good standing (except with respect to any
delinquent tax payments) under the laws of the jurisdiction in which it is
incorporated, and has the requisite corporate power and authority to own its
properties and to carry on its business as now being conducted. The Company is
duly qualified as a foreign corporation to do business and is in good standing
(except with respect to any delinquent tax payments) in every jurisdiction where
the failure to so qualify would have a Material Adverse Effect. "Material
Adverse Effect" means any material adverse effect on either (i) the business,
operations, properties, financial condition, operating results or prospects of
the Company and its subsidiaries, taken as a whole on a consolidated basis; or
(ii) the transactions contemplated hereby. The representations in this
subsection 3.1 shall not apply or relate to the Company's obligations to
register its direct marketing program in any state.
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3.2 Authorization and Enforcement. (a) The Company has the requisite
corporate power and authority to enter into and perform this Agreement and to
issue and sell, perform its obligations with respect to the Securities and this
Agreement; (b) the execution, delivery and performance of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby
(including without limitation the issuance of the Preferred Stock and the
reservation for issuance and issuance of the Conversion Shares) have been duly
authorized by all necessary corporate action and no further consent or
authorization of the Company, its board of directors, or its shareholders or any
other person, body or agency is required with respect to any of the transactions
contemplated hereby or thereby; (c) this Agreement has been duly executed and
delivered by the Company; and (d) this Agreement constitutes a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar
laws affecting creditors' rights, and subject to general equity principles and
to limitations on availability of equitable relief, including specific
performance.
3.3 Issuance of Securities. The shares of Preferred Stock are duly
authorized and reserved for issuance, and, upon conversion thereof the
Conversion Shares, will be validly issued, fully paid and non-assessable, and
free from all taxes, liens, claims and encumbrances and will not be subject to
preemptive rights or other similar rights of shareholders of the Company which
preemptive rights or other similar rights have not been waived prior to the
execution hereof.
3.4 Acknowledgment Regarding Purchasers' Purchase of the Securities.
The Company represents to each Purchaser that the Company's decision to enter
into this Agreement and the transactions contemplated hereby has been based
solely on an independent evaluation by the Company and its representatives.
ARTICLE IV
COVENANTS
4.1 Reporting Status. Subject to the completion of the Company's audit
for the fiscal year ended June 30, 2000, so long as any Purchaser beneficially
owns any of the Securities, the Company shall timely file all reports required
to be filed with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Company shall not terminate its status as an issuer required to file reports
under the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would permit such termination.
4.2 Information. The Company agrees to promptly provide the Purchasers
with any information with respect to the Company, its properties, or its
business as such Purchaser may reasonably request; provided, however, that the
Company shall not without prior notice give any Purchaser any material
non-public information. Without limitation of the foregoing, if any information
requested by a Purchaser from the Company contains material non-public
information, the Company shall inform the Purchaser in writing that the
information requested contains material
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non-public information and shall in no event provide such information to
Purchaser without the express prior written consent of such Purchaser after
being so informed.
4.3 Use of Proceeds. The Company agrees that a portion of the proceeds
from the sale of the Preferred Stock will be used to satisfy and pay in full all
delinquent federal, state and local taxes (including without limitation payroll
and sales taxes).
4.4 Registration Rights. (a) In the event that the Company proposes to
file a registration statement on a general form of registration under the
Securities Act (other than a form S-8 or S-4) relating to securities issued or
to be issued by it, then it shall give written notice of such proposal to the
record owner(s) of the Securities. If, within 15 days after the giving of such
notice, the record owners of any of the Securities shall request in writing that
at least 51% of the Conversion Shares be included in such proposed registration,
the Company shall, at its own expense (except as set forth below), also register
such number of Conversion Shares as shall have been so requested in writing;
provided, however, that
(i) the Company shall not be required to include any
of such Conversion Shares if, by reason of such inclusion, the Company
shall be required to prepare and file a registration statement on a
form promulgated by the Securities and Exchange Commission different
from that which the Company otherwise would use;
(ii) such owners shall cooperate with the Company in
the preparation of such registration statement to the extent required
to furnish information concerning such owners therein; and
(iii) if any underwriter or managing agent is purchasing or
arranging for the sale of the securities then being offered by the Company under
such registration statement, then such owners (A) shall agree to have the
Conversion Shares being registered sold to or by such underwriter or managing
agent on terms substantially equivalent to the terms upon which the Company is
selling the securities so registered, or (B) shall delay the sale of the
Conversion Shares for the lesser of a 60 day period commencing with the
effective date of the registration statement or the date on which the
underwriter agrees to permit the sale of all or a portion of the Conversion
Shares being registered; further, if the number of Conversion Shares as to which
such owner, and all other owners of securities of the Company holding
registration rights, has requested registration is in the aggregate sufficient
that such underwriter reasonably believes in good faith that the inclusion of
such Conversion Shares in the registration statement may jeopardize the success
of the offering, then such underwriter may require that each such owner of
securities reduce the number of Conversion Shares to be registered, with such
reduction to be in proportion to the number of shares as to which each
respective owner has requested registration which may be the entire number of
securities thereof.
