AGREEMENT AND PLAN OF MERGER by and among C$ cMONEY, INC., a Delaware corporation, BONFIRE PRODUCTIONS, INC., a Nevada corporation, C$ cMONEY ACQUISITION, INC., a Delaware corporation, and Tim C. DeHerrera April 7, 2010 AGREEMENT AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER
by and
among
C$
cMONEY, INC.,
a
Delaware corporation,
a Nevada
corporation,
C$ cMONEY
ACQUISITION, INC.,
a
Delaware corporation,
and Xxx
X. XxXxxxxxx
April 7,
2010
AGREEMENT
AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of April 7, 2010 (the
“Execution Date”), is entered into by and among C$ cMONEY, INC., a Delaware
corporation (“C$ cMoney”), BONFIRE PRODUCTIONS, INC., a Nevada corporation
(“Parent”), C$ cMONEY ACQUISITION, INC., a Delaware corporation, which is a
wholly owned Subsidiary of Parent (“Merger Sub”) and Xxx X. XxXxxxxxx, an
individual (“Parent Shareholder”).
WHEREAS,
Parent is the sole shareholder of Merger Sub; and
WHEREAS,
the Parent, as the sole shareholder of Merger Sub, and the boards of directors
of each of Merger Sub and C$ cMoney (each ja “Board”) have, pursuant to the Laws
of their respective states of organization, declared that this Agreement is
advisable, fair and in the best interests of their respective shareholders, and
have approved this Agreement and the consummation of the transactions
contemplated hereby, including the merger of Merger Sub with and into C$ cMoney
in exchange for shares of Parent Common Stock (the “Merger”);
NOW,
THEREFORE, in consideration of the covenants, promises and representations set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby expressly and mutually acknowledged, and
intending to be legally bound hereby, the parties hereto agree as
follows:
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ARTICLE
I
DEFINITIONS
Unless
the context otherwise requires, the terms defined in this Article I shall have
the meanings herein specified for all purposes of this Agreement, applicable to
both the singular
and plural forms of any of the terms herein defined.
1.1
Definitions. As used herein, the following terms shall have the following
meanings:
“Acquired
Entity” means any of C$ cMoney or any Subsidiaries and “Acquired Entities” means
C$ cMoney and any Subsidiaries, collectively.
“Current
SEC Reports” means the following SEC Reports of Parent: Annual Report on Form
10-K for the fiscal year ended June 30, 2009; Quarterly Report on Form 1 0-Q for
the fiscal quarter ended September 30, 2009; and Quarterly Report on Form 1 0-Q
for the fiscal quarter ended December 31, 2009.
“Employee
Benefit Plans” means all “employee benefit plans” (as defined in Section 3(3) of
ERISA) and all other employee benefit plans, policies, agreements or
arrangements, including any bonus or other incentive compensation, stock
purchase, equity or equity-based compensation, deferred compensation, change in
control, termination, severance, sick leave, vacation, loans, perquisites,
salary continuation, health, disability, life insurance and educational
assistance plans, policies, agreements or arrangements for the benefit of any
current or former employees, officers, directors or managers of a Person. For
the avoidance of doubt, “Employee Benefit Plans” do not include employee
agreements.
“Environmental
Law” means any Law of any Governmental Authority in effect as of the Execution
Date relating to pollution or protection of the environment, including Laws
related to emissions, discharges, releases, or threatened releases of Hazardous
Substances.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended. “Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“GAAP”
means accounting principles generally accepted in the United States of America,
as in effect from time to time.
“Governmental
Authority” means any foreign, federal, national, state or local judicial,
legislative, executive or regulatory body, authority or
instrumentality.
“Hazardous
Substances” means any substance, waste, contaminant, pollutant or material
defined or regulated as toxic or as a pollutant, contaminant or waste, or words
of similar meaning including petroleum or petroleum products, under any
Environmental Law.
“Immediate Family”
with respect to a specified natural Person, means such Person’s spouse,
parents and children, including adoptive relationships and relationships through
marriage.
“Indebtedness” of any
Person means, without duplication (a) all indebtedness for borrowed money; (b)
all obligations issued, undertaken or assumed as the deferred purchase
price of property or services (other than trade payables entered into in the
ordinary course of business consistent with past practices); (c) all
reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments; (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses;
(e) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with respect
to any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property); (f) all
monetary obligations under any leasing or similar arrangement which, in
connection with GAAP, consistently applied for the periods covered thereby, is
classified as a capital lease; (g) all indebtedness referred to in clauses (a)
through (f) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in any property or assets (including accounts and contract rights) owned by any
Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness; and (h) all
guaranties in respect of indebtedness or obligations of others of the kinds
referred to in clauses (a) through (g) above.
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“Insolvent”
means, with respect to any Person: (a) the present fair saleable value of such
Person’s assets is less than the amount required to pay such Person’s total
liabilities as they come due; (b) such Person is unable to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; (c) such Person intends to incur or
believes that it will incur debts that would be beyond its ability to pay as
such debts mature; or (d) such Person has unreasonably small capital with which
to conduct its business as such business is now conducted and is proposed to be
conducted.
“Intellectual
Property” means all trademarks and trademark rights, trade names and trade name
rights, service marks and service xxxx rights, service names and service name
rights, patents and patent rights, patent term extensions, supplementary
protection certificates, market or data exclusivities, brand names, trade dress,
product designs, product packaging, business and product names, logos, slogans,
rights of publicity, trade secrets, inventions, formulae, industrial models,
processes, designs, specifications, data, technology, methodologies, computer
programs (including all source codes), any other confidential and proprietary
right or information, whether or not subject to statutory registration, and all
related technical information, manufacturing, engineering and technical
drawings, know-how and all pending applications for and registrations of
patents, trademarks, service marks and copyrights, and the right to xxx for past
infringement, if any, in connection with any of the foregoing, and all
documents, disks and other media on which any of the foregoing is
stored.
“Knowledge,”
with respect to: (a) C$ cMoney and/or the Acquired Entities, means the actual
and imputed knowledge of Xxxxxxxx Xxxxxxx; and (b) Parent, means the actual
and
imputed knowledge of Xxx X. XxXxxxxxx; provided, that for purposes hereof,
“imputed knowledge” means, with respect to any individual, the knowledge that an
individual holding a similar office or position as such individual would
reasonably be expected to have after a reasonable inquiry.
“Law”
means any federal, state or local law, statute, rule, regulation, judgment,
decree, injunction, order, ordinance, code, regulation, arbitration award or
other legally enforceable requirement of or by any Governmental
Authority.
“Lien”
means any mortgage, pledge, security interest, encumbrance, lien or charge of
any kind, including, without limitation, any conditional sale or other title
retention agreement, any lease in the nature thereof and including any lien or
charge arising by Law.
“Material
Adverse Effect” means a material adverse effect on the operations, condition
(financial or other), assets, liabilities, earnings, prospects or business of
the Person affected or the ability of any Person to timely consummate the
transactions contemplated hereby; provided, however, that none of the following
shall be deemed to constitute, and none of the following shall be taken into
account in determining whether there has been or would be, a “Material Adverse
Effect” on or with respect to the Person affected: (a) any adverse change or
effect that is demonstrated to be primarily caused by conditions affecting the
United States economy generally; (b) any adverse change, event or effect that is
demonstrated to be primarily caused by the announcement or pendency of the
Merger or of the transactions contemplated hereby; or (c) the taking of any
action contemplated by this Agreement and other agreements contemplated hereby.
All references in this Agreement to a “Material Adverse Effect on C$ cMoney”
shall mean a Material Adverse Effect on C$ cMoney and its Subsidiaries, taken as
a whole and a “Material Adverse Effect on Parent” shall mean a Material Adverse
Effect on Parent and Merger Sub, taken as a whole.
“Organizational
Documents” means the certificate of incorporation or articles of incorporation,
as amended and/or restated, bylaws, as amended and/or restated and/or other
organizational or governing documents of a Person, as the case may be, as each
may be amended from time to time.
