EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into this 1st
day of September 2004, between BLUE MOON GROUP, INC, with a corporate address at
000 Xxxxxxxx Xx., Xxxxx, XX 00000, a Delaware corporation ("Buyer"), and XXXXXXX
XXXXX, who is the Sole Stockholder (the "Seller") of SMUZIO ENTERPRISES, INC.
and SMUZIO ENTERPRISES, INC, a Florida corporation with offices at 000 X.
Xxxxxxxx Xx., Xxxxx, XX 00000 (the "Company").
WHEREAS, the Company is engaged in the business of selling prepared
Italian foods and the sale and distribution of pre-recorded music, (the "
Business") located in Chicago, Illinois; and
WHEREAS, Seller desires to sell, assign and transfer to Buyer one
hundred percent (100%) of the issued and outstanding capital stock of the
Company ("Stock"), and Buyer desires to purchase the Stock from Seller,
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF STOCK
SECTION 1.01 Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller one hundred percent (100%) of the issued and outstanding capital stock of
the Company.
SECTION 1.02
(a) Security Interest. Seller warrants and covenants that at Closing
(as defined by Section 1.03 hereof), the assets owned by the Company shall be
held free and clear of all mortgages, liens, deeds of trust, security interests,
pledges, restrictions, prior assignments, charges, claims, defects in title and
encumbrances of any kind or type whatsoever (Collectively, the "Security
Interests") except for: (1) the Security Interests disclosed on Appendix A; (2)
liens for taxes, other than state, federal or local income taxes and other taxes
of the Company that not yet due and payable, accruing before the Closing Date,
and (3) the Continuing Liabilities described below.
(b) Continuing Liabilities. Except as otherwise provided herein and
subject to the terms and conditions of this Agreement, Seller represent,
warrant, and covenant that the Company shall have no liabilities at Closing
except the following (collectively, the "Continuing Liabilities"):
(1) All liabilities and obligations of the Company that
are accrued or reserved against on the Company's
balance sheet, dated August 31, 2004 (the "Interim
Balance Sheet Date") and as attached hereto as
Appendix B (the "Interim Balance Sheet"), and which
remain unpaid as of the Closing Date to the extent of
any remaining reserve or accrual on the Company's
balance sheet, dated as of the Closing Date (the
"Closing Balance Sheet");
(2) All liabilities of the Company that are incurred in
the ordinary course of the Business, consistent with
past practice, subsequent to the Interim Balance
Sheet Date and through the Closing Date, which remain
unpaid as of the Closing Date and are accrued or
reserved against in the Closing Balance Sheet, but
only to the extent of such reserve accrual;
(3) Any liability or obligation arising before the
Closing Date under the Contracts (as defined in
Section 2.01(e) hereof) but only to the extent of any
reserve or accrual on the Closing Balance Sheet and
all liabilities and obligations arising after the
Closing Date under the Contracts.
Excluded Liabilities. Buyer shall not assume, nor
does Buyer agree to pay, any debts not specifically
described in Section 1.02(a) and 1.02(b) hereof.
Seller shall indemnify and hold Buyer harmless
against any such debts.
SECTION 1.03 CLOSING. The Closing of this transaction shall be held at the
offices of Buyer, on September 1, 2004 or at such other time, date and place as
shall be fixed by agreement among the parties hereto ("Closing Date"). At the
Closing, the parties shall execute and deliver the documents referred to in
Section 1.05 below.
SECTION 1.04 PURCHASE PRICE AND PAYMENT. The Purchase Price for the Seller'
Stock shall be One Hundred Eighty Thousand Five Hundred Fifty-five (180,555)
Shares of Buyer's Common Stock.
SECTION 1.05 ITEMS TO BE DELIVERED AT CLOSING.
Seller shall deliver the following to Buyer at Closing
1. fully executed certificates of the Stock of the Company,
free and clear of all liens and encumbrances of any kind;
2. all third party consents which may be necessary of
desirable in connection with the transactions contemplated hereby,
including the Contracts (as defined herein);
3. a certificate, signed by a duly authorized officer of the
Company and dated the Closing Date, representing that any conditions
described herein is satisfied;
4. documents designated by Buyer sufficient to evidence the
Company's intellectual property rights;
5. any other certificates, documents, and instruments
reasonably required to complete the transaction.
