Exhibit 99.1
STOCK EXCHANGE AGREEMENT
By and Among
DUNN COMPUTER CORPORATION, a Delaware Corporation
and
THOMAS P. DUNNE
and
JOHN VAZZANA
and
CLAUDIA DUNNE
and
DUNN COMPUTER CORPORATION, a Virginia Corporation
January 6, 1997
STOCK EXCHANGE AGREEMENT
STOCK EXCHANGE AGREEMENT (the "Agreement") dated as of January 6, 1997, by
and among;
DUNN COMPUTER CORPORATION, a Delaware corporation with its principal place
of business at 1306 Squire Ct., Sterling, Virginia 20166 ("Dunn Delaware");
and
THOMAS P. DUNNE, an individual with his principal residence at 10856
Patowmack Drive, Great Falls, Virginia;
JOHN VAZZANA, as individual with his principal residence at 39470
Charlestown Pike, Hamilton, Virginia;
and
CLAUDIA DUNNE, an individual with her principal residence at 10856 Patowmack
Drive, Great Falls, Virginia;
(Thomas P. Dunne, John Vazzana and Claudia Dunne are collectively referred to
herein as the "Shareholders")
and
DUNN COMPUTER CORPORATION, a Virginia corporation with its principal place
of business at 1306 Squire Ct., Sterling, Virginia 20166 ("Dunn Virginia");
WITNESSETH
WHEREAS, Shareholders own 1,429 shares of common stock (the "Dunn Virginia
Shares") of Dunn Virginia, representing all of the issued and outstanding common
stock thereof; and
WHEREAS, Dunn Delaware has been authorized to exchange Four Million
(4,000,000) shares of its common stock (the "Dunn Delaware Shares") for the Dunn
Virginia Shares (the Four Million shares being determined based on an exchange
rate of 2,799.160251 shares of Dunn Delaware common stock for each share of Dunn
Virginia common stock); and
WHEREAS, Shareholders desire to exchange, and Dunn Delaware desires to
exchange, at the Closing, the Dunn Virginia Shares for the Dunn Delaware Shares,
on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the agreements set
forth below, the parties hereto agree to the following:
I. EXCHANGE OF SHARES
A. Shares to be Exchanged. At the Closing and upon the terms and subject to
the conditions of this Agreement, and upon the representations, warranties and
covenants herein made, Shareholders agree to assign, transfer, convey and
deliver to Dunn Delaware the Dunn Virginia Shares, and Dunn Delaware agrees to
assign, transfer, convey and deliver to the Shareholders, pro rata with the
ownership of the Dunn Virginia Shares, the Dunn Delaware Shares, all such shares
being free and clear of all liens, pledges, security interests, options, claims,
charges and encumbrances of any kind whatsoever, together with all rights now
and hereafter attaching thereto.
B. Deliver of Dunn Virginia Shares and the Dunn Delaware.
At the Closing (as hereinafter defined):
1. Shareholders shall transfer the Dunn Virginia Shares to Dunn
Delaware by delivering to Dunn Delaware, or its designee, the
original stock certificates representing ownership of Dunn
Virginia Shares, such Shares being properly endorsed for transfer
or accompanied by a stock power executed in blank, at which time
ownership of the Dunn Virginia Shares will pass.
2. Dunn Delaware shall transfer the Dunn Delaware Shares to the
Shareholders by delivering to the Shareholders, or their designee,
the original stock certificates representing ownership of Dunn
Delaware Shares, such share exchange having been duly authorized
by the board of directors of Dunn Delaware, at which time
ownership of the Dunn Delaware Shares will pass.
C. Closing. The closing of the Exchange of the Dunn Virginia Shares and the
Dunn Delaware Shares (the "Closing") will take place upon the execution of this
Agreement on the date hereof (the "Closing Date").