“OTCBB”
means the over-the-counter bulletin board market maintained by The Nasdaq Stock
Market, Inc.
“Parent
Common Stock” means the common stock of Parent.
“Person”
means all natural persons, corporations, business trusts, associations,
unincorporated organizations, limited liability companies, partnerships and
other entities and Governmental Authorities or any department or agency
thereof.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, a partial proceeding, such as a deposition) by or before any
Governmental Authority or arbitrator.
“SEC”
means the U.S. Securities and Exchange Commission. “Securities Act” means the
Securities Act of 1933, as amended.
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“Subsidiary”
means any corporation, association, business entity, partnership, limited
liability company or other entity of which a Person, either alone or together
with one or more other Subsidiaries: (a) directly or indirectly owns or controls
securities or other interests representing more than fifty (50%) of the voting
power of such entity; or (b) is entitled, by contract or otherwise, to elect,
appoint or designate managers or directors constituting a majority of the
managers or members of such entity’s board of directors or other governing
body.
“Tax” or
“Taxes” means all taxes of any kind, and fees or other assessments in the nature
of taxes, imposed by any Governmental Authority, and any and all interest,
penalties and additions relating thereto. “Tax” or “Taxes” includes, without
limitation, all add-on minimum, alternative minimum, capital stock, currency,
customs, documentary, disability, employee, employer, environmental, estimated,
excise, export, FICA, franchise, FUTA, gross receipts, income, import, natural
resources, license, occupation, payroll, personal property, premium, real
property, registration, sales, severance, social security, stamp, transfer,
unemployment, use, value added, windfall profit and withholding taxes and
duties. “Tax” or “Taxes” also includes any transferee or secondary liability for
Taxes and any liability pursuant to an agreement or otherwise, including
liability arising as a result of being or ceasing to be a member of any
affiliated group, or being included or required to be included in any Tax Return
relating thereto.
“Tax
Return” means any tax return, filing or information statement required to be
filed in connection with or with respect to any Taxes.
“C$
cMoney Common Stock” means the Common Stock of C$ cMoney.
“Transaction
Expenses” means all out-of-pocket fees and expenses (including legal and
accounting fees and expenses) with respect to this Agreement and the
transactions contemplated hereby, including without limitation all fees and
expenses relating to the preparation and filing of the Transaction Form
8-K.
“Delaware
Act” means the Delaware General Corporation Law.
ARTICLE
II
THE
MERGER
2.1
Merger. On the terms and subject to the conditions set forth in this Agreement,
at the Effective Time, in accordance with the provisions of the Delaware Act,
Merger Sub shall be merged with and into C$ cMoney. C$ cMoney shall continue as
the surviving entity (the “Surviving Entity”) and the separate existence of
Merger Sub shall cease.
2.2 The
Closing. The closing of the Merger and the other transactions contemplated by
this
Agreement (the “Closing”) shall take place at the offices of Xxxxxxxx &
Associates, P.C., in Houston, Texas on April 12, 2010, subject to the
satisfaction or waiver of all conditions to the obligations of the parties to
consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective parties will take at the Closing itself, but
subject to the fulfillment or waiver of those conditions) or such other date as
the parties may mutually determine (the “Closing Date”). C$ cMoney shall have
the unilateral right to extend the Closing Date up to and including April 30,
2010.
2.3
Effective Time. Prior to the Closing, Parent, Merger Sub and C$ cMoney shall
prepare, and, on the Closing Date, C$ cMoney shall file with the Delaware
Division of Corporations (the “Division”), Articles of Merger (the “Articles of
Merger”), and/or such other appropriate documents executed in accordance with
the applicable provisions of the Delaware Act and shall make all other filings
or recordings required under the Delaware Act to effect the Merger. The Merger
shall become effective at such time as the Articles of Merger are filed with the
Division on the Closing Date, or such other time and/or date specified in the
Articles of Merger (the “Effective Time.”)
2.4 Legal
Effects of the Merger. At the Effective Time, the effect of the Merger shall be
as provided in this Agreement and the applicable provisions of the Delaware Act.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all of the assets, properties, rights, privileges, powers and
franchises of C$ cMoney and Merger Sub shall vest in the Surviving
Entity.
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2.5
Articles of Incorporation and Bylaws of the Surviving Entity.
(a) Articles
of Incorporation. As of the Effective Time, by virtue of the Merger and without
any action on the part of Parent, Merger Sub or C$ cMoney, the Articles of
Incorporation of Merger Sub as in effect immediately prior to the Effective Time
shall be the Articles of Incorporation of the Surviving Entity until thereafter
amended in accordance with the Delaware Act.
(b) Bylaws.
As of the Effective Time, by virtue of the Merger and without any action on the
part of Parent, Merger Sub or C$ cMoney, the Bylaws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Bylaws of the Surviving
Entity until thereafter amended in accordance with the Delaware Act and the
Articles of Incorporation of the Surviving Entity.
2.6
Directors and Officers of the Surviving Entity. The initial director and officer
of the Surviving Entity shall be Xxxxxxxx Xxxxxxx, until her successor is duly
elected or appointed and qualified.
ARTICLE
III
TRANSFER
OF SECURITIES
3.1
Conversion of Shares in the Merger. Subject to the provisions of this Article
III, at and as of
the Effective Time, by virtue of the Merger and without any action on the part
of Parent, Merger Sub or C$ cMoney, or any of the shareholders of any of the
foregoing, the outstanding securities of C$ cMoney and Merger Sub shall be
converted as follows:
(a) C$ cMoney
Common Stock. As soon as practicable after the Effective Time, each record
holder of C$ cMoney Common Stock shall assign such stock to Parent and no
consideration shall be delivered in exchange therefor.
(b) Reserved.
(c)
Merger Sub Shares. Each share of common stock, par value 5.001 per share, of
Merger Sub issued and outstanding immediately prior to the Effective Time shall,
at the Effective Time, by virtue of the Merger and without any action on the
part of Parent, C$ cMoney or Merger Sub, be converted into and represent the
right to receive one (1) validly issued, fully paid and nonassessable share of
the common stock, par value $ .001 per share, of the Surviving
Entity.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF C$ cMoney
Except as
set forth on the Disclosure Schedule delivered to Parent in connection with this
Agreement, C$ cMoney represents and warrants to Parent as follows, each of which
is true and correct in all material respects at the Closing, and which shall
survive the Closing for the time period set forth in Article VII:
4.1
Organization and Standing. C$ cMoney is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware. C$ cMoney
has the requisite corporate authority to own and operate its properties and
assets, and to carry on its business as currently conducted. C$ cMoney is
presently qualified to do business as a foreign entity in each jurisdiction in
which the failure to be so qualified would have a Material Adverse Effect on C$
cMoney. True and accurate copies of the C$ cMoney Organizational Documents, each
as in effect as of and at the Closing, have been delivered to
Parent.
4.2
Corporate Power. C$ cMoney has all requisite corporate power and authority to
execute and deliver this Agreement (and other agreements contemplated hereby)
and to carry out and perform its other obligations hereunder.
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4.3
Authorization. All corporate action on the part of C$ cMoney and its
shareholders, as applicable, necessary for: (a) the authorization, execution and
delivery of this Agreement; and (b) the performance of C$ cMoney’s obligations
hereunder, has been taken. This Agreement has been duly executed by C$ cMoney
and, assuming the due authorization, execution and delivery by the other parties
hereto, constitutes and will constitute
a valid and legally binding obligation of C$ cMoney, except: (i) as limited by
Laws of general application relating to bankruptcy, insolvency and the relief of
debtors; and (ii) as limited by rules of Law governing specific performance,
injunctive relief or other equitable remedies and by general principles of
equity.
4.4
Subsidiaries. C$ cMoney does not directly or indirectly own any equity or
similar interest in, or any interest convertible or exchangeable or exercisable
for any equity or similar interest in, any corporation, partnership, joint
venture or other business association or entity.
