THE COMPANY STOCK SUBJECT TO TRANSFER AND/OR TO BE TRANSFERRED AS STATED IN
AND/OR PER THIS AGREEMENT HAS NOT BEEN REGISTERED UNDER ANY APPLICABLE STATE OR
FEDERAL REGULATION. NO SALE, OFFER TO SELL OR TRANSFER OF THE SHARES REPRESENTED
BY THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION STATEMENT UNDER THE
FEDERAL SECURITIES ACT OF 1933 AS AMENDED, AND COMPLIANCE WITH ANY APPLICABLE
STATE LAW WITH RESPECT TO THE EXISTENCE AND TRANSFERABILITY OF SUCH SHARES IS
THEN IN EFFECT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS THEN IN
FACT APPLICABLE TO SUCH SHARES.
STOCK PURCHASE AGREEMENT
This Agreement is made this _____ day of April, 2008 by and among GRC
Group, a Florida corporation with offices at 00000 XX 00xx Xxx., Xxxxx Xxxxx,
Xxxxxxx 00000, ("Purchaser"), SYNERGY BRANDS INC., a Delaware corporation,
("Seller") whose address is 000 Xxxxxxxxx Xxxx., Xxxxxxx, XX 00000, and GRAN
RESERVE CORPORATION, (the "Company") a Florida corporation with offices at 0000
XX 00xx Xxxxxx, Xx. 000, Xxxxx, Xxxxxxx 00000.
WHEREAS, the Seller owns all of the outstanding stock (the "Company Stock")
in the Company and the Company owns all of the Business Assets (as hereinafter
defined), and Seller has offered to sell to Purchaser and Purchaser is
interested in buying all of the Company Stock and thereby to control utilization
of all of the Business Assets; and
WHEREAS, the Purchaser desires to acquire, on the terms and subject to the
conditions reflected below, the Company Stock and to continue the Company
Business (as hereinafter defined) at Purchaser's choice; and
WHEREAS, the Seller believes that it is desirable and in the best interests
of the Seller and the Company that it sell the Company Stock and resulting
control over the associated Company Business and Business Assets to the
Purchaser subject to all current restrictions in place as agreed between the
parties hereto;
SECTION 1. DEFINITIONS.
1.1 Business Assets. The assets of the Company, which include all accounts
receivable, inventory; all and all applicable rights to utilize trade names,
trademarks and other proprietary rights as owned and/or being otherwise used by
the Company; the principals of the Purchaser, being familiar with the Company
because of they having managed the Company Business, rely upon the public
security filings of the Seller for more particulars regarding such Company
Business and Business Assets.
1.2 Business Liabilities. All liabilities and responsibilities regarding
the Company Business and Business Assets.
1.3 Closing. The date and proceeding of consummation of the transfer in
compliance with this Agreement, of the Company Stock by Seller to Purchaser.
1.4 Company. GRAN RESERVE CORPORATION
1.5 Company Business: The business conducted by the Company in which the
Company utilizes, utilized or may utilize the Business Assets, and associated
business, which shall include but not be limited to cigar sales, both
traditional wholesale and retail and wholesale via the internet predominately
but not restricted to restaurants, private and public clubs and other
hospitality and destination venues.
1.6 Exchange Act: The Securities Exchange Act of 1934, as amended to the
date as of which any reference thereto is relevant under this Agreement,
including any substitute or replacement statute adopted in place or lieu
thereof.
1.7 Proprietary Rights: Customers lists, contact names, phone numbers,
customer purchase information, ordering patterns and all information regarding
the conduct of business with each customer associated with the Company Business
shall be part of the assets transferred to the Purchaser, exclusive where such
be the nature of the asset. Trade secrets, copyrights, patents, trademarks,
service marks, customer lists, websites, URLs, domain names, software,
e-commerce platforms, and other internet identification and access codes and
information and all similar types of intangible property developed, created or
owned exclusively by the Company, or otherwise used by the Company in connection
with the Company Business, whether or not the same are entitled to legal
protection, all to be transferred as part of the Business Assets of the Company
over which control is represented by the Company Stock, without, however, any
representation made as to rights and exclusivity as to use and only to the
extent of use in the Company Business.
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1.8 Purchaser: GRC Group Inc.(or whatever entity it may assign its rights
to), which, under the terms of this Agreement, is acquiring the Company Stock.
1.9 Seller. SYNERGY BRANDS INC.
1.10 Transaction: The Sale of the Company Stock for the Consideration as
contemplated by, and subject to and in compliance with the terms and conditions
of, this Agreement.
