EXHIBIT 10.1
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ASSET PURCHASE AGREEMENT
This
Asset Purchase Agreement (this "Agreement") is made and entered
into
as of September 21, 2006 by and among Genotec Nutritionals, Inc., a
Delaware
corporation ("Seller"), George Kontonotas, an individual
("Kontonotas"), Joseph
Freedman, an individual ("Freedman"), Susan Blancato, an
individual
("Blancato"), (Kontonotas, Freedman, and Blancato shall be
collectively referred
to herein as the "Shareholders"), MM(2) Group, Inc. , a New Jersey
corporation
("MM2"), and Genotec Acquisition Corporation, a newly-formed,
wholly-owned
subsidiary of MM2 ("Buyer").
RECITALS
WHEREAS, the Shareholders own, of record and beneficially,
10,000,000 shares
(the "Company Shares") of the common stock, $0.01 par value, of the
Seller,
being all of the issued and outstanding shares of the capital stock
of the
Seller;
WHEREAS, the Seller is engaged in the business of selling
nutritional
supplements (the "Business");
WHEREAS, the Buyer wishes to purchase the Business and certain
other assets of
the Seller;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual
covenants and agreements contained herein, the parties hereto agree
as follows:
ARTICLE I.
DEFINITIONS
1.1
DEFINED TERMS. As used herein, the terms below shall have the
following
meanings:
"Action" shall mean any action, claim, suit, arbitration,
inquiry,
subpoena, discovery request, proceeding or investigation, or threat
thereof, by
or before any court or grand jury, any governmental or other
regulatory or
administrative agency or commission or any arbitration
tribunal.
"Affiliate" shall mean, with respect to any Person, any other
Person
directly or indirectly controlling, controlled by or under common
control with
such Person and any member, general partner, director, officer or
employee of
such Person. For purposes of this definition of Affiliate,
"control" shall mean
the power of one or more Persons to direct the affairs of the
Person controlled
by reason of ownership of voting stock, contract or otherwise.
"Brokerage Business" means the business of brokering raw
materials,
bulk commodities and ingredients for the benefit of third
parties.
"Damages" shall mean any and all costs, losses, damages,
liabilities,
demands, claims, suits, actions, judgments, causes of action,
assessments or
expenses, including interest, penalties, fines and attorneys' fees
incident
thereto, incurred in connection with any claim for indemnification
arising out
of this Agreement and any and all amounts paid in settlement of any
such claim.
"Intellectual Property" shall mean all copyrights, copyright
registrations, proprietary processes, trade secrets, license
rights,
specifications, technical manuals and data, drawings, inventions,
designs,
patents, patent applications, mask works, tradenames, trademarks,
service marks,
product information and data, know-how and development
work-in-progress,
customer lists, software, business correspondence and marketing
plans and other
intellectual or intangible property.
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"Knowledge" shall mean an individual shall be deemed to have
"Knowledge" of a particular fact or other matter if such individual
is actually
aware of such fact or other matter or if a prudent individual could
be expected
to discover or otherwise become aware of such fact or other matter
in the course
of conducting a diligent and comprehensive investigation concerning
the truth or
existence of such fact or other matter. Seller shall be deemed to
have
"Knowledge" of a particular fact or other matter if any officer or
other
representative of Seller has Knowledge of such fact or other
matter.
"Person" shall mean any person or entity, whether an
individual,
trustee, corporation, general partnership, limited partnership,
trust,
unincorporated organization, limited liability company, business
association,
firm, joint venture, or governmental agency or authority.
"Purchased Assets" shall have the meaning stated in Section 2.1 in
the
Agreement.
"Solvent" shall mean that the Seller shall pay its bills in the
ordinary course of business as the bills come due.
