EXHIBIT 2.1
SALE OF ASSETS AGREEMENT
This Sale of Assets Agreement is entered into as of the 1st day of April 2003 by
and between G2 Companies, Inc., a Delaware corporation ("Seller") and G2
Ventures, Inc., a Texas Corporation ("Purchaser").
WHEREAS, the Seller was engaged in the business of managing and promoting
recording musicians and is the owner of assets including, but not limited to,
equipment, inventories, contract rights, and miscellaneous assets used in
connection with the operation of its business;
WHEREAS, the Purchaser desires to purchase, and the Seller desires to sell, all
the operating assets used or useful, or intended to be used, in the operation of
the Seller's business.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Assets Purchased.
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The Seller agrees to sell to the Purchaser and the Purchaser agrees to purchase
from the Seller, on the terms and conditions set forth in this Agreement, the
assets set forth on Schedule 1 hereto ("Assets").
Section 2. Excluded Assets.
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Excluded from this sale and purchase are the Seller's accounts receivable, cash,
notes receivable, prepaid accounts, the corporate seals, minute books, stock
transfer books, general ledger and other accounting records (except as otherwise
provided herein), other records related exclusively to the organization,
existence or share capitalization of the Seller, its affiliates, subsidiaries,
and any other assets of the business not specified in Schedule 1 hereto,
together with the Seller's rights under any contract between the Seller and any
third party and to which consent to assignment to the Purchaser is required, but
has not been obtained on the Closing Date. The Seller shall make its general
ledger and other accounting records available for inspection by the Purchaser
from time to time upon reasonable request.
Section 3. Liabilities Assumed.
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3.1 Except as otherwise provided below, at Closing, the Purchaser agrees to
assume and pay, discharge or perform, as appropriate, only the liabilities and
obligations of the Seller specifically itemized on Schedule 3 hereto ("Assumed
Liabilities").
3.2 Notwithstanding Section 3.1, the Purchaser shall not assume, agree to
pay, discharge or perform, or incur, as the case may be, any of the following
liabilities:
32.1 liabilities (including principal and interest) arising out of loans
and other indebtedness owing to any person or entity, excluding only the Assumed
Liabilities;
3.22 liabilities of the Seller not arising in the ordinary course of its
business incurred or accrued prior to the Closing, unless an Assumed Liability;
and
3 2.3 any liability or obligation owing to current or former employees
of the Seller and/or arising out of or in connection with an employee benefit
plan, unless an Assumed Liability;
3.3 The obligations of the Purchaser under this Section are subject to
whatever rights the Purchaser may have under this Agreement or otherwise for
breach by the Seller of any representation, warranty, covenant or agreement
contained in this Agreement, including but not limited to any right of
indemnification provided by this Agreement.
Section 4. Purchase Price.
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The purchase price for the Assets shall be the assumption of the liabilities set
forth on Schedule 3 hereto.
Section 5. Closing.
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5.1 Time and Place.
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The closing ("Closing") of the sale and purchase of the Assets shall take place
at the offices of Seller on April 1,2003 ("Closing Date").
5.2 Obligations of Seller at the Closing.
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At the Closing, the Seller shall deliver to the Purchaser the following:
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5.2.1 one or more bills of sale from the Seller conveying all of the Assets
to the Purchaser;
5.2.2 a copy of the resolutions of the Seller's board of directors and
shareholders, authorizing the execution, delivery and performance of this
Agreement and any other agreement to be entered into by the Seller in connection
herewith, and the transactions contemplated hereby;
Section 6. Seller's Obligation Prior to Closing.
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6.1 Seller's Operation of Business Prior to Closing.
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The Seller agrees that between the date of this Agreement and the Closing Date,
the Seller will:
6.1.1 Continue to operate the business that is the subject of this
Agreement in the usual and ordinary course and in substantial conformity with
all applicable laws, ordinances, regulations, rules, or orders, and will use its
best efforts to preserve its business organization and preserve the continued
operation of its business with its customers, suppliers, and others having
business relations with the Seller.
6.1.2 Not assign, sell, lease, or otherwise transfer or dispose of any of
the assets used in the performance of its business, whether now owned or
hereafter acquired, except in the normal and ordinary course of business and in
connection with its normal operation.
6.1.3 Maintain all of its assets other than inventories in its present
condition, reasonable wear and tear and ordinary usage excepted, and maintain
the inventories at levels normally maintained.
6.2 Access to Premises and Information.
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At reasonable times prior to the Closing Date, the Seller will provide the
Purchaser and its representatives with reasonable access during business hours
to the assets, titles, contracts, and records of the Seller and furnish such
additional information concerning the Seller's business as the Purchaser from
time to time may reasonably request.
