AXIA GROUP, INC.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made as of the 27th day of
June, 2005, by and between Xxxxxxx Xxxxxxxx (the "Purchaser"), Xxxxxxx X.
Xxxxxxx (the "Seller"), and Axia Group, Inc., a Nevada corporation (the
"Company").
RECITALS
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A. The Seller owns 150,000 shares (the "Series C Shares") of Series C
Preferred Stock, $0.001 par value per share (the "Series C Preferred Stock") and
5,000,000 shares (the "Series D Shares") of Series D Preferred Stock, $0.001 par
value per share (the "Series D Preferred Stock") of the Company. The Series C
Shares and the Series D Shares are collectively referred to as the "Shares").
B. The Seller desires to sell the Shares to the Purchaser, and the
Purchaser desires to purchase the Shares from the Seller, on the terms and
subject to the conditions set forth herein.
AGREEMENT
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It is agreed as follows:
1. PURCHASE AND SALE OF SHARES. In reliance upon the representations and
warranties of the Seller and the Purchaser contained herein and subject to the
terms and conditions set forth herein, at Closing, the Purchaser shall purchase,
and the Seller shall sell to the Purchaser, the Shares, for $75,000.00 (the
"Purchase Price") in the form of $40,000.00 in cash and a secured note in the
principal amount of $35,000.00 in the form attached hereto as Exhibit A.
2. CLOSING(S).
2.1 Date and Time. Subject to all of the terms and conditions set
forth in this Agreement being satisfied, the closing of the sale of Shares
contemplated by this Agreement (the "Closing") shall take place at the offices
of the Seller's counsel or at such other place as the Seller and the Purchaser
shall agree in writing concurrently with the execution of this Agreement (the
"Closing Date").
2.2 Deliveries by Purchaser. The Purchaser shall deliver the
following to the Seller:
2.2.1 A check in the amount of $40,000.00.
2.2.2 A secured note in the principal amount of $35,000.00 in
the form attached hereto as Exhibit A (the "Note"), duly executed by the
Purchaser.
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2.2.3 A pledge agreement (the "Pledge Agreement") in the form
attached hereto as Exhibit B, duly executed by the Purchaser.
2.3 Deliveries by Seller. At the Closing, the Seller will deliver
the following to the Purchaser:
2.3.1 The certificates representing the Shares, duly endorsed
or delivered with blank stock powers appropriately executed, in the name of the
Purchaser, against delivery to the Seller by the Purchaser of the items set
forth in paragraph 2.2 above.
2.3.2 The Pledge Agreement, duly executed by the Seller.
2.3.3 The complete original articles of incorporation, bylaws,
minutes, and other corporate books and records, all as amended to date, of the
Company.
2.3.4 A list of all SEC and XXXXX codes for the Company.
2.3.5 Resignation of Xxxxxxx X. Xxxxxxx as President, Chief
Financial Officer, and Secretary of the Company.
2.3.6 Resolutions of the board of directors appointing Xxxxxxx
Xxxxxxxx as President, Chief Financial Officer, and Secretary of the Company.
2.3.7 Resignation of Xxxxxxx X. Xxxxxxxxxxx as a director of
the Company.
2.3.8 Resolutions of the board of directors appointing Xxxxxxx
Xxxxxxxx as a director of the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
As a material inducement to the Purchaser to enter into this Agreement and
to purchase the Shares, the Seller represents and warrants that the following
statements are true and correct in all material respects as of the date hereof
and will be true and correct in all material respects at Closing, except as
expressly qualified or modified herein.
3.1 Organization and Good Standing. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Nevada and has full corporate power and authority to enter into and
perform its obligations under this Agreement, and to own its properties and to
carry on its business as presently conducted and as proposed to be conducted.
The Company is duly qualified to do business as a foreign corporation in every
jurisdiction in which the failure to so qualify would have a material adverse
effect upon the Company.
3.2 Validity of Transactions. This Agreement, and each document
executed and delivered by the Seller in connection with the transactions
contemplated by this Agreement, have been duly authorized, executed and
delivered by the Seller and is each the valid and legally binding obligation of
the Seller, enforceable in accordance with its terms, except as limited by
applicable bankruptcy, insolvency reorganization and moratorium laws and other
laws affecting enforcement of creditor's rights generally and by general
principles of equity.
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3.3 Valid Issuance of Shares. The Shares that are being sold to the
Purchaser hereunder are duly and validly issued, fully paid and nonassessable
and free of restrictions on transfer, other than restrictions on transfer under
this Agreement and under applicable federal and state securities laws, will be
free of all other liens and adverse claims.