4.5
Noncontravention. The execution and delivery of this Agreement by C$ cMoney, and
C$ cMoney’s performance of and compliance with the terms hereof, and the
consummation of the Merger and the other transactions contemplated hereby, will
not: (a) result in any violation, breach or default, be in conflict with or
constitute, with or without the passage of time or giving of notice, a default
under the C$ cMoney Organizational Documents; (b) result in any material
violation, breach or default, be materially in conflict with or constitute, with
or without the passage of time or giving of notice, a material default under any
C$ cMoney Material Agreement; (c) require any consent or waiver under any C$
cMoney Material Agreement (other than any consents or waivers that have been
obtained); (d) conflict with or violate in any material respect any Law
applicable to the Acquired Entities or by which any property or asset of the
Acquired Entities is bound or affected; (e) result in the creation of any Lien
upon any of the properties or assets of any Acquired Entity (other than
Permitted Liens); (f) trigger any right of cancellation, termination or
acceleration under any C$ cMoney Material Agreement; (g) create any right of
payment (in cash, equity securities or other property) in any other Person; or
(h) result in a Material Adverse Effect on C$ cMoney.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Except as
set forth in the Current SEC Reports, Parent, Merger Sub and Parent Shareholder
jointly and severally represent and warrant to C$ cMoney as follows, each of
which is true and correct in all material respects at the Closing, and which
shall survive the Closing for the time period set forth in Article VII. Unless
the context otherwise requires, references in this Article V to “Parent” shall
be treated as a reference to Parent and Merger Sub, taken as a
whole.
5.1
Organization and Standing. Parent is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Nevada. Merger Sub
is a corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware. Each of Parent and Merger Sub has the requisite
corporate power and authority to own and operate its properties and assets, and
to carry on its business
as
currently conducted. Parent is presently qualified to do business as a foreign
corporation in each jurisdiction in which the failure to be so qualified would
have a Material Adverse Effect on Parent. True and accurate copies of Parent’s
and Merger Sub’s
Organizational Documents, each as in effect as of the Closing, have been
delivered to C$ cMoney.
5.2
Corporate Power. Each of Parent and Merger Sub has all requisite corporate power
and authority to execute and deliver this Agreement (and other agreements
contemplated hereby) and to carry out and perform its other obligations
hereunder.
5.3
Authorization. All corporate action on the part of each of Parent and Merger
Sub, and their respective Boards of Directors and shareholders, as applicable,
necessary for the: (a) due authorization, execution and delivery of this
Agreement; and (b) performance of all obligations of Parent and Merger Sub
hereunder has been taken. The approval of Parent’s shareholders is not required
for approval and adoption of this Agreement. This Agreement has been duly
executed by each of Parent, Merger Sub and Parent Shareholder, and assuming the
due authorization, execution and delivery by C$ cMoney, constitutes and will
constitute a valid and legally binding obligation of each of Parent, Merger Sub
and Parent Shareholder, except: (i) as limited by Laws of general application
relating to bankruptcy, insolvency and the relief of debtors; and (ii) as
limited by rules of Law governing specific performance, injunctive relief or
other equitable remedies and by general principles of equity.
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5.4
Authorized Securities. The shares of Parent Common Stock issuable pursuant to
Article III of this Agreement (the “Merger Shares”) have been duly authorized
and, when issued in accordance with this Agreement, will be duly and validly
issued, fully paid and non-assessable, free and clear of all Liens and shall not
be subject to preemptive or similar rights of shareholders.
5.5
Noncontravention. The execution and delivery of this Agreement by Parent and
Merger Sub, and Parent and Merger Sub’s performance of and compliance with the
terms hereof, and the consummation of the Merger and the other transactions
contemplated hereby, will not: (a) result in any violation, breach or default,
be in conflict with or constitute, with or without the passage of time or giving
of notice, a default under the Parent or Merger Sub Organizational Documents;
(b) conflict with or violate in any material respect any Law applicable to
Parent or Merger Sub; (c) create any right of payment (in cash, equity
securities or other property) in any other Person; or (d) result in a Material
Adverse Effect on Parent or Merger Sub.
5.6
Capitalization. The authorized capital stock of Parent consists of 65,033,320
shares of Parent Common Stock, 63,990,161 of which are issued and outstanding.
The Parent Common Stock has the rights, preferences, privileges and restrictions
set forth in the Parent Organizational Documents and under the Laws of the State
of Nevada. All issued and outstanding shares of Parent Common Stock have been
duly authorized and validly issued in compliance with applicable Laws, and are
fully paid and nonassessable and free of any restrictions on transfer, except
for transfer restrictions of the federal and state securities Laws. The issued
and outstanding shares of Parent Common Stock were not issued in violation of
the preemptive rights of any Person or any agreement by which Parent was bound
at the time of issuance. The Parent Common
Stock constitutes the only class of equity securities of Parent registered under
the Exchange Act.
5.7 SEC
Reports; Financial Statements. Parent has duly filed all required registration
statements, reports, certifications, schedules, forms, statements and other
documents (including amendments, supplements, exhibits and all other information
incorporated by reference) required to be filed by it with the SEC under the
Securities Act or the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, from the date Parent became obligated to make such filings (the
foregoing materials (together with any materials filed by Parent under the
Securities Act or the Exchange Act, whether or not required) being collectively
referred to herein as the “SEC Reports”) on a timely basis or has received a
valid extension of such time of filing and has filed any such SEC Reports prior
to the expiration of any such extension. At the time filed (and, in the case of
registration statements, proxy statements and information statements, at the
dates of effectiveness and mailing, respectively): (a) the SEC Reports complied
in all material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the SEC promulgated thereunder, as
the case may be; and (b) none of the SEC Reports contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The financial
statements of Parent (including the related notes) included in the SEC Reports
at the time filed (and, in the case of registration statements and proxy
statements, at the dates of effectiveness and mailing, respectively) complied in
all material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at such time. Such
financial statements have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved, except as may be otherwise
specified in such financial statements or the notes thereto, and fairly present
in all material respects the financial condition, results of operations and cash
flows of Parent as of the dates, and for the periods, indicated therein,
subject, in the case of unaudited statements, to normal, year-end audit
adjustments. All material agreements to which Parent or Merger Sub was a party
or to which the property or assets of Parent or the Merger Sub were subject are
included as part of or specifically identified in the SEC Reports.
5.8
Compliance with Laws. Neither Parent nor Merger Sub is in material violation of,
default under or breach of any provision of any agreement, instrument, mortgage,
deed of trust, loan, contract, commitment, judgment, decree, order or obligation
to which it is a party or by which it or any of its properties or assets are
bound. Neither Parent nor Merger Sub is in material violation of any provision
of any Law.
5.9
Litigation. There is no material Proceeding pending or, to Parent’s Knowledge,
threatened against or affecting Parent, Merger Sub or any of their respective
properties or rights before any court or arbitrator or by or before any other
Governmental Authority, including, without limitation, any Proceeding relating
to or affecting any of the transactions contemplated by this Agreement. Neither
Parent nor Merger Sub is party or
subject to, and none of their respective assets is bound by, the provisions of
any order, writ, injunction, judgment or decree of any Governmental Authority.
There is no Proceeding initiated by Parent or Merger Sub currently pending or
which Parent or Merger Sub intends to initiate.
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5.10
Governmental Consents. No consent, approval or authorization of or registration,
qualification, designation, declaration or filing with any Governmental
Authority on the part of Parent or Merger Sub is required in connection with the
valid execution and delivery of this Agreement or the consummation of any
transaction contemplated hereby, except: (a) the qualification or registration
(or taking such action as may be necessary to secure an exemption from
qualification or registration, if available) of the offer, issuance and sale of
the shares of Parent Common Stock under applicable federal and state securities
Laws; and (b) the filing of the Articles of Merger with the
Division.
5.11
Permits. Parent has all franchises, permits, licenses, and any similar authority
necessary for the conduct of its business as now being conducted by it. Parent
is not in default in any material respect under any of such franchises, permits,
licenses, or other similar authority.
