STOCK PURCHASE AGREEMENT
This Agreement as dated below is entered into by and between QUIZBIZ INTERNET
GROUP, INC., a public Nevada corporation ("QBIZ") of 6801 Powerline Road, Fort
Lauderdale, Florida 33309 and SMITHAGENCY.COM, INC. a Florida corporation, of
6801 Powerline Road, Fort Lauderdale, Florida 33309 and MASON STRATEGIC
COMMUNICATIONS, INC., a Florida corporation ("MASON") of 800 East Broward
Boulevard, Suite 505, Fort Lauderdale, Florida 33301, and DEBRA A. MASON
("DEBRA") of 800 East Broward Boulevard, Suite 505, Fort Lauderdale, Florida
33301 and
WITNESSETH:
WHEREAS QBIZ, is a Nevada Corporation in good standing with the Secretary of
State and is a public company trading under the symbol "QBIZ" and is a reporting
corporation with the United States Securities and Exchange Commission (SEC); and
WHEREAS MASON is a Florida corporation in good standing with the Secretary of
State and is a private company in the business of providing public relations and
strategic consulting services to businesses and organizations and throughout
this agreement is referred to as(" MASON") or ("corporation");
WHEREAS the Board of Directors of each of the constituent corporations deems it
advisable that MASON be acquired by QBIZ and that MASON be operated as a
division of SMITHAGENCY.COM, a wholly owned subsidiary of QBIZ; and
WHEREAS DEBRA, also known as ("seller"), is the owner of all shares of the
common capital stock issued and outstanding of MASON; and
WHEREAS SMITHAGENCY.COM, INC. ("SMITH") is a wholly owned subsidiary corporation
of QBIZ, a Nevada corporation; and
NOW, THEREFORE, in consideration of the foregoing and the mutual promises and
covenants herein contained the parties agrees as follows:
1. SALE OF SHARES: Subject to provisions of this Agreement, DEBRA agrees to sell
all of her stock in MASON to QBIZ. DEBRA agrees to deliver the stock to QBIZ at
closing, with all certificates duly endorsed to QBIZ and ready for transfer.
DEBRA further agrees to execute such additional documents as QBIZ deems
necessary to perfect QBIZ's title to the stock.
2. PURCHASE PRICE: The purchase price for the stock shall be $250,000.00,
(subject to adjustments at closing) and shall be paid as follows:
A. The purchase price shall be paid in QBIZ restrictive stock valued at
$1.00 for each share of common stock for a total of 173,000 shares (subject to
base floor price guarantees as herein set forth). Of the 173,000 restrictive
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shares, 50,000 shares will be held in escrow to guarantee the representations
and warranties set forth in this agreement relative to accounts receivable and
performance guarantees. Should there be a failure to achieve the account
receivables and/or a performance guarantees, then to the extent of the deficit
as determined by the formula herein set forth, the escrowed stock valued at
$1.00 per share, in the amount of the deficit will be returned to QBIZ.
B. The balance of the purchase price, being $77,000.00 represents the
March 31st assumption of liabilities and other debts and credits and this shall
be readjusted as of May 31, 2000 upward or downward depending on liability being
assumed and other debts as well as credits for accounts receivable in accordance
with the accounting standards of MASON. In the event the liabilities are less
than $77,000.00, QBIZ shall issue additional shares of stock having a $1.00 per
share value, provided however, should the liabilities exceed $77,000.00 and to
the extent they are in excess of $77,000.00, the 50,000 shares of stock escrowed
shall be reduced by one share of each dollar in excess of $77,000.
C. QBIZ guarantees to DEBRA a base floor price of the QBIZ stock of
$1.00 per share as of one year from the date of this agreement. In the event the
stock price falls below the floor price, QBIZ will issue additional restrictive
common shares to make up the difference between the floor price and the actual
price of the shares. Only in the event the stock price of the shares, one year
from date of purchase, is below the floor price, will shares get adjusted. QBIZ
shall use the average closing price, of five trading days, preceding the
one-year anniversary of the closing of the purchase, as a basis to determine the
price of common stock.
