EXHIBIT 10.2
ASSET ACQUISITION AGREEMENT
AMONG
GOT PIZZA, INC., AN ILLINOIS CORPORATION,
AND
BLUE MOON GROUP, INC., A DELAWARE CORPORATION
DATED: SEPTEMBER 1, 2004
TABLE OF CONTENTS
PAGE
BACKGROUND........................................................................................................1
ARTICLE I - SALE AND PURCHASE OF ASSETS...........................................................................1
Section 1.01 Purchased Assets; Excluded Assets......................................................1
Section 1.02 Assumed Obligations....................................................................2
Section 1.03 Excluded Assets........................................................................3
Section 1.04 Consideration..........................................................................3
Section 1.05 Allocation of Purchase Price...........................................................3
Section 1.06 Tax Consequences.......................................................................3
ARTICLE II - CLOSING; DOCUMENTS OF CONVEYANCE.....................................................................4
Section 2.01 Closing................................................................................4
Section 2.02 Actions to be Taken at the Closing.....................................................4
Section 2.03 Prorations at Closing..................................................................4
Section 2.04 Transfer of Possession.................................................................6
Section 2.05 Utility Services.......................................................................6
ARTICLE III - INTENTIONALLY LEFT BLANK
ARTICLE IV- REPRESENTATIONS AND WARRANTIES OF BUYER...............................................................6
Section 4.01 Due Organization.......................................................................6
Section 4.02 Capitalization, Etc....................................................................7
Section 4.03 Financial Statements...................................................................7
Section 4.04 Tax Matters............................................................................7
Section 4.05 Insurance..............................................................................7
Section 4.06 Legal Proceedings......................................................................7
Section 4.07 Assets.................................................................................8
Section 4.08 Blank..................................................................................8
Section 4.09 Compliance with Laws...................................................................8
Section 4.10 Guarantees.............................................................................8
Section 4.11 Authority; Binding Nature of Agreement.................................................8
Section 4.12 Non-Contravention......................................................................8
Section 4.13 Environmental Matters..................................................................9
Section 4.14 Significant Customers; Material Contracts and Commitments.............................10
Section 4.15 Employee Benefit Plans............................................................... 10
Section 4.16 Intellectual Property.................................................................11
Section 4.17 Software Licenses.....................................................................12
Section 4.18 Full Disclosure.......................................................................12
Section 4.19 Valid Issuance........................................................................12
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF SELLER.............................................................12
Section 5.01 Due Organization......................................................................12
Section 5.02 Financial Statements..................................................................12
Section 5.03 Tax Matters...........................................................................13
Section 5.04 Insurance.............................................................................13
Section 5.05 Legal Proceedings.....................................................................13
Section 5.06 Assets................................................................................13
Section 5.07 Real Property.........................................................................13
Section 5.08 Compliance with Laws..................................................................13
Section 5.09 Guarantees............................................................................13
Section 5.10 Authority; Binding Nature of Agreement................................................14
Section 5.11 Non-Contravention.....................................................................14
Section 5.12 Environmental Matters.................................................................15
Section 5.13 Significant Customers; Material Contracts and Commitments.............................15
Section 5.14 Intellectual Property.................................................................16
Section 5.15 Software Licenses.....................................................................16
ARTICLE VI - CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
AND BUYER........................................................................................................16
Section 6.01 Accuracy of Representations...........................................................16
Section 6.02 Performance of Covenants..............................................................17
Section 6.03 Consents..............................................................................17
Section 6.04 Agreements and Documents..............................................................17
Section 6.05 Additional Loans......................................................................17
ARTICLE VII - CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER......................................................17
Section 7.01 Accuracy of Representations...........................................................17
Section 7.02 Performance of Covenants..............................................................17
Section 7.03 Consents..............................................................................17
Section 7.04 Agreements and Documents..............................................................18
ARTICLE VIII - SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION.................................................................18
Section 8.01 Survival of Representations and Warranties............................................18
Section 8.02 Seller Indemnity......................................................................18
ARTICLE IX - CONDUCT OF THE PARTIES AFTER CLOSING................................................................19
Section 9.01 Cooperation...........................................................................19
Section 9.02 Access to Books and Records...........................................................19
Section 9.03 Use of Name...........................................................................19
Section 9.04 Repayment of Obligations..............................................................19
ARTICLE X - MISCELLANEOUS........................................................................................20
Section 10.01 144 Legend............................................................................20
Section 10.02 Further Assurances....................................................................20
Section 10.03 Fees and Expenses.....................................................................20
Section 10.04 Attorneys' Fees.......................................................................20
Section 10.05 Notices...............................................................................21
Section 10.06 Severability..........................................................................21
Section 10.07 Headings..............................................................................21
Section 10.08 Counterparts..........................................................................21
Section 10.09 Governing Law; Venue..................................................................21
Section 10.10 Interpretation........................................................................22
Section 10.11 Remedies Cumulative; Specific Performance.............................................22
Section 10.12 Waiver................................................................................23
Section 10.13 Amendments............................................................................23
Section 10.14 Entire Agreement......................................................................23
Section 10.15 Board Appointment.....................................................................23
Section 10.16 Share Combination.....................................................................23
SCHEDULES AND EXHIBITS
----------------------
EXHIBITS DESCRIPTION
-------- -----------
Exhibit A............................Certain Definitions
Exhibit B............................Lease Agreement
Exhibit C............................Allocation of Purchase Price
Exhibit D............................▇▇▇▇ of Sale and Assignment
Exhibit F............................Assumption and Release Agreement
SCHEDULES DESCRIPTION
--------- -----------
Schedule 1.01(a)...................Patents, Trademarks, and Applications
Schedule 1.01(c)...................Assets Purchased
Schedule 1.01(j)...................List of Leased Assets
Schedule 1.02......................Assumed Obligations
Schedule 4.02......................Share Restrictions, etc.