5.12
Brokers or Finders. Neither Parent nor Merger Sub has engaged any brokers,
finders or agents, and Parent and Merger Sub have not incurred, and will not
incur, directly or indirectly, as a result of any action taken by Parent, Merger
Sub or any of their affiliates, any liability for brokerage or finders’ fees or
agents’ commissions or any similar charges in connection with this Agreement and
the transactions contemplated hereby.
5.13 Tax
Returns and Payments. Except for matters that would not individually or in the
aggregate have a Material Adverse Effect: (a) all Tax Returns required to have
been filed by Parent and each Subsidiary of Parent, have been timely filed
(taking into account any extension of time to file granted or obtained) for all
taxable periods; (b) all Taxes shown to be payable on such Tax Returns have been
paid when due or, if not yet due, will be timely paid; (c) no deficiency for any
amount of Tax has been asserted or assessed by a Governmental Authority in
writing against Parent or any Subsidiary of Parent that has not been satisfied
by payment, settled or withdrawn; (d) there are no Tax liens on any assets of
Parent or any Subsidiary of Parent (other than Permitted Encumbrances); and (e)
all Tax Returns filed are true and complete in all material respects and
accurately reflect the liability of the Taxes of Parent and each Subsidiary of
Parent, as the case may be.
5.14
Employee Benefit Plans. Parent and Merger Sub do not sponsor, maintain or
contribute to any Employee Benefit Plans.
5.15
Obligations to Related Parties. There are no loans, leases, agreements,
understandings, commitments or other continuing transactions between Parent and:
(a) any executive officer or director of Parent or any member of any such
Person’s Immediate
Family; (b) any shareholder of Parent or member of any such Person’s Immediate
Family; or (c) any Person that, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with any
of the foregoing Persons (each such Person identified in (a), (b) or (c), a
“Parent Related Person”). No Parent Related Person has any direct or indirect
ownership interest in any Person with which Parent has a business relationship,
or any Person that competes with Parent, except in connection with the ownership
of stock of publicly-traded companies (but not exceeding two percent (2%) of the
outstanding capital stock or other equity securities of any such company). No
Parent Related Person has, directly or indirectly, any financial interest in any
Parent Material Agreement (other than such contracts as relate to any such
person’s ownership of capital stock or other securities of Parent or employment
by Parent). Parent is not a guarantor or indemnitor of any Indebtedness of any
other Person.
5.16
Environmental Laws. Parent is in compliance in all material respects with all
applicable Environmental Laws. There is no environmental litigation or other
environmental Proceeding pending or, to Parent’s or Parent Shareholder’s
Knowledge, threatened by any Governmental Authority or others with respect to
the business of the Acquired Entities. To Parent’s and Parent Shareholder’s
Knowledge, no state of facts exists as to environmental matters or Hazardous
Substances that involves the reasonable likelihood of a material capital
expenditure by any Acquired Entity or that may otherwise materially and
adversely affect Parent. To Parent’s and Parent Shareholder’s Knowledge, no
Hazardous Substances have been used, treated, stored or disposed of, or
otherwise deposited, in or on the properties owned or leased by Parent or Parent
Shareholder in violation of any applicable Environmental Laws, where the effect
of such violations, individually or in the aggregate, could reasonably result in
a material capital expenditure by Parent or that may otherwise be expected to
have a Material Adverse Effect on Parent.
5.17 No
Assets; No Liabilities. Notwithstanding any disclosure in the SEC Reports,
Parent will not own immediately prior to the Effective Time, any assets of any
kind or nature (including, without limitation, tangible and intangible, personal
and real property). Parent is not involved in the operation of any business or
property and has not been involved in the operation of any business or property
at any time since June 30, 2009. Notwithstanding any disclosure in the SEC
Reports, Parent will not have immediately prior to the Effective Time, any
direct or indirect liability, Indebtedness or obligation of any kind or nature
(including without limitation, known or unknown, absolute or contingent,
liquidated or unliquidated or due or to become due).
-8-
5.18
Operations of Merger Sub. Merger Sub is a direct, wholly owned Subsidiary of
Parent, was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement, has engaged in no other business activities and
has conducted its operations only as contemplated by this Agreement. Merger Sub
has no assets of any kind or nature (including, without limitation, tangible and
intangible, personal and real property) other than minimal paid-in capital and
has no liabilities or obligations of any kind or
character whatsoever (including, without limitation, known or unknown, absolute
or contingent, liquidated or unliquidated or due or to become
due).
5.19
Trading Matters. The Parent Common Stock was previously quoted on the OTCBB
under the symbol “BNFR,” and lost its listing due the failure to timely file its
Form 10-Q quarterly reports with the SEC. Parent is otherwise in compliance in
all material respects with all rules and regulations of the OTCBB applicable to
it and the Parent Common Stock. There is no action or Proceeding pending or, to
Parent’s Knowledge, threatened against Parent by Nasdaq Stock Market, Inc. or
FINRA with respect to any intention by such entities to prohibit the quotation
of any such securities on the OTCBB in the future. Following the execution of
this Agreement and prior to the closing, Parent will file it’s Form 1 0-Q
reports with the SEC and cause all necessary filings with FINRA pursuant to SEC
Rule 15c2-11 to resume trading on the OTCBB.
5.20
Disclosure. No representation or warranty of Parent, Merger Sub and/or Parent
Shareholder in this Article V, or in any certificate furnished or to be
furnished by Parent, Merger Sub and/or Parent Shareholder to C$ cMoney pursuant
hereto, contains or will contain an untrue statement of a material fact or omits
or will omit to state a material fact necessary to make the statements contained
herein and therein, in the light of the circumstances under which they were
made, not misleading.
ARTICLE
VI
ADDITIONAL
AGREEMENTS
6.1
Reserved.
6.2
Transaction Form 8-K; Other Filings. As promptly as practicable (but in no
event, with respect to filing, later than the date required under applicable
Law), Parent will prepare and file a current report on Form 8-K (the
“Transaction Form 8-K”) and any filings required to be filed by it under the
Exchange Act, the Securities Act or any other federal or blue sky or related
Laws relating to the execution of this Agreement and the consummation of the
Merger, as well as under regulations of or as required by the OTCBB and such
Governmental Authorities as may require the filing of such other filings. C$
cMoney will work together with Parent as promptly as practicable to prepare the
Transaction Form 8-K and other filings referred to above and provide Parent
whatever information is necessary to accurately complete such filings in a
timely manner.
6.3
Parent Directors. Parent shall take such actions as may be required to cause:
(a) the resignation and removal of the current members of its Board; (b) the
authorized number of directors on Parent’s Board to be set at five (5); and (c)
the election or appointment of the Director Nominees as the members of Parent’s
Board, each of the foregoing actions in this Section 6.03 to be effective as of
the Effective Time, or, if later, the earliest date consistent with Law. Each
Director Nominee shall serve as a director for a term expiring at Parent’s next
annual meeting of shareholders following the Closing Date and until his or her
successor is elected and qualified. “Director Nominees”
means the current members of the C$ cMoney Board as of the Effective
Time.
6.4
Parent Officers. Parent shall take such actions as may be required to cause the
resignation or removal of Parent’s current officers and the election of C$
cMoney’s officers as Parent’s officers, each of the foregoing actions in this
Section 6.4 to be effective as of the Effective Time.
6.5
Further Assurances. Subject to the terms and conditions herein provided, each of
the parties hereto agrees to use its commercially reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws and regulations to satisfy
the conditions to the Closing to be satisfied by it and to consummate and make
effective the transactions contemplated by this Agreement, in the most
expeditious manner practicable, including, without limitation: (a) obtaining
from Governmental Authorities all consents, approvals, authorizations,
qualifications and orders as are necessary or may be required for or as a result
of the consummation of the transactions contemplated by this Agreement; and (b)
promptly making all necessary filings, and thereafter making any other required
submissions, with respect to this Agreement or the transactions contemplated
hereby required under applicable Law. Each of the parties shall use all
commercially reasonable efforts to resolve such objections, if any, as may be
asserted by any Governmental Authority with respect to the transactions
contemplated hereby. In connection therewith, if any administrative or judicial
action or Proceeding is instituted (or threatened to be instituted) challenging
such transactions, and if, by mutual agreement, the parties decide that
litigation is in their best interests, each party shall cooperate and use
commercially reasonable efforts vigorously to contest and resist any such action
or Proceeding and to have vacated, lifted, reversed, or overturned any order
that is in effect and that prohibits, prevents or restricts consummation of such
transactions. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, each party
to this Agreement shall use commercially reasonable efforts to take all such
necessary action.
