COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement ("Agreement"), dated
January 25, 2005, made by and between ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
an individual principally residing in the State of Ohio,
entitled to receive mail at Suite 250, ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Seller"), and ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, an individual principally residing in the State
of New York, entitled to receive mail at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Purchaser"), with
reference to the following facts, covenants, terms,
provisions, and conditions:
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties agree
as follows:
1. SALE OF SHARES; DELIVERIES. In exchange for Purchaser's
cash consideration, evidenced by a promise to pay and
annexed hereto, and the covenants and conditions set
forth herein, Seller shall sell and transfer to Purchaser
185,000 (One Hundred Eighty-five Thousand) shares of the
common stock of Cartoon Acquisition Corporation, a United
States corporation organized under the laws of the State
of Delaware ("Cartoon" and "Cartoon Stock", respectively)
held by Seller. Upon transfer in accordance with the
terms of this Agreement, the Cartoon Stock will be fully
paid and non-assessable. At the Closing, the Seller
shall deliver to the Purchaser a certificate or
certificates representing the Cartoon Stock, duly
endorsed by Seller and issued to Purchaser, and
accompanied by appropriate stock powers, with Medallion
Signature Guarantee affixed by an authorized United
States banking corporation.
2. PAYMENT FOR THE SHARES; PURCHASER CLOSING CONDITIONS.
Contemporaneously on the date hereof, Purchaser has
issued a promissory note (the "Note") in principal the
amount of $100,000 (One Hundred Thousand and 00/100
Dollars) to the Seller as full and complete payment for
the Cartoon Stock. Purchaser hereby acknowledges receipt
of such payment by acceptance of the Note, and of the
pledge and security agreement that operates concomitantly
with the Note.
The obligation of the Purchaser to consummate the
transactions to be performed by him in connection with
the closing hereunder (the "Closing") is subject to
satisfaction of the following conditions:
(i) each of the conditions to closing under that certain
Common Stock Purchase Agreement, dated the date
hereof, by and between Purchaser and Seller shall have
been satisfied and the parties thereto shall have
executed and delivered this Agreement and the
transactions contemplated by this Agreement shall have
closed or be closing simultaneously with the Closing
of the transactions contemplated by this Agreement;
(ii) the representations and warranties of Seller set
forth in this Agreement shall be true and correct in
all material respects at and as of the Closing Date,
Seller shall have performed and complied with all of
its covenants hereunder in all material respects
through the
Common Stock Purchase Agreement, January 25, 2005,
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Closing, Seller shall have procured any
third party consents necessary to consummate the
transactions contemplated hereby and Seller shall have
delivered to Purchaser an officer's certificate,
executed by the President of Seller, certifying as to
the foregoing.
3. PURCHASER REPRESENTATIONS AND WARRANTIES. In order to
induce Seller to accept this Agreement, Purchaser hereby
represents and warrants to Seller, as follows:
(a) OPPORTUNITY TO INVESTIGATE. Purchaser has been
given a full opportunity to ask questions of, and to
receive answers from, the officers, agents and
representatives of Seller and of Cartoon concerning
the financial condition and the corporate history and
status of Cartoon and to obtain such other information
that Purchaser and Purchaser's professional advisors
(if any) desire in order to evaluate the purchase of
the Cartoon Stock. All such questions have been
answered to the full satisfaction of Purchaser.
(b) ACKNOWLEDGMENT OF RISKS. Purchaser acknowledges and
understands that Cartoon is not currently operating,
that Cartoon has no assets, that in purchasing the
Cartoon Stock Purchaser is making a highly speculative
and risky investment, and that Purchaser may lose his
entire investment in the Cartoon Stock. As the
holder-in-supermajority of Cartoon Stock following the
Closing, Purchaser understands that Cartoon is
obligated to file quarterly, annual, transitional, and
current reports with the Securities and Exchange
Commission (the "SEC"), and, Cartoon is delinquent in
its filings under its reporting obligations to the
SEC.