SECTION 2. CONSIDERATION
The purchase price shall be $400,000 to be provided to Seller in exchange
for transfer of the Company Stock (and consequently the transfer of control over
the Company Business and Business Assets) to Purchaser payable as follows: (i)
$50,000 payable in cash at the Closing, (ii) balance to paid by way of payment
pursuant to the terms of a promissory note (the "Note") to include a term of
five years at an annual interest rate of 5% payable in equal monthly
installments amortized over the full length of such term, each monthly payment
due by the 10th day of the month with a 10% penalty for any late payment, no
prepayment penalty, excepting that any prepayment shall not reduce the monthly
payment amount but shall instead reduce the length of the term of such Note as
appropriate. The Note shall be in the form, and substance, as to provisions in
addition to payment terms as stated herein, as attached hereto and incorporated
herein as an Exhibit to this Agreement, and payment and compliance otherwise
with such Note shall be secured by all of the Business Assets in form as
acceptable to Seller.
SECTION 3. PURCHASER REPRESENTATIONS
Purchaser hereby represents and warrants to the Seller (which
representations and warranties shall be confirmed as of the Closing Date):
3.1 Authority Relative to this Agreement. The Purchaser has the power and
authority to enter into and to perform this Agreement in its name without the
necessity of any third party approval, including governmental. This Agreement
has been duly and validly executed and delivered by the Purchaser, and
constitutes a valid and binding Agreement of the Purchaser, enforceable in
accordance with its terms.
3.2 Absence of Breach. The execution, delivery and performance of this
Agreement, and the performance by the Purchaser of its obligations hereunder do
not (1) contravene any law, rule or regulation known to Purchaser of any State
or Commonwealth or of the United States, or of any applicable foreign
jurisdiction, or any order, writ, judgment, injunction, decree, determination,
or award affecting or binding upon the Purchaser, in such a manner as to provide
a basis for enjoining or otherwise preventing consummation of the Transaction;
(2) conflict with or result in a material breach of or default under any
material indenture or loan or credit agreement or any other material agreement
or instruments to which Purchaser is a party, in such a manner as to provide a
basis for enjoining or otherwise preventing consummation of the Transaction; or
(3) require the authorization, consent, approval or license of any third party
of such a nature that the failure to obtain the same would provide a basis for
enjoining or otherwise preventing consummation of the Transaction.
3.3 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finders or other fee or commission in connection with this Agreement
or the Transaction or any related transaction of Purchaser based upon any
agreements, written or oral, made by or on behalf of Purchaser.
3.4 Investment Intent. Purchaser is acquiring the Company Stock for its own
account for investment without a view to the sale or other public distribution
thereof.
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SECTION 4. SELLER AND COMPANY REPRESENTATIONS
The Company and the Seller represent and warrant to the Purchaser as
follows, (which representations and warranties shall be confirmed as of the
Closing Date):
4.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Florida and has the requisite corporate power and authority to carry on its
business as it is now being conducted, including the Company Business. The
Company is duly qualified as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of the properties owned
as a foreign corporation in that jurisdiction or the conduct of its business
there requires authorization by law. No part of the Company Business is
separately incorporated.
4.2 Authority Relative to this Agreement. This Agreement has been duly and
validly executed and delivered by the Seller and the Company and constitutes a
valid and binding Agreement of the Seller and the Company enforceable in
accordance with its terms. The Seller and the Company have all requisite
corporate power and/or other authority as necessary to enter into this Agreement
and to carry out the Transaction contemplated hereby, and their doing so has
been duly and sufficiently authorized, including shareholder approval where
necessary.
4.3 Absence of Breach; No Consents. To the best knowledge of Seller and the
Company, the execution, delivery and performance of this Agreement, and the
performance by the Seller and/or the Company of their obligations hereunder, do
not (1) conflict with or result in a breach of any of the provisions of the
Articles of Incorporation or By-Laws of the Company; (2) contravene any law,
ordinance, rule or regulation of any State or Commonwealth or political
subdivision of either, or of any applicable foreign jurisdiction, or contravene
any order, writ, judgment, injunction, decree, determination, or award of any
court or other authority having jurisdiction, or cause the suspension or
revocation of any authorization, consent, approval, or license, presently in
effect and/or necessary to continue the Company Business, which affects or
binds, the Seller, the Company or all or any part of the Business Assets,
Company Business or any material properties of the Company, except in any such
case where such contravention will not have a material adverse effect on the
business condition (financial or otherwise), operations or prospects of the
Company and Company Business and will not have a material adverse effect on the
validity of this Agreement or on the validity of the consummation the
Transaction; (3) conflict with or result in a material breach of or default
under any material indenture or loan or credit agreement or any other material
agreement or instrument to which the Seller and/or the Company is a party or by
which the Business Assets, Company Business, or any of the material properties
of the Company may be affected or bound where appropriate approval for the
transfer has not been received; or (4) require the authorization, consent,
approval, or license of any third party, governmental or otherwise which shall
not be received at or before Closing.
