This SECURITIES PURCHASE AGREEMENT, dated as of May 6, 2005 (this
"Agreement"), is entered into by and among Taylor Madison Corp., a Florida
corporation maintaining its business address at 0000 XX 000xx Xxxxxx, Xxxxx XX0,
Xxxxxxxx, Xxxxxxx 00000 (the "SELLER"), Xxxxxx Xxxxxxx, an individual
maintaining a business address at 0000 XX 000xx Xxxxxx, Xxxxx XX0, Xxxxxxxx,
Xxxxxxx 00000, and Xxxxxxx X. Xxxxxxxxx, an individual maintaining a business
address at 0000 XX 000xx Xxxxxx, Xxxxx XX0, Xxxxxxxx, Xxxxxxx 00000
(collectively, the "MAJORITY SHAREHOLDERS"), Taylor Madison Holdings, Inc., a
Florida corporation maintaining a business address at 0000 XX 000xx Xxxxxx,
Xxxxx XX0, Xxxxxxxx, Xxxxxxx 00000 ("HOLDINGS"), and Xxxxx Xxxxxxxx as
authorized representative for each of the purchasers of the 10% Convertible
Promissory Debentures listed on Exhibit "A" attached hereto (individually, a
"PURCHASER" and collectively, the "PURCHASERS").
BACKGROUND INFORMATION
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Effective as the date first set forth above, the Purchasers are acquiring
from the Seller and the Seller is selling and delivering to the Purchasers, free
and clear of all liabilities, obligations, claims, liens and encumbrances 10%
Convertible Promissory Debentures, with an principal amount of up to $1,000,000,
and certain Class A warrants for the purchase of an aggregate of up to 1,250,000
shares of Seller's Common Stock, par value $.001 per share, calculated assuming
completion of the 1 for 31 reverse stock split. In addition, effective as of
the date first set forth above, the Seller is acquiring all of the issued and
outstanding capital stock of Telzuit Technologies, Inc. ("TELZUIT"), a Florida
corporation maintaining an office located at 0000 Xxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000 (the "SHARE EXCHANGE"), pursuant to the Share Exchange
Agreement of even date herewith, by and between the Seller, Telzuit
Technologies, LLC, Telzuit Technologies, Inc., and certain other persons a party
thereto. Contemporaneously with the transaction referred to above, certain
existing directors and officers of the Seller will resign and the remaining
directors of the Seller will elect new directors and officers.
OPERATIVE PROVISIONS
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In consideration of the mutual agreements contained herein, the parties
agree as follows:
ARTICLE 1
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Purchase and Sale of Debentures and Warrants
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1.1 Description of Purchase Securities; Authorization of Financing.
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(a) The Seller has authorized the issuance and delivery to the
Purchasers in the manner provided herein of 10% Convertible Debentures
substantially in the form of Exhibit 1.1(a) in the aggregate principal amount of
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up to $1,000,000 (the "DEBENTURES").
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(b) The Seller has authorized the issuance and delivery to Purchasers
of Seller's Common Stock Class A warrants (the "CLASS A WARRANTS") for the
purchase of an aggregate of up to 1,250,000 (calculated assuming completion of
the 1 for 31 reverse stock split) shares of Seller's Common Stock, par value
$.001 per share such Class A Warrants to have an exercise price of $.60 per
share. The Warrants shall be substantially in the form of Exhibit 1.1(b).
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1.2 Purchase and Sale. The Seller hereby agrees to sell to the
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Purchasers, and, subject to the terms and conditions herein set forth, each
Purchaser hereby agree to purchase from the Seller the following securities:
(a) On the Closing Date (as defined below), Debentures in the principal
amount set forth next to each Purchaser's name on Exhibit "A" attached hereto.
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(b) On the Closing Date, the Seller shall issue the Class A Warrants,
in the form of Exhibit 1.1(b), to each Purchaser in the denominations set forth
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next to each Purchaser's name on Exhibit "A" attached hereto, as additional
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consideration for the purchase by the Purchasers of the Debentures.
