STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of November 7, 2002, by and among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("Seller"), on the one
hand, and ▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇") and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Sessions" who
shall, along with ▇▇▇▇▇▇, each be called a "Buyer" and collectively the
"Buyers").
R E C I T A L S
A. Seller is a party to that certain Stock Purchase Agreement dated
October 28, 2002 (the "October Agreement") whereby Seller will acquire, upon the
Closing as set forth in the October Agreement, 250,000 outstanding shares of
Series A Preferred Stock (the "Shares"), representing all of the outstanding
shares of preferred stock of all classes of TMI Holdings, Inc., a Florida
corporation (the "Company"). A copy of the Statement of Designation of Series A
Preferred Stock is attached as Exhibit A hereto.
B. Buyers wish to purchase and Seller wishes to sell the Shares on the
terms and conditions set forth in this Agreement.
C. Buyers, and each of them, acknowledge that Buyers has had an
opportunity to ask questions of appropriate persons concerning the business,
financial condition and results of operations of the Company.
NOW, THEREFORE, in reliance on the foregoing recitals and in consideration
of and for the mutual covenants contained herein, the parties hereto agree as
follows:
A G R E E M E N T
1. SALE OF SHARES. Seller will sell and transfer to Buyers, and Buyers
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will purchase from Seller, with each Buyer purchasing an equal one-half, the
Shares, free and clear of all security interests, liens, encumbrances, claims,
charges, assessments and restrictions other than restrictions on transfer under
federal and state securities laws. The purchase price for the Shares shall be
$175,000 payable by issuance at Closing (as hereinafter defined) of a promissory
note by Buyers in the form of Exhibit B hereto (the "Note").
2. CLOSING.
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2.1 Closing of the transactions contemplated hereby ("Closing") shall
take place upon satisfaction of the following conditions, but in no event later
than 2 days following the closing of the October Agreement:
(a) The then-current Board of Directors of the Company shall have
exempted the transaction from the provisions of Section 607.0901 and 607.0902 of
the Florida Statutes.
(b) The closing, as set forth in the October Agreement, shall have
occurred with all closing conditions satisfied.
2.2 If the conditions set forth in paragraph 2.1 are not satisfied on
or prior to December 12, 2002 (45 days from the date of the October Agreement),
this Agreement shall automatically terminate and be of no further force and
effect.
2.3 At Closing, Seller shall deliver certificates evidencing the Shares
to the Buyers, with duly executed stock powers for transfer to Buyers with a
restrictive legend, and Buyers shall deliver to Seller the Note.
3. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
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3.1 As of the Closing, Seller has and will transfer to Buyer, good,
valid and marketable title to the Shares, and, except with respect to the
restrictions on transfer under federal and state securities laws specified in
this Agreement, there are no security interests, liens, encumbrances, claims,
charges, assessments or restrictions or any other defects in title of any nature
whatsoever on any of the Shares.
3.2 Seller has the right, power, legal capacity and authority to enter
Into and perform Seller's obligations under this Agreement.
3.3 Except as set forth herein, Seller makes no representations
or warranties with respect to the Company or the Shares and Buyer is purchasing
the Shares "as is".
3.4 Seller will not assign, sell, mortgage, lease, transfer, pledge,
grant a security interest in or lien upon, encumber, or otherwise dispose if or
abandon, nor will the Seller suffer or permit any of the same to occur with
respect to, any part or all of the Shares, without the prior written consent of
Buyer; Seller has made, and will continue to make until the Closing or
termination of this Agreement, payment or deposit or otherwise provide for the
payment, when due, of all taxes, assessments or contributions required by law
which have been or may be levied or assessed against the Seller with respect to
any of the Collateral Shares.
4. BUYER'S REPRESENTATIONS AND WARRANTIES.
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Buyers, and each of them, hereby represent and warranty as follows:
4.1 Buyer is an "accredited investor" as such term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act of 1933, as amended
(the "Securities Act").
4.2 Buyer has the right, power, legal capacity and authority to
transfer the Shares, enter into and perform Buyer's obligations under this
Agreement.
4.3 Buyer has received, read carefully and is familiar with this
Agreement. With respect to the Company, Buyer is familiar with the Company's
business, plans and financial condition, and any other matters relating to the
Company; the Buyer has received all materials that have been requested by the
Buyer; Buyer has had a reasonable opportunity to ask questions of the Company
and its representatives; and the Company has answered all inquiries that the
Buyer or his representatives have put to it. Buyer has had access to
all additional non-confidential information necessary, in Buyer's judgment,
to evaluate the merits and risks of an investment in the Company. Buyer
acknowledges that Seller has made no representations or warranties of any kind
to the Buyer regarding the Company, its business, finances or prospects.