"Taxes" shall mean all taxes, however denominated, including
any
interest, penalties or other additions to tax that may become
payable in respect
thereof, (i) imposed by any federal, territorial, state, local or
foreign
government or any agency or political subdivision of any such
government, for
which Buyer could become liable as successor to or transferee of
the Software
Assets or which could become a charge against or lien on the
Software Assets,
which taxes shall include, without limiting the generality of the
foregoing, all
sales and use taxes, ad valorem taxes, excise taxes, business
license taxes,
occupation taxes, real and personal property taxes, stamp taxes,
environmental
taxes, real property gains taxes, transfer taxes, payroll and
employee
withholding taxes, unemployment insurance contributions, social
security taxes
and other governmental charges, and other obligations of the same
or of a
similar nature to any of the foregoing, which are required to be
paid, withheld
or collected, or (ii) any liability for amounts referred to in (i)
as a result
of any obligations to indemnify another person.
ARTICLE II.
PURCHASE AND SALE OF ASSETS
2.1
TRANSFER OF PURCHASED ASSETS. Pursuant to the terms and subject to
the
conditions of this Agreement, in exchange for the consideration set
forth in
Section 2.2 below, at the Closing, Seller shall sell, assign and
deliver to
Buyer, and Buyer shall purchase from Seller, the assets listed on
Schedule 2.1
(hereinafter collectively referred to as the "Purchased
Assets").
2.2
PURCHASE PRICE. As consideration for the Purchased Assets, Buyer
shall
tender Seller the consideration set forth below:
(a) Ten million (10,000,000) shares of Class A Common Stock of
MM(2)
Group, Inc. (the "Buyer's Stock") to Seller's designees as listed
on Schedule
2.2. MM2 hereby agrees to file a registration statement with the
Securities and
Exchange Commission to register the Buyer's Stock under the
Securities Act of
1933 (the "Act") within sixty (60) days from the Closing Date (the
"Registration
Statement"). Subsequent to the Securities and Exchange Commission
declaring the
Registration Statement effective, MM2 shall have its counsel
provide the
appropriate legal opinion to its transfer to remove the restrictive
legend
endorsed upon the share certificates of the Buyer's Stock.
2.3
LIABILITIES OF SELLER. . Pursuant to the terms and subject to
the
conditions of this
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Agreement, Buyer will assume certain liabilities included on the
June 30, 2006
Balance Sheet of Seller and as adjusted in the ordinary course of
business as of
the closing date. Such liabilities are listed on Schedule 2.3
herein
(hereinafter collectively referred to as the "Assumed
Liabilities").
ARTICLE III.
CLOSING
3.1
CLOSING. The closing of the transactions contemplated herein
(the
"Closing") shall be held at 10:00 a.m. Eastern Standard Time at the
offices of
Buyer at 5 Regent Street, Suite 520, Livingston, NJ 07039, on
September 21,
2006, or at such other time and place as the parties may agree (the
"Closing
Date") provided that all of the Closing conditions set forth in
Section 3.3
hereof shall have occurred.
3.2
DELIVERIES. Together with an executed counterpart of this
Agreement,
the following items shall be delivered by the parties at the
Closing:
(a) BY BUYER. Buyer shall deliver:
(i) a certificate(s) evidencing the Buyer's Stock;
(ii) the Employment Agreements for each of the Shareholders
executed by Buyer.
(iii) Secretary's Certificate of the Seller as set forth in
Schedule 3.2.(a)(iv)
(iv) Officer's Incumbency Certificate of Seller as set forth in
Schedule 3.2(a)(v).
(v) MM2 shall have purchased Seventy-five Thousand Dollars
($75,000) of the Buyer's Series A Preferred Convertible Stock.
(b) BY SELLER. Seller shall deliver to Buyer:
(i) one or more Bills of Sale, in form and substance
satisfactory
to Buyer and sufficient to convey the Purchased Assets to
Buyer;
(ii) such electronic and paper copies and representations of
the
Intellectual Property as may in Buyer's reasonable judgment be
necessary to convey the Intellectual Property to Buyer;
(iii) the Employment Agreements for each of the Shareholders
executed by Kontonotas, Freedman, and Blancato respectively;
(iv) an Assignment of Seller's rights to the corporate name
"Genotec Nutritionals, Inc."
(v) Amendment to the Certificate of Incorporation of Genotec
Nutritionals, Inc. for filing with the Delaware Secretary of
State to change its name to a name different from and
dissimilar
to Genotec Nutritionals, Inc.
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(vi) Secretary's Certificate of the Buyer as set forth in
Schedule 3.2(b)(vi).