1.3 Closing; Payment of Purchase Price: The closing of the sale and
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purchase of the Debentures and Class A Warrants shall take place at the offices
of Xxxx Xxxx Xxxxxxx Xxxxxx & Xxxx, P.A., 000 X. Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx
00000 on May 6, 2005, at 10:00 am., or at such other time and location as may be
agreed to by the parties (the "CLOSING"). Subject to the terms and conditions
of this Agreement, in reliance on the representations, warranties and agreements
of the Seller contained herein, and in consideration of the sale and delivery of
the Debentures and Class A Warrants, each Purchaser shall loan, in cash at the
Closing, the amount set forth to its name on Exhibit "A" attached hereto. At
the Closing, the Seller shall deliver to each Purchaser a Debentures and a Class
A Warrant, in each case, in denominations set forth next to each Purchaser's
name on Exhibit "A". Each party shall be responsible for all fees and costs
incurred by them or on their behalf in connection with the negotiation of this
Agreement and the Closing.
ARTICLE 2
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REPRESENTATIONS AND WARRANTIES
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OF SELLER AND MAJORITY SHAREHOLDERS
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The Seller and Majority Shareholders, jointly and severally, represent,
warrant and agree as follows:
2.1 Organization and Standing of Seller: Seller is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Florida and has all requisite corporate power and authority to own and operate
its properties and to carry on its business as now conducted and as proposed to
be conducted. Seller has furnished to the Purchaser complete and correct copies
of its Articles of Incorporation and By-Laws as presently in effect.
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2.2 Capitalization: The authorized capital stock of Seller consists of
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50,000,000 shares of common stock, $.001 par value, and 10,000,000 shares of
preferred stock. On the date hereof, prior to issuance of the Debentures and
Series A Warrants and closing the Share Exchange, 31,010,405 shares of common
stock are issued and outstanding. shares of common stock are issued and
outstanding. Seller has issued no shares of preferred stock. Seller holds no
shares of its capital stock in its treasury (any such shares having been
returned to the status of authorized but unissued shares) and all issued and
outstanding shares of capital stock have been duly authorized and validly issued
and are fully paid and non-assessable. As of the Closing, there are no
outstanding rights, options, warrants, conversion privileges or agreements of
any kind for the purchase or acquisition from, or the sale or issuance by,
Seller of any shares of its capital stock and no authorization therefor has been
given. There are no restrictions on the transfer of shares of capital stock of
the Seller other than those imposed by relevant Federal and state securities
laws. Seller shall deliver at the Closing a complete list of the capital stock
of the Seller which is currently issued and the names in which such capital
stock is registered on the stock transfer books of the Seller.
2.3 Authorization of Seller and Majority Shareholders: When executed
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and delivered by the Seller, this Agreement and all ancillary agreements hereto,
will constitute the valid and binding obligations of each of the Seller and
Majority Shareholders, respectively and as applicable, enforceable in accordance
with their respective terms.
2.4 Subsidiaries: Except for those subsidiaries set forth on Schedule
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2.4 (the "SUBSIDIARIES"), Seller does not control (as such term is defined in
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Sec.368(c) of the Internal Revenue Code of l986, as amended), directly or
indirectly, any other corporation, association or other business entity, nor
does it have any direct or indirect interest therein. Other than pending
litigation disclosed pursuant to Section 2.9 below, all Subsidiaries listed on
Schedule 2.4 have not had any operations or owned any assets or had any
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obligations during the preceding twelve months.
2.5 Consents; Conflicts: No consent, approval or authorization of or
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registration, qualification, designation, declaration or filing with any
governmental authority or private person or entity on the part of the Seller,
the Subsidiaries or the Majority Shareholders are required in connection with
the execution and delivery of this Agreement or the consummation of any other
transaction contemplated hereby, except as shall have been duly taken or
effected prior to the Closing. The execution of this Agreement and the
consummation of the transactions contemplated hereby will not constitute a
default under any provision of any agreement by which Seller, the Subsidiaries
or the Majority Shareholders are bound.