Buyer shall deliver to Seller the following:
i. a certificate, signed by an authorized officer of
Buyer and dated the Closing Date, representing that
any conditions represented in this agreement have
been met;
ii. copies of resolutions of the Board of Directors of
Buyer with respect to the approval of this Agreement
and the transactions contemplated hereby;
iii. any other certificates or other documents and
instruments required herein to be delivered by Buyer
in order to complete the transaction.
iv. fully executed certificates for shares of the Buyer's
common stock required by the Purchase Price.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties of Seller. In order to induce Buyer
to enter into this Agreement and to consummate the transactions contemplated
hereby, Seller represents and warrants to Buyer as follows:
(a) Stock; Status of the Company. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida and is duly qualified to transact business in every state in which the
failure to be so qualified would have a material adverse affect on the Business.
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The Company has the requisite power to carry on its Business as it is now being
conducted and to own and operate the Business, and has the requisite power
(corporate, financing and other) to enter into and complete the transactions
contemplated by this Agreement. The Company has no business other than as stated
in this Stock Purchase Agreement. No person has any option or right to acquire
from Seller or the Company any of the Stock or other equity interest in the
Company. The Stock in the Company is validly issued, fully paid and
non-assessable. Attached as Appendix A are the Articles of Incorporation and
Bylaws of the Company and all amendments thereto.
(b) Authorization of Agreement; Non-Contravention; Consents and
Approvals.
(1) The execution, delivery and performance by Seller of this
Agreement and each of the other agreements to be executed in connection with the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized and approved by all necessary corporate action of the
Company. This Agreement has been duly executed and delivered by Seller and
constitutes a valid and binding obligation of Seller enforceable against Seller
in accordance with its terms.
(2) Neither the execution and delivery by Seller of this
Agreement nor the consummation of the transactions contemplated hereby, nor
compliance by Seller with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of the Articles of Incorporation, as
amended, or Bylaws, as amended, of the Company, (ii) result in the breach of, or
conflict with, any of the terms and conditions of, or constitute a default (with
or without the giving of notice or the lapse of time or both) with respect to,
or result in the cancellation or termination of, or the acceleration of the
performance of any obligations or of any indebtedness under any contract,
agreement, lease, commitment, indenture, mortgage, note, bond, license or other
instrument or obligation to which Seller or the Company is a party or by which
Seller or the Company may be bound or affected, or (iii) violate any law or any
rule or regulation of any administrative agency or governmental body (a
"Governmental Entity"), or any order, writ, injunction or decree of any court or
Governmental Entity to which Seller or the Company may be subject.
(c) Capitalization. The issued and outstanding shares of capital stock
of the Corporation are held beneficially and of record as set forth in Appendix
D. All issued and outstanding shares of capital stock of the Corporation have
been validly issued and are fully paid and non-assessable. Appendix D also sets
forth all outstanding options, warrants, preemptive rights, convertible or
exchangeable securities or other rights that could obligate the Corporation to
issue or purchase shares of capital stock or other securities (including any
phantom stock, stock appreciation rights or similar interests), and the holders
thereof, and specifies the extent to which any options, warrants, securities or
other rights are currently vested. The offer, issuance and sale of the capital
stock of the Corporation and the outstanding options, warrants, convertible
securities or other rights to acquire such capital stock were made in compliance
with applicable federal and state securities laws. Except as set forth on
Appendix C, there are no agreements, written or oral, relating to the
acquisition, disposition, voting or registration of any security or interest of
the Corporation
(d) Assets. The Company has, or will have at the Closing, good, valid
and marketable title to all assets shown on the Interim and Closing Balance
Sheets, free and clear of any Liens, except as disclosed under Appendix B. The
Company has not sold, transferred, assigned or conveyed any of its right, title
and interest, or granted or entered into any option to purchase or acquire any
of its right, title or interest, in and to any of the Assets or its Business. No
third party has any option or right to acquire the Company's Business or any of
the Assets.
(d) Real Property. The Company owns no real property. Appendix E
includes a complete list of the only real property leased by the Company
("Leased Real Property"). The Company has a valid leasehold interest in the
Leased Real Property and will deliver to Buyer at Closing, a certificate
confirming that such lease is in full force and effect and that its leasehold
interest will be transferred to Buyer at Closing without penalty or any
condition that would be unacceptable to Buyer.
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(e) Contracts. All Revenue Contracts (meaning contracts to which the
Company is a party with its clients or customers by which the Company generates
revenue) are listed on Appendix F-1. All Vendor Contracts (meaning standing
contracts to which the Company is a party with third-party vendors from which
the Company receives goods or services) are listed on Appendix F-2 . All Other
Contracts (meaning all other standing contracts to which the Company is a party
which are essential to the operation of it business) are listed on Appendix F-3.