(vii) Officer's Incumbency Certificate of Buyer as set forth in
Schedule 3.2(b)(vii).
(viii) such other documents and instruments as are reasonably
necessary to consummate the transactions contemplated hereby.
(viii) delivery of all consents, approvals, and assignments
necessary to consummate the transaction contemplated under this
Agreement including,
but not limited to: third party software
vendors' consents and reseller agreement consents.
(ix) an assignment of the lease for 450 Commack Road, Deer
Park,
NY
(x) Termination of sublet to CardioCeuticals LLC for office
space
located at 450 Commack Road, Deer Park, NY.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
4.1
ORGANIZATION. Seller is a corporation duly organized, validly
existing
and in good standing under the laws of the State of Delaware and
has full
corporate power and authority to own, lease and operate its
properties and to
carry on its business as it is now being conducted. Seller is duly
qualified or
licensed as a foreign corporation to do business, and is in good
standing, in
each jurisdiction where the character of the properties owned,
leased or
operated by it or the nature of its business makes such
qualification or
licensing necessary, except for failures to be so qualified or
licensed and in
good standing that would not, individually or in the aggregate,
affect the
Purchased Assets in a materially adverse manner.
4.2
AUTHORIZATION. Seller has all necessary corporate power and
authority
and has taken all corporate action necessary to enter into this
Agreement, to
consummate the transactions contemplated hereby and to perform its
obligations
hereunder. This Agreement has been duly executed and delivered by
Seller and is
a valid and binding obligation of Seller, enforceable against it in
accordance
with its respective terms subject to the effect of applicable
bankruptcy,
insolvency, reorganization, moratorium and other similar laws
relating to or
affecting the rights of creditors generally and limitations imposed
by equitable
principles, whether considered in a proceeding at law or in equity,
and the
discretion of the court before which any proceeding therefor may be
brought.
4.3
BROKERS. (a) The parties acknowledge that a broker's commission
will be
due and owing at the Closing (the "Brokers' Commission Fee") to
Michael Logerfo
("Logerfo") and/or Raymond Burke ("Burke"). The Brokers' Commission
Fee is the
sole responsibility of Buyer. Other than the Logerfo and Burke set
forth above,
the Seller and the Shareholders represent that all negotiations
relating to this
Agreement and the transactions contemplated hereby have been
conducted without
the intervention of any person or entity acting on behalf of Seller
in such a
manner as to give rise to any valid claim against the Seller and/or
the Buyer
for any broker's or finder's commission, fee or similar
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compensation. The Seller and the Shareholders, jointly and
severally, shall
indemnify Buyer and MM2 and hold both harmless from any liability
or expense
arising from any claim for brokerage commissions, finder's fees or
other similar
compensation based on any agreement, arrangement or understanding
made by or on
behalf of Seller and/or the Shareholders.
(b)
MM2 hereby agrees to issue 500,000 shares of MM2 Class A Common
Stock
(the
"Logerfo's Stock") to Logerfo, or their designees, as complete
and
final payment owed to Logerfo as his Brokers' Commission Fee.
Logerfo's
Stock will reduce the number of shares to be issued as Buyer's
Stock. The
Logerfo's Stock will be endorsed with the restrictive legend set
forth in
Section 8.1(a) herein.
4.4
LITIGATION, PROCEEDINGS AND APPLICABLE LAW. There are no
Actions,
suits, investigations or proceedings, at law or in equity or before
or by any
governmental authority or instrumentality or before any arbitrator
of any kind,
pending or, to Seller's Knowledge, threatened (a) against Seller
which, if
determined adversely against Seller, would have a material adverse
effect on
Seller's or Buyer's ability to use the Intellectual Property in the
manner in
which it is now being used by Seller or (b) seeking to delay or
enjoin the
consummation of the transactions contemplated hereby, except as
listed on
Schedule 4.4. There are no outstanding orders, decrees or
stipulations issued by
any federal, state, local or foreign, judicial or administrative
authority in
any proceeding to which Seller is or was a party relating to the
Software
Assets.