2.6 Contracts: No Seller or Subsidiary has any contracts, commitments,
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leases, arrangements, agreements or understandings, written or oral, except
those listed and described in Schedule 2.6 attached hereto.
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2.7 Financial Statements: Seller has delivered to the Purchasers: (a)
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the audited balance sheet of Seller and Subsidiaries (prepared on a
consolidated basis) as of fiscal year ended June 30, 2004 (the "BALANCE SHEET"),
and the related audited statement of income for the fiscal year then ended, (b)
an unaudited balance sheet of Seller and Subsidiaries (prepared on a
consolidated basis) for the quarters ended as of December 31, 2004 and March 31,
2004 (the "INTERIM BALANCE SHEETS") and the related unaudited statements of
income for each of the three (3) months then ended. Such financial statements
fairly present the financial condition and the results of operations of Seller
and Subsidiaries as at the respective dates of and for the periods referred to
in such financial statements. Seller and the Subsidiaries have no liabilities
or obligations of any nature (whether known or unknown and whether absolute,
accrued, contingent, or otherwise) except for liabilities or obligations
reflected or reserved against in the Balance Sheet or the Interim Balance
Sheets. The Seller shall pay, in full, all of the liabilities of Seller or
Subsidiaries, of whatever kind, immediately prior to the Closing, except for
those liabilities set forth on Schedule 2.7, in the amounts set forth on
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Schedule 2.7 and those liabilities assigned or transferred in accordance with
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Section 6.8 below.
2.8 Taxes: Seller has filed all federal and state income tax returns,
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federal and state payroll tax returns and state sales tax returns that are or
were required to be filed by or with respect to Seller and the Subsidiaries
prior to the Closing. Seller has paid, or made provision for the payment of,
all taxes reflected on those returns that have been filed (including all returns
filed for 2004). None of the returns are being audited. Seller has not given
or been requested to give waivers or extensions of any statute of limitations
relating to the payment of taxes of Seller or for which Seller or any Subsidiary
may be liable. All taxes that Seller or any Subsidiary is or was required to
withhold or collect have been duly withheld or collected and, to the extent
required been paid. All tax returns described in this Section 2.8 that have
been filed by Seller or a Subsidiary are true, correct, and complete.
2.9 Litigation: There are no claims, actions, suits, proceedings or
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investigations pending or, to the knowledge of Seller, threatened against or
affecting Seller or any Subsidiary before any foreign, federal, state, local or
other governmental authority or agency, except as set forth on Schedule 2.9
------------
attached hereto. Neither Seller nor any Subsidiary is in violation of any order
or judgment of any court or governmental authority and there is no order, decree
or judgment of any kind in existence enjoining or restraining Seller or any
Subsidiary, or any officers, shareholders or employees of Seller or any
Subsidiary from taking any action of any kind with respect to Seller or any
Subsidiary, or requiring Seller or any Subsidiary, or any of its officers,
shareholders or employees to take, any action of any kind with respect to Seller
or any Subsidiary.
2.10 Compliance with Laws: Seller and each Subsidiary has materially
----------------------
complied with all applicable material laws and regulations of foreign, federal,
state, local and other governmental authorities and agencies which affect Seller
or any Subsidiary.
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2.11 Disclosure. Neither this Agreement, nor any other document,
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certificate or statement furnished to the Purchaser by or on behalf of the
Seller or any Subsidiary in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein not
misleading; and there is no fact which materially adversely affects, or in the
future may (so far as the Seller can now reasonably foresee) materially
adversely affect the assets, business, operations or prospects of the Seller or
any Subsidiary which has not been set forth herein or in a schedule or statement
furnished to the Purchaser.
2.12 Employee Benefit Plans. Except as set forth on Schedule 2.12,
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Seller has no employee pension benefit plans (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), no
employee welfare benefit plan (as defined in Section 3(1) of ERISA) and no
nonqualified employee benefit plan, program or fringe benefit covering any
employee of the Business (the "Employee Benefit Plans"). Except as set forth on
Schedule 2.12, there are no multi-employer plans covering any employee of the
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Business and there is no current multi-employer plan withdrawal liability with
respect to such employees. Except as set forth on Schedule 2.12, the Seller has
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properly made all contributions to the Employee Benefit Plans and is in full
compliance with the requirements of the Employee Benefit Plans.