Schedule 4.03......................Financial Statement Exceptions
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ASSET ACQUISITION AGREEMENT
---------------------------
This Asset Acquisition Agreement (the "Agreement") is made as of the
1st day of September, 2004, by and among, BLUE MOON GROUP, Inc., a Delaware
corporation (hereafter, "Buyer"), and GOT PIZZA, INC., an Illinois corporation
(hereafter "Seller")
BACKGROUND
WHEREAS, the Seller is engaged in business as a restranteur; and
WHEREAS, the Seller desires to sell substantially all of its assets
and, under the terms and conditions set forth in this Agreement, the Buyer has
agreed to purchase such assets and assume certain of the Seller's obligations;
and
WHEREAS, the Buyer, is a Delaware corporation engaged in holding
various entertainment properties and subsidiaries, that desires to purchase the
assets of the Seller;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants, representations, warranties, and agreements contained
herein, and intending to be legally bound, the Seller, the Buyer, and the Buyer
agree as follows:
ARTICLE I
SALE AND PURCHASE OF ASSETS
Section 1.01 Purchased Assets. Subject to the terms and conditions of
this Agreement, on the Closing Date (as defined in Section 2.01), Seller will
sell to Buyer, and Buyer will purchase from Seller, the assets of Seller listed
below (collectively, the "Purchased Assets"). The Purchased Assets will be
purchased free and clear of all security interests, liens, restrictions, claims,
encumbrances or charges of any kind ("Encumbrances"), except as provided herein.
The Purchased Assets will include the following items:
(a) Intellectual Property. All trademarks and trademark
applications, and all patents and patent applications, including specifically
those set forth in Schedule 1.01(a), all goodwill associated therewith, and all
computer software developed by Seller, including all documentation thereof and
all other Intellectual Property (as defined in Section 4.16) of Seller, and all
rights to use the name "Got Pizza, Inc.;"
(b) Promotional Rights. All marketing or promotional designs,
brochures, advertisements, concepts, literature, books, media rights, rights
against any other Person in respect of any of the foregoing and all other
promotional properties, in each case primarily used or useful or developed or
acquired by the Seller for use in connection with the ownership and operation of
the Purchased Assets;
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(c) Assets Exhibit 1.01(c);
(d) Customer Lists and other Intangible Assets. All other
intangible assets, including without limitation all customer lists, goodwill,
"know-how," proprietary information and trade secrets relating to the Seller's
business operations; and all manufacturers' warranties (including pending
warranty claims) and manuals relating to the Purchased Assets;
(e) Seller's Deposits and Prepayments. All of the Seller's
lease deposits on leases assumed by Buyer;
(f) Permits. All permits relating to the operation of Seller's
business, to the extent such permits are transferable and whether or not all
action necessary to effect such transfer has been taken prior to the Closing;
(g) Leases. All real property leases of Seller, to the extent such are
assignable.
(h) Telephone and Facsimile Numbers. The right to use the
telephone and facsimile machine numbers assigned to Seller's places of business
in Illinois;
(i) Books and Records. Except as expressly set forth in
Section 1.03, all papers, documents, computerized databases and records of
Seller relating to the Purchased Assets and its business operations, including
without limitation all software design documents, source code, employer records
and workers' compensation records relating to employees hired by the Buyer,
sales records, marketing records, accounting and financial records, and
maintenance and production records; and
(j) Claims Relating to Purchased Assets. All claims, causes of
action, rights of recovery and rights of setoff of every type and kind relating
to the Purchased Assets and all claims, causes of action, rights of recovery and
rights of setoff of every type and kind relating to the Assumed Obligations (as
defined in Section 1.02), in each case whether accruing before or after the
Closing; provided, however, that the definition of Purchased Assets shall not
include any items defined as Excluded Assets in Section 1.03.
Section 1.02 Assumed Obligations. In consideration of Buyer's purchase
of the Purchased Assets, subject to the terms and conditions set forth herein,
on the Closing Date the Seller shall assign to the Buyer and the Buyer shall
assume and discharge in a timely fashion all of the liabilities and obligations
of the Seller set forth on Schedule 1.02 (hereafter collectively referred to as
the "Assumed Obligations").
Except as expressly set forth in this Section 1.02, the Buyer shall
have no responsibility for any of the Seller's obligations (including contracts,
leases, product warranties, purchase orders and liabilities of any type, kind or
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nature), whether fixed, accrued, contingent or otherwise, and whether arising in
contract, in tort, by violation of law, by operation of law, or otherwise, and
all such obligations shall remain with the Seller and are herein referred to as
the "Excluded Obligations."
Section 1.03 Excluded Assets. The Purchased Assets shall not include
any of the Seller's rights, privileges, title or interest in the following
assets (hereafter referred to as the "Excluded Assets"):
(a) Books and Records. All of the Seller's minute books, stock
books, tax returns and books and records directly relating to the Excluded
Obligations and all of Seller's books and records except to the extent that such
records relate to the intellectual property purchased hereunder;
(b) Rights Hereunder. All rights and claims of the Seller
under this Agreement; and
(c) Contracts not Assigned. All rights of the Seller in, to
and under those leases, purchase orders, contracts and other agreements not
being assigned to the Buyer pursuant to Section 1.01.
(d) Tangible Personal Property. All of the tangible personal
property leased to Seller pursuant to the terms of Section 1.0.1.
(e) Additional Cash. Seller's cash in excess of that specified
in Section 1.01(c).
Section 1.04 Consideration. In addition to the assumption of the
Assumed Obligations, at the Closing, Buyer shall deliver to Seller 347,222
shares of Buyer's restricted common stock.