(c) SHARES REGISTERED. Purchaser understands that the
Cartoon Stock has been registered under the Securities
Exchange Act of 1934; however, the Purchaser
understands that the Cartoon Stock, which is being
acquired pursuant to this Agreement, may be sold,
offered for sale, transferred, pledged, hypothecated
or otherwise disposed of in accordance with the rules
and regulations of the SEC, and under applicable
Federal securities laws.
(d) MAJORITY SHAREHOLDER. Purchaser understands that
Seller is the current supermajority shareholder in
Cartoon, owning ninety-nine percent (99.9%) of the
Cartoon Stock
(e) INDEPENDENT INVESTIGATION. In making Purchaser's
decision to purchase the Cartoon Stock, Purchaser has
relied solely upon independent investigations made by
Purchaser. Purchaser has received no representation
or warranty from Seller, Cartoon, or any of the
affiliates, employees, or agents of Seller or Cartoon,
except as expressly set forth herein.
(f) LEGAL AUTHORITY. Purchaser has full power and
authority to execute and deliver this Agreement and to
perform his obligations hereunder. This Agreement
constitutes the valid and legally binding obligation
of the Purchaser, enforceable in accordance with its
terms and conditions. As of the Closing all consents,
permits or approvals by any third parties, if any,
necessary in order to consummate the transactions
contemplated by this Agreement shall have been
obtained.
Common Stock Purchase Agreement, January 25, 2005,
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(g) NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation of
the transactions contemplated hereby, will (1)
conflict with or violate the terms of any certificate
of trust, trust agreement or other instrument
governing the Purchaser; (2) violate any statute,
regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any
government, governmental agency, or court to which
Purchaser is subject or (3) conflict with, result in a
breach of, constitute a default under, result in the
acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which
Purchaser is a party or by which it is bound or to
which any of his assets are subject.
(h) ACCURACY AND SURVIVAL OF REPRESENTATIONS. Each
representation and warranty of Purchaser contained
herein and all information furnished by Purchaser to
Seller is true, correct, and complete in all respects.
All representations and warranties set forth above
will be true, correct and complete in all respects on
and as of the date of the transfer of the Cartoon
Stock by Seller to Purchaser, as if made on and as of
such date and shall survive such transfer.
4. SELLER REPRESENTATIONS AND WARRANTIES. In order to
induce Purchaser to accept this Agreement, Seller hereby
represents and warrants to Purchaser, as follows:
(a) LEGAL AUTHORITY. Seller has full power and
authority to execute and deliver this Agreement and to
perform his obligations hereunder. This Agreement
constitutes the valid and legally binding obligation
of the Seller, enforceable in accordance with its
terms and conditions. As of the Closing all consents,
permits or approvals of any third parties, if any,
necessary in order to consummate the transactions
contemplated by this Agreement shall have been
obtained.
(b) NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation of
the transactions contemplated hereby including the
transfer and sale of the Cartoon Stock, will (1)
conflict with or violate the terms of the certificate
or Certificate of Incorporation or Bylaws of Cartoon
or any other instrument governing Seller or Cartoon;
(2) violate any statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or
court to which each of Seller or Cartoon is subject or
(3) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create
in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or
other arrangement to which Seller or Cartoon is a
party or by which either of them are bound or to which
any of their assets are subject.
(c) STOCK OWNERSHIP INFORMATION. Cartoon is a Delaware
corporation that was formed on September 25, 2003.
There are 100,000,000 (One Hundred Million) shares of
common stock, par value $0.0001 per share, of which
200,000 shares are issued and outstanding and
20,000,000 (Twenty Million) shares of preferred stock,
par value $0.0001 per share, of which none are issued.
There are no outstanding options, warrants, or other
rights to acquire shares of common stock or shares of
preferred stock and there are no
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preemptive rights.