(b) In the event that the record owners of at least 51% of the
Conversion Shares should give written notice to the Company of their intention
to exercise the rights set forth in this Section 4.4(b), then the Company shall
file a registration statement in accordance with this
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Section 4.4(b). Such notice(s) by the record owners must, to be effective, (i)
be received by the Company within a 30-day period of each other, and (ii) be
given with respect to Conversion Shares that the record owner is not otherwise
entitled to sell publicly in the United States without registration and without
restriction. The Company shall be obliged no more than twice to file a
registration statement in accordance with this Section 4.4(b). The rights
provided record owners by this Section 4.4(b) are in addition to those provided
by Section 4.4(a). Unless the record owner's notice specifically states
otherwise, it shall be deemed to be a notice with respect to all Conversion
Shares owned of record by such holder. Within 15 days after receipt of any such
notice or notices, the Company shall give further written notice of such
proposed registration pursuant to Section 4.4(a) hereof. The Company shall then,
at its own expense (except as set forth below), register such number of
Conversion Shares as requested in such notice or notices pursuant to this
Section 4.4(b); provided, however, that
(i) such owners shall cooperate with the Company in
the preparation of such registration statement to the extent required
to furnish information concerning such owners therein; and
(ii) if any underwriter or managing agent is
purchasing or arranging for the sale of the securities then being
offered by the Company under another registration statement previously
filed or filed within 30 days after the notice by the record owners
pursuant to this Section 4.4(b), then such owners (A) shall agree to
have the Conversion Shares being registered sold to or by such
underwriter or managing agent on terms substantially equivalent to the
terms upon which the Company is selling the securities otherwise
registered, or (B) shall delay the sale of the Conversion Shares for
the lesser of the 60 day period commencing with the effective date of
the other registration statement or the date on which the underwriter
agrees to permit the sale of the Conversion Shares.
(c) In connection with the filing of a registration statement
pursuant to Section 4.4, the Company shall:
(i) notify such owners as to the filing thereof and
of all amendments thereto filed prior to the effective date of
said registration statement;
(ii) notify such owners, promptly after it shall have
received notice thereof, of the time when the registration statement
becomes effective or any supplement to any prospectus forming a part of
the registration statement has been filed;
(iii) prepare and file without expense to such owners
any necessary amendment or supplement to such registration statement or
prospectus as may be necessary to comply with Section 10(a)(3) of the
Securities Act or advisable in connection with the proposed
distribution of the Conversion Shares by such owners;
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(iv) take all reasonable steps to qualify the
Conversion Shares being so registered for sale under the securities or
blue sky laws in such states as the holders of the Conversion Shares
being so registered may reasonably request;
(v) notify such registered owners of any stop order
suspending the effectiveness of the registration statement and use its
reasonable best efforts to remove such stop order; and
(vi) undertake to keep said registration statement
and prospectus effective until the earlier of (A) two years from the
effective date thereof (provided, that if the Holders are required to
delay the sale of the securities, then such period shall be extended by
the amount of such delay), or (B) the date the Conversion Shares are
sold or become available for public sale without restriction under the
Securities Act; provided, however, that such undertaking shall apply
only to the extent that the Company is permitted to register such
securities for continuous sale under Rule 415 of the General Rules
promulgated under the Securities Act, under any successor provision, or
under authoritative interpretations of applicable law.
(d) The record owners of the Conversion Shares being
registered under this Section 4.4 agree to pay all of the underwriting discounts
and commissions, registration fees and their own counsel fees with respect to
the Conversion Shares owned by them and being registered. The Company agrees
that the costs and expenses which it is obligated to pay in connection with a
registration statement to be filed pursuant to Section 4.4 hereof including, but
not limited to, the fees and expenses of counsel for the Company, the fees and
expenses of the Company's accountants and all other costs and expenses incident
to the preparation, printing and filing under the Securities Act of any such
registration statement, each prospectus and all amendments and supplements
thereto, the costs incurred in connection with the qualification of such
securities for sale in a reasonable number of states, including fees and
disbursements of counsel for the Company, and the costs of supplying a
reasonable number of copies of the registration statement, each preliminary
prospectus, final prospectus and any supplements or amendments thereto to such
registered owners.