Section 1.05 Allocation of Purchase Price. At or prior to the Closing,
the Buyer and the Seller shall execute a written instrument in the form of
Exhibit C setting forth by asset category and amount the mutually agreed
allocation of the consideration being paid by the Buyer for the Purchased
Assets. Each party agrees to report the purchase and sale contemplated herein on
Internal Revenue Service Form 8594 and for all other federal and state tax
purposes in accordance with such allocation.
Section 1.06 Tax Consequences. For federal income tax purposes, the
transactions contemplated hereby are intended to constitute a "reorganization"
within the meaning of Section 368 of the Code. The parties to this Agreement
hereby adopt this Agreement as a "plan of reorganization" within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations,
and each party is intended to be a "party to the reorganization" within the
meaning of Section 368 of the Code.
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ARTICLE II
CLOSING; DOCUMENTS OF CONVEYANCE
Section 2.01 Closing. Subject to the satisfaction of the conditions set
forth in Articles VI and VII, the purchase and sale contemplated hereby shall be
consummated at a closing (referred to herein as the "Closing") to be held at the
offices of Buyer in Tampa, Florida, on September 1, 2004 (the "Closing Date").
The purchase and sale shall be deemed effective for all purposes as of the close
of business on the Closing Date (the "Effective Time").
Section 2.02 Actions to be Taken at the Closing. At the Closing, the
Parties will take the following actions and deliver the following documents:
(a) Seller will execute and deliver to Buyer a ▇▇▇▇ of Sale
and Assignment Agreement in substantially the form attached hereto as Exhibit D,
together with such other instruments of conveyance and evidence of the transfer
of title to the Purchased Assets from Seller to Buyer as Buyer may reasonably
request.
(b) Buyer will deliver to Seller certificates representing
347,222 shares of Buyer's common stock in exchange for the Purchased Assets.
(c) Buyer will deliver to Seller in the Form in Exhibit
2.02(c) an agreement that in the event of insolvency of the Buyer through
December 31, 2006 the Seller can return all common shares of the Buyer received
by the Seller and repurchase all of the assets the Seller originally conveyed
per Exhibit 1.01(c).
(d) Buyer will deliver to Seller an Assumption and Release
Agreement in substantially the form of Exhibit F.
(e) Buyer and Seller will each deliver to the others (to the
extent applicable), all consents and approvals (including, without limitation,
resolutions and incumbency certificates of the directors and officers of each,
and necessary minutes or resolutions of the stockholders of each) required for
each party to enter into this Agreement and consummate the transactions
described herein.
All instruments of conveyance shall be free of all Encumbrances except for any
liens securing the Assumed Obligations and shall be in form and content
reasonably acceptable to counsel for the Buyer and the Seller.
Section 2.03 Prorations at Closing. All compensation (including
vacation and sick pay accruals, as applicable), payroll and withholding taxes
relating to the Seller's employees, including wages accrued but unpaid for the
current payroll period (determined as of the Closing Date) shall be paid by the
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Buyer when due and shall be treated as an Assumed Obligation; provided, however,
that Seller will pay the entire payroll for the period ending August 31, 2004.
Seller will also pay all bills for ordinary accounts payable received prior to
the Effective Time, and Buyer will pay all bills for ordinary accounts payable
received after the Effective Time, not to exceed $10,000 in the aggregate, plus
the Assumed Obligations. All other operating expenses and liabilities relating
to the ownership and operation of the Purchased Assets attributable to the
period ending at the Effective Time that are not Assumed Obligations shall be
paid by the Seller as they fall due. The Assumed Obligations and all operating
and other expenses relating to the ownership and operation of the Purchased
Assets attributable to periods commencing on and after the Effective Time shall
be the sole responsibility of the Buyer.
Section 2.04 Transfer of Possession. Simultaneously with the Effective
Time, the Seller shall give the Buyer full possession and enjoyment of the
Purchased Assets.
Section 2.05 Utility Services. On the Closing Date or as soon
thereafter as practicable, the Seller and the Buyer will cooperate with each
other to arrange to disconnect or obtain final readings with respect to all
electricity, water, telephone, and other utilities, and to have such services
reconnected in or otherwise transferred to the Buyer's name immediately
thereafter.
ARTICLE III
Intentionally left blank
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer represents and warrants to the Seller and covenants with the
Seller, as follows:
Section 4.01 Due Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has all
necessary power and authority to conduct its business in the manner in which its
business is currently being conducted. Each subsidiary of Buyer is a corporation
duly organized, validly existing and in good standing under the laws of its
place of incorporation and has all necessary power and authority to conduct its
business in the manner in which its business is currently being conducted.
Section 4.02 Capitalization, Etc. The capitalization of Buyer consists
of 50,000,000 shares of voting common stock, of which at Closing, less than
25,000,000 will be issued and outstanding and 5,000,000 shares of preferred
stock, of which none are issued and outstanding. The relative rights and
preferences of any of the preferred stock have not been established. All of the
outstanding shares of Buyer's common stock have been duly authorized and validly
issued, and are fully paid and non-assessable, and none of such shares is
subject to any repurchase option or restriction on transfer, except as provided
in Schedule 4.02. All of such shares have been issued in compliance with
applicable securities laws. Except as provided in Schedule 3.04, there is no:
(i) outstanding subscription, option, call, warrant or right (whether or not
currently exercisable) to acquire or otherwise relating to, any shares of the
capital stock or other securities of Buyer; (ii) outstanding security,
6
instrument or obligation that is or may become convertible into or exchangeable
for any shares of the capital stock or other securities of Buyer; (iii) contract
under which Buyer is or may become obligated to sell or otherwise issue any
shares of its capital stock or any other securities; or (iv) condition or
circumstance that may give rise to or provide a basis for the assertion of a
claim by any Person to the effect that such Person is entitled to acquire or
receive any shares of capital stock or other securities of Buyer.