-9-
6.6
Notices and Consents. Each of Parent, Merger Sub and C$ cMoney will give any
notices to third parties, and will use its commercially reasonable efforts to
obtain any third party consents required pursuant to any Laws in connection with
the Merger and the transaction contemplated hereby.
6.7
Reserved.
6.8
Post-Closing Restructuring. Immediately after the Effective Time, Parent shall
cause the Surviving Entity to be merged with and into Parent, with Parent as the
surviving entity in such short-form merger. In connection therewith, Parent
shall change its name to C$ cMoney, Inc., and the Bylaws of the Surviving Entity
shall be the Bylaws of the surviving entity in such short-form merger until
thereafter amended in accordance with Nevada Law.
6.9 C$
cMoney Shareholder Approval. Prior to the Closing, a majority of the issued and
outstanding shares of C$ cMoney Common Stock shall have approved this Agreement,
the Merger and the transaction contemplated hereby as required pursuant to
applicable Law.
6.10
Notice of Developments. Each party will give prompt written notice to the others
of: (a) any adverse development causing a breach of any of its own
representations and warranties contained herein; and (b) any fact, condition or
change that such party reasonably believes, individually or in the aggregate,
has resulted or is reasonably likely to result in a Material Adverse
Effect.
ARTICLE
VII
INDEMNIFICATION
7.1
Survival; Timing of Claims. The representations and warranties of Parent, Merger
Sub, Parent Shareholder and C$ cMoney contained in or made pursuant to this
Agreement will survive the execution and delivery of this Agreement and the
Closing, and for an additional six month period immediately subsequent to the
Closing. Any and all claims for indemnification pursuant to Section 7.2 must be
made in writing on or before the end of such six month period for
indemnification to be available therefor.
7.2
Indemnification.
(a) Subject
to the provisions of this Article VII, Parent Shareholder hereby agrees to
indemnify and hold harmless C$ cMoney and its successors hereunder and, as
applicable, their officers, directors, agents and representatives (each, a “C$
cMoney Indemnified Party”) from and against any and all claims, demands, losses,
damages, expenses or liabilities (including reasonable attorneys’ fees)
(“Damages”) relating to or arising out of a breach of any representation,
warranty or covenant provided by Parent, Merger Sub and/or Parent Shareholder
hereunder.
(b) Subject
to the provisions of this Article VII, C$ cMoney hereby agrees to indemnify and
hold harmless Parent Shareholder from and against any and all Damages relating
to or arising out of a breach of any representation, warranty or covenant
provided by C$ cMoney hereunder.
7.3 Sole
Remedy. The parties acknowledge and agree that, in lieu of any other rights and
remedies to which they would otherwise be entitled, the rights of the parties
under this Article VI shall be the sole and exclusive remedy of the parties for
any and all breaches of the representations, warranties and covenants of the
parties set forth herein or for any other liability or obligation of the parties
arising out of this Agreement or the transactions contemplated hereby; provided,
however: (a) the foregoing shall not apply in the case of a party seeking
injunctive relief; and (b) no party shall be deemed to have waived any rights,
claims, causes of action or remedies if and to the extent: (i) such rights,
claims, causes of action or remedies may not be waived under applicable Laws; or
(ii) fraud or intentional misrepresentation is proven on the part of a party by
another
party hereto.
-10-
7.4
Mitigation. The parties shall use all commercially reasonable efforts and shall
consult and cooperate with each other with a view towards mitigating any Damages
that may give rise to claims for indemnification under this Article VII. Without
limiting the generality of the foregoing, the Indemnified Party shall use
commercially reasonable efforts to recover any Damages by exhausting any
available remedies against insurers and other third parties.
7.5
Waiver of Damage. In no event shall any party be liable to any other party for
punitive, exemplary, special, incidental or consequential damages or the like,
including damages for loss of revenue, loss of profits, business interruption,
cost of capital or loss of business reputation or opportunity, relating to any
claim arising out of or relating to this Agreement or the transactions
contemplated hereby, regardless of whether a claim is based on contract, tort,
strict liability or any other legal or equitable principle, other than
indemnification of amounts paid or payable to third parties in respect of any
third party claim for which indemnification is required hereunder.
7.6 Right
to Indemnification Not Affected by Knowledge or Waiver. The right to
indemnification hereunder based upon breach of representations, warranties, or
covenants will not be affected by any investigation conducted, or knowledge
acquired (or capable of being acquired) at any time, whether before or after the
Closing, by the party seeking indemnification with respect to the accuracy or
inaccuracy of or compliance with any such representation, warranty, or
covenant.
ARTICLE
VIII
MISCELLANEOUS
8.1
Successors and Assigns. This Agreement is binding upon and inures to the benefit
of the parties and their heirs, personal representatives and permitted
successors and assigns. None of the parties to this Agreement may assign or
otherwise transfer this Agreement or any rights or obligations hereunder without
the prior written consent of the other parties.
8.2
Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, and all of which together shall constitute
one and the same agreement. A facsimile or e-mailed copy of an original written
signature shall be deemed to have the same effect as an original written
signature.
8.3
Notices. Unless otherwise provided herein, all notices, requests, waivers and
other communications made pursuant to this Agreement will be in writing and will
be conclusively deemed to have been duly given: (a) when hand delivered to the
other party; (b) upon receipt, when sent via email delivery of a “.pdf” format
data file to the appropriate party at the email address set forth below; or (c)
the next business day after deposit with a national overnight delivery service,
postage prepaid, addressed to the parties as set forth below with next business
day delivery guaranteed. A party may change or supplement the addresses given
below, or designate additional addresses for
purposes of this Section 8.3, by giving the other party written notice of the
new address in the manner set forth above.
If to
Parent or the Surviving Entity:Xxx X. XxXxxxxxx
|
with
a copy (which shall not constitute notice) to:
|
If
to C$ cMoney: C$ cMoney, Inc
0000
Xxxxxx, Xxx 000 Xxxxxxx, XX 00000
|
|
with
a copy (which shall not constitute notice) to:
|
W.
Xxxxxx Xxxxxxxx Xxxxxxxx & Associates, P.C.
270
First City Tower 0000 Xxxxxx Xxxxxx Xxxxxxx, XX
00000
|
8.4 Amendments. The provisions of this Agreement may not be
amended, supplemented, waived or changed orally, but only by a writing signed by
all parties to this Agreement and making specific reference to this Agreement.
Provided however, that upon the deposit into escrow of the stock purchase price
contemplated by the Stock Purchase Agreements, C$ cMoney may adjust or
restructure this merger agreement as necessary to accomplish its underlying
purpose.
-11-
8.5
Enforceability; Severability. The parties hereto agree that each provision of
this Agreement will be interpreted in such a manner as to be effective and valid
under applicable Law. If one or more provisions of this Agreement are
nevertheless held to be prohibited, invalid or unenforceable under applicable
Law, such provision will be effective to the fullest extent possible excluding
the terms affected by such prohibition, invalidity or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. If the prohibition, invalidity or unenforceability referred to in the
prior sentence requires such provision to be excluded from this Agreement in its
entirety, the balance of the Agreement will be interpreted as if such provision
were so excluded and will be enforceable in accordance with its
terms.
8.6
Governing Law. This Agreement shall be construed in accordance with, and
governed
in all respects by, the internal Laws of the State of Texas, without reference
to its choice of law rules.
8.7
Reserved.
