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Exhibit 10.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of the 30
th
day of May, 2008
AMONG:
BENACQUISTA GALLERIES, INC. , a corporation incorporated on
January 17, 2003 under the laws of the State of Nevada with
executive offices located at 6870 La Valle Plateada Rancho Santa
Fe, California (“ Benacquista
”);
BENACQUISTA ACQUISITION CORP. , a body corporate formed
pursuant to the laws of the State of Nevada and a wholly-owned
subsidiary of Benacquista (the “ Merger Sub
”);
VIBE RECORDS, INC. , a corporation incorporated on March 8,
2004 under the laws of the State of Delaware with executive offices
are located at 446 Edwards Avenue, Suite #1, Calverton, New York
11933 (“ Vibe
”);
WHEREAS:
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A.
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Benacquista
is a corporation that is traded on the OTC Bulletin Board which is
not presently engaged in any business;
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B.
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Vibe
is conducts business as an artist and repertoire company as well as
an independent record label;
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C.
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The
respective Boards of Directors of Benacquista, Vibe and the Merger
Sub deem it advisable and in the best interests of Benacquista,
Vibe and the Merger Sub that Vibe merge with and into the Merger
Sub pursuant to this Agreement and the Certificate of Merger, and
the applicable provisions of the laws of the State of Nevada and
the State of Delaware; and
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D.
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It
is intended that the Merger shall qualify for United States federal
income tax purposes as a reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as
amended.
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NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in
consideration of the premises and the mutual covenants, agreements,
representations and warranties contained herein, and other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In
this Agreement the following terms will have the following
meanings:
“
Acquisition
Shares ” means the 13,489,201 Benacquista Common
Shares to be issued to the Vibe Shareholders at Closing
pursuant to the terms of the Merger in accordance with
Exhibit A
, annexed hereto;
“
Agreement
” means this agreement and plan of merger among
Benacquista, the Merger Sub and Vibe;
“
Benacquista
Business ” means all aspects of any business
conducted by Benacquista and its subsidiaries;
“
Benacquista
Common Shares ” means the shares of common stock
in the capital of Benacquista;
“
Benacquista
Financial Statements ” means, collectively, the
audited consolidated financial statements of Benacquista,
together with the unqualified auditors’ report thereon,
and the unaudited consolidated financial statements of
Benacquista;
“
Closing
” means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 8
hereof;
“
Closing
Date ” means the day on which all conditions
precedent to the completion of the transaction as contemplated
hereby have been satisfied or waived;
“
Effective
Time ” means the date of the filing of this
Agreement and officers’ certificates, as applicable, in
the form required by State Corporation Law;
‘‘
Material Adverse
Effect ’’ means, with respect to any party,
a materially adverse effect on the business, results of
operation, financial condition, properties or assets of such
party and any subsidiaries, taken as a whole;
“
Merger
” means the merger, at the Effective Time, of Vibe and
the Merger Sub pursuant to this Agreement and Plan of
Merger;
“
Place of
Closing ” means the offices of Sichenzia Ross
Friedman Ference LLP, or such other place as Benacquista and
Vibe may mutually agree upon;
‘‘
Returns
’’ means all returns, declarations, reports,
statements and other documents required to be filed in respect
of Taxes, and the term ‘‘Return’’
means any one of the foregoing Returns;
“
Securities
Act ” means the Securities Act of 1933, as
amended;
“
State
Corporation Law ” means either the Delaware
General Corporation Law or the Nevada Revised Statutes, as
applicable;
“
Surviving
Company ” means Vibe following the merger with
the Merger Sub;
“
Taxes
’’ means all federal, state, local, foreign and
other income, sales, use, ad valorem, transfer, franchise,
withholding, payroll, employment, gross receipts, property,
severance, duties, net worth, excise or other taxes, charges,
levies or like assessments of any kind, together with any
interest, penalties and additions with respect thereto, and
the term ‘‘ Tax
’’ means any one of the foregoing
Taxes;
“
Vibe
Assets ” means the undertaking and all the