ARTICLE 3
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REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER
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The Purchaser represents and warrants to, and covenant with, the Seller as
follows:
3.1 Authorization: When executed and delivered by the Purchaser, this
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Agreement will constitute the valid and binding obligations of the Purchaser,
enforceable in accordance with their respective terms.
3.2 No Contractual Violation: Neither the execution, delivery nor
--------------------------
performance of this Agreement by the Purchaser, including the consummation by
the Purchaser of the transactions contemplated hereby, will constitute a
violation of or a default under, or conflict with, any term or provision of the
any contract, commitment, indenture or other agreement, or of any other private
restriction of any kind, to which the Purchaser is a party or by which he is
otherwise bound.
ARTICLE 4
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ADDITIONAL AGREEMENTS
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4.1 Resignation: At the Closing, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxxxx,
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and Xxxxxxx Xxxx shall execute and deliver to the Seller a letter, in form and
content reasonably satisfactory to the Purchasers, resigning from each officer
position he then holds, effective as of the Closing. Additionally, the Seller
shall cause Xxxxxxx Xxxxxxxxx to resign as a director and the remaining director
and the Majority Shareholders shall appoint Telzuit's nominees as the directors
and officers of Seller. Seller, the Majority Shareholders and the Purchasers
will comply with Rule 14f-1 of the Securities Exchange Act of 1934, as amended.
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4.2 Satisfaction of Debt. Except those obligations set forth on
----------------------
Schedule 2.7 above, in amounts set forth on Schedule 2.7, the Seller shall pay,
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in full, all of the liabilities of Seller, of whatever kind, immediately prior
to the Closing. Immediately after the Closing, the Seller shall use the
proceeds from the sale of the Debentures and Class A Warrants to satisfy those
obligations set forth on Schedule 2.7, in the amounts set forth on Schedule 2.7.
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4.3 Escrow of Funds. With regard to the pending lawsuit filed by Media
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8 against Seller, at the Closing, the Seller shall deposit, from the proceeds
from the sale of the Debentures and Class A Warrants, $25,000 as identified on
Schedule 2.7, into escrow with Xxxx Xxxx, P.A. (the "Escrow Agent") to hold
pursuant to the terms of the Escrow Agreement of even date herewith attached
hereto as Exhibit 4.3.
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4.4 Consultation. After the Closing, the Majority Shareholders shall
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make themselves available to the Seller, from time to time, to consult with
Seller regarding its business. The Majority Shareholders shall spend that
amount of time which, in his sole discretion and judgment, is necessary to
provide such consulting services.
4.5 Change of Name. Within forty five (45) days of the Closing, Seller
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shall change its name from "Taylor Madison" and shall relinquish all rights to
use the name "Taylor Madison."
4.6 Assignment of Certain Obligations. Prior to the Closing, Seller
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shall transfer or assign to Holdings all of its assets (including the stock of
Nimbus Jets, Inc. and Take To Xxxxxxx.xxx, Inc.), and, other than those
obligations expressly set forth on Schedule 2.7, Holdings shall have assumed all
of Seller, including (a) all rights and obligations under that certain licensing
agreement with Major League Baseball (the "MLB Licensing Agreement"), (b) all
rights and obligations under that certain Manufacturing and Distribution
Agreement with Boom, LLC (the "Boom Distribution Agreement"), (c) all rights and
obligations under that certain lease agreement for the offices located at 0000
XX 000xx Xxxxxx, Xxxxx Xxxxxxxxx Xxx, Xxxxxxxx, Xxxxxxx 00000 (the "Lease
Agreement"). Holdings and Majority Shareholders hereby agree to use their best
efforts to cause each of Major League Baseball, Boom, LLC, and the landlord, to
provide a written release, releasing Seller from any and all obligations under
the MLB Licensing Agreement, the Boom Distribution Agreement, and the Lease
Agreement, respectively. In addition, Holdings and Majority Shareholders hereby
agree to use their best efforts to cause Gund, Inc. to release Seller from any
and all obligations under that certain licensing agreement between Seller and
Gund, Inc., as assigned to Omniscent Corp.