Except as disclosed on Appendix X-0, Xxxxxxxx X-0, Appendix F-3 (collectively,
the "Contract Schedules") each Contract will be enforceable after the Closing
and sale of the Stock to Buyer without the consent of any party. A complete and
accurate copy of each Scheduled Contract has been delivered or made available to
Buyer or, if oral, a complete and accurate summary thereof has been delivered to
Buyer. Except as set forth on Appendix F-1, Appendix X-0, Xxxxxxxx X-0, the
Scheduled Contracts are valid, binding and enforceable in accordance with their
respective terms, are in full force and effect and were entered into in the
ordinary course of business on an "arms-length" basis. The Company is not in
breach or default of any of the Scheduled Contracts and no occurrence or
circumstance exists which constitutes a present breach or default by the other
party thereto. The Company has not been notified or advised by any party to a
Scheduled Contract of such party's intention or desire to terminate or modify
any such contract or agreement. The Company has not granted any lien on any
Scheduled Contract included in the Assets.
(f) Litigation. There is no litigation, suit, proceeding, action, claim
or investigation, at law or in equity, pending or, to the knowledge of Seller,
threatened against, or affecting in any way the Seller, the Company or the
Company's ability to own or operate its Business, or which questions the
validity of this Agreement or challenges any of the transactions contemplated
hereby. Neither the Company nor the Seller is subject to any judgment, order,
writ, injunction or decree of any court or any federal, state, municipal or
other Governmental Entity, department, commission, board, bureau, agency or
other instrumentality.
(g) Absence of Change or Events. Since the Interim Balance Sheet Date,
the Company has operated its business only in the ordinary course and there has
not been any material adverse change in the financial condition, results of
operations, business, assets or prospects of the Company or the value or
condition of the Assets.
(h) Compliance with Laws. The Company has at all time conducted its
Business in compliance with all applicable laws, regulations, ordinances and
other requirements of all Governmental Entities (including applicable federal,
state and local laws, rules and regulations respecting occupational safety and
health standards). Neither Seller nor the Company has received any notice,
advice, claim or complaint from any employee or Governmental Entity that the
Company has not conducted, or is not presently conducting, its Business and
operations in accordance with all applicable laws and other requirements of
Governmental Entities.
(i) Intellectual Property.
(1) COMPANY IP PROPERTY. The Company owns, or has the valid
right or license to use, possess, sell or license, all Intellectual Property (as
defined below and more precisely enumerated in Appendix G) necessary or required
for the conduct of its business as presently conducted and as presently proposed
to be conducted, (such Intellectual Property being hereinafter collectively
referred to as the "Company IP Rights"), and such rights to use, possess, sell
or license are sufficient for such conduct of such business. As used herein, the
term "Intellectual Property" means, collectively, all worldwide industrial and
intellectual property rights, including, without limitation, patents, patent
applications, rights to file for patent applications (including but not limited
to continuations, continuations-in-part, divisionals and reissues), trademarks,
logos, service marks, trade names and service names (in each case whether or not
registered) and applications for and the right to file applications for
registration thereof, Internet domain name or application for an Internet domain
name, Internet and World Wide Web URLs or addresses, copyrights (whether or not
registered) and applications for and the right to file applications for
registration thereof, franchises, licenses, inventions, trade secrets, trade
dress, know-how, customer lists, supplier lists, proprietary processes and
formulae, software source code and object code, algorithms, net lists,
architectures, structures, screen displays, layouts, inventions, development
tools, designs, blueprints, specifications, technical drawings (or similar
information in electronic format), publicity and privacy rights and any other
intellectual property rights arising under the laws of the United States of
America, any State thereof, or any country or province, and all documentation
and media (in whatever form) constituting, describing or relating to the
foregoing, including, without limitation, manuals, programmers' notes, memoranda
and records.
(2) NO DEFAULT. Neither the execution, delivery and
performance of this Agreement nor the consummation of the transactions
contemplated hereby will: (i) constitute a breach, violation or default of any
instrument, contract, license or other agreement governing any Company IP Right
to which the Company is a party; (ii) cause the forfeiture or termination of, or
give rise to a right of forfeiture or termination of, any Company IP Right held
or owned by the Company; or (iii) impair the rights of the Company or Buyer or
their subsidiaries to use, possess, sell or license any Company IP Right or
portion thereof. There are no royalties, honoraria, fees or other payments
payable by the Company or any of its affiliates to any third person by reason of
the ownership, use, possession, license, sale, marketing, advertising or
disposition of any Company IP Rights by Company.