II. REPRESENTATIONS AND WARRANTIES
A. Representations and Warranties of Dunn Virginia and the Shareholders.
Dunn Virginia and the Shareholders hereby represent and warrant to Dunn Delaware
as follows, and acknowledge and confirm that Dunn Delaware is relying upon such
representations and warranties in connection with the execution, delivery and
performance of this Agreement, notwithstanding any investigation made by Dunn
Delaware or on its behalf, which shall be true as of the Closing and shall
survive the Closing:
1. Dunn Virginia and the Shareholders represent and warrant that Dunn
Virginia is a corporation duly organized, validly existing and in good standing
under the laws of the State of Virginia.
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2. The Shareholders have the requisite power and authority to enter
into this Agreement and to consummate the transaction contemplated hereby. The
execution and delivery of this Agreement and the consummation of the transaction
contemplated hereby has been or will be duly authorized by all necessary action
on the part of the Shareholders. This Agreement has been duly executed and
delivered by the Shareholders, and constitutes a legal, valid and binding
obligation of the Shareholders, enforceable against the Shareholders in
accordance with its terms subject as to enforcement of remedies, to applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally. The Shareholders are not the subject of, nor the
debtor in, any pending, potential or threatened bankruptcy proceeding, voluntary
or involuntary, or any similar proceeding, claim or action which could result in
such an event. No consent, approval, order or authorization of, or registration,
declaration or filing with any governmental authority or any other party is
required to be made or obtained by the Shareholders in order to execute this
Agreement or fulfill the obligations provided for hereby.
3. The issued and outstanding capital stock of Dunn Virginia consists
solely of the Dunn Virginia Shares being exchanged by the Shareholders hereby.
There are no outstanding securities, options, warrants, agreements or
undertakings of any kind with respect to the Dunn Virginia Shares being sold
hereby (except for this Agreement) or under which Dunn Virginia would issue or
deliver, or cause to be issued or delivered, additional shares of capital stock
of Dunn Virginia.
4. The Dunn Virginia Shares being exchanged hereby are validly issued
and outstanding, fully paid and non-assessable, and are owned by the
Shareholders free and clear of all security interests, pledges, liens, charges
or encumbrances of any kind or nature whatsoever.
5. There are no legal, administrative or other proceedings or
governmental investigations pending or threatened, which, alone or in the
aggregate, would materially adversely affect the Shareholders' ownership of the
Dunn Virginia Shares. The Shareholders are not party to any agreement or
instrument or subject to any judgment, order, regulation, code or ordinance of
any court or governmental body or authority, domestic or foreign, which
adversely affects, or might reasonably be expected to adversely affect, the
Shareholders' ownership of the Dunn Virginia Shares.
B. Representations and Warranties of Dunn Delaware. Dunn Delaware hereby
represents and warrants to the Shareholders as follows, and acknowledges and
confirms that the Shareholders are relying upon such representations and
warranties in connection with the execution, delivery and performance of this
Agreement, notwithstanding any investigation made by the Shareholders or on
their behalf:
1. Dunn Delaware represents and warrants that it is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
2. Dunn Delaware represents and warrants that it has the requisite
corporate power and authority to enter into this Agreement and to consummate the
transaction contemplated hereby. The execution and delivery of this agreement
and the consummation of the transaction contemplated hereby have been duly
authorized by all necessary corporate action on
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the part of Dunn Delaware. This Agreement has been duly executed and delivered
by Dunn Delaware and constitutes a legal, valid and binding obligation of Dunn
Delaware, enforceable against Dunn Delaware in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or similar laws
affecting creditors' rights generally. Dunn Delaware is not the subject of, or
the debtor in, any pending, potential or threatened bankruptcy proceeding,
voluntary or involuntary, or any similar proceeding, claim or action which could
result in such an event. No consent, approval, order or authorization of, or
registration, declaration or filing with any authority or any third party is
required to be made or obtained by Dunn Delaware in order to execute this
Agreement or fulfill the obligations provided for hereby.