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6.3 Conditions and Best Efforts.
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The Seller will use its best efforts to effectuate the transactions contemplated
by this Agreement and to fulfill all the conditions of the obligations of the
Seller under this Agreement, and will do all acts and things as may be required
to carry out its respective obligations under this Agreement and to consummate
and complete this Agreement.
Section 7. Covenants of Purchaser Prior to Closing.
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7.1 Conditions and Best Efforts.
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The Purchaser will use its best efforts to effectuate the transactions
contemplated by this Agreement and to fulfill all the conditions of the
Purchaser's obligations under this Agreement, and shall do all acts and things
as may be required to carry out the Purchaser's obligations and to consummate
this Agreement.
7.2 Confidential Information.
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If for any reason the sale of Assets is not closed, the Purchaser will not
disclose to third parties any confidential information received from the Seller
in the course of investigating, negotiating, and performing the transactions
contemplated by this Agreement.
Section 8. Seller's Representations and Warranties.
The Seller represents and warrants to the Purchaser as follows:
8.1 Corporate Existence.
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The Seller is now, and on the Closing Date will be, a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has all requisite corporate power and authority to own its properties
and assets and carry on its business and is good standing in each jurisdiction
in which such qualification is required.
8.2 Corporation Power and Authorization.
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The Seller has full corporate authority to execute and deliver this Agreement
and any other agreement to be executed and delivered by the Seller in connection
herewith, and to carry out the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate and
shareholder action. No other corporate proceedings by the Seller will be
necessary to authorize this Agreement or the carrying out of the transactions
contemplated hereby. This Agreement constitutes a valid and binding Agreement of
the Seller in accordance with its terms.
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8.3 Conflict with Other Agreements, Consents and Approvals.
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With respect to (i) the articles of incorporation or bylaws of the Seller, (ii)
any applicable law, statute, rule or regulation, (iii) any contract to which the
Seller is a party or may be bound, or (iv) any judgment, order, injunction,
decree or ruling of any court or governmental authority to which the Seller is a
party or subject, the execution and delivery by the Seller of this Agreement and
any other agreement to be executed and delivered by the Seller in connection
herewith and the consummation of the transactions contemplated hereby will not
(a) result in any violation, conflict or default, or give to others any interest
or rights, including rights of termination, cancellation or acceleration, (b)
require any authorization, consent, approval, exemption or other action by any
court or administrative or governmental body which has not been obtained, or any
notice to or filing with any court or administrative or governmental body which
has not been given or done.
8.4 Compliance with Law.
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The Seller's use and occupancy of the Assets, wherever located, has been in
compliance with all applicable federal, state, local or other governmental laws
or ordinances, the non-compliance with which, or the violation of which, might
have a material adverse affect on the Assets, the Assumed Liabilities or the
financial condition, results of operations or anticipated business prospects of
the Put chaser, and the Seller has received no claim or notice of violation with
respect thereto. Without in any way limiting the generality of the foregoing,
the Seller is in compliance with, and is subject to no liabilities under, any
and all applicable laws, governmental rules, ordinances, regulations and orders
pertaining to the presence, management, release, discharge, or disposal of toxic
or hazardous waste material or substances, pollutants (including conventional
pollutants) and contaminants The Seller has obtained all material permits,
licenses, franchises and other authorizations necessary for the conduct of its
business.
8.5 Financial Statements.
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Attached hereto on Schedule 8.5 are the Seller's audited (reviewed) financial
statements for the period ended December 31, 2002 ("Financial Statements"). The
Financial Statements are in accordance with the books and records of the Seller
and are true, correct, and complete; fairly present financial conditions of the
Seller at the dates of such Financial Statements and the results of its
operations for the periods then ended; and were prepared in accordance with
generally accepted accounting principles applied on a basis consistent with
prior accounting periods.
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Except as described in this Agreement, since December 31, 2002 there has been no
material adverse change in the financial condition of the Seller.