3. CLOSING: The closing on this transaction shall be held on or about May 31,
2000. At such time within ordinary business hours and at such place in Broward
County, Florida, as the parties may agree.
4. REPRESENTATIONS AND WARRANTY OF DEBRA. DEBRA as the seller of the Corporate
Stock herein identified, makes the following representations and warranties to
QBIZ:
A. Recitals. All of the recitals in the preamble to this agreement are true
and are incorporated in this agreement as representations of DEBRA.
B. Title. DEBRA has good, absolute, and marketable title to the stock, free
from all liens, claims, and encumbrances. DEBRA has the unfettered right, power,
and authority to sell all of the stock under this agreement. Delivery of the
stock to QBIZ as contemplated by this agreement will vest unencumbered title to
all of the stock of MASON in QBIZ.
C. Financial Statements. Seller has delivered, and QBIZ has received,
certain documents and financial statements of the MASON corporation which are
reflective of items having been delivered which are identified as follows:
1. Assets, including companies name, divisions, phone numbers,
URL's, trademarks, copyrights, and good will.
2. Accounts receivable.
3. Client list, former and present.
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4. Client's artwork, inventory and other property held by MASON.
5. All of MASON'S inventory of supplies, office furniture,
equipment, phone system, accounting programs and software.
6. Deposits held by MASON and all cash in MASON'S account.
7. List of all liabilities being assumed.
DEBRA warrants and represents that all financial statements and other
schedules as hereinabove set forth are true and correct and have been
prepared according to generally acceptable accounting principles and
there are no liabilities of the corporation other than as disclosed in
the schedule of liabilities attached hereto. Further, DEBRA warrants
that the corporation has not made any distribution to shareholders and
employees, created any obligations or liabilities or transferred any
assets outside the ordinary course of business or cancelled any debts
or waived any rights and that all financial matters of MASON are fully
and accurately reflected on the financial statements attached hereto.
D. Taxes. The corporation has filed all required federal, state and local
tax returns and has fully paid all federal, state, and local taxes due. The
corporation has fully complied with all provisions of all federal, state, and
local tax laws. The corporation has not had any tax deficiencies proposed or
assessed against it and has not executed a waiver of the statute of limitations
on the assessment or collection of any tax. No taxing authority has audited the
books, records, or returns of the corporation. If a tax deficiency of the
corporation relating to events occurring before the closing is determined after
the closing, the seller shall be responsible for the full payment of any such
deficiency.
E. Litigation. There is no litigation, arbitration, or other legal,
judicial, administrative, or government action (pending or threatened) against
the corporation or its assets. Neither DEBRA nor the corporation is aware of any
facts that might give rise to such a proceedings.
F. Compliance with Laws and Corporate Instruments. The business and
operation of the corporation has complied with all applicable federal, state,
and local laws, ordinances, rules, and regulations, and with all provisions of
corporate articles of incorporation, bylaws, and resolutions.
G. Corporate Records. The books of MASON corporation being the minute book
and the stock ledger are being delivered in blank forms as all transactions of
the corporation have not been fully documented in the corporate records.
However, the financial records, as delivered, together with the other documents
correctly and properly reflect all material business affairs of the corporation.
H. Disclosure. No representation or warranty furnished by the seller to the
buyer in this agreement or otherwise contains or will contain any untrue
statement of a material fact or omits or will omit any material fact required to
make such statements not misleading.
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I. Notwithstanding the foregoing, DEBRA warrants and represents that any
shareholder loans to MASON have been satisfied and are cancelled, and
specifically, any loans from herself or John Pace, have been rendered duly
satisfied and are not a liability of MASON.
J. MASON is a duly organized valid existing and a good standing Florida
corporation.
