Stock Exchange Agreement

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.


2


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 ( ...