4.5
NO CONFLICT OR VIOLATION. Neither the execution, the delivery of
this
Agreement nor the consummation of the transactions contemplated
hereby or
thereby will result in (i) a violation of or a conflict with any
provision of
the Articles of Incorporation or Bylaws of Seller, (ii) a material
breach or
termination of, or a material default under, any term or provision
of any
contract to which Seller is a party or an event which, with notice,
lapse of
time, or both, would result in any such material breach, such
termination or
such material default, or (iii) a material violation by Seller of
any Legal
Requirement or an event which, with notice, lapse of time or both,
would result
in such a material violation.
4.6
INTELLECTUAL PROPERTY. Seller owns all rights to the
Intellectual
Property without any conflict or infringement of the intellectual
property
rights of others. In addition, Seller has taken reasonable steps
(including,
without limitation, entering into Confidentiality Agreements with
all officers
and employees of and consultants involved in Seller's business) to
maintain the
secrecy and confidentiality of and its proprietary rights in, all
Intellectual
Property.
(b)
Schedule 4.6(b) lists (i) all patents and patent applications
and
all registered copyrights, trade names, trademarks, service marks
and other
company, product or service identifiers included in the
Intellectual Property,
and specifies the jurisdictions in which each of the foregoing has
been
registered, including the respective registration numbers, and/or
any
application for any such registration has been filed; (ii) all
licenses,
sublicenses and other agreements as to which Seller is a party and
pursuant to
which Seller or any other Person is authorized to use any
Intellectual Property;
and (iii) all licenses under which Seller is or may be obligated to
make royalty
or other payments. Copies of all licenses, sublicenses and other
agreements
identified pursuant to clauses (ii) and (iii) above have been
delivered by
Seller to Buyer.
(c) Seller is not in violation in any material respect of any
license,
sublicense or agreement described in Schedule 4.6(b). As a result
of the
execution and delivery of this Agreement or the performance of
Seller's
obligations hereunder, neither Seller nor Buyer shall be in
violation in any
material respect of any license, sublicense or agreement described
in such
schedule.
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(d) Seller is the sole owner of all necessary right, title and
interest in and to (free and clear of any liens, encumbrances or
security
interests) all non-public domain Intellectual Property and has full
rights to
the use, sale, license or disposal thereof. Except as expressly set
forth in
Schedule 4.6(b), no other Person has any rights with respect to any
of the
Intellectual Property, nor is any consent or approval of any third
party needed
to fully utilize and exploit the Intellectual Property.
(e) No claims with respect to the Intellectual Property have
been
asserted to Seller, or, to Seller's Knowledge, are threatened by
any person, and
Seller knows of no claims (i) to the effect that Seller infringes
any copyright,
patent, trade secret, or other intellectual property right of any
third party or
violates any license or agreement with any third party, (ii)
contesting the
right of Seller to use, sell, license or dispose of any
Intellectual Property,
or (iii) challenging the ownership, validity or effectiveness of
any of the
Intellectual Property.
(f) To the Knowledge of Seller, all trademarks, service marks,
and
other company, product or service identifiers held by Seller are
valid and
subsisting worldwide.
(g) To the Knowledge of Seller, and except as expressly set forth
in
Schedule 4.6(b), there has not been and there is not now any
unauthorized use,
infringement or misappropriation of any of the Intellectual
Property by any
third party. Seller has not been sued or, to Seller's Knowledge,
charged as a
defendant in any claim, suit, action or proceeding that involves a
claim of
infringement of any patents, trademarks, service marks, copyrights
or other
intellectual property rights that comprise the Intellectual
Property. Seller
does not have any infringement liability with respect to any
patent, trademark,
service mark, copyright or other intellectual property right of any
third party
insofar as the Intellectual Property is concerned.
(h) No Intellectual Property is subject to any outstanding
order,
judgment, decree, stipulation or agreement restricting in any
material manner
the licensing thereof by Seller. Seller has not entered into any
agreement to
indemnify any other person against any charge of infringement of
any
Intellectual Property. Seller has not entered into any agreement
granting any
third party the right to bring infringement actions with respect
to, or
otherwise to enforce rights with respect to, any Intellectual
Property. Seller
has the exclusive right to file, prosecute and mai