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(3) PROTECTION OF PROPRIETARY INFORMATION. The Company has
taken all necessary and appropriate steps to protect, preserve and maintain the
secrecy and confidentiality of the Company IP Rights and all Seller' ownership
interests and proprietary rights therein.
(4) REGISTERED AND UNREGISTERED INTELLECTUAL PROPERTY.
Appendix G contains a true and correct list of (i) all worldwide registrations
of any patents, copyrights, trademarks, service marks, Domain Names or Internet
or World Wide Web URLs or addresses with any governmental or quasi-governmental
authority; (ii) all applications, registrations, filings and other formal
actions made or taken pursuant to federal, state and foreign laws by the Company
to secure, perfect or protect its interest in the Company IP Rights, including,
without limitation, all patent applications, copyright applications, and
applications for registration of trademarks and service marks, (iii) all
unregistered copyrights, trademarks and service marks and (iv) all 800- or 888-
prefix phone numbers (or similar toll-free phone numbers) used by the Company in
connection with the conduct of its business. All patents, and all registered
trademarks, service marks, Internet domain names, Internet or World Wide Web
URLs or addresses and copyrights held by the Company are valid and enforceable.
(5) NO INFRINGEMENT BY THIRD PARTIES. To the knowledge of
Seller, there is no unauthorized use, disclosure, infringement or
misappropriation of any Company IP Rights or any Intellectual Property Right of
the Company by any third party, including any employee or former employee of the
Company. The Company has not agreed to indemnify any person for any infringement
of any Intellectual Property of any third party by any product or service that
has been sold, licensed, leased, supplied, marketed, distributed, or provided by
the Company.
(j) No Broker's or Finder's Fees. No agent, broker, investment banker,
person or firm acting on behalf of Seller or the Company is or will be entitled
to any broker's or finder's fee or any other commission or similar fee in
connection with any of the transactions contemplated herein.
(k) Employee Benefit Plans. Except as shown on Appendix H, the Company
has no plans in effect for pension, profit sharing, deferred compensation,
severance pay, bonuses, stock options, stock purchases, or any other form of
retirement or deferred benefit, or for any health, accident or other welfare
plan, as to which Buyer will become liable as a result of the transactions
contemplated hereby.
(l) Environmental Matters. There have been no private or governmental
claims, citations, complaints, notices of violation or letters made, issued to
or threatened against Seller or the Company by any Governmental Entity or
private or other party for the impairment or diminution of, or damage, injury or
other adverse effects to, the environment or public health resulting, in whole
or in part, from the ownership, use of operation of any of the Company's
facilities (whether owned or leased) which will be occupied or operated by Buyer
as a result of the transactions contemplated hereby (the "Property").
The Company has duly complied with, and to the best of Seller' and the
Company's knowledge, the Property is in compliance with, the provisions of all
federal, state and local environmental, health and safety laws, codes and
ordinances and all rules and regulations promulgated hereunder.
Buyer has been provided with true, accurate and complete copies of any
written information in the possession of Seller or the Company, which pertains
to the environmental history of the Property. Seller and the Company shall also
promptly furnish to Buyer true, accurate and complete copies of any sampling and
test results which may be obtained by Seller or the Company prior to the Closing
from all environmental and/or health samples and tests taken at and around the
Property.
(m) Financial Statements. The Company has delivered to Buyer the
Interim Balance Sheet of the Company at the offices of Buyer and the related
statements of income for the August 31, 2004 period then ended. Such financial
statements, including the notes thereto, are in accordance with the books and
records of the Company, have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
covered thereby and present fairly the financial position and the results of
operations of the Company as of the dates and for the periods indicated. On or
before the Closing, the Company shall deliver to Buyer monthly financial
statements in a form reasonably satisfactory to Buyer for all monthly periods
after the Interim Balance Sheet Date for which financial information is
available, including the Closing Balance Sheet, which financial statements shall
be prepared on a consistent basis with the financial statements described above.
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(n) Taxes.