3. The Dunn Delaware Shares, when issued, shall be validly issued and
outstanding, fully paid and non-assessable, and free and clear of all security
interests, pledges, liens, charges as encumbrances of any kind or nature
whatsoever.
III. COVENANTS
A. Consents and Notices. Promptly after the date hereof, the shareholders
and Dunn Delaware shall use their best efforts to obtain all consents, waivers,
approvals and authorizations which may be necessary to effectuate this Agreement
and to consummate the transactions contemplated hereby in accordance with the
terms hereof, or to continue in effect, and shall give all notices to third
parties required to be given by the Shareholders in contemplation and as a
result of the transactions contemplated by this Agreement. The Shareholders
shall promptly advise Dunn Delaware of any difficulties encountered in obtaining
any such consents, waivers, approvals and authorizations.
B. Further Assurances and Documents.
1. At any time and from time to time after the Closing, at Dunn
Delaware's request, and without further consideration, the Shareholders will
execute and deliver such other instruments of sale, transfer, conveyance,
assignment and confirmation, and take such actions, as Dunn Delaware may
reasonably deem necessary or desirable in order more effectively to transfer,
convey and assign to Dunn Delaware, and to confirm Dunn Delaware's title to, all
of the Dunn Virginia Shares, to put Dunn Delaware in actual possession thereof,
and to assist in exercising all rights with respect thereto.
2. At any time and from time to time after the Closing, at
Shareholders' request, and without further consideration. Dunn Delaware will
execute and deliver such other instruments of sale, transfer, conveyance,
assignment and confirmation, and take such actions, as Shareholders may
reasonably deem necessary or desirable in order more effectively to transfer,
convey and assign to Shareholders, and to confirm Shareholders' title to, all of
the Dunn Delaware Shares, to put Shareholders in actual possession thereof, and
to assist in exercising all rights with respect thereto.
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IV. INDEMNIFICATION
A. Indemnification by the Shareholders and Dunn Delaware. The Shareholders
and Dunn Delaware hereby agree to indemnify and hold harmless each other against
all losses, liabilities, costs, damages and expenses (including reasonable
attorney's fees) incurred by each resulting from, arising out of or connected
with:
1. any damage or deficiency resulting from any breach of the
representations and warranties contained in this Agreement or any instrument
furnished hereunder, any misrepresentation or omission, breach of warranty,
nonfulfillment of any agreement under this Agreement or from any
misrepresentation in or omission from any certificate, document or other
instrument furnished or to be furnished hereunder;
2. the nonfulfillment of any agreement or covenant made in this
Agreement or in any instrument furnished hereunder or in connection with the
Closing.
3. all actions, suits, proceedings, demands, assessments, judgments,
costs (including reasonable attorney's fees) and expenses incident to any of the
foregoing.
B. Claims.
1. If it shall be determined in accordance with this Section that the
Shareholders or Dunn Delaware are required to indemnify the other for any claim,
judgment and expenses (including attorneys' fees) relating to any litigation by
a court of competent jurisdiction of which the Shareholders or Dunn Delaware
have received notice and an opportunity to participate in the defense or as a
result of a settlement approved by the Shareholders or Dunn Delaware, the amount
of such indemnification shall be paid by the Shareholders or Dunn Delaware from
time to time, on demand, for any amounts as to which the indemnity relates.
2. In the event of a determination of the amount of any indemnification
pursuant to this Section, the Shareholders or Dunn Delaware shall give written
notice of the existence of any claim by or under this Agreement, and written
notice of the amount of loss or damage relating to any such claim within sixty
(60) days after the Shareholders or Dunn Delaware has actual notice thereof in
the case of any claim made by a third party of which the Shareholders or Dunn
Delaware has actual notice thereof before settling any claim for which it
expects to be reimbursed in whole or in part, and the Shareholders or Dunn
Delaware shall give the other the right to participate in the defense of any
such claim at their own expense.