8.8 No
Third Party Beneficiaries. This Agreement is made and entered into for the sole
benefit of the parties hereto, and their permitted successors, assigns, heirs
and personal representatives, and except for the provisions of Article VII to
the extent they relate to the Parent Indemnified Parties or the C$ cMoney
Indemnified Parties, no other Person shall have any right or action under this
Agreement.
8.9
Entire Agreement. This Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior
understandings and agreements, whether oral or written, between them with
respect to the subject matter hereof. No party will be liable or bound to any
other party in any manner by any warranties, representations or covenants except
as specifically set forth herein.
8.10
Waivers. A waiver by one party of the performance of any covenant, agreement,
obligation, condition, representation or warranty shall not be construed as a
waiver by such party of any other covenant, agreement, obligation, condition,
representation or warranty. A waiver by any party of the performance of any act
shall not constitute a waiver by such party of the performance of any other act
or an identical act required to be performed at a later date. Any waiver,
permit, consent or approval of any kind or character on the part of any party of
any provisions or conditions of this Agreement must be in writing and will be
effective only to the extent specifically set forth in such
writing.
8.11 No
Strict Construction. The parties have participated jointly in the negotiation
and drafting of this Agreement, and the language used in this Agreement is
deemed to be the language chosen by the parties to express their mutual intent.
In the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. No rules of
strict construction will be applied against any party.
8.12
Expenses. Each party shall bear and pay all Transaction Expenses and other costs
and expenses incurred by it in connection with the transactions contemplated by
this Agreement.
8.13
Construction. Whenever the words “include,” “includes,” or “including” are used
in this Agreement, they shall be deemed to be followed by the words “without
limitation.” As used herein, words in the singular will be held to include the
plural and vice versa (unless the context otherwise requires), words of one
gender (or the neuter) shall be held to include the other gender (or the neuter)
as the context requires, and the terms “hereof,” “herein,” and “herewith” and
words of similar import will, unless otherwise stated,
be construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement. The captions and headings used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
-12-
8.14
Arm’s Length Negotiations. Each party herein expressly represents and warrants
to all other parties hereto that: (a) before executing this Agreement, said
party has fully informed itself of the terms, contents, conditions and effects
of this Agreement; (b) said party has relied solely and completely upon its own
judgment in executing this Agreement; (c) said party has had the opportunity to
seek and has obtained the advice of its own counsel with respect to this
Agreement and the transactions contemplated hereby before executing this
Agreement; (d) said party has acted voluntarily and of its own free will in
executing this Agreement; (e) said party is not acting under duress, whether
economic or physical, in executing this Agreement; and (f) this Agreement is the
result of arm’s length negotiations conducted by and among the parties and their
counsel.
8.15
Conditions Precedent to Closing. C$ Money’s obligations hereunder are expressly
conditioned and contingent upon the satisfaction of the terms, conditions,
representations, warranties, and stock transfers contained and described in the
Letter of Intent, dated March 17, 2010, attached to this Agreement as Exhibit
“A”.
[Signatures
begin on next page.]
-13-
IN
WITNESS THEREOF, this Agreement and Plan of Merger has been executed by the
undersigned as of the day, month and year first above written.
C$
cMONEY, INC., a Delaware corporation
By: /s/
Xxxxxxxx Xxxxxxx
---------------------------
Xxxxxxxx
Xxxxxxx
President
& CEO
BONFIRE
PRODUCTIONS, INC., a Nevada corporation
By: /s/
Xxx X. XxXxxxxxx
-----------------------------
Xxx X.
XxXxxxxxx
President
C$ cMONEY
ACQUISITION, INC., a Delaware corporation
By: /s/
Xxx X. XxXxxxxxx
--------------------------------
Xxx X.
XxXxxxxxx President
/s/
Xxx X. XxXxxxxxx
--------------------------------
Xxx X.
XxXxxxxxx President
-14-
Letter
of Intent
This
letter of intent (“LOI”) shall evidence an understanding
between cMoney, Inc. (“Buyer”), Xxx X. XxXxxxxxx and
Xxxxxxxxx Xxxxxx Group, Inc. (hereinafter referred to as “Seller” whether one or
more) and Bonfire Productions, Inc. (“Company”), as of March 17, 2010, as
follows:
1. Terms.
Buyer, including certain non-affiliates, agrees to purchase from Seller
63,990,161 shares (98.4% of the outstanding shares) of the Company’s common
stock for the purchase price of $350,000 (the “Purchase
Price”). Seller represents that Seller is the owner of such
shares. Closing documents shall include an Affiliate Stock Purchase
Agreement and Non-Affiliate Stock Purchase Agreements as well as an Escrow
Agreement and Release and Disbursement Instructions. Buyer’s purchase of the
Company’s common stock shares (the “Transaction) in exchange for the Purchase
Price hereunder shall be subject to Buyer’s reasonable review and approval (the
“Review”) of the documentation (the “Documentation”), which may be demonstrated
in hard copy or electronic format, set forth in section 3 of the
LOI.
2. Payment
of Purchase Price. The Purchase Price consists of the deposit
of $70,000.00, as discussed in Paragraph 3(b) below, and the balance of
$280,000, to be paid at closing on or before April 30, 2010. Upon
receipt of the first stage of funding from Kodiak Capital, LLC, Buyer will
transfer the balance of the Purchase Price into the escrow account designated
for this transaction, which is Xxxxxxx X. Xxxxxx Business and Legal Support,
Inc., (“Escrow Agent”), in their capacity as escrow agent, pursuant to the
Escrow Agreement, between Escrow Agent, Buyer and Seller. On or
before the Closing Date the Seller shall deliver 63,990,161 shares (98.4% of the
outstanding shares) of the common stock and stock powers endorsed with
signatures medallion guaranteed where required and, if required, corporate
resolutions. The Seller warrants that the current controlling shareholders of
the Company (the “Current Controlling Shareholders”) understand that at the
Closing Date the officers and directors of the Company shall resign, to be
replaced by designees of the Buyer, and that all books and records of the
Company and other information reasonably requested by the Buyer shall be turned
over to the Buyer.
3. Terms
of the Transaction
|
(a)
|
Review
of the Company by the Buyer will entail review of the following
Documentation: (i) satisfactory representations and warrants by the
Current Controlling Shareholders of the satisfactory financial condition
of the Company, including that it has no outstanding debts or liabilities
except as otherwise disclosed herein; (ii) the full and complete
indemnification by the Current Controlling Shareholders with respect to
any such outstanding debts or liabilities of the Seller; (iii) the Company
having no more than 65,033,320 common shares issued and outstanding as of
the Closing Date, with no other securities convertible into or exercisable
for common stock; (iv) the production of a certified shareholder list of
the Company; (v) evidence that the Company is in good standing in the
state of Nevada; (vi) evidence that the Company is clear for trading on
the Pink Sheets with at least two market makers and a valid trading symbol
and other reasonable information requested by the Buyer in order to
prepare reviewed financial statements to bring the Company current for two
quarters (two 10Q filings); and (vii) such additional documents as may be
reasonably requested by Buyer to confirm the accuracy of the
representations and warranties contained in the LOI and its exhibits. The
Company will then file a 15c211 to become fully listed on the OTC Bulletin
Board. Twenty Five Thousand ($25,000) of the cost of the Company shall be
allocated to cover costs of re-listing on the OTC Bulletin Board, pay the
Transfer Agent and 10Q filings.
|
|
(b)
|
Immediately
upon execution of this LOI the Buyer authorizes the immediate release of
$70,000 (the “Deposit”) to Xxxxxxxxx Xxxxxx Group Inc. In the
event the Closing does not conclude on or before April 30, 2010, the
Seller shall have the absolute right to sell the Company to another
purchaser but will not do so prior to such date. At Closing,
the deposit will be credited towards the total Purchase
Price.
|
|
(c)
|
At
Closing, the Seller will execute an Agreement (the “Stock Purchase
Agreement”) and Buyer will wire the remaining Purchase Price into the
account of Escrow Agent.
|
|
(d)
|
Closing
shall be on the day of execution of the Stock Purchase Agreement at which
time the funds, less expenses, will be released by Escrow Agent for the
delivery to the Seller of the Shares, duly endorsed in blank with
signatures medallion guaranteed where required and, if required, corporate
resolutions.
|
4. Confidentiality.
Each of the parties understands that this LOI and the terms hereof are
confidential and shall not be disclosed to any third party without the express
written consent of the other party.