3.4 Title to Shares. The Seller is the sole record and beneficial
owner of the Shares, free and clear of all liens, encumbrances, equities,
assessments and claims, and, upon delivery of the Shares by the Seller and
payment of the Purchase Price in full by the Purchaser pursuant to this
Agreement, the Seller will transfer to the Purchaser valid legal title to the
Shares, free and clear of all liens, encumbrances, equities, assessments and
claims.
3.5 No Violation. The execution, delivery and performance of this
Agreement will not violate any law or any order of any court or government
agency applicable to the Company, as the case may be, or the Articles of
Incorporation or Bylaws of the Company, and will not result in any breach of or
default under, or, except as expressly provided herein, result in the creation
of any encumbrance upon any of the assets of the Company pursuant to the terms
of any agreement or instrument by which the Company or any of its assets may be
bound. No approval of or filing with any governmental authority is required for
the Company to enter into, execute or perform this Agreement.
3.6 SEC Reports and Financial Statements. The Company has delivered
or made available to the Purchaser accurate and complete copies (excluding
copies of exhibits) of each report, registration statement and definitive proxy
statement filed by the Company with the SEC since January 1, 2001 (collectively,
with all information incorporated by reference therein or deemed to be
incorporated by reference therein, the "SEC Reports"). The information in the
SEC Reports, taken as a whole, was true and correct in all material respects as
of the filing date and did not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
3.7 Securities Law Compliance. Assuming the accuracy of the
representations and warranties of the Purchaser set forth in Section 4 of this
Agreement, the offer, sale and delivery of the Shares will constitute an
exempted transaction under the Securities Act of 1933, as amended and now in
effect ("Securities Act"), and registration of the Shares under the Securities
Act is not required. The Company shall make such filings as may be necessary to
comply with the Federal securities laws and the blue sky laws of any state,
which filings will be made in a timely manner.
3.8 Qualifications, Legal and Investment. All authorizations,
approvals, or permits, if any, of any governmental authority or regulatory body
of the United States including "blue sky" filings in any state that are required
in connection with the lawful sale of the Shares pursuant to this Agreement have
been or will be, on a timely basis, duly obtained and are effective. No stop
order or other order enjoining the sale of the Shares have been issued and no
proceedings for such purpose are pending or, to the knowledge of the Seller,
threatened by the SEC, or any commissioner of corporations or similar officer of
any state having jurisdiction over this transaction. The sale of the Shares is
legally permitted by all laws and regulations to which the Purchaser, the
Seller, and the Company are subject.
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4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby represents, warrants, and covenants with the Seller
as follows:
4.1 Legal Power. The Purchaser has the requisite power to enter into
this Agreement, to purchase the Shares hereunder, and to carry out and perform
its obligations under the terms of this Agreement.
4.2 Due Execution. This Agreement has been duly executed and
delivered by Purchaser, and, upon due execution and delivery by the Seller, this
Agreement will be a valid and binding agreement of the Purchaser.
4.3 Receipt and Review of SEC Reports. The Purchaser represents that
it has received and reviewed the SEC Reports and have been given full and
complete access to the Company for the purpose of obtaining such information as
the Purchaser or its qualified representative have reasonably requested in
connection with the decision to purchase the Shares. The Purchaser represents
that it has been afforded the opportunity to ask questions of the officers of
the Company regarding its business prospects and the Shares, all as the
Purchaser or its qualified representative have found necessary to make an
informed investment decision to purchase the Shares.
4.4 Restricted Securities. The Purchaser has been advised that the
Shares have not been registered under the Securities Act or any other applicable
securities laws and that the Shares are being offered and sold pursuant to the
so-called "Section 4(1 1/2) exemption" of the Securities Act, and that the
Seller's reliance upon the so-called "Section 4(1 1/2) exemption" is predicated
in part on the Purchaser's representations as contained herein.
4.4.1 The Purchaser is an "accredited investor" as defined
under Rule 501 under the Securities Act.
4.4.2 The Purchaser acknowledges that the Shares have not been
registered under the Securities Act or the securities laws of any state and are
being offered, and will be sold, pursuant to applicable exemptions from such
registration for nonpublic offerings and will be sold as "restricted securities"
as defined by Rule 144 promulgated pursuant to the Securities Act. The Shares
may not be resold in the absence of an effective registration thereof under the
Securities Act and applicable state securities laws unless, in the opinion of
the Company's counsel, an applicable exemption from registration is available.
4.4.3 The Purchaser is acquiring the Shares for its own
account, for investment purposes only and not with a view to, or for sale in
connection with, a distribution, as that term is used in Section 2(11) of the
Securities Act, in a manner which would require registration under the
Securities Act or any state securities laws.
