Exhibit 2.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement"), made and entered into this
28th day of June, 2002, by and between MEDINEX SYSTEMS, INC., a Delaware
corporation (hereinafter sometimes referred to as "Medinex" or "Seller"), DELTA
GROUP, INC., an Idaho corporation (hereinafter referred to as "Purchaser"), and
▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇").
W I T N E S S E T H
WHEREAS, Medinex is the owner of 100,000 shares of the capital stock of
MedMarket, Inc., a Colorado corporation ("MedMarket"), constituting all of the
issued and outstanding shares of capital stock of MedMarket (the "MedMarket
Shares");
WHEREAS, Medinex is the owner of all shares of the capital stock of
DiscountMedBooks, Inc., a Delaware corporation ("DiscountMedBooks"),
constituting all of the issued and outstanding shares of capital stock of
DiscountMedBooks (the "DiscountMedBooks Shares");
WHEREAS, Medinex is the owner of 7,274,223 shares of the capital stock of
Net.Capitol, Inc., a Delaware corporation ("Net.Capitol"), constituting all of
the issued and outstanding shares of capital stock of Net.Capitol (the
"Net.Capitol Shares");
WHEREAS, Medinex is the owner of 100 shares of the capital stock of
Raintree Communications Corporation, a Virginia corporation ("Raintree"),
constituting all of the issued and outstanding shares of capital stock of
Raintree (the "Raintree Shares");
WHEREAS, Medinex is the owner of all shares of the capital stock of U.S.
Congress Handbook, Inc., a Virginia corporation ("Handbook"), constituting all
of the issued and outstanding shares of capital stock of Handbook (the "Handbook
Shares");
WHEREAS, Medinex is the owner of 4 shares of the capital stock Public
Disclosure, Inc., a District of Columbia corporation ("Public Disclosure"),
constituting all of the issued and outstanding shares of capital stock of Public
Disclosure (the "Public Disclosure Shares");
WHEREAS, Net.Capitol, Raintree, Public Disclosure, and Handbook are
collectively referred to as the Votenet division or the Votenet Subsidiaries
("Votenet");
WHEREAS, the MedMarket Shares, DiscountMedBooks Shares, the Net.Capitol
Shares, the Raintree Shares, the Handbook Shares, and the Public Disclosure
Shares are collectively referred to as the "Purchased Shares;"
WHEREAS, Medinex and the Votenet Subsidiaries sold substantially all of the
assets of Votenet to Votenet Solutions, Inc., a Delaware corporation, pursuant
to an Asset Purchase Agreement dated February 9, 2001, which provided, among
other things that certain liabilities be retained by the Votenet Subsidiaries;
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WHEREAS, the Purchaser desires to purchase all of the capital stock of
MedMarket, DiscountMedBooks and the Votenet Subsidiaries and Seller desires to
sell the same to Purchaser in accordance with the terms and conditions of this
Agreement; and
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1. SALE OF CAPITAL STOCK. Subject to the terms and conditions provided
herein, the Seller hereby transfers, assigns, sells and conveys to the Purchaser
all of its right, title and interest, in and to the Purchased Shares, and
Purchaser hereby purchases and acquires the same from Seller in accordance with
the terms and conditions of this Agreement.
2. CLOSING. The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of Seller and shall be effective
as of April 1, 2002 (the "Closing Date").
3. CONSIDERATION. As consideration for the purchase and sale of the
Purchased Shares, Purchaser agrees to manage the accounts payable and other
liabilities of the Votenet Subsidiaries and the MedMarket Payables (the
"Payables"), including the repayment of such accounts payable and other
liabilities as set forth and described more fully below. The Payables are
described on Exhibit "A" and Exhibit "B" attached hereto and incorporated
herein. Purchaser shall also cause Paquin, and Paquin hereby agrees, to
contribute One Hundred Thousand (100,000) shares of unrestricted capital stock
of Medinex to the Votenet Subsidiaries, free of state or federal securities laws
exemptions. Purchaser agrees to cause said Medinex shares to be sold monthly in
increments of 8,000 shares, and to use the proceeds from the sale of such shares
to make payments on the Payables. In addition, Purchaser shall cause MedMarket,
Inc., or any successor thereto, to pay the sum of Two Thousand Dollars
($2,000.00) per month to the Votenet Subsidiaries for the purpose of making
payments on the Payables. Buyer has expressed that its sole intent for the use
of such shares is to reduce the Payables. This assurance was made to the Board
of Directors of Medinex Systems; which was a strong motivation for the approval
of this entire agreement, since it is the Board's intent to act in good faith in
the retirement of the Payables.