property and assets of the Vibe Business of every kind and
description wheresoever situated including, without
limitation, Vibe Cash, Vibe Equipment, Vibe Inventory and Vibe
Material Contracts;
“
Vibe
Business ” means all aspects of the business
conducted by Vibe;
“
Vibe
Cash ” means all cash on hand or on deposit to
the credit of Vibe on the Closing Date;
“
Vibe
Debt ” means all of the issued and outstanding
convertible promissory notes of Vibe;
“
Vibe
Debt Holders ” means all of the holders of the
issued and outstanding Vibe Debt;
“
Vibe
Equipment ” means all machinery, equipment,
furniture, and furnishings used in the Vibe
Business;
“
Vibe
Financial Statements ” means collectively, the
audited consolidated financial statements of Vibe, together
with the unqualified auditors’ report
thereon;
“
Vibe
Inventory ” means all inventory and supplies of
the Vibe Business;
“
Vibe
Material Contracts ” means the burden and benefit
of and the right, title and interest of Vibe in, to and under
all trade and non-trade contracts, engagements or commitments,
whether written or oral, to which Vibe is entitled in
connection with the Vibe Business whereunder Vibe is obligated
to pay or entitled to receive the sum of $10,000 or more
including, without limitation, any pension plans, profit
sharing plans, bonus plans, loan agreements, security
agreements, indemnities and guarantees, any agreements with
employees, lessees, licensees, managers, accountants,
suppliers, agents, distributors, officers, directors,
attorneys or others which cannot be terminated without
liability on not more than one month’s
notice;
“
Vibe
Shares ” means all of the issued and outstanding
shares of Vibe’s stock;
“
Vibe
Shareholders ” means the holders of shares of
capital stock of Vibe;
Any
other terms defined within the text of this Agreement will
have the meanings so ascribed to them.
1.2 Captions and Section Numbers
The
headings and section references in this Agreement are for
convenience of reference only and do not form a part of this
Agreement and are not intended to interpret, define or limit
the scope, extent or intent of this Agreement or any provision
thereof.
1.3 Section References and Schedules
Any
reference to a particular “Article”,
“section”, “paragraph”,
“clause” or other subdivision is to the particular
Article, section, clause or other subdivision of this
Agreement and any reference to a Schedule by letter will mean
the appropriate Schedule attached to this Agreement and by
such reference the appropriate Schedule is incorporated into
and made part of this Agreement.
1.4 Severability of Clauses
If
any part of this Agreement is declared or held to be invalid
for any reason, such invalidity will not affect the validity
of the remainder which will continue in full force and effect
and be construed as if this Agreement had been executed
without the invalid portion, and it is hereby declared the
intention of the parties that this Agreement would have been
executed without reference to any portion which may, for any
reason, be hereafter declared or held to be
invalid.
ARTICLE 2. MERGER
2.1 The Merger
The
Merger Sub shall be merged with and into Vibe pursuant to this
Agreement and the separate corporate existence of the Merger
Sub shall cease and Vibe, as it exists from and after the
Closing, shall be the Surviving Company.
2.2 Effect of the Merger
The
Merger shall have the effect provided therefor by the State
Corporation Law. Without limiting the generality of the
foregoing, and subject thereto, at Closing (i) all the
rights, privileges, immunities, powers and franchises, of a
public as well as of a private nature, and all property, real,
personal and mixed, and all debts due on whatever account,
including without limitation subscriptions to shares, and all
other choses in action, and all and every other interest of or
belonging to or due to Vibe or the Merger Sub, as a group,
subject to the terms hereof, shall be taken and deemed to be
transferred to, and vested in, the Surviving Company without
further act or deed; and all property, rights and privileges,
immunities, powers and franchises and all and every other
interest shall be thereafter as effectually the property of
the Surviving Company, as they were of Vibe and the Merger
Sub, as a group, and (ii) all debts, liabilities, duties
and obligations of Vibe and the Merger Sub, as a group,
subject to the terms hereof, shall become the debts,
liabilities and duties of the Surviving Company and the
Surviving Company shall thenceforth be responsible and liable
for all debts, liabilities, duties and obligations of Vibe and
the Merger Sub, as a group, and neither the rights of
creditors nor any liens upon the property of Vibe or the
Merger Sub, as a group, shall be impaired by the Merger, and
may be enforced against the Surviving Company.