4.4 Buyer has such knowledge and experience in finance, securities,
investments and other business matters so as to be able to protect the interests
of the Buyer in connection with this transaction, and Buyer's investment in the
Company hereunder is not material when compared to Buyer's total financial
capacity.
4.5 Buyer understands the various risks of an investment in the Company
and can afford to bear such risks, including, without limitation, the risks of
losing the entire investment.
4.6 Buyer acknowledges that no liquid market for the Shares currently
exists and none may develop in the future and that Buyer may find it impossible
to liquidate the investment at a time when it may be desirable to do so, or at
any other time.
4.7 Buyer will acquire the Shares for Buyer's own account for
investment and not with a view to the sale or distribution thereof or the
granting of any participation therein, and has no present intention of
distributing or selling to others any of such interest or granting any
participation therein.
4.8 Buyer has been advised by Seller that none of the Shares have been
registered under the Securities Act or applicable state securities law and that
the Shares will be sold in a transaction exempt therefrom. Buyer acknowledges
that it is familiar with the nature of the limitations imposed by the Securities
Act and the rules and regulations thereunder on the transfer of the Shares. In
particular, Buyer agrees that the Company shall not be required to give any
effect to a sale, assignment or transfer of the Shares, unless (i) the sale,
assignment or transfer of such Shares is registered under the Securities Act,
and applicable state securities laws, it being understood that the Shares are
not currently registered for sale and that the Company has no obligation or
intention to so register the Shares or (ii) such sale, assignment or transfer is
otherwise exempt from registration under the Securities Act and applicable state
securities laws. Buyer further understands that an opinion of counsel and other
documents may be required to transfer the Shares. Buyer acknowledges that
Shares shall be subject to stop transfer orders and the certificate or
certificates evidencing any Shares shall bear the following or a substantially
similar legend or such other legend as may appear on the forms of Shares and
such other legends as may be required by state blue sky laws:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state or foreign securities laws and neither
such securities nor any interest therein may be offered, sold,
pledged, assigned or otherwise transferred unless (1) a registration
statement with respect thereto is effective under the Securities Act
and any applicable state securities laws, or (2) the Company receives
an opinion of counsel to the holder of such securities, which counsel
and opinion are reasonably satisfactory to the Company, that such
securities may be offered, sold, pledged, assigned or transferred in
the manner contemplated without an effective registration statement
under the Securities Act or applicable state securities laws."
5. BINDING UPON SUCCESSORS AND ASSIGNS. Subject to, and unless other-
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wise provided in, this Agreement, each and all of the covenants, terms,
provisions, and agreements contained herein shall be binding upon, and
inure to the benefit of, the successors, executors, heirs, representatives,
administrators and assigns of the parties hereto.
6. ENTIRE AGREEMENT. This Agreement constitutes the entire understand-
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ing and agreement of the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements or under-
standings, inducements or conditions, express or implied, written or oral,
between the parties with respect hereto and thereto.
7. COUNTERPARTS. This Agreement may be executed in any number of
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counterparts, each of which shall be an original as against any party whose
signature appears thereon and all of which together shall constitute one and the
same instrument.
8. AMENDMENT AND WAIVERS. Any term or provision of this Agreement may
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be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a writing signed by the party to be bound thereby. The
waiver by a party of any breach hereof for default in payment of any amount due
hereunder or default in the performance hereof shall not be deemed to constitute
a waiver of any other default or any succeeding breach or default.
9. ATTORNEYS' FEES. Should suit be brought to enforce or interpret any
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part of this Agreement, the prevailing party shall be entitled to recover, as an
element of the costs of suit and not as damages, reasonable attorneys' fees to
be fixed by the court (including without limitation, costs, expenses and fees on
any appeal). The prevailing party shall be the party entitled to recover its
costs of suit, regardless of whether such suit proceeds to final judgment. A
party not entitled to recover its costs shall not be entitled to recover
attorneys' fees. No sum for attorneys' fees shall be counted in calculating the
amount of a judgment for purposes of determining if a party is entitled to
recover costs or attorneys' fees.
10. GOVERNING LAW. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Florida, without regard to its
choice of law principles.
11. RELIANCE BY COMPANY. The parties hereto expressly authorize the
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Company and its counsel to rely upon the representations set forth herein in
connection with the transfer of the Shares.
SELLER: BUYERS:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
EXHIBIT A
STATEMENT OF DESIGNATION OF SERIES A
PREFERRED STOCK
EXHIBIT B
PROMISSORY NOTE