K. Other than those disclosed herein or attached to this agreement there
are no service contracts, employment agreements, license agreements, independent
contractor agreements, executory contracts, supplier contracts, leases,
equipment leases, maintenance agreements or other agreements relative to the
operation of the Business or the Assets that would materially affect the
financial statements of MASON. For definition purposes, such contract or
liability would have to have a cost in excess of $5000.00 to be material.
L. All contracts, service agreements, leases and other similar executory
agreements assigned herein are fully assignable by QBIZ provided however, some
of the agreements require the consent of third parties.
M. Seller warrants that the scheduled Receivables are fully collectible
within 12 months after closing, that the equipment will be in working order at
the time of closing, and that the schedule of clients accurately reflects
seller's clients and their relationship with the seller. In the event, after one
year from closing of this transaction there are outstanding accounts receivable,
it is agreed that for every dollar uncollected, fifty cents of every dollar will
be deducted from the shares at the price established on the shares at time of
closing, escrowed pursuant to paragraph 3 of this agreement, and which shares
shall then become treasury stock of QBIZ.
N. That the Uniform Commercial Code financing statements in favor of
BankAtlantic filed in the office of the Secretary of State of Florida, document
#98-242419-4 and the document in favor of Barnett Bank of Broward County,
document #96-138835, represent the bank loans and/or creditlines herein after
disclosed in this agreement.
5. CONDITION PRECEDENT TO BUYERS OBLIGATION. The obligation of QBIZ to perform
under this agreement, shall be subject to the satisfaction of the following
conditions before or contemporaneously with closing:
A. Truth of Warranties and Representation. The warrantiesand
representations of DEBRA shall be true as of the date of this agreement and
shall continue to be true until closing.
B. Actions of Corporation. The actions of the corporation shall have
complied with the provision of this agreement and furnish all documentation
required by this agreement.
C. Resignation of Directors and Officers. DEBRA shall deliver resignations
of all officers and directors of the corporation to QBIZ.
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D. Prior to or contemporaneously with the closing QBIZ shall have been able
to agree, in writing, on the terms of employment agreements with DEBRA A.
MASON and JOHN PACE, and that QBIZ shall have been able to agree, in
writing, on the terms and conditions of Noncompete/Nondisclosure agreement
with DEBRA A. MASON and JOHN PACE.
6. REPRESENTATIONS AND WARRANTIES OF QBIZ. QBIZ makes the following
representation and warranties to DEBRA.
A. Purpose of Purchase. QBIZ is purchasing corporate stock under this
agreement neither for investment nor for resale. QBIZ intends that MASON be
operated as a division of SMITHAGENCY.COM, INC., a wholly owned subsidiary
of QBIZ.
B. QBIZ has the full power and authority to enter into and to consummate
this agreement.
7. WARRANTY OF PERFORMANCE. DEBRA warrants and guarantees that MASON, as a
division of SMITHAGENCY.COM, INC., will generate gross profits (as same is
defined and illustrated in March 31st Profit and Loss statement as provided to
QBIZ) of not less than $400,000.00, for the first 12 months of its operation,
subsequent to the closing of this transaction. In the event, after one year from
closing of this transaction, the guaranteed of gross profits are not achieved,
50% of every dollar below $400,000.00, will be deducted from the shares issued
at closing (as adjusted) at a agreed price of $1.00 per share. Any such shares
returned to QBIZ shall become treasury stock of corporation. This warranty,
along with the other representations and warranties set forth in this agreement
shall survive the closing.
8. COVENANTS OF QBIZ. QBIZ upon satisfactory closing of this transaction agrees
to continue a Gainesville office lease of MASON and to make reasonable and
appropriate arrangements for housing of MASON employees that are temporarily
staying in Gainesville, Florida. QBIZ also assumes the liability for the
existing lease in the city of Fort Lauderdale, at the address set forth in this
agreement.
9. CLOSING DOCUMENTS.
A. Sellers Documents:
(1) All documents as stated in this agreement.
(2) Corporate Resolutions authorizing the transaction.