4. STOCK CONTRIBUTION BY SELLER. Seller agrees to contribute or issue One
Hundred Thousand (100,000) shares of restricted 144 capital stock of Medinex to
the Votenet Subsidiaries for the purpose of making payments on or settling any
of the Payables. Beginning in the thirteenth month following the date of the
Agreement purchaser agrees to cause said Medinex shares to be sold monthly in
increments of 8,000 shares, and to use the proceeds from the sale of such shares
to make payments on the Payables.
5. MANAGEMENT OF ACCOUNTS PAYABLE. Purchaser acknowledges and agrees that
the Payables are the sole responsibility of MedMarket, DiscountMedBooks and the
Votenet Subsidiaries and are not the responsibility of the Seller. Purchaser
agrees to diligently manage all of the Payables, including without limitation,
setting up mailing addresses, email addresses and phone
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numbers as reasonably necessary to receive communications from any parties
representing the Payables, and further agrees to promptly return messages,
respond to inquiries and otherwise handle all of the calls from such parties in
a courteous, business-like manner. Purchaser shall not refer any such parties
back to Seller, or any of its representatives or agents. MedMarket,
DiscountMedBooks, and all of the Votenet Subsidiaries and any entity created by
Purchaser to whom such responsibilities may be delegated shall remain in
operation at least until December 31, 2003.
6. STOCK ASSIGNMENT/TRANSFER OF TITLE. At Closing, Seller shall execute and
deliver Stock Assignments Separate From Certificate to evidence the transfer of
title in and to the Purchased Shares. At the Closing, Paquin shall endorse
certificates and/or execute Stock Assignments Separate From Certificate to
evidence the transfer of the 100,000 shares of stock of Medinex. Seller shall
execute and deliver such documents as may be necessary to cause the issuance or
transfer of 100,000 shares of stock of Medinex.
7. PRORATION. The Seller and Purchaser hereby acknowledge and agree that
any and all taxes, insurance, rents, payroll, unemployment insurance, worker's
compensation and other employment-related expenses, deposits, utilities and
other expenses relating to MedMarket, which are unbilled but have accrued as of
the Closing Date, shall be prorated between the parties outside of Closing as of
the end of business on the Closing Date. Said items shall be adjusted between
the parties within thirty (30) days of the Closing (and outside of Closing);
provided, however, that any such item which is unknown as to amount within
thirty (30) days of Closing shall be paid and prorated within ten (10) days of
its ascertainment by the parties.
8. LIABILITIES OF SELLER AND/OR PRINCIPALS. In addition to the
consideration payable under Section 3 above, Purchaser agrees to assume with
respect to MedMarket, Inc.: (a) all of the trade payables and accounts payable
of MedMarket, including without limitation, the payables listed on Exhibit "B"
attached hereto and incorporated herein by this reference, (b) all of the
executory obligations, fixed, contingent or otherwise, of MedMarket under any
contracts, leases or other agreements relating to the business of MedMarket, and
(c) all of the taxes, insurance, rents, payroll, unemployment insurance,
worker's compensation and other employment-related expenses, deposits, utilities
and other expenses of MedMarket relating to the operation of its business after
the Closing Date.
9. REPRESENTATIONS AND WARRANTIES OF SELLER. As an inducement to Purchaser
to enter into this Agreement and to consummate the transactions contemplated
hereby, Seller represents and warrants to Purchaser, with the knowledge and
intention that said representations and warranties be relied upon by Purchaser,
that the following are true and correct as of the date hereof:
(a) Organization, Standing and Foreign Qualification. The Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware, and has the full power and authority to carry on
its business in the places it is now being conducted and to own and lease the
assets of the business which it now owns or leases.
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(b) Authority and Status. The Seller has the capacity and authority to
execute and deliver this Agreement, to perform hereunder, and to consummate the
transactions contemplated hereby without the necessity of any act or consent of
any other person, entity or governmental authority. The execution, delivery and
performance by Seller of this Agreement and each and every agreement, document
and instrument provided for herein have been duly authorized and approved. This
Agreement and each and every agreement, document and instrument to be executed,
delivered and performed by Seller in connection herewith constitute or will,
when executed and delivered, constitute the valid and legally binding
obligations of Seller enforceable against it in accordance with their respective
terms.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF SELLER AND PRINCIPALS.
All representations, warranties, agreements, covenants and obligations made or
undertaken by Seller in this Agreement or in any document or instrument executed
and delivered pursuant hereto are material and have been relied upon by
Purchaser and shall survive the consummation of the transactions hereunder and
shall not merge in the performance of any obligation by any party hereto.