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V. GENERAL PROVISIONS
A. Entire Agreement. This Agreement, and any agreements specifically
referred to herein, constitute the entire agreement among the parties hereto and
supersede all prior agreements and understandings, oral and written, among the
parties hereto with respect to the subject matter hereof.
B. Survival of Representations, Warranties and Agreements. Notwithstanding
any investigation conducted or notice or knowledge obtain by or on behalf of any
party hereto, each representation and warranty in this Agreement and in the
Exhibits and certificates delivered pursuant to this Agreement and each
agreement or covenant in this Agreement which does not by its own terms expire
on or prior to the Closing, shall survive the Closing without limitation as to
time.
C. Descriptive Headings. Descriptive headings used in this Agreement are for
convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement.
D. Notices. All notices or other communications which are required or
permitted hereunder, shall be in writing and shall be sufficient if delivered or
mailed by registered or certified mail, postage prepaid, or by overnight
courier, or faxed (but then confirmed by mailing of the original by registered
or certified mail, or overnight courier) at the following addresses or as the
appropriate party may advise each other hereto in writing:
To Dunn Delaware:
Dunn Computer Corporation
1306 Squire Court
Sterling, Virginia 20166
Attention: Thomas P. Dunne
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With a copy to:
GERSTEN, SAVAGE, KAPLOWITZ, FREDERICKS &
CURTIN, LLP
101 East 52nd Street, 9th Floor
New York, New York 10022
Attention: Arthur S. Marcus
To the Shareholders:
THOMAS P. DUNNE
10856 Patowmack Drive
Great Falls, Virginia
JOHN VAZZANA
39470 Charlestown Pike
Hamilton, Virginia
CLAUDIA DUNNE
10856 Patowmack Drive
Great Falls, Virginia
E. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same Agreement.
F. Binding Nature; Assignment. This Agreement is binding upon, and inures to
the benefit of the parties hereto and their respective heirs, successors and
assigns, only. There are no third party beneficiaries to this Agreement. This
Agreement may not be assigned by the Shareholders or Dunn Delaware without the
prior written consent of the Shareholders or Dunn Delaware.
G. Exhibits and Documentation. All Exhibits annexed hereto and all
documentation referred to herein are incorporated in and made a part of this
Agreement as if set forth herein. Any matter disclosed on any documentation
herein or Exhibit hereto shall be deemed also to have been disclosed on any
other applicable documentation referred to herein and/or Exhibit hereto, as the
case may be.
H. Expenses. The Shareholders and Dunn Delaware shall each be responsible
for their respective expenses in connection with the transaction contemplated
hereby, including but not limited to attorneys fees.
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I. Waivers and Amendments. Any waiver of any term or condition of this
Agreement, or any amendment or supplementation of this Agreement, shall be
effective only if in writing. A waiver of any breach or failure to enforce any
of the terms or conditions of this Agreement shall not in any way affect, limit
or waive a party's rights hereunder at any time to enforce strict compliance
thereafter with every term or condition of this Agreement.
J. Severability of Provisions. If any provision or any portion of any
provision of this Agreement or the application of any such provision or any
portion thereof to any person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the remaining
provisions of this Agreement, or the application of such provision or portion of
such provision as is held invalid or unenforceable to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby.
K. Governing Law. This Agreement shall be governed by, and constituted to
accordance with the laws of the State of Delaware, without regard to its
conflicts of laws principles.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
DUNN COMPUTER CORPORATION, a Delaware
Corporation
/s/ Thomas P. Dunne
-----------------------
By: Thomas P. Dunne
Title: President
/s/ Thomas P. Dunne
-----------------------
THOMAS P. DUNNE
/s/ John Vazzana
-----------------------
JOHN VAZZANA
/s/ Claudia Dunne
-----------------------
CLAUDIA DUNNE
DUNN COMPUTER CORPORATION, a Delaware
Corporation
/s/ Thomas P. Dunne
-----------------------
By: Thomas P. Dunne
Title: President
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