4.4 Taxes. The Seller and the Company have properly filed or caused to be
filed, all federal, state, local and foreign income, payroll, sales and/or other
tax returns, reports, and declarations that are required by applicable law to be
filed by them and that relate to or in any way affect the Company Business, the
Business Assets and/or the Company Stock, and have paid, or made full and
adequate provision for the payment of all federal, state, local and foreign
income, payroll, sales, and/or other taxes properly due for the periods covered
by such returns, reports and declarations, as to which they are aware.
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4.5 Litigation. (a) No material investigation or review by any governmental
entity with respect to the Company Business, the Company Stock or any of the
Business Assets or the use thereof is pending, or, to the best of the knowledge
of the Seller and/or the Company, threatened (other than inspections and reviews
customarily made of businesses such as the Company Business), nor has any
governmental entity indicated to the Seller and/or the Company an intention to
conduct the same, and (b) there is no action, suit or proceeding pending, or, to
the best of the knowledge of the Seller, and/or the Company threatened against
or affecting the Company Business, Company Stock, or the Business Assets at law
or in equity, or before any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality.
4.6 Compliance with Laws. To the best knowledge of the Seller and the
Company, the Company, Company Business and the Business Assets are in
substantial compliance with all, and no notice has been received by Seller or
the Company of any violation of any laws or regulations known by Seller and/or
the Company to be applicable to the operation of the Company Business and/or
utilization of the Business Assets in connection therewith, including, without
limitation, the laws and regulations relevant to the use or utilization of and
collection upon said assets by the Company, Seller, Purchaser or any other
applicable and relevant person or entity, or with respect to which compliance is
a condition of engaging in any aspect of the business of the Company Business
and the Company Business has all permits, licenses, and other governmental
authorization understood by Seller and the Company to be necessary to conduct
its business as presently conducted, including but not limited to the sale of
cigars and related products. All such permits, licenses, and other governmental
authorizations will, as a part and consequence of the Transaction, be
transferred as part of the Company Business at the Closing and Seller will
cooperate in assisting Purchaser, where necessary or reasonably requested, to
accede to the authority to use and benefits of ownership of such permits,
licenses and other government authorizations for which Purchaser is required to
apply as owner of the Company or proprietor and/or conductor of the Company
Business.
4.7 Ownership of Assets. To the best knowledge of Seller and the Company,
the Company has good, marketable and insurable title to all of the Business
Assets and the Company Business; such ownership upon transfer of the Company
Stock per this Agreement shall be free and clear of all liens and encumbrances
known to Seller; no other person shall at Closing have any ownership or similar
right in, or contractual or other right to acquire any such right in, any of
such assets; and such ownership will be conveyed to the Purchaser through
transfer of the Company Stock at the Closing pursuant to the Transaction.
Neither the Seller nor the Company knows of any potential action by any party,
governmental or other, and no proceedings with respect thereto have been
instituted of which the Seller or the Company has notice, that would materially
affect the Purchaser's and/or Company's ability to use and to utilize each of
such assets in the business of the Company Business while same shall be managed
by the Purchaser and/or its affiliate(s) or appointee(s).
4.8 Proprietary Rights. The Company possesses rights to use (without
payment), all Proprietary Rights used in the Company Business or utilized in
conjunction with the Business Assets, and all such rights shall be conveyed as
part of the Business Assets through transfer of the Company Stock to Purchaser
at the Closing pursuant to the Transaction; neither the Company nor the Seller
has received any notice of conflict which asserts the right of others with
respect thereto; and to the best knowledge of the Company and the Seller the
Company has in all material respects performed all of the obligations required
to be performed, and is not in default in any material respect, under any
agreement to which they are a party relating to any such Proprietary Rights.
4.9 Stock. The Company has present authority only to issue one class of
stock which is common stock of which the Company Stock is a part and the Company
Stock when transferred shall constitute all of the outstanding stock in the
Company and validly issued shares of common stock of the Company, and be fully
paid and non assessable. There are no outstanding puts, calls, warrants,
commitments, agreements, claims or demands of any character relating to the
Company Stock or other authorized but not issued stock of the Company, nor has
Seller and/or the Company issued any bond, note or other instruments convertible
into or otherwise given any right to purchase any of the Company Stock or other
authorized but not issued stock of the Company.