Section 4.03 Financial Statements. Buyer has delivered to Seller the
following financial statements and notes (collectively, the "Buyer Financial
Statements"): the audited consolidated balance sheet, income statement, and
statement of cash flows of Buyer and its subsidiaries as of December 31, 2003,
and the unaudited consolidated balance sheet, income statement, and statement of
cash flows of Buyer and its subsidiaries as of June 30, 2004. The Buyer
Financial Statements are accurate and complete in all material respects and
present fairly the financial position of Buyer as of the dates thereof and the
results of operations and cash flows of Buyer for the periods covered thereby.
Except as disclosed on Schedule 4.03, there has been no material adverse change
in Buyer's financial condition, business or properties since the date of the
most recent Buyer Financial Statements. Except as disclosed on Schedule 4.03
attached hereto, neither Buyer nor any of its subsidiaries are liable for or
subject to any liabilities, except for those liabilities reflected on the Buyer
Financial Statements and not heretofore paid or discharged and those liabilities
arising in the ordinary course of business consistent with past practice under
any contract, commitment or agreement specifically disclosed on any Schedule to
this Agreement.
Section 4.04 Tax Matters. Except as set forth on Schedule 4.04, all Tax
Returns required to be filed by or on behalf of Buyer or any of its subsidiaries
with any Governmental Body with respect to any transaction occurring or any
taxable period ending on or before the Closing Date (the "Buyer Returns") (i)
have been or will be filed when due, and (ii) have been, or will be when filed,
accurately and completely prepared in compliance with all applicable Legal
Requirements.
Section 4.05 Insurance. Buyer and each of its subsidiaries has
maintained, and will maintain insurance coverage against liability, loss or
casualty with respect to its operations. A description of all such policies is
hereto attached as Schedule 4.05.
Section 4.06 Legal Proceedings. Except as set forth on Schedule 4.06,
there is no pending Legal Proceeding, and, to the best of the knowledge of
Buyer, no Person has threatened to commence any Legal Proceeding: (i) that
involves Buyer, any subsidiary of Buyer, or any of the assets owned or used by
Buyer or its subsidiaries and which, if decided against Buyer or the
subsidiaries, would have a Material Adverse Effect on the financial condition,
business or properties of Buyer or the subsidiary; or (ii) that challenges, or
that may have the effect of preventing, delaying, making illegal or otherwise
interfering with any of the transactions contemplated by this Agreement.
Section 4.07 Assets. Buyer and its subsidiaries have good, valid and
marketable title to all assets shown on the most recent Buyer Financial
Statements, free and clear of any liens, except as disclosed on Schedule 4.07.
Neither Buyer nor any of its subsidiaries has sold, transferred, assigned or
conveyed any of its right, title and interest, or granted or entered into any
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option to purchase or acquire any of its right, title or interest, in and to any
of its assets or its business since the date of the most recent Buyer Financial
Statements. Neither Buyer nor any of its subsidiaries has purchased or acquired
a material amount of assets or a line of business or entered into any agreement
or option to purchase or acquire a material amount of assets or a line of
business since the date of the most recent Buyer Financial Statements except as
known between the parties on the Closing Date. No third party has any option or
right to acquire Buyer's business or any of its assets or those of any of its
subsidiaries.
Section 4.08 Intentionally left blank
Section 4.09 Compliance with Laws. To the best knowledge of Buyer, it
and each of its subsidiaries has at all times conducted its business in
compliance with all applicable laws, regulations, ordinances and other
requirements of all Governmental Bodies (including applicable federal, state and
local laws, rules and regulations respecting occupational safety and health
standards). Buyer has not received any notice, advice, claim or complaint from
any employee or Governmental Body that Buyer or any subsidiary has not
conducted, or is not presently conducting, its business and operations in
accordance with all applicable laws and other requirements of Governmental
Bodies.
Section 4.10 Guarantees. Neither Buyer nor any of its subsidiaries has
guaranteed or pledged any assets with respect to any obligation or indebtedness
of any Person or Entity.
Section 4.11 Authority; Binding Nature of Agreement. Buyer has the
absolute and unrestricted right, power and authority to enter into and to
perform its obligations under this Agreement; the execution, delivery and
performance by Buyer of this Agreement have been duly authorized by all
necessary action on the part of Buyer and its board of directors; and the
approval of Buyer's shareholders is not required. This Agreement constitutes the
legal, valid and binding obligation of Buyer, enforceable against it in
accordance with its terms, subject to (i) laws of general application relating
to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies.
At the Closing, Buyer will deliver to Seller such evidence of the authorization
of its execution, delivery, and performance of this Agreement as Seller may
reasonably request.
Section 4.12 Non-Contravention. Neither (i) the execution delivery or
performance of this Agreement or any of the other agreements referred to in this
Agreement, nor (ii) the consummation of any of the transactions contemplated by
this Agreement, will directly or indirectly (with or without notice or lapse of
time):
(a) contravene, conflict with or result in a violation of (i)
the provisions of the respective Articles of Incorporation or Bylaws of Buyer,
or (ii) any resolution adopted by the shareholders or Board of Directors of
Buyer;
(b) contravene, conflict with or result in a violation of, or
give any Governmental Body or any Person the right to challenge any of the
transactions contemplated by this Agreement or to exercise any remedy or obtain
8
any relief under, any Legal Requirement or any order, writ, injunction,
judgment, or decree to which Buyer or any of its subsidiaries, or any of the
assets owned or used by it or them, is subject; or
(c) contravene, conflict with or result in a violation of, or
breach of, or result in a default under, any provision of any Contract to which
Buyer or any of its subsidiaries is a party, or give any Person the right to (i)
declare a default or exercise any remedy under any such Contract, (ii)
accelerate the maturity or performance of any such Contract, (iii) cancel,
terminate or modify any such Contract.