2.3 Certificate of Incorporation; Bylaws; Directors and
Officers
The
Certificate of Incorporation of the Surviving Company from and
after the Closing shall be the Certificate of Incorporation of
Vibe until thereafter amended in accordance with the
provisions therein and as provided by the applicable
provisions of the State Corporation Law. The Bylaws
of the Surviving Company from and after the Closing shall be
the Bylaws of Vibe as in effect immediately prior to the
Closing, continuing until thereafter amended in accordance
with their terms, the Certificate of Incorporation of the
Surviving Company and as provided by the State Corporation
Law. The directors of Vibe in office immediately
prior to the Closing Date shall serve as the directors of
the Surviving Corporation from and after the Closing
Date.
2.4 Conversion of Securities
At
the Effective Time, by virtue of the Merger and without any
action on the part of the Merger Sub or Vibe, the shares of
capital stock of each of Vibe and the Merger Sub shall be
converted as follows:
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(a)
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Capital Stock of Vibe . Each issued and outstanding share of
Vibe’s capital stock shall continue to be issued and
outstanding and shall represent one share of validly issued, fully
paid, and non-assessable common stock of the Surviving Company
owned by Benacquista. Each stock certificate of Vibe evidencing
ownership of any such shares shall continue to evidence ownership
of such shares of capital stock of the Surviving
Company.
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(b)
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Conversion of Vibe Shares . Each Vibe Share that is issued
and outstanding at the Effective Time, set forth on Exhibit A ,
shall automatically be cancelled and converted, without any action
on the part of the holder thereof, into the right to receive one
(1) Acquisition Share for each Vibe Share. All such Vibe
Shares, when so converted, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist,
and each holder of a certificate representing any such shares shall
cease to have any rights with respect thereto, except the right to
receive the Acquisition Shares paid in consideration therefor upon
the surrender of such certificate in accordance with this
Agreement.
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2.5 Adherence with Applicable Securities Laws
The
certificates representing the Acquisition Shares shall bear
the following legend:
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, IN
RESPECT OF SUCH SHARES IS THEN IN EFFECT OR AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF SAID ACT IS THEN IN FACT
APPLICABLE TO SAID SHARES.
2.6 Additional Actions.
If
at any time after the Effective Time the Surviving Corporation
shall consider or be advised that any deeds, bills of sale,
assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or
confirm, of record or otherwise, in the Surviving Corporation,
its right, title or interest in, to or under any of the
rights, privileges, powers, franchises, properties or assets
of either Vibe or the Merger Sub or (b) otherwise to
carry out the purposes of this Agreement, the Surviving
Corporation and its proper officers and directors or their
designees shall be authorized (to the fullest extent allowed
under applicable law) to execute and deliver, in the name
and on behalf of either Vibe or the Merger Sub, all such
deeds, bills of sale, assignments and assurances and do, in
the name and on behalf of Vibe or the Merger Sub, all such
other acts and things necessary, desirable or proper to vest,
perfect or confirm its right, title or interest in, to or
under any of the rights, privileges, powers, franchises,
properties or assets of Vibe or the Merger Sub, as applicable,
and otherwise to carry out the purposes of this
Agreement.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF VIBE
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(a)
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Vibe
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Vibe
Disclosure Schedule contains a list of the name and jurisdiction of
organization of each subsidiary of Vibe (each such corporation,
partnership or other entity being referred to herein individually
as a ‘‘ Vibe
Subsidiary ’’ and collectively, as the
‘‘ Vibe
Subsidiaries ’’) and Vibe ownership
interest with respect thereto. Each Vibe Subsidiary is a
corporation or partnership duly organized, validly existing and in
good standing under the laws of its place of
incorporation.