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4.4.4 The Purchaser understands and acknowledges that the
Shares will bear the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE SOLD OR TRANSFERRED FOR VALUE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION THEREOF UNDER THE SECURITIES ACT OF 1933 AND/OR THE
SECURITIES ACT OF ANY STATE HAVING JURISDICTION OR AN OPINION OF
COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR ACTS.
4.4.5 The Purchaser acknowledges that an investment in the
Shares is not liquid and is transferable only under limited conditions. The
Purchaser acknowledges that such securities must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available. The Purchaser is aware of the provisions of Rule
144 promulgated under the Securities Act, which permits limited resale of
securities purchased in a private placement subject to the satisfaction of
certain conditions and that such Rule is not now available and, in the future,
may not become available for resale of the Shares.
4.5 Purchaser Sophistication and Ability to Bear Risk of Loss. The
Purchaser acknowledges that it is able to protect its interests in connection
with the acquisition of the Shares and can bear the economic risk of investment
in such securities without producing a material adverse change in Purchaser's
financial condition. The Purchaser otherwise has such knowledge and experience
in financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Shares.
4.6 Purchases by Groups. The Purchaser represents, warrants, and covenants
that it is not acquiring the Shares as part of a group within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
5. COVENANTS.
5.1 Further Assurances; Cooperation. Each party hereto will, before,
at, and after the Closing, execute and deliver such instruments and take such
other actions as the other party or parties, as the case may be, may reasonably
require in order to carry out the intent of this Agreement. Without limiting the
generality of the foregoing, at any time after the Closing, at the request of
the Company or the Purchaser, and without further consideration, the Seller (a)
will execute and deliver such instruments of sale, transfer, conveyance,
assignment and confirmation and take such action as the Company or the Purchaser
may reasonably deem necessary or desirable in order to more effectively
transfer, convey and assign to the Purchaser, and to confirm the Purchaser's
title to, the Shares, and (b) will execute such documents as and take such
action as the Company or the Purchaser may reasonably deem necessary or
desirable in order to prepare and file any future SEC Reports that the Company
seeks to file with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
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5.2 Covenants of the Purchaser. Until the Note has been paid in full, the
Purchaser shall not directly or indirectly, offer, issue, sell, contract to sell
(including, without limitation, any short sale), grant any option for the sale
of, pledge, or otherwise dispose of or transfer any of the Shares.
5.3 Covenants of the Company. Until the Note has been paid in full, the
Company shall not do any of the following without the prior written consent of
the Seller, and such action taken by the Company without the prior written
consent of the Seller shall be void ab initio):
5.3.1 Amend any of the terms of the Company's Series C Preferred
Stock or Series D Preferred Stock; or
5.3.2 Issue any shares of any class or series of preferred stock of
the Company.
6. MISCELLANEOUS.
6.1 Governing Law. This Agreement shall be governed by and construed under
the laws of the State of California. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the county
of Orange, State of California, for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed
herein and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Note and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.
6.2 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto.
6.3 Entire Agreement. This Agreement and the Exhibits hereto and thereto,
and the other documents delivered pursuant hereto and thereto, constitute the
full and entire understanding and agreement among the parties with regard to the
subjects hereof and no party shall be liable or bound to any other party in any
manner by any representations, warranties, covenants, or agreements except as
specifically set forth herein or therein. Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto and
their respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
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6.4 Severability. In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, it shall to the extent practicable, be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
6.5 Amendment and Waiver. Except as otherwise provided herein, any term of
this Agreement may be amended, and the observance of any term of this Agreement
may be waived (either generally or in a particular instance, either
retroactively or prospectively, and either for a specified period of time or
indefinitely), with the written consent of the Seller and the Purchaser. Any
amendment or waiver effected in accordance with this Section shall be binding
upon each future holder of any security purchased under this Agreement
(including securities into which such securities have been converted) and the
Seller.
6.6 Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be effective when delivered personally,
or sent by telex or telecopier (with receipt confirmed), provided that a copy is
mailed by registered mail, return receipt requested, or when received by the
addressee, if sent by Express Mail, Federal Express or other express delivery
service (receipt requested) in each case to the appropriate address set forth
below:
If to the Seller: Xxxxxxx X. Xxxxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
If to the Purchaser: Xxxxxxx Xxxxxxxx
0000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
If to the Company: Axia Group, Inc.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxx, XX 00000
6.7 Titles and Subtitles. The titles of the paragraphs and subparagraphs
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
PURCHASER: Xxxxxxx Xxxxxxxx
/s/ Xxxxxxx Xxxxxxxx
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SELLER: Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
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COMPANY: Axia Group, Inc.
/s/ Xxxxxxx X. Xxxxxxx
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By: Xxxxxxx X. Xxxxxxx
President
(Signature Page to Stock Purchase Agreement)
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