Buyer is not and will not be required to make any filing with or give any notice
to, or to obtain any Consent from, any Person in connection with (x) the
execution, delivery or performance of this Agreement or any of the other
agreements referred to in this Agreement, or (y) the consummation of any of the
transactions contemplated by this Agreement.
Section 4.13 Environmental Matters.
(a) Buyer and each of its subsidiaries has complied with and
is in compliance with all federal, state, local and foreign statutes (civil and
criminal), common laws, ordinances, regulations, rules, notices, permits,
judgments, orders and decrees applicable to it and its properties, assets,
operations and businesses relating to environmental protection (collectively
"Environmental Laws"), including without limitation Environmental Laws relating
to air, water, land and the generation, storage, use, handling, transportation,
treatment or disposal of hazardous wastes and hazardous substances (as such
terms are currently defined in any applicable Environmental Law), except to the
extent that noncompliance with any Environmental Law, either singly or in the
aggregate, does not and would not have a Material Adverse Effect;
(b) Buyer and each of its subsidiaries has obtained and
adhered to all necessary permits and other approvals necessary to treat,
transport, store, dispose of and otherwise handle hazardous wastes and hazardous
substances and has reported, to the extent required by all Environmental Laws,
all past and present sites owned and operated by Buyer and each of its
subsidiaries where hazardous wastes or hazardous substances have been treated,
stored, disposed of or otherwise handled, except to the extent that a failure to
do so, either singly or in the aggregate, does not and would not have a Material
Adverse Effect;
(c) There have been no releases or threats of releases (as
defined in Environmental Laws) by Buyer or any of its subsidiaries from, in or
on any property owned or operated by Buyer or any of its subsidiaries except as
permitted by Environmental Laws or where such releases do not and would not have
a Material Adverse Effect; and
(d) Buyer knows of no on-site or off-site location to which
Buyer or any of its subsidiaries has transported or disposed of hazardous wastes
and hazardous substances or arranged for the transportation of hazardous wastes
9
and hazardous substances, which site is the subject of any federal, state, local
or foreign enforcement action or any other investigation which could lead to any
claim against Buyer or any of its subsidiaries for any clean-up cost, remedial
work, damage to natural resources or personal injury, including without
limitation any claim under United States environmental statutes, as amended.
Section 4.14 Significant Customers; Material Contracts and Commitments.
Schedule 4.14 hereto contains an accurate list of (i) all significant customers
of Buyer or its subsidiaries (i.e. those customers representing 5% or more of
Buyer's consolidated revenues for the 12 months ending on the date of the most
recent Buyer Financial Statements) and (ii) all material contracts, commitments,
and leases to which Buyer or any of its subsidiaries is a party or by which it
or its properties are bound (including without limitation contracts with
significant customers, joint venture or partnership agreements, contracts with
any labor organizations, loan agreements, indemnity or guaranty agreements,
bonds, mortgages, options to purchase land, liens, pledges or other security
agreements, and material employment contracts) (collectively, the "Buyer
Material Contracts"). Except to the extent set forth on Schedule 4.14 hereto,
(i) none of Buyer's significant customers have canceled or substantially reduced
or, to the knowledge of Buyer are currently attempting or threatening to cancel
or substantially reduce their purchases of goods or services, (ii) Buyer and its
subsidiaries have complied with its material commitments and obligations and are
not in default under any of the Buyer Material Contracts and no notice of
default has been received with respect to any thereof and (iii) there are no
Buyer Material Contracts that were not negotiated at arm's length with third
parties not affiliated with Buyer or any officer, director or stockholder of
Buyer or its subsidiaries. No employees of Buyer or any of its subsidiaries are
represented by any labor union or covered by any collective bargaining agreement
and, to the best of Buyer's knowledge, no campaign to establish such
representation is in progress. Buyer considers its relationship with its
employees to be good.
Section 4.15 Employee Benefit Plans. All employee benefit plans,
programs and policies (whether formal or informal, and whether maintained for
the benefit of a single individual or more than one individual) maintained or
contributed to by Buyer or any of its subsidiaries for the benefit of any
current or former employee of Buyer or its subsidiaries or in which such
employees are entitled to participate are listed in Schedule 4.15 (the "Buyer
Benefit Plans"), and copies of all such written plans and policies, written
descriptions of all such oral plans and policies, and all other documentation
relating to such plans and policies have been delivered or made available to
Seller. Except as disclosed on Schedule 4.15: (i) each Buyer Benefit Plan and
the administration thereof complies, and has at all times complied, in all
material respects with the requirements of all applicable law; (ii) no suit,
action or other litigation (excluding claims for benefits incurred in the
ordinary course of plan activities) has been brought against or with respect to
any Buyer Benefit Plan; and (iii) all required contributions to Buyer Benefit
Plans have been made, and all benefits accrued under any unfunded Buyer Benefit
Plan will have been paid, accrued or otherwise adequately reserved in accordance
with GAAP, and Buyer and each of its subsidiaries have performed all material
obligations required to be performed under the Buyer Benefit Plans.
Section 4.16 Intellectual Property.