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(b)
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Vibe
and each Vibe Subsidiary (i) has all requisite corporate power
and authority to own, lease and operate its properties and carry on
its business as now being conducted and (ii) is duly qualified
and in good standing to do business in each jurisdiction in which
the nature of its business or the nature or location of its assets
require such qualification and where the failure to be so qualified
and in good standing would have a Material Adverse Effect on
Vibe.
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(c)
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Vibe
has all necessary corporate power and authority to enter into this
Agreement and, subject to approval and adoption of this Agreement
by the holders of a majority of the outstanding shares of Vibe, to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Vibe and the performance by Vibe,
subject to approval and adoption of this Agreement by the Vibe
Shareholders, of its obligations hereunder have been duly
authorized and approved by all requisite corporate action and no
other corporate proceedings on the part of Vibe are necessary to
authorize this Agreement or for Vibe to consummate the Merger. This
Agreement has been duly executed and delivered by duly authorized
officers of Vibe and constitutes a valid and binding obligation of
Vibe, enforceable against Vibe in accordance with its
terms.
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(d)
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No
consent, approval, order or authorization of, or registration,
declaration or filing with any court, administrative agency or
commission or other governmental authority or instrumentality (each
of the foregoing being a ‘‘ Governmental
Entity ’’), is required by or with respect to
Vibe or any Vibe Subsidiary in connection with the execution and
delivery of this Agreement by Vibe or the consummation by Vibe of
the transactions contemplated hereby.
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(e)
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Neither
the execution and delivery of this Agreement by Vibe, nor the
consummation by Vibe of the transactions contemplated hereby, will
(i) conflict with or result in a breach of any of the terms or
provisions of Vibe Certificate of Incorporation or By-Laws,
(ii) violate any statute or administrative regulation, or any
order, writ, injunction, judgment or decree of any court or
governmental authority or any arbitration award to which Vibe is a
party or by which Vibe is bound, or (iii) violate, conflict
with, breach, constitute a default (or an event which, with notice
or lapse of time or both, would constitute or default) under,
or result in the termination of, or accelerate the performance
required by, or result in the creation of any lien or other
encumbrance upon any of the properties or assets of Vibe or any
Vibe Subsidiary under, any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or obligation
to which Vibe or any Vibe Subsidiary is a party or to which they or
any of their respective properties or assets are
subject.
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(f)
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As
of the date hereof, the authorized capital stock of Vibe consists
of Common, par value $0.0001 per share and preferred stock, par
value $0.001 per share (the ‘‘Vibe
Preferred’’). As of the date hereof, 50,000,000 shares
of Common Stock are authorized, 13,489,201 shares of Common Stock
are issued and outstanding or will be issued and outstanding prior
to the Effective Time. As of the date hereof 5,000,000 shares of
Vibe Preferred are authorized, none of which will be issued and
outstanding prior to the Effective Time. There are no other shares
of capital stock of Vibe authorized, issued or outstanding. All of
the issued and outstanding shares of capital stock of Vibe have
been duly authorized, validly issued and are fully paid and
nonassessable. Except as set forth on the Vibe Disclosure Schedule,
there are no subscriptions, options, warrants, rights (including
preemptive rights), calls, convertible securities or other
agreements or commitments of any character relating to the issued
or unissued capital stock or other securities of Vibe obligating
Vibe to issue any securities of any kind.