5. Indemnification.
The Seller will indemnify and hold harmless the Buyer and its officers,
directors and affiliates for any and all liability that arises from the acts or
omissions of the Company, its officers, directors and affiliates. The Buyer will
indemnify and hold harmless the Seller and its officers, directors and
affiliates for any and all liability that arises from the acts or omissions of
the Buyer and its officers, directors and affiliates. For the purposes of this
paragraph, the term “liability” includes all reasonable costs of defending any
legal action, including but not limited to attorneys' fees. This provision shall
be enforced to the maximum extent allowed under the corporate law of
Texas.
-15-
6. Financing
from Kodiak Capital Group, LLC. The obligations of the
Buyer to purchase the Seller’s shares under this Letter of Intent are contingent
upon the payment of the Purchase Price by Kodiak Capital Group, LLC into escrow
with Xxxxxxx X. Xxxxxx Business and Legal Support, Inc., (“Escrow Agent”), in
its capacity as escrow agent, pursuant to an escrow agreement, between Escrow
Agent, the Seller, the Buyer and the Company. As of the execution
hereof, $70,000 shall be immediately disbursed and deemed non-refundable to
Xxxxxxxxx Xxxxxx Group. The balance of the Kodiak payment into escrow
will be paid by the Escrow Agent to the Seller at the Closing. The
Company shall use all commercially reasonable efforts to conclude the merger
described above within thirty (30) days of the date this Letter of Intent is
signed.
7. Cooperation
with Buyer in Securities Filings. The Seller and the Company
will cooperate with Buyer in the submission of such securities filings as
required to effectuate this transaction.
8. Miscellaneous.
|
|
(a)
|
The
representations and warranties contained herein and attached hereto as
Exhibit “A”, shall be true and accurate as of the date hereof and as of
the Closing Date.
|
|
|
(b)
|
This
LOI may not be modified or amended except in writing signed by all
parties.
|
|
|
(c)
|
This
LOI shall be governed by and interpreted under the laws of the State of
Texas.
|
|
|
(d)
|
This
Agreement is legally binding, including signatures received electronically
or faxed.
|
|
|
(e)
|
This
LOI is Null and Void if not executed on or before March 17,
2010.
|
If the
above correctly reflects our understanding and agreement with respect to the
foregoing matters, please so confirm by signing this letter Agreement in the
space provided below, effective as of the date first mentioned
above.
SELLER:
/s/ Xxx
X.
XxXxxxxxx /s/
Xxxxx Xxxxx
---------------------------------------------- By: -----------------------------------------------------
Xxx X.
XxXxxxxxx, as President
and Xxxxx
Xxxxx, President
Controlling
Shareholder
of Xxxxxxxxx
Xxxxxx Group, Inc.
BUYER:
cMoney,
Inc.
By: /s/
Xxxxxxxx Xxxxxxx
------------------------------------------
Xxxxxxxx Xxxxxxx, President
-16-
EXHIBIT
“A”
REPRESENTATIONS
AND WARRANTIES
Except as
previously disclosed in writing to Buyer by the Company, or as disclosed on the
Company's SEC Documents, the Company represents and warrants to the Buyer
that:
(A) ORGANIZATION
AND QUALIFICATION. The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of Nevada, USA and
has the requisite corporate power and authorization to own its properties and to
carry on its business as now being conducted. Both the Company and the companies
it owns or controls (“Subsidiaries”) are duly qualified to do business and are
in good standing in every jurisdiction in which its ownership of property or the
nature of the business conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect. As used in this Agreement, "Material
Adverse Effect" means any material adverse effect on the business, properties,
assets, operations, results of operations, financial condition or prospects of
the Company and its Subsidiaries, if any, taken as a whole, or on the
transactions contemplated hereby or by the agreements and instruments to be
entered into in connection herewith, or on the authority or ability of the
Company to perform its obligations under the Equity Line Transaction Documents
(as defined in Section 1 and 4(B), below).
(B) RESERVED.
(C) CAPITALIZATION.
As of the date hereof, the authorized capital stock of the Company consists of
75,000,000 shares of Common Stock with no par value per share, of which as of
the date hereof, 65,033,320 shares are issued and outstanding.
Except as
disclosed in the Company's publicly available filings with the SEC:
|
(I)
|
No
shares of the Company's capital stock are subject to preemptive rights or
any other similar rights or any liens or encumbrances suffered or
permitted by the Company;
|
|
(II)
|
There
are no outstanding debt securities;
|
|
(III)
|
There
are no outstanding shares of capital stock, options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of
capital stock of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of
its Subsidiaries is or may become bound to issue additional shares of
capital stock of the Company or any of its Subsidiaries or options,
warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible
into, any shares of capital stock of the Company or any of its
Subsidiaries;
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(IV)
|
There
are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities
under the 1933 Act (except the Registration Rights
Agreement);
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(V)
|
There
are no outstanding securities of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no
contracts, commitments, understandings or arrangements by which the
Company or any of its Subsidiaries is or may become bound to redeem a
security of the Company or any of its
Subsidiaries;
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(VI)
|
There
are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the transactions described in this
Agreement; (VII) the Company does not have any stock appreciation rights
or "phantom stock" plans or agreements or any similar plan or agreement;
and (VIII) there is no dispute as to the classification of any shares of
the Company's capital stock.
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The
Company has furnished to the Buyer, or the Buyer has had access through XXXXX
to, true and correct copies of the Company's Amended and Restated Certificate of
Incorporation, as in effect on the date hereof (the "Certificate of
Incorporation"), and the Company's By-laws, as in effect on the date hereof (the
"By-laws"), and the terms of all securities convertible into or exercisable for
Common Stock and the material rights of the holders thereof in respect
thereto.
-17-
(E) NO
CONFLICTS. The consummation of the transactions contemplated hereby will
not: (I) result in a violation of the Certificate of Incorporation, any
Certificate of Designations, Preferences and Rights of any outstanding series of
preferred stock of the Company or the By-laws; or (II) conflict with, or
constitute a material default (or an event which with notice or lapse of time or
both would become a material default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any material agreement,
contract, indenture mortgage, indebtedness or instrument to which the Company or
any of its Subsidiaries is a party, or to the Company's knowledge result in a
violation of any law, rule, regulation, order, judgment or decree (including
United States federal and state securities laws and regulations and the rules
and regulations of the Principal Market or principal securities exchange or
trading market on which the Common Stock is traded or listed) applicable to the
Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected. Except as disclosed in
Schedule 4(e), neither the Company nor its Subsidiaries is in violation of any
term of, or in default under, the Certificate of Incorporation, any Certificate
of Designations, Preferences and Rights of any outstanding series of preferred
stock of the Company or the By-laws or their organizational charter or by-laws,
respectively, or any contract, agreement, mortgage, indebtedness, indenture,
instrument, judgment, decree or order or any statute, rule or regulation
applicable to the Company or its Subsidiaries, except for possible conflicts,
defaults, terminations, amendments, accelerations, cancellations and violations
that would not individually or in the aggregate have or constitute a Material
Adverse Effect. The business of the Company and its Subsidiaries is not being
conducted, and shall not be conducted, in violation of any law, statute,
ordinance, rule, order or regulation of any governmental authority or agency,
regulatory or self-regulatory agency, or court, except for possible violations
the sanctions for which either individually or in the aggregate would not have a
Material Adverse Effect. Except as specifically contemplated by this Agreement
and as required under the 1933 Act or any securities laws of any states, to the
Company's knowledge, the Company is not required to obtain any consent,
authorization, permit or order of, or make any filing or registration (except
the filing of a registration statement as outlined in the Registration Rights
Agreement between the Parties) with, any court, governmental authority or
agency, regulatory or self-regulatory agency or other third party in order for
it to execute, deliver or perform any of its obligations under, or contemplated
by, the Equity Line Transaction Documents in accordance with the terms hereof or
thereof. All consents, authorizations, permits, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof and are
in full force and effect as of the date hereof. Except as disclosed in Schedule
4(e), the Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing. The Company is not, and will not
be, in violation of the listing requirements of the Principal Market as in
effect on the date hereof and on each of the Closing Dates and is not aware of
any facts which would reasonably lead to delisting of the Common Stock by the
Principal Market in the foreseeable future.