(1) Except as shown on Schedule I the Company has filed all
Tax Returns (as defined below) that it was required to file. All such Tax
Returns were correct and complete in all respects. To the best knowledge of
Seller and the Company, all Taxes owed by the Company (whether or not shown on
any Tax Return) have been paid. The Company is not currently the beneficiary of
any extension of time within which to file any Tax Return. No claim has ever
been made by any Taxing Authority in a jurisdiction where the Company does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction
which has not been resolved. There are no security interests on any of the
Assets that arose in connection with any failure (or alleged failure) to pay any
Tax. The Company has not waived any statute of limitations in respect of any
Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency. There is no pending or threatened action, audit, proceeding or
investigation for the assessment of collection of any Taxes for which the
Company could be liable, and no written or legally binding agreement has been
entered into with any Taxing Authority relating to Taxes for which the Company
could be liable.
(2) To the actual knowledge of Seller, the Company has
withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.
(3) For purposes of this Agreement, "Tax" means any federal,
state, local or foreign income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under section 59A of the Internal Revenue Code), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated or other tax of any kind whatsoever, including any interest, penalty
or addition thereto, whether or not disputed; "Tax Return" means any return,
declaration, report, claim for refund or information return or statement
relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof; and "Taxing Authority" means any governmental authority
responsible for the imposition or collection of any Tax.
(o) Absence of Undisclosed Liabilities. To the actual knowledge of
Seller, the Company has no material liabilities or obligations, other than (a)
those reflected in the Interim Balance Sheet, (b) those liabilities or
obligations incurred, consistently with past business practice, in or as a
result of the normal and ordinary course of business since the Interim Balance
Sheet Date, and (c) those revealed in the Appendix and Schedules attached hereto
or delivered at Closing.
(p) Guarantees. The Company has not guaranteed or pledged any Assets
with respect to any obligation or indebtedness of any person or entity and no
person or entity has guaranteed any obligation or indebtedness of Seller.
(q) Accuracy of Documents and Information. The information provided to
the Buyer by Seller in connection with its investigation of Seller and the
Company, does not (and will not at the Closing Date) contain any statement of a
material fact known to be untrue by the Seller.
SECTION 2.02 Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
(a) Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Buyer has
the full power and authority to enter into and perform this Agreement, to carry
on its business as it is now being conducted, and to execute, deliver and
perform its obligations under this Agreement and consummate the transactions
contemplated hereby.
(b) Capitalization. The authorized capital stock of the Buyer consists
of 50,000,000 shares of Common Stock. As of the date hereof, there are in excess
of 21,000,000 shares of Common Stock issued and outstanding. All outstanding
shares of Buyer's Common Stock have been duly authorized and validly issued and
are fully paid and non-assessable, and none of such outstanding shares has been
issued in violation of the preemptive rights of any person, firm or entity. The
Buyer also has 5,000,000 shares of blank check Preferred Stock authorized with
none outstanding.
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(c) Binding Obligation. The execution, delivery and performance by
Buyer of this Agreement and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized and approved by all
necessary corporate action of Buyer. Neither the execution and delivery by Buyer
of this Agreement nor the consummation by Buyer of the transactions contemplated
hereby, nor compliance by the Buyer with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of the Articles of
Incorporation or Bylaws of Buyer, (ii) result in the breach of, or conflict
with, any of the terms and conditions of, or constitute a default, or result in
the cancellation or termination of, or the acceleration of the performance of
any obligations or of any indebtedness under any contract, agreement, lease,
commitment, indenture, mortgage, note, bond, license or other instrument or
obligation to which Buyer is a party or by which its assets may be bound or
affected, (iii) violate any law or any rule or regulation of any administrative
agency or Governmental Entity, or any order, writ, injunction or decree of any
court, administrative agency or Governmental Entity to which Buyer may be
subject.
ARTICLE III
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 3.01 Covenants of Seller. During the period from the date of this
Agreement and continuing until the Closing, Seller agree (except as expressly
contemplated by this Agreement or to the extent that Buyer shall otherwise
consent in writing) that they will cause the business of the Company to take the
following actions:
(a) Ordinary Course. From the date hereof until the Closing Date, the
Company shall carry on its business in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and, to the extent
consistent with such business, use all reasonable efforts consistent with past
practice and policies to preserve intact its present business organization, keep
available the services of its presents officers and key employees and preserve
its relationships with customers, suppliers and others having business dealings
with it to the end that its goodwill and ongoing business shall be unimpaired as
a result of the transactions contemplated hereby.
(b) No Other Bids. Neither the Seller, the Company, nor any of their
respective affiliates, shall not directly or indirectly, through any officer,
director, employee, shareholder, agent or otherwise, offer any of the Stock in
the Company for sale to any other individual or entity other than Buyer, nor
shall they solicit or enter into negotiations with any other party for the
disposition of the Assets of the Company.