(3) Leases and service contracts.
(4) Satisfaction and cancellation of UCC filing statement by John
Pace, as secured party.
(5) Closing Statement.
(6) All financial documentation required by Buyer.
(7) Copies of employment agreements, and non-competition agreement
and such other written consents as required by this agreement.
(8) Such other documents, instruments or certificates as shall be
reasonably required by Buyers counsel.
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B. Buyers Documents:
(1) The closing shares of stock to be issued.
(2) Corporate Resolutions approving purchase.
(3) Such other documents, instruments or certificates as shall be
reasonably required by Sellers counsel.
10. GOOD FAITH EFFORTS. DEBRA and QBIZ covenant to use their best efforts both
before and after closing in good faith to comply with the provisions of this
agreement. Except as provided herein, the parties shall bear their own
attorneys' fees.
11. ASSIGNABILITY. Neither party may assign his rights hereunder without the
prior written consent of the other party.
12. NOTICES. All necessary notices, demands and requests required or permitted
to be given under the provisions of this agreement shall be in writing, and
shall be sent certified mail, return receipt requested, to the address for each
party shown on the face of this agreement. Notice given by or to the attorney
for either party shall be as effective as if given by or to that party.
A. If to Buyer. QBIZ and SMITHAGENCY.COM, INC., 6801 Powerline Road, Fort
Lauderdale, Florida, 33309, with copies to John E. Aurelius, P.A., 4367
North Federal Highway, Suite 101, Fort Lauderdale, FL 33308.
B. If to Seller. DEBRA MASON, 800 East Broward Boulevard, Suite 505, Fort
Lauderdale, FL 33301, with copies to Tripp Scott, 110 SE 6th Street, 15th
Floor, Fort Lauderdale, FL 33301
13. ENTIRE AGREEMENT. This agreement constitutes the entire agreement of the
parties and may not be amended or modified except in a writing signed by both
parties. All prior understandings and agreements between the parties are merged
in this agreement, which alone fully and completely expresses their
understanding.
14. NO BROKERS OR FINDERS. Seller and Buyer hereby warrant and represent to each
other that this agreement was not induced or procured through any person, firm
or corporation acting as a broker or finder. Each of the parties herewith agree
to indemnify and hold each other harmless from any liability, loss, damage,
costs or expenses, including reasonable attorneys' fees and expenses, suffered
or incurred as a result of a breach of the foregoing warranty.
15. COUNTERPARTS. This agreement may be signed in any number of counterparts
with the same effect as if the signature on each such counterpart were on the
same instrument, provided any changes or interlineations appear in all
counterparts and are initiated on all counterparts.
16. HEADINGS. The headings of the paragraphs of this agreement are for
convenience only and in no way modify, interpret or construe the meaning of
specific provisions of the agreement.
17. SCHEDULES. The schedules to this agreement are a material part hereof.
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18. SEVERABILITY. In case any one or more of the provisions contained in this
agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
19. CHOICE OF LAW AND VENUE. This agreement is to be construed and governed by
the laws of the State of Florida. Any action to enforce this agreement shall be
brought in Broward County, Florida, unless in buyer's determination, action in
another jurisdiction is necessary to insure enforcement.
20. CONFIDENTIALITY. Buyer and DEBRA agree to keep confidential (i.e. not
revealing to any third parties) the finances, business knowhow, trade secrets,
customer lists, and methods of practice of the Buyer in accordance with the
terms and conditions of the nondisclosure noncompete agreement and further not
to disclose any of the terms and conditions of this agreement without the mutual
consent of the other party.
21. CREDITOR'S CLAIMS. Within five (5) days after notice of creditor's claim
against MASON of an undisclosed material amount (to be material, the amount of
the debt must be over $5,000.00 in the aggregate), QBIZ shall give DEBRA notice
in writing, of the specific creditor's name, address and nature of claim.