(a) Buyer owns, free and clear of any Encumbrance, or has the
valid right to use all Intellectual Property (as defined below) used by it and
its subsidiaries in their respective businesses as currently conducted. Each
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employee of Buyer or any of its subsidiaries who created any of Buyer's or its
subsidiaries' Intellectual Property and each independent contractor engaged by
Buyer or any of its subsidiaries who created any of Buyer's or its subsidiaries'
Intellectual Property has assigned to Buyer or its subsidiaries all of such
employee's or contractor's right, title and interest in such Intellectual
Property. No other Person (other than licensors of software that is generally
commercially available, licensors of Intellectual Property under the agreements
disclosed pursuant to paragraph (c) below and non-exclusive licensees of Buyer's
Intellectual Property in the ordinary course of Buyer's business) has any rights
to any of the Intellectual Property owned or used by Buyer or its subsidiaries,
and, to Buyer's knowledge, no other person or entity is infringing, violating or
misappropriating any of the Intellectual Property that Buyer or any of its
subsidiaries owns or has an exclusive license to use. For purposes of this
Agreement, "Intellectual Property" means all (i) patents and patent
applications, (ii) copyrights, and registrations thereof, (iii) mask works and
registrations and applications for registration thereof, (iv) computer software,
data and documentation, (v) trade secrets and confidential business information,
whether patentable or unpatentable and whether or not reduced to practice,
know-how, manufacturing and production processes and techniques, research and
development information, copyrightable works, financial, marketing and business
data, pricing and cost information, business and marketing plans and customer
and supplier lists and information, (vi) trademarks, service marks, trade names,
domain names and applications and registrations therefor and (vii) other
proprietary rights relating to any of the foregoing.
(b) None of the activities or business conducted by Buyer and
none of the Intellectual Property owned or used by Buyer or any of its
subsidiaries (other than "off-the-shelf" generally commercially available
software) infringes, violates or constitutes a misappropriation of (or in the
past infringed, violated or constituted a misappropriation of) any Intellectual
Property of any other person or entity. Buyer has not received any written
complaint, claim or notice alleging any such infringement, violation or
misappropriation.
(c) Except as set forth on Schedule 4.16, there are no
agreements with any Person pursuant to which Buyer obtains rights to
Intellectual Property material to the business of Buyer or any of its
subsidiaries (other than software that is generally commercially available) that
is owned by a party other than Buyer. Other than license fees for software that
is generally commercially available, Buyer is not obligated to pay any royalties
or other compensation to any third party in respect of its ownership, use or
license of any of its Intellectual Property.
(d) Buyer has taken reasonable precautions (i) to protect its
rights in its and its subsidiaries' Intellectual Property and (ii) to maintain
the confidentiality of its and its subsidiaries' trade secrets, know-how and
other confidential Intellectual Property, and to Buyer's knowledge, there have
been no acts or omissions by the officers, directors, employees and agents of
Buyer or its subsidiaries, the result of which would be to materially compromise
the rights of Buyer or its subsidiaries to apply for or enforce appropriate
legal protection of Buyer's or its subsidiaries' Intellectual Property.
Section 4.17 Software Licenses. Buyer has all necessary licenses to use
all material third-party software used in Buyer's business, and Buyer's use of
third-party software does not infringe the rights of any Person.
11
Section 4.18 Full Disclosure. This Agreement, and all documents
delivered by Buyer to Seller in connection with the transactions contemplated
herein, do not (i) contain any representation, warranty or information that is
false or misleading with respect to any material fact, or (ii) omit to state any
material fact necessary in order to make the representations, warranties and
information contained and to be contained herein and therein not false or
misleading.
Section 4.19 Valid Issuance. The Buyer common stock to be issued and
delivered pursuant to the transactions contemplated herein will, when issued in
accordance with the provisions of this Agreement, be validly issued, fully paid
and non-assessable. Buyer intends to issue the Buyer common stock and Buyer
intends to deliver the Buyer common stock in reliance on exemptions from
registration and qualification under various federal and state securities laws.
In the event such exemptions are determined not to be available, Buyer will make
a good-faith effort to cure any noncompliance by undertaking to register or
qualify the Buyer common stock issued hereunder by filing a registration
statement that includes the Buyer common stock on or before December 31, 2004.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants, to and for the benefit of Buyer and
Buyer as follows as of the date hereof and as of the Closing Date:
Section 5.01 Due Organization. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Illinois
and has all necessary power and authority to conduct its business in the manner
in which its business is currently being conducted.
Section 5.02 Financial Statements. Seller has delivered to Buyer the
following financial statements and notes (collectively, the "Seller Financial
Statements"): the unaudited balance sheets, income statements, and statements of
cash flows and shareholders' equity of Seller as of December 31, 2003 and August
31, 2004. The Seller Financial Statements are accurate and complete in all
material respects and present fairly the financial position of Seller as of the
dates thereof and the results of operations and cash flows of Seller for the
period covered thereby. Except as disclosed on Schedule 5.02, there has been no
material adverse change in Seller's financial condition, business or properties
since the date of the most recent Seller Financial Statements. Except as
reflected on the Seller Financial Statements or otherwise disclosed on the
Schedules attached hereto, Seller is not liable for or subject to any
liabilities not heretofore paid or discharged and those liabilities arising in
the ordinary course of its business consistent with past practice.
Section 5.03 Tax Matters. Except as set forth on Schedule 5.03, all Tax
Returns required to be filed by or on behalf of Seller with any Governmental
Body with respect to any transaction occurring or any taxable period ending on
or before the Closing Date (the "Seller Returns") (i) have been timely filed or
are not yet due, and (ii) have been accurately and completely prepared in
compliance with all applicable Legal Requirements.
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Section 5.04 Insurance. Seller has maintained, and will maintain
through the Closing Date, insurance coverage against liability, loss or casualty
with respect to the operations of Seller. A description of all such policies is
hereto attached as Schedule 5.04.
Section 5.05 Legal Proceedings. Except as set forth on Schedule 5.05,
there is no pending Legal Proceeding, and, to the best of the knowledge of
Seller, no Person has threatened to commence any Legal Proceeding: (i) that
involves Seller or any of the assets owned or used by Seller and which, if
decided against Seller, would have a Material Adverse Effect on the financial
condition, business or properties of Seller; or (ii) that challenges, or that
may have the effect of preventing, delaying, making illegal or otherwise
interfering with any of the transactions contemplated by this Agreement.