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.01 Confidentiality and Access to Information. The Seller shall cause
the Company to afford to Buyer and to Buyer's accountants, counsel and other
representatives, reasonable access during normal business hours during the
period prior to the Closing to all of the Company's books and records, and
during such period, the Company shall furnish promptly to Buyer all information
concerning the Company's Business, properties and personnel, as Buyer may
reasonably request. Buyer agrees that (except as may be required by law) it will
disclose or use any information revealed during this executory period with
respect to Seller or the Company at any time or in any manner, and will not use
such information other than in connection its preparation for Closing of the
transactions contemplated by this Agreement. In the event of termination of this
Agreement for any reason, Buyer shall promptly return, or cause to be returned,
to Seller and the Company all nonpublic documents obtained from Seller and the
Company that it would not otherwise have been entitled to obtain; and shall not,
in any manner, utilize any such information for Buyer's benefit or in any manner
harmful to Seller and the Company. The provisions of this Section 4.01 shall
survive the termination of this Agreement.
SECTION 4.02 Expenses. Whether or not the transactions contemplated hereby are
consummated, all costs and expenses incurred by Buyer, Seller and the Company in
connection with this Agreement and the transactions contemplated hereby,
including, without limitation, expenses of legal counsel, accountants and other
advisers, shall be paid by the party incurring such costs.
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ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01 Conditions to Each Party's Obligation. The respective obligations
of each of the parties to this Agreement shall be subject to the satisfaction
prior to the Closing Date of the following conditions:
(a) Approvals. All authorizations, consents, orders or approvals of, or
declarations or filings with, or expiration of waiting periods imposed by, any
Governmental Entity necessary for the consummation of the transactions
contemplated by this Agreement, if any, shall have been filed, occurred or been
obtained.
(b) Legal Action. No action, suit or proceeding by any person shall
have been commenced and still be pending, no investigation by any governmental
or regulatory authority shall have been commenced and still be pending, and no
action, suit or proceeding by any person shall have been threatened against
Buyer, Seller or the Company, (a) seeking to restrain, prevent or change the
transactions contemplated hereby or questioning the validity or legality of any
such transactions or (b) which if resolved adversely to any party, would
materially and adversely affect the business or condition, financial or
otherwise, of the Buyer, Seller or the Company.
SECTION 5.02 Conditions of Obligations of Buyer. The obligations of Buyer to
effect the transactions contemplated hereby are subject to the satisfaction of
the following conditions unless waived by Buyer in writing:
(a) Representations and Warranties. The representations and warranties
of Seller set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as through
made on and as of the Closing Date, and Buyer shall have received a separate
certificate signed by Seller to such effect.
(b) Performance of Obligations of the Company. Seller shall have
performed all obligations required to be performed by them under this Agreement
prior to the Closing Date, and Buyer shall have received a certificate signed by
Seller to such effect. All proceedings to be taken by the Company in connection
with the transactions contemplated hereby and all documents incident thereto
shall be reasonably satisfactory in form and substance to the Buyer and its
counsel, and Buyer and its counsel shall have received all such counterpart
originals or certified or other copies of such documents as it or they may
reasonably request.
(c) No Material Adverse Change. Unless this condition shall be waived
in writing by Buyer, since the Interim Balance Sheet Date, there shall have been
no material adverse change in the financial condition, results of operations,
business or assets of the Company, and the Buyer shall have received a
certificate signed by Seller to such effect. For purposes of this Paragraph, the
term "material change" shall mean some condition(s) or event(s) which, when
taken individually or in total, shall have the effect of reducing the current
net worth of the Company by greater than ten percent (10%) than as shown in the
Interim Balance Sheet.
(d) Consents and Actions. All requisite consents of any third parties
to the transactions contemplated by this Agreement shall have been obtained.
(e) Other Documents. Buyer shall have received such other documents,
instruments or certificates as shall be reasonably requested by Buyer or its
counsel.
SECTION 5.03 Conditions and Obligations of Seller. The obligations of Seller to
close the transactions contemplated hereby are subject to the satisfaction of
the following conditions unless waived by Seller in writing:
(a) Representations and Warranties. The representations and warranties
of Buyer set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as through
made on and as of the Closing Date, and Seller shall have received a certificate
signed by an authorized officer of Buyer to such effect.
(b) Performance of Obligations of Buyer. Buyer shall have performed all
obligations required to be performed by it under this Agreement at and prior to
the Closing Date, and Seller shall have received a certificate signed by an
authorized officer of Buyer to such effect.