4.7 Bank Accounts; Tax Filings; 10 QSB. Prior to the Closing, Seller
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shall (a) close any and all existing bank accounts and shall provide proof of
such closed account within two days after the Closing, (b) file its corporate
tax return for 2004 with the IRS and shall also prepare and file any additional
required 2004 state or local tax filings, and (c) prepare its 10QSB for the
quarter ended March 31, 2005. Seller shall have paid, in full, all Federal,
state and local taxes due for 2004.
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4.8 Cancellation of Employment Contracts. Prior to the Closing, the
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Seller shall cancel all employment agreements, and shall have satisfied any and
all obligations related thereto, including any employment agreements with Xxx
Xxxx, Xxxxxxx Xxxxxxxxx, or Xxxxxx Xxxxxxx.
4.9 SEC Filings. The Majority Shareholders hereby agree to timely file
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Form 4's and amendments to Schedule 13D, as necessary, at their expense, related
to the transactions contemplated herein or in connection with the Share
Exchange.
4.10. Eclipse Aviation Shares. In connection with an agreement between
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Nimbus Jet, Inc. and Eclipse Aviation, Seller had previously issued shares of
its common stock to Eclipse Aviation. The Seller and Majority Shareholders
hereby represent to Purchasers that Eclipse Aviation has agreed that it is
obligated to return to the Seller for cancellation, without payment of
consideration, 1,532,846 shares of common stock of the Seller. Such shares have
not been cancelled because the share certificate representative of shares has
been lost by the Seller.
ARTICLE 5
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ADDITIONAL AGREEMENTS AND COVENANTS
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The parties further agree and covenant as follows:
5.1 Delivery of Additional Instruments on Request: Each party agrees
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to execute and deliver or cause to be executed and delivered at the Closing, and
at such other times and places as shall be reasonably subsequently agreed to,
such additional instruments as the other party may reasonably request for the
purpose of fully effecting the transactions herein contemplated.
5.2 Agreements as to Conditions: Each party agrees to use his best
------------------------------
efforts to satisfy each and every of the conditions set forth in Sections 6. and
7., respectively, of this Agreement.
5.3 Brokerage Fee: Each of the parties alleges that he has not engaged
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or authorized any broker or finder to act in a representative capacity or
otherwise in connection with the transactions contemplated by this Agreement,
and each agrees to indemnify and hold harmless the other from and against any
and all claims, losses, liabilities or expenses which may be asserted against or
suffered by either, or by Seller, as a result of any broker, finder or other
person claiming any fee or commission by reason of services rendered or alleged
to have been rendered for or at the instance of a particular party hereto with
respect to the negotiation or execution of this Agreement or to the delivery of
the consideration herein specified.
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ARTICLE 6
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CONDITIONS TO CLOSING BY THE PURCHASERS
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The obligations of the Purchaser to consummate the transactions herein
contemplated is subject to the satisfaction at or prior to the Closing of each
of the following conditions, and if the Purchaser shall not consummate such
transactions by reason of the failure of any of such conditions to be met as
herein provided, the Purchaser shall have no liability to the Seller:
6.1 Corporate Action, Good Standing and Certificates: The Purchaser
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shall have received a copy of the Articles of Incorporation and By-Laws of
Seller, certified as to their accuracy and completeness by the Seller.
6.2 Truthfulness of Representations and Warranties: Each of the
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representations and warranties of the Seller contained in this Agreement shall
be true and correct as of the Closing with the same effect as though such
representations and warranties had been made on and as of such date. Each such
representation and warranty shall survive the consummation of the transactions
contemplated by this Agreement and shall remain in full force and effect
thereafter.
6.3 Performance: Each of the agreements of the Seller to be performed
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or complied with at or before the Closing pursuant to the terms hereof shall
have been duly performed or complied with.