(F) SEC
DOCUMENTS; FINANCIAL STATEMENTS. Other than two late quarterly reports,
as of the date hereof, the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the 1934 Act (all of the foregoing filed prior
to the date hereof and all exhibits included therein and financial statements
and schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the "SEC Documents"). The Company has delivered to
the Buyer or its representatives, or they have had access through XXXXX to, true
and complete copies of the SEC Documents. As of their respective filing dates,
the SEC Documents complied in all material respects with the requirements of the
1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. As of their respective dates, the financial statements of
the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles, by a firm
that is a member of the Public Companies Accounting Oversight Board ("PCAOB")
consistently applied, during the periods involved (except (I) as may be
otherwise indicated in such financial statements or the notes thereto, or (II)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). No other written information provided by or on behalf of the
Company to the Buyer which is not included in the SEC Documents, including,
without limitation, information referred to in Section 4(D) of this Agreement,
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements therein, in the light of the circumstance
under which they are or were made, not misleading. Neither the Company nor any
of its Subsidiaries or any of their officers, directors, employees or agents
have provided the Buyer with any material, nonpublic information which was not
publicly disclosed prior to the date hereof and any material, nonpublic
information provided to the Buyer by the Company or its Subsidiaries or any of
their officers, directors, employees or agents prior to any Closing Date shall
be publicly disclosed by the Company prior to such Closing Date.
(G) ABSENCE
OF CERTAIN CHANGES. Except as otherwise set forth in the SEC Documents,
the Company does not intend to change the business operations of the Company in
any material way. The Company has not taken any steps, and does not currently
expect to take any steps, to seek protection pursuant to any bankruptcy law nor
does the Company or its Subsidiaries have any knowledge or reason to believe
that its creditors intend to initiate involuntary bankruptcy proceedings.
-18-
(H) ABSENCE
OF LITIGATION AND/OR REGULATORY PROCEEDINGS. Except as set forth in the
SEC Documents, there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the executive officers of
Company or any of its Subsidiaries, threatened against or affecting the Company,
the Common Stock or any of the Company's Subsidiaries or any of the Company's or
the Company's Subsidiaries' officers or directors in their capacities as such,
in which an adverse decision could have a Material Adverse Effect.
(I) ACKNOWLEDGMENT
REGARDING BUYER'S PURCHASE OF SHARES. The Company acknowledges and agrees
that the Buyer is acting solely in the capacity of an arm's length purchaser
with respect to the transactions contemplated hereby and thereby.
(K)
EMPLOYEE RELATIONS. Neither the Company nor any of its Subsidiaries is
involved in any union labor dispute nor, to the knowledge of the Company or any
of its Subsidiaries, is any such dispute threatened. Neither the Company nor any
of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that relations with their employees are
good. No executive officer (as defined in Rule 501(f) of the 0000 Xxx) has
notified the Company that such officer intends to leave the Company's employ or
otherwise terminate such officer's employment with the Company.
(L) INTELLECTUAL
PROPERTY RIGHTS. The Company and its Subsidiaries own or possess adequate
rights or licenses to use all trademarks, trade names, service marks, service
xxxx registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and
rights necessary to conduct their respective businesses as now conducted. Except
as set forth in the SEC Documents, none of the Company's trademarks, trade
names, service marks, service xxxx registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, government authorizations,
trade secrets or other intellectual property rights necessary to conduct its
business as now or as proposed to be conducted have expired or terminated, or
are expected to expire or terminate within two (2) years from the date of this
Agreement. The Company and its Subsidiaries do not have any knowledge of any
infringement by the Company or its Subsidiaries of trademark, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service names, service
marks, service xxxx registrations, trade secret or other similar rights of
others, or of any such development of similar or identical trade secrets or
technical information by others and, except as set forth in the SEC Documents,
there is no claim, action or proceeding being made or brought against, or to the
Company's knowledge, being threatened against, the Company or its Subsidiaries
regarding trademark, trade name, patents, patent rights, invention, copyright,
license, service names, service marks, service xxxx registrations, trade secret
or other infringement; and the Company and its Subsidiaries are unaware of any
facts or circumstances which might give rise to any of the foregoing. The
Company and its Subsidiaries have taken commercially reasonable security
measures to protect the secrecy, confidentiality and value of all of their
intellectual properties.
(M) ENVIRONMENTAL
LAWS. The Company and its Subsidiaries (I) are, to the knowledge of the
management and directors of the Company and its Subsidiaries, in compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"); (II) have, to the knowledge of the management and
directors of the Company, received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective
businesses; and (III) are in compliance, to the knowledge of the
management and directors of the Company, with all terms and conditions of
any such permit, license or approval where, in each of the three (3) foregoing
cases, the failure to so comply would have, individually or in the aggregate, a
Material Adverse Effect.
(N) TITLE.
The Company and its Subsidiaries have good and marketable title to all personal
property owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
except such as are described in the SEC Documents or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company or any of its Subsidiaries.
Any real property and facilities held under lease by the Company or any of its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
Subsidiaries.
(O) INSURANCE.
The Company is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company
reasonably believes to be prudent and customary in the businesses in which the
Company and its Subsidiaries are engaged. Neither the Company nor any of its
Subsidiaries has been refused any insurance coverage sought or applied for and
neither the Company nor its Subsidiaries has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material Adverse
Effect.
-19-
(P)
REGULATORY PERMITS. The Company and any Subsidiaries have in full force
and effect all certificates, approvals, authorizations and permits from the
appropriate federal, state, local or foreign regulatory authorities and
comparable foreign regulatory agencies, necessary to own, lease or operate their
respective properties and assets and conduct their respective businesses, and
neither the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
approval, authorization or permit, except for such certificates, approvals,
authorizations or permits which if not obtained, or such revocations or
modifications which, would not have a Material Adverse
Effect.
(Q)
INTERNAL ACCOUNTING CONTROLS. The Company and any of its Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (I) transactions are executed in accordance with
management's general or specific authorizations; (II) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles by a firm with membership to the PCAOB
and to maintain asset accountability; (III) access to assets is permitted only
in accordance with management's general or specific authorization; and (IV) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(R)
NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Company nor any of its
Subsidiaries is subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation which in the judgment of the
Company's officers has or is expected in the future to have a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is a party to any
contract or agreement which in the judgment of the Company's officers has or is
expected to have a Material Adverse Effect.
(S) TAX
STATUS. The Company and any its Subsidiaries has made or filed all United
States federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and its Subsidiaries has set aside on its
books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.
(T) CERTAIN
TRANSACTIONS. Except as set forth in the SEC Documents filed at least ten
(10) days prior to the date hereof and except for arm's length transactions
pursuant to which the Company makes payments in the ordinary course of business
upon terms no less favorable than the Company could obtain from disinterested
third parties and other than the grant of stock options disclosed in the SEC
Documents, none of the officers, directors, or employees of the Company is
presently a party to any transaction with the Company or any of its Subsidiaries
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or
partner.
(U)
NO BROKERS, FINDERS OR FINANCIAL ADVISORY FEES OR COMMISSIONS. No
brokers, finders or financial advisory fees or commissions will be payable by
the Seller, the Company, its agents or Subsidiaries, with respect to the
transactions contemplated by this Agreement, except as otherwise disclosed in
writing to the Buyer.
-20-