Section 5.06 Assets. Seller has, and will have at the Closing, good,
valid and marketable title to all of the Purchased Assets, free and clear of any
liens, except as disclosed on Schedule 5.06. Seller has not sold, transferred,
assigned or conveyed any of its right, title and interest, or granted or entered
into any option to purchase or acquire any of its right, title or interest, in
and to any of the Purchased Assets or its business. No third party has any
option or right to acquire Seller's business or any of the Purchased Assets.
Section 5.07 Real Property. Seller owns no real property. Schedule 5.07
includes a complete list of the real property leased by Seller ("Seller Leased
Real Property"). Seller has a valid leasehold interest in the Seller Leased Real
Property and will deliver to Buyer at Closing a certificate confirming that such
leases are in full force and effect.
Section 5.08 Compliance with Laws. To the best knowledge of Seller, it
has at all time conducted its business in compliance with all applicable laws,
regulations, ordinances and other requirements of all Governmental Bodies
(including applicable federal, state and local laws, rules and regulations
respecting occupational safety and health standards). Seller has not received
any notice, advice, claim or complaint from any employee or Governmental Body
that Seller has not conducted, or is not presently conducting, its business and
operations in accordance with all applicable laws and other requirements of
Governmental Bodies.
Section 5.09 Authority; Binding Nature of Agreement. Subject only to
the approval of its shareholders, Seller has the absolute and unrestricted
right, power and authority to enter into and to perform its obligations under
this Agreement; and the execution, delivery and performance by Seller of this
Agreement has been duly authorized by all necessary action on the part of Seller
and its board of directors. Subject to the approval of Seller's shareholders,
this Agreement constitutes the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, subject to (i) laws of
general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies. At the Closing, Seller will deliver to Buyer such
evidence of the authorization of Seller's execution, delivery, and performance
of this Agreement as Buyer may reasonably request.
13
Section 5.10 Non-Contravention. Neither (i) the execution, delivery or
performance of this Agreement or any of the other agreements referred to in this
Agreement, nor (ii) the consummation of any of the transactions contemplated by
this Agreement, will directly or indirectly (with or without notice or lapse of
time):
(a) contravene, conflict with or result in a violation of (i)
any of the provisions of Seller's articles of incorporation or bylaws, or (ii)
any resolution adopted by Seller's shareholders or Board of Directors;
(b) contravene, conflict with or result in a violation of, or
give any Governmental Body or other Person the right to challenge any of the
transactions contemplated by this Agreement or to exercise any remedy or obtain
any relief under, any Legal Requirement or any order, writ, injunction, judgment
or decree to which Seller, or any of the Purchased Assets is subject; or
(c) contravene, conflict with or result in a violation or
breach of, or result in a default under, any provision of any Seller Contract,
or give any Person the right to (i) declare a default or exercise any remedy
under any Seller Contract, (ii) accelerate the maturity or performance of any
Seller Contract, or (iii) cancel, terminate or modify any Seller Contract.
Except for the required shareholder approval, Seller is not and will not be
required to make any filing with or given any notice to, or to obtain any
Consent from, any Person in connection with (x) the execution, delivery or
performance of this Agreement or any of the other agreements referred to in this
Agreement, or (y) the consummation of any of the transactions contemplated by
this Agreement, except to the extent the consent of third parties may be
required in connection with the assignment of the Purchased Assets and the
Assumed Obligations and Leased Obligations.
Section 5.11 Environmental Matters.
(a) Seller has complied with and is in compliance with all
Environmental Laws, including without limitation Environmental Laws relating to
air, water, land and the generation, storage, use, handling, transportation,
treatment or disposal of hazardous wastes and hazardous substances (as such
terms are currently defined in any applicable Environmental Law), except to the
extent that noncompliance with any Environmental Law, either singly or in the
aggregate, does not and would not have a Material Adverse Effect;
(b) Seller has obtained and adhered to all necessary permits
and other approvals necessary to treat, transport, store, dispose of and
otherwise handle hazardous wastes and hazardous substances and has reported, to
the extent required by all Environmental Laws, all past and present sites owned
and operated by Seller where hazardous wastes or hazardous substances have been
treated, stored, disposed of or otherwise handled, except to the extent that a
failure to do so, either singly or in the aggregate, does not and would not have
a Material Adverse Effect;
(c) There have been no releases or threats of releases (as
defined in Environmental Laws) by Seller at, from, in or on any property owned
14
or operated by Seller except as permitted by Environmental Laws or where such
releases do not and would not have a Material Adverse Effect; and
(d) Seller knows of no on-site or off-site location to which
Seller has transported or disposed of hazardous wastes and hazardous substances
or arranged for the transportation of hazardous wastes and hazardous substances,
which site is the subject of any federal, state, local or foreign enforcement
action or any other investigation which could lead to any claim against Seller
for any clean-up cost, remedial work, damage to natural resources or personal
injury, including without limitation any claim under United States environmental
statutes, as amended.
Section 5.12 Significant Customers; Material Contracts and Commitments.
Schedule 5.13 hereto contains an accurate list of all material contracts,
commitments, leases, instruments, agreements, licenses or permits to which
Seller is a party or by which it or its properties are bound (including without
limitation contracts with significant customers, joint venture or partnership
agreements, contracts with any labor organizations, loan agreements, indemnity
or guaranty agreements, bonds, mortgages, options to purchase land, liens,
pledges or other security agreements, employment contracts, and employee benefit
plans) (collectively, the "Seller Material Contracts"). Except to the extent set
forth on Schedule 5.13 hereto, (i) Seller has complied with its material
commitments and obligations and is not in default under any of the Seller
Material Contracts and no notice of default has been received with respect to
any thereof and (ii) there are no Seller Material Contracts that were not
negotiated at arm's length with third parties not affiliated with Seller or any
officer, director or stockholder of Seller. Seller is not bound by or subject to
(and none of its respective assets or properties is bound by or subject to) any
arrangement with any labor union. No employees of Seller are represented by any
labor union or covered by any collective bargaining agreement and, to the best
of Seller's knowledge, no campaign to establish such representation is in
progress. Seller considers its relationship with its employees to be good.