Thereafter, MASON shall have the sole responsibility to resolve, settle, or
defend said claim. Should MASON fail to properly respond to the claim, or should
the claim ultimately result in judgment or decree against MASON, then in that
event, the amount of the claim including any costs or expenses incurred by QBIZ,
shall be deducted from any amounts owed to DEBRA, pursuant to the terms of this
agreement.
22. INDEMNITIES.
A. DEBRA, in consideration of $1,000.00 of the purchase price hereby
indemnifies and holds QBIZ harmless from and against any liability, loss,
damage, cost or expense, including reasonable attorney's fees and expenses
suffered by QBIZ as a result of:
(1) Any breach of this agreement by DEBRA and/or MASON.
(2) Any inaccuracy in or breach of any of the representations,
warranties or covenants made by DEBRA and/or MASON herein; and
B. QBIZ, in consideration of the terms and conditions of this contract
hereby indemnifies and holds DEBRA and/or MASON harmless from and against
any liability, loss, damage, cost or expense, including reasonable
attorney's fees and expenses, suffered by MASON as a result of:
(1) Any breach of this agreement by QBIZ; and
(2) Any inaccuracy in or breach of any representations, warranties,
or covenants made by QBIZ herein.
(3) Any liability resulting from QBIZ's failure to perform under a
service contract, lease, franchise agreement, or other obligation
assumed herein.
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(4) QBIZ specifically acknowledges that it is assuming an outstanding
loan at BankAtlantic and creditlines at NationsBank as guaranteed
by DEBRA. The approximate balances of the loan being $28,000.00
and the creditlines being $40,000.00, with the creditlines
maximum amount that could be borrowed being $70,000.00. QBIZ
specifically indemnifies and holds DEBRA harmless from any
liability in regards to either or both the lines of credit or the
bank loan. This specific indemnity is based upon the personal
guarantee of DEBRA for the identified loan and creditlines.
Notwithstanding the foregoing, QBIZ agrees that it will not draw
down or charge against any surplus creditline amount at any time
without the written consent of DEBRA.
(5) Any decision or change made to MASON whether by tax
classification or otherwise, subsequent to closing which
negatively impacts DEBRA.
C. Each party shall promptly notify the other party of any claim or demand
for payment of any debt, liability or other claims by it for misrepresentation,
breach of warranty, breach of covenant, or right of indemnification under this
agreement. Either party shall make available to the other party or its
representatives all records and other materials required by them for their use
in contesting any such liability.
23. DOCUMENTATION PROVIDED BY QBIZ. DEBRA and JOHN PACE (who is a signatory to
this agreement for the purpose of this paragraph) individually acknowledge that
they have reviewed the public filings of QBIZ and understand the information
therein contained.
24. LITIGATION/ATTORNEY'S FEES. In connection with any litigation arising out of
the enforcement of this agreement, or for its interpretation, the prevailing
party shall be entitled to recover its cost, including reasonable attorney's
fees, from the other party hereto if such party was an adverse party to such
litigation.
25. CONSTRUCTION. This agreement shall not be construed against either party
regardless of who is responsible for its drafting.
26. FACSIMILE. A legal facsimile copy of this entire contract and any signatures
thereon shall be considered as originals.
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IN WITNESS WHEREOF, the parties have executed or have caused this
agreement to be executed by a duly authorized officer as of the date first
written below.
WITNESSES: SELLER: DEBRA A. MASON
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___________________________________ ________________________________________
Date:____________
___________________________________
___________________________________ ________________________________________
JOHN PACE Date:____________
BUYER: QUIZBIZ INTERNET GROUP, INC.
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__________________________________ By:_____________________________________
_____________________________________
__________________________________ Date:____________
MASON STRATEGIC COMMUNICATIONS, INC.
__________________________________ By: ____________________________________
____________________________________
Date:_____________
_________________________________
BUYER: SMITHAGENCY.COM, INC.
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__________________________________ By: ____________________________________
____________________________________
Date:_____________
_________________________________
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