Except for the issuance pursuant to this Agreement,
there is no existing commitment, either actual or
contingent, to issue additional shares of the common
or preferred Stock of Cartoon to any person. Seller
holds the Cartoon Stock, free and clear of any
restrictions on transfer (other than any restrictions
under the Securities Act and state securities laws),
taxes, security interests, options, warrants, purchase
rights, contracts, commitments, equities, claims, and
demands. Seller is not party to any option, warrant,
purchase right, or other contract or commitment that
could require Seller to sell, transfer, or otherwise
dispose of the Cartoon Stock other than this
Agreement. Seller is not party to any voting trust,
proxy, or other agreement or understanding with
respect to the voting of the Cartoon Stock. Upon
delivery of the Cartoon Stock hereunder to Purchaser,
Purchaser will be the absolute owner of the Cartoon
Stock, free, clear, and discharged of and from all
liens and encumbrances, with the singular exception of
the evidence of indebtedness to Seller by Purchaser in
accordance with the terms and conditions set forth and
contained in this Agreement, in the Note, and in the
annexed pledge and security agreement that operates in
accordance with the Note.. As a result of the
consummation of the transactions contemplated hereby
and by the Common Stock Purchase Agreement, the
Purchaser will own ninety-two and one-half of one
percent (92.5%) of the issued and outstanding common
stock of Cartoon.
(d) REPRESENTATIONS AND WARRANTIES OF CARTOON IN COMMON
STOCK PURCHASE AGREEMENT. Each representation and
warranty of Cartoon by Seller contained in the Common
Stock Purchase Agreement is true and correct as of the
date hereof and will be true and correct as of the
Closing hereunder and thereunder and Seller hereby
makes such representations and warranties to Purchaser
to the same extent, and with the same effect, as
Cartoon made them to Purchaser in the Common Stock
Purchase Agreement.
(e) ACCURACY AND SURVIVAL OF REPRESENTATIONS. Each
representation and warranty of Seller contained herein
and all information furnished by Seller is true,
correct, and complete in all respects. All
representations and warranties set forth above will be
true, correct and complete in all respects on and as
of the date of the transfer of the Cartoon Stock by
Seller to Purchaser, as if made on and as of such date
and shall survive such transfer.
5. LEGENDS AND RESTRICTIONS.
(a) COMPLIANCE WITH APPLICABLE SECURITIES LAWS. The
transfer of the Cartoon Stock being purchased pursuant
to this Agreement is governed by various United States
Federal and state securities laws. Therefore, the
resale or transfer of the Cartoon Stock by Purchaser
shall only be made in compliance with all applicable
securities laws of the United States. Furthermore, it
shall be the responsibility of the Purchaser to timely
notify the SEC of the overall transaction represented
by this Agreement.
6. INDEMNITY AGAINST LIABILITIES.
(a) SELLERS INDEMNIFICATION OF PURCHASER. Seller agrees
to indemnify and hold Purchaser, his counsel, and his
agents harmless ("the Indemnitees") against and in
respect
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of any and all losses, liabilities, damages,
and expenses whatsoever, including legal fees,
incurred in investigating, preparing, or defending
against any litigation (whether or not involving a
third party), commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement
of any claim or litigation, as and when incurred, (i)
arising out of, based upon, or in connection with any
breach of any representation, warranty, covenant, or
agreement of Seller contained in this Agreement or of
Cartoon contained in the Common Stock Purchase
Agreement; or (ii) arising out of, based upon, or in
connection with any and all claims relating to the
business, properties, assets, and/or operations of the
Cartoon which arose prior to the Closing.
(b) CARTOON'S STOCKHOLDER'S INDEMNIFICATION OF
PURCHASER. By his execution of this Agreement, ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, as controlling stockholder of Cartoon,
the Seller hereunder, hereby agrees to indemnify and
hold Purchaser, his counsel and his agents harmless
("the Indemnitees") against and in respect of any and
all losses, liabilities, damages, and expenses
whatsoever, including legal fees, incurred in
investigating, preparing, or defending against any
litigation (whether or not involving a third party),
commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or
litigation, as and when incurred, (i) arising out of,
based upon, or in connection with any breach of any
representation, warranty, covenant, or agreement of
Seller contained in this Agreement or of Cartoon
contained in the Common Stock Purchase Agreement; or
(ii) arising out of, based upon, or in connection with
any and all claims relating to the business,
properties, assets, and/or operations of the Cartoon
which arose prior to the Closing.
