EXHIBIT 99.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of October 28, 2002, by and among Marc Douglas ("Seller") and Matthew
P. Dwyer ("Buyer").
RECITALS
A. Seller is the holder of 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. Buyer wishes to purchase and Seller
wishes to sell the Shares on the terms and conditions set forth in this
Agreement.
B. Buyer acknowledges that Buyer 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:
AGREEMENT
1. SALE OF SHARES. Seller will sell and transfer to Buyer, and
Buyer will purchase from Seller, 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 $150,000 payable by issuance at
Closing (as hereinafter defined) of a promissory note by Buyer in the form of
Exhibit B hereto (the "Note").
2. CLOSING.
2.1 Closing of the transactions contemplated hereby
("Closing") shall take place upon satisfaction of the following conditions, but
in no event earlier than 21 days from the date of this Agreement:
(a) The 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 current Board of Directors of the
Company shall have (i) appointed two designees of the Buyer to the Board of
Directors and (ii) resigned as directors of the Company, all to take effect
upon compliance by the Company with Rule 14f-1 under the Securities Act of 1934
("Rule 14f-1").
(c) The Company shall have complied with Rule
14f-1.
(d) The Company shall have assigned to Seller
and his affiliates a Promissory Note in the principal amount of $675,000, plus
accrued interest, which sum is a part of the original Promissory Note in the
original principal amount of $1,175,000 made by Thrift Ventures, Inc. to the
Company.
(e) The Company shall have entered into a
five-year Consulting Agreement with Seller in form and content satisfactory to
Seller which will take effect January 1, 2003 and which will provide for an
aggregate consulting fee of $500,000, which shall be paid in five equal annual
installments of $100,000 each by the Company assigning to Seller the sum of
$100,000 per year each year that being the sum due to the Company under that
original Promissory Note in the original principal amount of $1,175,000 made by
Thrift Ventures, Inc. to the Company.
(f) The Company will redeem 1,567,161 shares of
its Common Stock held by Seller, Douglas Family Holdings, Inc. and Douglas
Family Limited Partnership.
(g) The Seller shall cancel all options and
warrants to purchase Common Stock held by him.
(h) The existing Consulting Agreement between
the Company and Seller shall thereupon terminate.
2.2 If the conditions set forth in paragraph 2.1 are not
satisfied on or prior to November ___, 2002 (45 days from the date of this
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 Buyer, with duly executed stock powers for
transfer to Buyer with a restrictive legend, Buyer shall deliver to Seller the
Note and Buyer shall execute and deliver to Seller the Pledge Agreement and the
Escrow Agreement in the forms of Exhibits D and E hereto and the securities
required to be pledged under such agreements.
2.4 The Buyer shall cause the Company to pay the current
liabilities of the Company set forth on Exhibit C hereto within 21 days of the
Closing.
3. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
3.1 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".
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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.
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
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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
otherwise 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
understanding and agreement of the parties hereto with respect to the subject
matter hereof and supersedes all prior and contemporaneous agreements or
understandings, 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
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 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
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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 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 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 Company and its counsel to rely upon the representations set forth herein
in connection with the transfer of the Shares.
SELLER: BUYER:
/s/ Marc Douglas /s/ Matthew P. Dwyer
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Marc Douglas Matthew P. Dwyer
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