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(c) Consents and Actions. All requisite consents of any third parties
or governmental agencies to the transactions contemplated hereby shall have been
obtained.
(d) Other Documents. Seller shall have received such other documents,
instruments or certificates as shall be reasonably requested by Seller or its
counsel.
ARTICLE VI
INDEMNIFICATION
SECTION 6.01
(a) Indemnification.
(1) Seller shall indemnify and hold harmless Buyer against all
loss, liability, damage or expense, including reasonable attorney's fees, net of
any applicable insurance proceeds ("Losses"), for claims brought by a third
party, which Buyer shall suffer, sustain or become subject to as a direct result
of any breach of representation or warranty of Seller contained in this
Agreement.
(2) Subject to the provisions of Section 6.01(a) hereof, Buyer
shall indemnify and hold harmless Seller against all Losses that Seller may
suffer, sustain, or become subject to as a direct result of any breach or
inaccuracy of any representation, warranty, covenant or other agreement of Buyer
contained in this Agreement, or a claim by a third party which, without regard
to the merits of the claim, would constitute a breach or misrepresentation.
(b) Conditions of Indemnification for Third Party Claims. The
obligations and liabilities of the parties under this Article 6 shall be subject
to the following conditions:
(1) The party entitled to be indemnified hereunder (the
"Indemnified Party") shall give the party obligated to provide the indemnity
(the "Indemnifying Party") prompt notice of any Third Party Claim (the "Claim
Notice"). If the Indemnifying Party promptly acknowledges in writing its
obligation to indemnify in accordance with the terms and subject to the
limitations of such party's obligation to indemnify contained in this Agreement
with respect to that claim, the Indemnifying Party shall have a reasonable time
to assume the defense of the Third Party Claim at its expense and with counsel
of its choosing, which counsel shall be reasonably satisfactory to the
Indemnified Party. Any Claim Notice shall identify, to the extent known to the
Indemnified Party, the basis for the Third Party Claim, the facts giving rise to
the Third Party Claim, and the estimated amount of the Third Party Claim (which
estimate shall not be conclusive of the final amount of such claim or demand).
The Indemnified Party shall make available to the Indemnifying Party copies of
all relevant documents and records in its possession.
(2) If the Indemnifying Party, within a reasonable time after
receipt of such Claim Notice, fails to assume the defense of any Third Party
Claim in accordance with Section 6.01(b)(1), the Indemnified Party shall (upon
further notice to the Indemnifying Party) have the right to undertake the
defense, compromise or settlement of the Third Party Claim, at the expense and
for the account and risk of the Indemnifying Party.
(3) Anything in this Section 6.01 to the contrary
notwithstanding, (i) the Indemnifying Party shall not without the written
consent of the Indemnified Party, settle or compromise any Third Party Claim or
consent to the entry of judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified Party of
an unconditional release from all liability in respect of the Third Party Claim;
(ii) if such Third Party Claim involves an issue or matter which the Indemnified
Party believes will have a materially adverse effect on the Indemnified Party's
business, operations, assets, properties or prospects of its business, the
Indemnified Party shall have the right to control the defense or settlement of
any such claim or demand, at the expense of the Indemnified Party without
contribution from the Indemnifying Party; and (iii) the Indemnified Party shall
have the right to employ its own counsel to defend any claim at the expense of
the Indemnify Party if (x) the employment of such counsel by the Indemnified
Party has been authorized by the Indemnifying Party, or (y) counsel selected by
the Indemnifying Party shall have reasonably concluded that there may be a
conflict of interest between the Indemnifying Party and the Indemnified Party in
the conduct of the defense of such action or (z) the Indemnifying Party shall
not have employed counsel to assume the defense of such claim in accordance with
Section 6.01(b).
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(4) Nothing herein shall be deemed to prevent any Indemnified
Party from making a claim hereunder for potential or contingent claims or
demands, provided that (i) the Claim Notice sets forth (A) the specific basis
for any such potential or contingent claim or demand and (B) the estimated
amount thereof (to the extent then feasible) and (ii) the Indemnified Party has
reasonable grounds to believe that such a claim or demand will be made.
(5) Notwithstanding any other provision of this Agreement, a
party's right to indemnification shall not arise until the aggregate claims
(exclusive of attorney fees) exceed Twenty Five Thousand Dollars ($25,000).