(c) DURATION OF INDEMNIFICATION. The indemnification
provided in this Section 6 shall only apply to a
claim, which is commenced or threatened within one
year from the Closing Date.
7. GENERAL PROVISIONS.
(a) NOTICES. Except as expressly provided herein, all
notices, requests or other communications required
hereunder shall be in writing and shall be given by
personal delivery, international overnight courier
service, or certified or registered mail, postage
prepaid, return receipt requested, addressed to the
respective party at the applicable address set forth
herein, or to any party at such other addresses as
shall be specified in writing by such party to the
other parties in accordance with the terms and
conditions of this Section. All notices, requests, or
communications shall be deemed effective upon personal
delivery, or seven (7) days following deposit in the
mail, or two (2) business days following deposit with
any international overnight courier service.
In order to be effective, any such Notice shall be
given, as follows:
If to Seller: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Suite 250
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Common Stock Purchase Agreement, January 25, 2005,
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If to Purchaser: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
A change of address shall be given by written notice
in the manner detailed in this paragraph. Rejection
or other refusal to accept or the failure to deliver
due to any change of address of which no notice was
given shall not affect the time at which such notice
shall be deemed to have been given and shall
constitute receipt of such communication.
(b) JURISDICTION, VENUE AND GOVERNING LAW. This
Agreement is being made, and performance is to be had,
in the City of Cleveland, State of Ohio. This
Agreement shall be governed by, construed, and
enforced in accordance with the laws of the United
States of America and the State of Ohio (regardless of
choice of law principles of that jurisdiction or of
any other jurisdiction). This Agreement shall be
interpreted as if it had been jointly prepared by the
parties and in the event of any ambiguity, the
Agreement shall not be interpreted as if it had been
prepared by any one party. Any action or proceeding
arising in connection herewith shall be litigated in
the state and United States' Federal courts located in
Cleveland, Ohio, and each party hereby waives any
right that such party may have to assert the Doctrine
of Forum Non Conveniens or to object to venue. The
parties each hereby stipulate that the courts located
in the City of Cleveland, State of Ohio, shall have
exclusive personal jurisdiction and venue over each
party for the purpose of litigating any such dispute,
controversy or proceeding arising out of or related to
this Agreement.
(c) AMENDMENTS; ENTIRE AGREEMENT. This is the entire
agreement between the parties. There are no promises,
conditions, covenants, or terms, which are not
contained herein. This Agreement shall be binding
upon and inure to the benefit of the parties and their
respective successors, heirs and permitted assigns.
This Agreement may not be altered, modified, changed,
or canceled, except in a writing signed by all
parties.
(d) VALIDITY. If any one or more of the provisions (or
any part thereof) of this Agreement shall be held to
be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the
remaining provisions (or any part thereof) shall not
in any way be affected or impaired thereby.
(e) TIME OF ESSENCE; COOPERATION. Time is of the
essence in the performance of the obligations of the
parties in connection with this Agreement. All
parties shall cooperate fully in carrying out the
terms of this Agreement and shall prepare and execute
all documents reasonably necessary to carry out the
terms of this Agreement.
(f) COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute
one agreement. Any party may deliver to the other
party a facsimile of any part of this
Common Stock Purchase Agreement, January 25, 2005,
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Agreement and
may deliver such facsimile by telecopier, as if this
Agreement, or any amendments or modifications hereto,
were executed in the presence of the other party.
IN WITNESS WHEREOF, each of the parties hereby executes
this Agreement of the date first set forth above.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("Purchaser")
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
("Seller")
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Common Stock Purchase Agreement, January 25, 2005,
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