8.5 Tax and Other Returns and Reports.
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(i) All federal, state, local and foreign tax returns and reports (including
without limitation all income tax, social security, payroll, unemployment
compensation, sales and use, excise, privilege, property, ad valorem, franchise,
license, and school) required to be filed by the Seller by the Closing ("Tax
Returns") have been filed with the appropriate governmental agencies in all
jurisdictions in which such returns and reports are required to be filed, and
all such returns and reports properly reflect the taxes of the Seller for the
periods covered thereby; (ii) all federal, state, and local taxes, assessments,
interest, penalties, deficiencies, fees and other governmental charges or
impositions, including those enumerated above with respect to the Tax Returns,
which are called for by the Tax Returns, or which are claimed to be due from the
Seller by notice from any taxing authority, or upon or measured by its
properties, assets or income ("Taxes"), have been properly accrued or paid by or
at the Closing if then due and payable; and (iii) the reserves for Taxes
contained in the Financial Statements are adequate to cover the tax liabilities
of the Seller as of that date, and nothing other than tax on operations
subsequent to the date of the Financial Statements has occurred subsequent to
that date to make any of such reserves inadequate.
8.6 Title to Assets.
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Except as described in Schedule 1 of this Agreement, the Seller holds good and
marketable title to the Assets, free and clear of restrictions on or conditions
to transfer or assignment, and free and clear .of liens, pledges, charges, or
encumbrances.
8.7 Litigation.
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The Seller has no knowledge of any claim, litigation, proceeding, or
investigation pending or threatened against the Seller that might result in any
material adverse change in the business or condition of Assets being conveyed
under this Agreement.
8.8 Accuracy of Representations and Warranties.
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None of the representations or warranties of the Seller contain or will contain
any untrue statement of a material fact or omit or will omit or misstate a
material fact necessary in order to make statements in this Agreement not
misleading. The Seller knows of no fact that has resulted, or that in its
reasonable judgment will result in a material change in the business,
operations, or
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assets of the Seller that has not been set forth in this Agreement or otherwise
disclosed to the Purchaser.
Section 9. Representations of Purchaser.
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The Purchaser represents and warrants to Seller as follows:
9.1 Authorization.
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The Purchaser has full authority to execute and deliver this Agreement and any
other agreement to be executed and delivered by the Purchaser in connection
herewith, and to carry out the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action. No other
corporate proceedings by the Purchaser will be necessary to authorize this
Agreement or the carrying out of the transactions contemplated hereby. This
Agreement constitutes a valid and binding Agreement of Purchaser, in accordance
with its terms.
9.2 Accuracy of Representations and Warranties.
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None of the representations or warranties of the Purchaser contains or will
contain any untrue statement of a material fact or omit or will omit or misstate
a material fact necessary in order to make the statements contained herein not
misleading.
Section 10. Conditions Precedent to Purchaser's Obligations.
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The obligation of the Purchaser to purchase the Assets is subject to the
fulfillment, prior to or at the Closing Date, of each of the following
conditions, any one or portion of which may be waived in writing by the
Purchaser:
10.1 Representations, Warranties and Covenants of Seller.
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The representations and warranties of the Seller contained herein and the
information contained in the Schedules and any other documents delivered by the
Seller in connection with this Agreement shall be true and correct in all
material respects at the Closing; and the Seller shall have performed all
obligations and complied with all agreements, undertakings, covenants and
conditions required by this Agreement to be performed or complied with by it
prior to the Closing.
10.2 Conditions of the Business.
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There shall have been no material adverse change in the manner of operation of
the Seller's business prior to the Closing Date.
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10.3 No Suits or Actions.
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At the Closing Date no suit, action, or other proceeding shall have been
threatened or instituted to restrain, enjoin, or otherwise prevent the
consummation of this Agreement or the contemplated transactions.
Section 11. Conditions Precedent to Obligations of the Seller.
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The obligations of the Seller to consummate the transactions contemplated by
this Agreement are subject to the fulfillment, prior to or at the Closing Date,
of each of the following conditions, any one or a portion of which may be waived
in writing by the Seller:
11.1 Representations, Warranties, and Covenants of Purchaser.
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All representations and warranties made in this Agreement by the Purchaser shall
be true as of the Closing Date as fully as though such representations and
warranties had been made on and as of the Closing Date, and the Purchaser shall
not have violated or shall not have failed to perform in accordance with any
covenant contained in this Agreement.
Section 12. Purchaser's Acceptance.
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The Purchaser represents and acknowledges that it has entered into this
Agreement on the basis of its own examination, personal knowledge, and opinion
of the value of the business. The Purchaser has not relied on any
representations made by .the Seller other than those specified in this
Agreement. The Purchaser further acknowledges that the Seller has not made any
agreement or promise to repair or improve any of the leasehold improvements,
equipment, or other real or personal property being sold to the Purchaser under
this Agreement, and that the Purchaser takes all such property in the condition
existing on the date of this Agreement, except as otherwise provided in this
Agreement.
Section 13. Risk of Loss.