6.4 Consents: All consents to the consummation of the transactions
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contemplated herein which are required in order to prevent a breach of, or a
default under, the terms of any agreement to which Seller is a party or is bound
shall have been obtained.
6.5 No Litigation Threatened: No action or proceeding shall have been
-------------------------
instituted or, to the knowledge of the Seller, shall have been threatened before
a court or other governmental body or by any public authority to restrain or
prohibit the transactions contemplated herein. No governmental agency or body
shall have taken any other action or made any request of the Purchaser or the
Seller as a result of which the Purchaser deems it inadvisable to proceed with
the transaction.
6.6 Satisfaction of Liabilities. Except for those liabilities set
------------------------------
forth on Schedule 2.7, in amounts set forth on Schedule 2.7, the Seller shall
have paid, in full, all of the liabilities of Seller, of whatever kind,
immediately prior to the Closing.
6.7 [Intentionally Omitted].
6.8 Assignment of Assets and Certain Obligations. Seller shall
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transfer or assign to Holdings all of its assets (including the stock of Nimbus
Jets, Inc. and Take To Xxxxxxx.xxx, Inc.), and, other than those obligations
expressly set forth on Schedule 2.7, Holdings shall have assumed all of Seller,
including (a) all rights and obligations under that certain licensing agreement
with Major League Baseball (the "MLB Licensing Agreement"), (b) all rights and
obligations under that certain Manufacturing and Distribution Agreement with
Boom, LLC (the "Boom Distribution Agreement"), (c) all rights and obligations
under that certain lease agreement for the offices located at 0000 XX 000xx
Xxxxxx, Xxxxx Xxxxxxxxx Xxx, Xxxxxxxx, Xxxxxxx 00000 (the "Lease Agreement").
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6.9 Bank Accounts; Tax Filings; 10 QSB. Seller shall (a) close any and
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all existing bank accounts and shall provide proof of such closed accounts
within two after the Closing, (b) file its corporate tax return for 2004 with
the IRS and shall also prepare and file any additional required 2004 state or
local tax filings, and (c) prepare its 10 SB for the quarter ended March 31,
2005. Seller shall have paid, in full, all Federal, state and local taxes due
for 2004.
6.10 Designations, Limitations and Preferences for Preferred Stock.
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Seller shall have filed an Articles of Amendment establishing Series B Preferred
Stock with those Designations, Limitation, and Preferences set forth on Exhibit
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6.10(a) attached hereto.
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6.11 Shareholders List. Seller and Majority Shareholder shall cause the
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transfer agent to deliver a stockholder ledger dated the Closing Date at the
Closing, reflecting that the number of shares referenced in Section 2.2 above
are issued and outstanding.
6.12. Cancellation of Employment Contracts. Xxx Xxxx, Xxxxxxx
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Xxxxxxxxx, and Xxxxxx Xxxxxxx shall provide written evidence, satisfactory to
Purchasers, of the cancellation of each of their respective employment
contracts. Additionally, any other employment contracts entered into by Seller
or any Subsidiary shall be cancelled.
ARTICLE 7
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CONDITIONS TO CLOSING BY THE SELLER
-----------------------------------
The obligations of the Seller to consummate the transactions herein
contemplated shall be subject to the satisfaction of the Seller on or prior to
the Closing of each of the following conditions, and if the Seller shall not
consummate such transactions by reason of the failure of any of such conditions
to be met as herein provided, the Seller shall have no liability to the
Purchasers:
7.1 Truthfulness of Representations and Warranties: Each of the
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representations and warranties of the Purchasers contained in this Agreement
shall be true and correct as of the Closing with the same effect as though such
representations and warranties had been made on and as of such date. Each such
representation and warranty shall survive the consummation of the transactions
contemplated by this Agreement and shall remain in full force and effect
thereafter.
7.2 Performance: Each of the agreements of the Purchasers to be
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performed or complied with on or before the Closing pursuant to the terms hereof
shall have been duly performed and complied with.