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(g)
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The
financial statements of Vibe included in Exhibit B
attached hereto have been prepared in accordance with generally
accepted accounting principles (“ GAAP
’’) consistently applied (except as may be
indicated in the notes thereto or) and fairly present in all
material respects the consolidated financial position of Vibe as at
the dates thereof and the consolidated results of its operations,
cash flows and changes in financial position for the periods
indicated therein.
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(h)
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Except
as otherwise disclosed in the Vibe Disclosure Schedule, Vibe and
the Vibe Subsidiaries do not have any liabilities or obligations of
any nature (whether accrued, absolute, contingent or
otherwise) other than liabilities or obligations which would
not, individually or in the aggregate exceed $10,000.
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(i)
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Vibe
has not suffered or, to Vibe’s knowledge, been threatened
with any change (other than changes generally affecting the
industries in which Vibe or any Vibe Subsidiary operates or changes
relating to the transactions contemplated by this
Agreement) which could have a Material Adverse Effect on Vibe;
and (ii) Vibe and the Vibe Subsidiaries have operated only in
the ordinary course of business consistent with past
practice.
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(1)
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As
used in this Agreement, the term
(i) ‘‘Taxes’’ means all federal,
state, local, foreign and other income, sales, use, ad valorem,
transfer, franchise, withholding, payroll, employment, gross
receipts, property, severance, duties, net worth, excise or other
taxes, charges, levies or like assessments of any kind, together
with any interest, penalties and additions with respect thereto,
and the term ‘‘Tax’’ means any one of the
foregoing Taxes, and (ii) ‘‘Returns’’
means all returns, declarations, reports, statements and other
documents required to be filed in respect of Taxes, and the term
‘‘Return’’ means any one of the foregoing
Returns.
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(2)
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There
have been properly completed and filed on a timely basis all
Returns required to be filed by Vibe or any Vibe Subsidiary. As of
the time of filing, the foregoing Returns correctly reflected the
facts regarding the income, business, assets, operations,
activities, status or other matters of Vibe or, as applicable, a
Vibe Subsidiary or any other information required to be shown
thereon.
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(3)
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With
respect to all amounts in respect of Taxes imposed upon Vibe or any
Vibe Subsidiary, or for which Vibe or any Vibe Subsidiary is liable
to taxing authorities, with respect to all taxable periods or
portions of periods ending on or before the date hereof, all
applicable Tax laws have been complied with and all amounts
that are required to have been paid.
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(4)
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No
issues have been raised or are currently pending by any tax
authority in connection with any of the Returns. There are no
material outstanding waivers of the applicable statutes of
limitation with respect to Tax liabilities of Vibe or any Vibe
Subsidiary.
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(5)
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Vibe
has not agreed to make, nor is required to make, any adjustment
under Section 481(a) of the Code by reason of a change in
accounting method or otherwise.
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(k)
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Vibe
and the Vibe subsidiaries have never had more than 10 employees in
any given 12 month period.
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(l)
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Except
as set forth on the Vibe Disclosure Schedule, there is no
litigation or proceeding, in law or in equity, and there are no
proceedings or governmental investigations before any commission,
authority, agency or other administrative authority, pending or, to
Vibe’s knowledge, threatened against Vibe or any Vibe
Subsidiary with respect to or affecting Vibe’s or any Vibe
Subsidiary’s operations, business or financial
condition.
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(m)
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Neither
Vibe nor any Vibe Subsidiary is a party to, or bound by, any
judgment, writ, injunction, decree, order, or arbitration award (or
agreement entered into in any administrative, judicial or
arbitration proceeding with any Governmental Entity) with
respect to or affecting the properties, assets, personnel or
business activities of Vibe or any Vibe Subsidiary.
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(n)
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Each
of Vibe and the Vibe Subsidiaries owns, licenses or otherwise has
the right to use all patents, copyrights, trademarks, trade names
and rights in respect of the foregoing, adequate for the conduct of
its business substantially as now conducted without any known
conflict with any rights of others.
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