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The risk of loss, damage, or destruction to any of the equipment, inventory, or
other personal property to be conveyed to the Purchaser under this Agreement
shall be borne by the Seller to the time of Closing. In the event of such loss,
damage, or destruction, the Seller, to the extent reasonable, shall replace the
lost property or repair or cause to repair the damaged property to its condition
prior to the damage If replacement, repairs, or restorations are not completed
prior to Closing, then the purchase price shall be adjusted by an amount agreed
upon by the Purchaser and the Seller that will be required to complete the
replacement, repair, or restoration following Closing. If the Purchaser and the
Seller are unable to agree, then the Purchaser, at its sole option and
notwithstanding any other provision of this Agreement, upon notice to the
Seller, may rescind this Agreement and declare it to be of no further force and
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effect, in which event there shall be no Closing of this Agreement and all the
terms and provisions of this Agreement shall be deemed null and void. If, prior
to Closing, any of the real properties that are included in the Assets are
materially damaged or destroyed, then the Purchaser may rescind this Agreement
in the manner provided above unless arrangements for repair satisfactory to all
parties involved are made prior to Closing.
Section 14. Miscellaneous Provisions.
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Section 14.1 Notices.
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Any notices permitted or required under this Agreement shall be deemed given
upon the date of personal delivery or 48 hours after deposit in the United
States mail, postage fully prepaid, return receipt requested, addressed to
Seller at:
00000 X. Xxxxxx Xxxxxxx Xxxxx 000
Xxxxxx, Xxxxx 00000
Purchaser at:
00000 X. Xxxxxx Xxxxxxx Xxxxx 000
Xxxxxx, Xxxxx 00000
or at any other address as any party may, from time to time, designate by notice
given in compliance with this section.
Section 14.2 Survival.
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Any of the terms and covenants contained in this Agreement which require the
performance of either party after the Closing shall survive the Closing.
Section 14.3 Waiver.
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The waiver by either party of the breach of any provision of this Agreement by
the other party shall not operate or be construed as a waiver of any subsequent
breach.
Section 14.4 Assignment.
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Except as otherwise provided within this Agreement, neither party hereto may
transfer or assign this Agreement without prior written consent of the other
party.
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Section 14.5 Law Governing.
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This Agreement shall be governed by and construed in accordance with the laws of
the State of Texas.
Section 14.5 Titles and Captions.
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All article, section and paragraph titles or captions contained in this
Agreement are for convenience only and shall not be deemed part of the context
nor affect the interpretation of this Agreement.
Section 14.6 Entire Agreement.
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This Agreement contains the entire understanding between and among the parties
and supersedes any prior understandings and agreements among them respecting the
subject matter of this Agreement.
Section 14.7 Agreement Binding.
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This Agreement shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties hereto.
Section 14.8 Further Action.
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The parties hereto shall execute and deliver all documents, provide all
information and take or forbear from all such action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 14.9 Good Faith, Cooperation and Due Diligence.
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The parties hereto covenant, warrant and represent to each other good faith,
complete cooperation, due diligence and honesty in fact in the performance of
all obligations of the parties pursuant to this Agreement. All promises and
covenants are mutual and dependent.
Section 14.10 Counterparts.
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This Agreement may be executed in several counterparts and all so executed shall
constitute one Agreement, binding on all the parties hereto even though all the
parties are not signatories to the original or the same counterpart.
Section 14.11 Parties in Interest.
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Nothing herein shall be construed to be to the benefit of any third party, nor
is it intended that any provision shall be for the benefit of any third party.
Section 14.13 Savings Clause.
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If any provision of this Agreement, or the application of such provision to any
person or circumstance, shall be held invalid, the remainder of this Agreement,
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or the application of such provision to persons or circumstances other than
those as to which it is held invalid, shall not be affected thereby.
Signed as of April 1st, 2003.
Seller Purchaser
G2 Companies, Inc. G2 Ventures, Inc.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, President Xxxx Xxxxxx, President
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SCHEDULE 1
TO SALE OF ASSETS AGREEMENT DATED APRIL 1, 2003
1. Exclusive Recording Artist Agreement for artist One Up dated January 6th,
2003.
2. Exclusive Recording Artist Agreement for Xxxxxxxx Xxxxxxxx dated December
5, 2002.
3. G2 Records logo, artwork, trademarks, web domains and affiliated
intellectual property.
4. G2 Records database, customer data, distributor lists, trade and industry
contacts, and other proprietary data.
5. All office equipment, furniture, computers, software and supplies.
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SCHEDULE 3
TO SALE OF ASSETS AGREEMENT DATED APRIL 1, 2003
Accounts payable $ 1,059
Officers advances $40.345
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Total liabilities $41,404
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