7.3 No Litigation Threatened: No action or proceeding shall have been
-------------------------
instituted or, to the knowledge of the Purchasers, shall have been threatened
before a court or other governmental body or by any public authority to restrain
or prohibit the transactions contemplated herein. No governmental agency or
body shall have taken any other action or made any request of the Seller or the
Purchasers as a result of which the Seller deems it inadvisable to proceed with
the transaction.
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ARTICLE 8
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INDEMNIFICATION
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8.1 Survival of Representations: Each representation, warranty,
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covenant and agreement made by any party within this Agreement or pursuant
hereto shall survive the date of Closing and any investigation at any time made
by or on behalf of another party. All statements in any certificate, schedule,
list and other document described pursuant hereto or in connection with the
transactions contemplated hereby shall be deemed representations and warranties
within the meaning of this Section.
8.2 Indemnification: The Majority Shareholders and Holdings,
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jointly and severally, shall indemnify and hold harmless the Seller and
Purchasers at all times from and after the date of this Agreement against and in
respect of all demands, claims, actions, liabilities, damages, losses,
judgments, assessments, costs and expenses (including without limitation
interest, penalties and attorney fees) asserted against, resulting to, imposed
upon or incurred by the Seller (post-Closing) or the Purchasers, directly or
indirectly (individually a "Claim" and collectively the "Claims"), arising out
of or resulting from:
(a) any and all liabilities of Seller (other than those liabilities
expressly set forth on Schedule 2.7, in the amounts set forth on Schedule 2.7)
of any nature, whether accrued, absolute, contingent or otherwise, existing on
the date of the Closing (including, without limitation, any tax liabilities
accrued in respect of or measured by Seller's income for any period prior to the
date of the Closing) or arising out of transactions entered into or facts or
circumstances existing prior to that date (including, without limitation, the
MLB Licensing Agreement, the Boom Distribution Agreement, the Lease Agreement,
and the Gund Licensing Agreement);
(b) the lawsuit filed by Media 8 against Seller, Holdings, and Take To
Xxxxxxx.xxx, Inc. (the "Media 8 Litigation"); provided, however, the Majority
Shareholders and Holdings shall not be required to indemnify Seller and
Purchasers to the extent of the Escrow Funds (as defined in Section 4.3 above)
are available to satisfy the Media 8 Litigation;
(c) the Nimbus Group Plan referenced on Schedule 2.12 attached hereto;
or
(d) a breach of any representation, warranty, covenant or agreement
made or to be performed by the Seller under this Agreement.
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8.3 Notification: The Purchasers shall, upon becoming aware or being
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put on notice of the existence of a Claim with respect to which any Purchaser
may be entitled to indemnification pursuant to this Article 8, promptly notify
the Majority Shareholders and Holdings in writing of such matter. If through
any fault of the Purchasers, the Majority Shareholders and Holdings do not
receive notice of any Claim with respect to which the Purchasers may be entitled
to indemnification hereunder in time to contest, the Majority Shareholders and
Holding shall not be obligated to indemnify the Purchasers; PROVIDED, that the
Purchasers shall be deemed to have notified the Majority Shareholders and
Holdings by giving written notice of any such Claim to Majority Shareholders and
Holdings in the manner provided in Section 9.1 hereto.
8.4 Settlement and Defense of Claims: Except as hereinafter provided,
---------------------------------
upon receiving notice thereof in accordance with the provisions of Section 8.3
hereof, the Majority Shareholders and Holdings shall have the right to settle
at his own cost and expense all Claims which are susceptible of being settled or
defended, and to defend, through counsel of his own choosing and at his own cost
and expense, any third party action which may be brought in connection
therewith; provided, that the Majority Shareholders and Holdings shall be
required to keep the Purchasers fully and currently informed of all settlement
negotiations and of the progress of any litigation; and provided further that
the Purchasers shall have the right to fully participate in the defense or
settlement of any Claim at their own expense.