SECTION 5. MISCELLANEOUS
5.1 Name. The Seller agrees that following consummation of the Transaction,
neither it nor any entity under its control or affiliated with it other than the
Company as owned by Purchaser or otherwise as Purchaser shall provide, shall
make any attempt to make any use of any formal filed tradename under which the
Company has conducted business while the Company has been owned by Seller, or
authorize others to do so, without the written consent of the Purchaser.
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5.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested), or is sent by telefax
to the parties at the address as stated at the outset hereof (or at such other
address for a party as shall be specified by like notice given at least five (5)
days prior thereto).
5.3 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
5.4 Survival of Representations, Warranties, Et Cetera. The representations
and warranties of the parties contained herein shall survive the Closing for a
period of one (1) year from the Closing. Covenants and agreements shall survive
for the longer of one (1) year from the Closing or one (1) year after they were
to have been performed and were capable of performance.
5.5 Miscellaneous. This Agreement (1) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
between the parties, with respect to the subject matter hereof, except as
specifically provided otherwise or referred to herein, so that no such external
or separate agreements relating to the subject matter of this Agreement shall
have any effect or be binding, unless the same is referred to specifically in
this Agreement, or is executed by the parties after the date hereof; (2) is not
intended to confer upon any other person any rights or remedies hereunder; (3)
shall not be assigned by operation of law or otherwise except as specifically
authorized herein; and (4) shall be governed in all respects, including
validity, interpretation and effect, by the internal laws of the State of New
York without regard to the principles of conflict of laws thereof and all
parties submit themselves to the jurisdiction of the courts in the State of New
York if such courts are called upon to decide any issue relating to this
Agreement and counsel for the respective parties are authorized to accept
service of process to such parties in such court proceedings. This Agreement may
be executed in two or more counterparts, which together shall constitute a
single agreement.
5.6 Publicity. Prior to the Closing any written news releases or other
public disclosure by any of the parties hereto pertaining to this Agreement or
the Transaction shall be submitted to the Seller for review and approval prior
to release and shall be released only in a form approved by the Seller,
provided, however, that (a) such approval shall not be unreasonably withheld,
and (b) such review and approval shall not be required of releases if prior
review and approval would prevent the timely and accurate dissemination of such
as required to comply, in the judgment of counsel for any of the parties hereto,
with any applicable law, rule of policy.
5.7. The parties hereto are aware that the Company Stock is presently
subject to pledge to and lien interest by both Laurus Master Fund LLC, Xxxxx
Xxxxxx III and Milfam I LLP under financing arrangements between such lenders
and Seller and consummation of this Transaction is and shall be conditioned upon
release of those lien interests and approval of such lenders to be evidenced in
writing by Seller at or before Closing.
5.8 The principals of Purchaser have been involved in management of the
business affairs of the Company and are therefore familiar with the status of
the Company Business and Business Assets and are satisfied as to the good
standing of such as being appropriate for the purposes of the Purchaser in
continuing the Company Business and Seller is therefore not making and Purchaser
is not relying on any representations regarding the Company Business and/or the
Business Assets other than the limited representations made in this written
Agreement being strictly construed and Purchaser is acquiring such Company
Business and Business Assets in their AS IS condition at the date of this
Agreement and waive any inspection/due diligence rights they may otherwise be
entitled to thereby regarding.
5.9 Purchaser agrees after the Closing on the Transaction to allow Seller
access to the business records of the Company sufficient to facilitate the
Seller's regulatory reporting of its interest in the Company and transfer of
such interest and Purchaser agrees to cooperate to the full extent as Seller
deems appropriate to make disclosure of this Agreement and the Transaction for
all applicable regulatory purposes.
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5.10 Attorney Representation. Purchaser confirms herein that it is not
being represented by counsel in this Transaction but that Seller and the Company
are is being represented by Xxxxxxx X. Xxxxx, Esq. as counsel. Seller further
represents that it has been advised of its right to counsel but has voluntary
chosen not to be so represented.
The parties hereby consent to the purchase of the Company Stock per the
terms of this Stock Purchase Agreement.
Synergy Brands Inc.
by____________________
Xxxx Xxxxxxx, CEO
Gran Reserve Corporation
by______________________
Xxxxxxx Xxxxxxxx
President
GRC Group Inc.
by______________________
President
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