(6) This Article VI shall survive the consummation of this
Agreement and the transactions contemplated herein; PROVIDED HOWEVER that no
claim for indemnification may be made after the one (1) year anniversary of the
Closing of this transaction.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.01 Termination. This Agreement may be terminated at any time prior to
the Closing: (a) by mutual consent of Buyer and all Seller;
(b) by Buyer, on the one hand, and Seller, on the other hand, if there
has been a material misrepresentation or breach of covenant or agreement
contained in this Agreement on the part of the other and such breach of a
covenant or agreement has not been promptly cured;
(c) by Buyer if any of the conditions set forth in Sections 5.01 and
5.02 shall not have been satisfied before August 31, 2004 or such later date as
the parties hereto shall mutually agree in writing;
(d) by Seller if any of the conditions set forth in Sections 5.01 and
5.03 shall not have been satisfied before August 31, 2004 or such later date as
the parties hereto shall mutually agree in writing.
SECTION 7.02 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01
(a) Entire Agreement. This Agreement, together with all exhibits and
schedules attached hereto, constitutes the entire agreement between and among
the parties hereto pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties, and there are no warranties, representations or other
agreements between the parties in connection with the subject matter hereof
except as set forth specifically herein or contemplated hereby. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (regardless of whether similar), nor shall any such waiver
constitute a continuing waiver unless otherwise expressly provided.
(b) Survival of Covenants, Representations, Warranties and Agreements.
The covenants, agreements, representations and warranties of the parties hereto
contained in this Agreement or in any certificate or other writing delivered
pursuant hereto or in connection herewith shall not survive the Closing except
for the covenants and agreements contained herein which contemplate or
specifically provide for performance after the Closing Date.
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(c) Costs and Expenses. Each of the parties to this Agreement shall
bear his or its own expenses incurred in connection with the negotiation,
preparation, execution and closing of this Agreement and the transactions
contemplated hereby (the "Transaction Expenses").
(d) Notices. Any notice, request, instruction, correspondence or other
document to be given hereunder by any party hereto to another (herein
collectively called "Notice") shall be in writing and delivered personally or
mailed by registered or certified mail, postage prepaid and return receipt
requested, or by facsimile, as follows:
If to Buyer: Blue Moon Group, Inc.
000 Xxxxxxxx Xx.
Xxxxx, Xxxxxxx 00000
Fax (000)000-0000
Attn : Xxxxxxx Xxxxx
If to Seller: SMUZIO ENTERPRISES, Inc.
000 X. Xxxxxxxx Xx.
Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Each of the above addresses for notice purposes may be changed by
providing appropriate notice hereunder. Notice given by personal delivery or
registered mail shall be effective upon actual receipt. Notice given by
facsimile shall be effective upon actual receipt if received during the
recipient's normal business hours, or at the beginning of the recipient's next
normal business day after receipt if not received during the recipient's normal
business hours. All Notices by facsimile shall be confirmed by the sender
thereof promptly after transmission in writing by registered mail or personal
delivery. Anything to the contrary contained herein notwithstanding, notices to
any party hereto shall not be deemed effective with respect to such party until
such Notice would, but for this sentence, be effective both as to such party and
as to all other persons to whom copies are provided above to be given.
(e) Governing Law. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the internal laws of the State
of Florida.
(f) 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 effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
(g) Severability. If any provision of this Agreement (or any portion
thereof) or the application of any such provision (or any portion thereof) to
any person or circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof (or the remaining
portion thereof) or the application of such provision to any other persons or
circumstances.
(h) Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
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IN WITNESS WHEREOF, Buyer, Seller and the Company have executed this
Agreement as of the date first written above.
BLUE MOON GROUP, INC. SMUZIO ENTERPRISES, INC.
By: By:
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: Chairman & CEO Title: President
Xxxxxxx Xxxxx, Sole Shareholder
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APPENDIX A
(ARTICLES OF INCORPORATION, BYLAWS WITH ANY AMENDMENTS)
APPENDIX B
(INTERIM BALANCE SHEET)
APPENDIX C
NOT APPLICABLE
APPENDIX D
(CAPITALIZATION SCHEDULE)
APPENDIX E
(LEASED REAL PROPERTY)
APPENDIX F-1
(REVENUE CONTRACTS)
NONE
APPENDIX F-2
(VENDOR CONTRACTS)
NONE
APPENDIX F-3
(OTHER CONTRACTS)
NONE
APPENDIX G
(REGISTERED AND UNREGISTERED INTELLECTUAL PROPERTY)
APPENDIX H
(EMPLOYEE BENEFIT PLANS)
NONE
APPENDIX I
(TAX RETURNS)
NONE
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