ARTICLE V
MISCELLANEOUS
5.1 Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida applicable to
contracts made and to be performed in the State of Florida. The parties hereto
irrevocably consent to the jurisdiction of the United States federal courts
located in the State of Florida and the state courts located in the County of
Palm Beach in the State of Florida in any suit or proceeding based on or arising
under this Agreement or the transactions contemplated hereby and irrevocably
agree that all claims in respect of such suit or proceeding may be determined in
such courts. The Company further agrees that service of process upon the Company
delivered by nationally recognized overnight courier shall be deemed in every
respect effective service of process upon the Company in any suit or proceeding
arising hereunder.
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The parties hereto agree that a final non-appealable judgment in any such suit
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.
5.2 Counterparts. This Agreement may be executed in two or more
counterparts, including, without limitation, by facsimile transmission, all of
which counterparts shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered
to the other party. In the event any signature page is delivered by facsimile
transmission, the party using such means of delivery shall cause additional
original executed signature pages to be delivered to the other parties.
5.3 Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
5.4 Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.
5.5 Amendments. No provision of this Agreement may be waived other than
by an instrument in writing signed by the party to be charged with enforcement
and no provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the Purchasers.
5.6 Notice. Any notice herein required or permitted to be given shall
be in writing and may be personally served or delivered by courier or by
facsimile-machine confirmed telecopy, and shall be deemed delivered at the time
and date of receipt (which shall include telephone line facsimile transmission).
5.7 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
the Company nor any Purchaser shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.
Notwithstanding the foregoing, any Purchaser may assign its rights and
obligations hereunder to any of its "affiliates," as that term is defined under
the Exchange Act, without the consent of the Company so long as such affiliate
is an accredited investor. This provision shall not limit any Purchasers' right
to transfer the Securities pursuant to the terms of this Agreement.
5.8 Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
5.9 Survival. The representations, warranties and covenants of
Purchasers and the Company set forth in Articles II, III and IV shall survive
the closing hereunder notwithstanding any due
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diligence investigation conducted by or on behalf of any Purchaser. Subject to
federal and state law, the Company agrees to indemnify and hold harmless each
Purchaser (including any corporation owned or controlled by any Purchaser and
any officer, director, employee or partner of any such corporation) for loss or
damage or expenses (including reasonable attorneys fees) arising as a result of
or related to (a) any breach or alleged breach by the Company of any of its
representations or covenants set forth herein, including advancement of expenses
as they are incurred, (b) any cause of action, suit or claim brought or made
against any Purchaser and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement or any other certificate,
instrument or document contemplated hereby or thereby, (c) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of the issuance of the Securities, or (d) the status of Purchaser or
holder of the Securities as an investor in the Company. To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the
Company shall make the maximum contribution to the payment and satisfaction of
each of the indemnified liabilities which is permissible under applicable law.
5.10 Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
5.11 Remedies. No provision of this Agreement providing for any remedy
to any Purchaser shall limit any remedy which would otherwise be available to
Purchaser at law or in equity. Nothing in this Agreement shall limit any rights
Purchaser may have with any applicable federal or state securities laws with
respect to the investment contemplated hereby.
5.12 Full Agreement. Except as specifically referenced herein, this
Agreement (including all schedules and exhibits hereto) constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein and therein. This Agreement
supersedes all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof and thereof.
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IN WITNESS WHEREOF, the undersigned Purchasers and the Company have
caused this Agreement to be duly executed as of the date first above written.
INTERNATIONAL COSMETICS MARKETING CO.
By: /s/ Xxxxxxxxx XxXxxx
-------------------------------------------
Xxxxxxxxx XxXxxx, President
By: /s/ Xxxxx Xxxxxx
-------------------------------------------
Xxxxx Xxxxxx, Chief Financial Officer
PURCHASERS
/s/ Nico X. Xxxxx
----------------------------------------------
Nico X. Xxxxx , individually
Atlas Partners
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxxxx, Partner
Atlas Xxxxxxxx, P.A.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxxxx, Partner
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EXHIBIT A
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EXHIBIT B
Number of Shares of
Name of Purchaser Preferred Stock Purchased
----------------- -------------------------
Nico X. Xxxxx 200,000
Atlas Partners 16,000
Atlas Xxxxxxxx, P.A. 5,458
-------
221,458
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