8.6 Cooperation of Indemnitee: The Purchasers shall permit the
---------------------------
Majority Shareholders and Holders access to the books and records of Seller and
its successors or assigns, and otherwise shall cooperate and shall cause Seller
to cooperate with the Majority Shareholders and Holdings in connection with the
settlement or defense of any Claim. In addition, except as hereinafter
provided, the Purchasers shall pay or voluntarily permit the determination of
any Claim while the Majority Shareholders and Holdings are negotiating the
settlement thereof or litigating the Claim, except with the prior written
consent of the Purchasers.
8.7 Assumption by Indemnitee: Notwithstanding anything contained
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herein to the contrary, the Purchasers may, by releasing the Majority
Shareholders and Holdings from liability to him, her or it with respect to such
Claim, take over and assume the settlement and defense of any Claim.
ARTICLE 9
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MISCELLANEOUS PROVISIONS
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9.1 Notices: All notices or other communications required or permitted
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to be given pursuant to this Agreement shall be in writing and shall be
considered as properly given or made if hand delivered, mailed from within the
United States by certified mail, or sent by overnight delivery service to the
applicable address appearing in the preamble to this Agreement, or to such other
address as either party may have designated by like notice forwarded to the
other party hereto. All notices shall be deemed given when postmarked (if
mailed), when delivered to an overnight delivery service or, if hand delivered,
when delivered to the recipient.
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9.2 Binding Agreements; Non-Assignability: Each of the provisions and
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agreements herein contained shall be binding upon and inure to the benefit of
the personal representatives, heirs, devisees and successors of the respective
parties hereto; but none of the rights or obligations attaching to either party
hereunder shall be assignable.
9.3 Entire Agreement: This Agreement, and the other documents
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referenced herein, constitute the entire understanding of the parties hereto
with respect to the subject matter hereof, and no amendment, modification or
alteration of the terms hereof shall be binding unless the same be in writing,
dated subsequent to the date hereof and duly approved and executed by each
party.
9.4 Severability: Every provision of this Agreement is intended to be
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severable. If any term or provision hereof is illegal or invalid for any reason
whatever, such illegality or invalidity shall not affect the validity of the
remainder of this Agreement.
9.5 Headings: The headings of this Agreement are inserted for
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convenience and identification only, and are in no way intended to describe,
interpret, define or limit the scope, extent or intent hereof.
9.6 Application of Florida Law; Venue: This Agreement, and the
-------------------------------------
application or interpretation thereof, shall be governed exclusively by its
terms and by the laws of the State of Florida. Venue for any legal action which
may be brought hereunder shall be deemed to lie in Hillsborough County, Florida.
9.7 Counterparts: This Agreement may be executed in any number of
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.8 Legal Fees and Costs: If a legal action is initiated by any party
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to this Agreement against another, arising out of or relating to the alleged
performance or non-performance of any right or obligation established hereunder,
or any dispute concerning the same, any and all fees, costs and expenses
reasonably incurred by each successful party or his, her or its legal counsel in
investigating, preparing for, prosecuting, defending against, or providing
evidence, producing documents or taking any other action in respect of, such
action shall be the joint and several obligation of and shall be paid or
reimbursed by the unsuccessful party(ies).
9.9 Jurisdiction: The parties agree that, irrespective of any wording
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that might be construed to be in conflict with this paragraph, this agreement is
one for performance in Florida. The parties to this agreement agree that they
waive any objection, constitutional, statutory or otherwise, to a Florida
court's taking jurisdiction of any dispute between them. By entering into this
agreement, the parties, and each of them understand that they might be called
upon to answer a claim asserted in a Florida court.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties have executed this Capital Stock Purchase
Agreement as of the day and year first above written.
SELLER
TAYLOR MADISON CORP., a Florida corporation
By:
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Name (print):
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Its:
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MAJORITY SHAREHOLDERS
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Xxxxxx Xxxxxxx, individually
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Xxxxxxx X. Xxxxxxxxx, individually
TAYLOR MADISON HOLDINGS, INC.
By:
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Name:
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Its:
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PURCHASERS
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Xxxxx Xxxxxxx, as authorized representative
for each of the Purchasers set forth on
Exhibit "A"
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