Subject to the limitations set forth herein, Seller agrees to indemnify and hold
Purchaser, its successors and assigns, harmless from and against all liability,
losses, damages, injury, judgments, and all reasonable costs and expenses
(including reasonable counsel fees and costs of any suit related thereto),
suffered or incurred by Purchaser, its successors and assigns, arising from (i)
any misrepresentation by, or any warranty of, Seller contained in this Agreement
or in any document or instrument executed and delivered pursuant hereto, and
from any misrepresentation in or omissions from any instrument furnished or to
be furnished by Seller hereunder, or (ii) the breach of any covenant or
agreement in this Agreement or other agreement delivered in connection with this
transaction. Should any claim covered by the foregoing indemnity be asserted,
Purchaser shall notify Seller promptly and Seller shall have at least thirty
(30) days to decide whether to assert the right to defend, settle or contest
said claim, at Seller's cost and expense and at Seller's discretion as long as
said breach or warranty or claims does not unduly adversely affect Purchaser.
11. REPRESENTATIONS AND WARRANTIES OF PURCHASER. As an inducement to Seller
to enter into this Agreement and to consummate the transactions contemplated
hereby, Purchaser represents and warrants to Seller, with the knowledge and
intention that said representations and warranties be relied upon by Seller,
that the following are true and correct as of the date hereof:
(a) Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Idaho.
(b) Authority and Status. Purchaser has full corporate power and authority
to execute and deliver this Agreement, to perform hereunder, and to consummate
the transactions contemplated hereby without the necessity of any act, approval
or consent of any other person, entity or governmental authority. This
Agreement, and each and every other agreement, document and instrument to be
executed and delivered by Purchaser in connection herewith, constitute or will,
when executed and delivered, constitute the valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with their terms.
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(c) No Representations by Seller. Purchaser is purchasing the Purchased
Shares hereunder "as-is" on the basis of its own evaluation of the Purchased
Shares, MedMarket and the Votenet Subsidiaries and not on the basis of any
representation or warranty of Seller, or any of its directors, officers,
employees, agents and representatives, and Purchaser has evaluated the risks
associated with the assumption of the obligations set forth herein and is
assuming the same on the basis of its own evaluation.
(d) Acknowledgement. Purchaser acknowledges that it has received a copy of
the client list for MedMarket, which is attached hereto as Exhibit "C" (the
"MedMarket Client List") and a copy of the list of MedMarket accounts
receivable, which is attached hereto as Exhibit "D" (the "MedMarket Accounts
Receivable"). Purchaser acknowledges and agrees, however, that Seller makes no
representations whatsoever as to the collectibility of the MedMarket Accounts
Receivable or as to the accuracy of Exhibits "C" or "D," and Purchaser
acknowledges and agrees that the foregoing exhibits are provided to Purchaser
for informational purposes only.
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF PURCHASER. All
representations, warranties, agreements, covenants and obligations made or
undertaken by Purchaser in this Agreement or in any document or instrument
executed and delivered pursuant hereto are material, have been relied upon by
Seller and shall survive the consummation of the transactions hereunder and
shall not merge in the performance of any obligation by any party hereto.
Purchaser agrees to indemnify and hold Seller, its successors and assigns,
harmless from and against all liability, loss, damages, injury, judgments, all
reasonable costs and expenses (including reasonable counsel fees and costs of
any suit related thereto), suffered or incurred by Seller arising from (i) any
misrepresentation by, or any warranty of, Purchaser contained in this Agreement
or in any document or instrument executed and delivered pursuant hereto or from
any misrepresentation in or omissions from any instrument furnished or to be
furnished by Purchaser hereunder, (ii) any claim for a debt, obligation or
liability which has been assumed by Purchaser pursuant to this Agreement, or
(iii) the breach of any covenant or agreement in this Agreement or other
agreement delivered in connection with this transaction. Should any claim
covered by the foregoing indemnity be asserted, Seller shall notify Purchaser
promptly and give Purchaser an opportunity to defend the same at Purchaser's
cost and expense, and Seller shall extend reasonable cooperation to Purchaser in
connection with such defense.
13. NOTICE. All notices, requests, demands and other communications
hereunder shall be delivered to the respective parties either personally or by
registered or certified mail, return receipt requested, first class postage
prepaid, at the addresses set forth herein. If delivered personally, the date on
which a notice, request, instruction or document is delivered shall be the date
on which such delivery is made, and if delivered by mail, the date on which such
notice, request, instruction or document is received shall be the date of
delivery. Any party hereto may change its address specified for notices herein
by designating a new address by notice in accordance with this section.
If to Seller
or Medinex: Medinex Systems, Inc.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
1200 Ironwood, ▇▇▇▇▇ ▇▇▇
▇
▇▇▇▇▇ ▇'▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, P.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇'▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
If to Purchaser: Delta Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇'▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
14. CONSTRUCTION AND SURVIVAL. This Agreement is the complete agreement
between the parties and any contracts previously executed between the parties,
along with such other written or verbal representations or warranties as may
have been made by either party, their broker, agents, or assigns, are merged
into this Agreement and are extinguished, except as set forth herein. The
warranties, representations, covenants and provisions contained in this
Agreement shall survive the closing and shall continue in full force and effect.
16. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns and legal representatives.
17. BREACH. In the event of a breach or threatened breach by either party
of any of the provisions of this Agreement, or collateral documents, the other
party shall have the right to invoke any remedy allowed at law or in equity;
reference to any particular remedy shall not preclude the exercise of any other
remedies, all of which being cumulative, and the failure of a party to exercise
any power hereunder or to insist upon strict compliance for the other party with
any obligations hereunder, shall not constitute a waiver of any rights to demand
compliance with the terms thereof.
Should either party breach the covenants of this Agreement, the
non-breaching party shall be entitled, as it elects, to institute and prosecute
proceedings in any court of competent jurisdiction, to obtain any one or more of
the following remedies against the breaching party: specific performance of this
Agreement, injunction against breach of this Agreement, and damages (plus all
costs and expenses, including, but not limited to, reasonable attorney's fees
incurred by such institution and prosecution).
18. ARBITRATION. In the event of any dispute over the interpretation or
enforcement of this Agreement, or any documents or instruments executed pursuant
hereto, the Purchaser and the Seller agree that any claim that cannot be
amicably settled shall be determined solely and exclusively by arbitration in
accordance with the current Commercial Arbitration Rules of the American
Arbitration Association in Coeur d'Alene, Idaho with the Purchaser and the
Seller agreeing to pay all costs and expenses (including reasonable attorneys
fees) as determined or allocated by the arbitrator. Any decision and award made
pursuant to said rules shall be exclusive, final and binding on the Purchaser
and the Seller. The arbitration shall promptly proceed to hearing and
determination provided, however, that if the actual hearing has not been
commenced within sixty (60) days after selection of the arbitrator(s) or if a
final decision has not been rendered within
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thirty (30) days after conclusion of the hearing, then either the Seller or the
Purchaser may terminate the arbitration and proceed to litigation.
19. ATTORNEY'S FEES. The prevailing party in any action or procedure in
court or mutually agreed arbitration proceeding to enforce terms of this
Agreement is entitled to receive its reasonable attorney's fees and other
reasonable enforcement costs and expense from the non-prevailing party.
20. GOVERNING LAW. This Agreement shall be governed by and construed
according to the laws of the State of Idaho.
21. SEVERABILITY. Whenever possible, each provision of this Agreement shall
be interpreted in such a manner as to be enforceable and valid under applicable
law, but if any provision of this Agreement, or any word, phrase, clause,
sentence or other portion thereof shall be held to be unenforceable or invalid
for any reason, such provision or portion thereof shall be modified or deleted
in such a manner so as to make this Agreement, as modified, legal and
enforceable to the fullest extent permitted under applicable laws.
22. RELIANCE. The parties do agree and affirm that no representations,
warranties, or inducements are relied upon by either party except those set
forth herein in the execution of this Agreement.
23. ENTIRE AGREEMENT. This Agreement and the other agreements or
instruments expressly referred to herein and executed concurrently with this
Agreement, supersede and cancel all prior negotiations, agreements,
representations, warranties and communications, whether oral or written, between
the parties hereto relating to the transactions contemplated hereby or the
subject matter herein. Neither this Agreement nor any provisions hereof may be
changed, waived, discharged or terminated orally, but only by an agreement in
writing signed by the party against whom or which the enforcement of such
change, waiver, discharge or termination is sought.
24. FURTHER ASSURANCES. At any time and from time to time after the
closing, at either party's request and without further consideration, the other
party shall execute and deliver such other instruments of sale, transfer,
conveyance, assignment and confirmation and take such action as Purchaser may
reasonably deem necessary or desirable in order to more effectively carry out
the intent and purposes of this Agreement.
25. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become a binding agreement when one or more counterparts have been
executed by all parties.
26. TIME IS OF THE ESSENCE. Time is of the essence as to all provisions of
this Agreement.
27. NUMBER AND GENDER. Whenever required by the context, the singular
number shall include the plural and the masculine gender shall include the
feminine and the neuter.
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28. HEADINGS. Headings of sections, subsections and paragraphs in this
Agreement are for convenience only, and neither limit nor amplify the provisions
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase
Agreement on the day and year first above written.
MEDINEX SYSTEMS, INC.,
A Delaware corporation
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
DELTA GROUP, INC.,
an Idaho corporation
By:
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Individually
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