Section 5.13 Intellectual Property.
(a) Seller owns, free and clear of any Encumbrance, or has the
valid right to use all Intellectual Property (as defined in Section 4.16) used
by it in its business as currently conducted. Each employee of Seller who
created any of Seller's Intellectual Property and each independent contractor
engaged by Seller who created any of Seller 's Intellectual Property has
assigned to Seller all of such employee's or contractor's right, title and
interest in such Intellectual Property. No other Person (other than licensors of
software that is generally commercially available, licensors of Intellectual
Property under the agreements disclosed pursuant to paragraph (c) below and
non-exclusive licensees of Seller's Intellectual Property in the ordinary course
of Seller's business) has any rights to any of the Intellectual Property owned
or used by Seller, and, to Seller's knowledge, no other Person or Entity is
infringing, violating or misappropriating any of the Intellectual Property that
Seller owns or has an exclusive license to use.
(b) None of the activities or business conducted by Seller and
none of the Intellectual Property owned or used by Seller (other than
"off-the-shelf" generally commercially available software) infringes, violates
or constitutes a misappropriation of (or in the past infringed, violated or
15
constituted a misappropriation of) any Intellectual Property of any other person
or entity. Seller has not received any written complaint, claim or notice
alleging any such infringement, violation or misappropriation.
(c) Except as set forth on Schedule 5.14, Seller has no
agreements with any Person pursuant to which Seller obtains rights to
Intellectual Property material to the business of Seller (other than software
that is generally commercially available) that is owned by a Person other than
Seller. Other than license fees for software that is generally commercially
available, Seller is not obligated to pay any royalties or other compensation to
any third party in respect of its ownership, use or license of any of its
Intellectual Property.
(d) Seller has taken reasonable precautions (i) to protect its rights in its
Intellectual Property and (ii) to maintain the confidentiality of its trade
secrets, know-how and other confidential Intellectual Property, and to Seller's
knowledge, there have been no acts or omissions by the officers, directors,
employees and agents of Seller, the result of which would be to materially
compromise the rights of Seller to apply for or enforce appropriate legal
protection of Seller's Intellectual Property.
Section 5.14 Software Licenses. Seller has all necessary licenses to
use all material third-party software used in Seller's business, and Seller's
use of third-party software does not infringe the rights of any Person.
Section 5.15 Full Disclosure. This Agreement, and all documents
delivered by Seller to Buyer and Buyer in connection with the transactions
contemplated herein, do not (i) contain any representation, warranty or
information that is false or misleading with respect to any material fact, or
(ii) omit to state any material fact necessary in order to make the
representations, warranties and information contained and to be contained herein
and therein not false or misleading. Buyer and Buyer have completed their due
diligence investigation of Seller.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND BUYER.
------------------------------------------------------
The obligations of Buyer and Buyer to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, at or prior to
the Closing, of each of the following conditions:
Section 6.01 Accuracy of Representations. Each of the representations
and warranties made by Seller in this Agreement and in each of the other
agreements and instruments delivered to Buyer and Buyer in connection with the
transactions contemplated by this Agreement shall have been accurate in all
respects as of the date of this Agreement, and shall be accurate in all respects
as of the Closing Date as if made on the Closing Date.
Section 6.02 Performance of Covenants. Each covenant or obligation that
Seller is required to comply with or to perform at or prior to the Closing shall
have been complied with and performed in all respects.
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Section 6.03 Consents. All Consents required to be obtained in
connection with the transactions contemplated by this Agreement shall have been
obtained and shall be in full force and effect.
Section 6.04 Agreements and Documents. Buyer shall have received a
certificate executed by Seller containing the representation and warranty of
Seller that each of the representations and warranties set forth in Article V is
accurate in all material respects as of the Closing Date as if made on the
Closing Date and that the conditions set forth in Article VI have been duly
satisfied.
Section 6.05 Additional Loans. Intentionally left blank.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller to consummate the transactions contemplated
by this Agreement are subject to the satisfaction, at or prior to the Closing,
of the following conditions:
Section 7.01 Accuracy of Representations. Each of the representations
and warranties made by Buyer and Buyer in this Agreement and in each of the
other agreements and instruments delivered to Seller in connection with the
transactions contemplated by this Agreement shall have been accurate in all
respects as of the date of this Agreement, and shall be accurate in all respects
as of the Closing Date as if made on the Closing Date.
Section 7.02 Performance of Covenants. All of the covenants and
obligations that Buyer or Buyer is required to comply with or to perform at or
prior to the Closing shall have been complied with and performed in all
respects.
Section 7.03 Consents. All Consents required to be obtained in
connection with the transactions contemplated by this Agreement shall have been
obtained and shall be in full force and effect.
Section 7.04 Agreements and Documents. Seller shall have received a
certificate executed by each of Buyer and Buyer, and containing the
representation and warranty of each that each of the representations and
warranties set forth in Articles III and IV are accurate in all material
respects as of the Closing Date as if made on the Closing Date and that the
conditions set forth in Article VII have been duly satisfied.
17
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
Section 8.01 Survival of Representations and Warranties. All of the
representations and warranties of Buyer and Seller contained in this Agreement
shall survive the Closing and shall continue for a period of one year following
the Closing Date.
Section 8.02 Seller Indemnity. Subject to the provisions of Section
8.04 hereof, Seller shall defend, indemnify and hold harmless Buyer (and their
respective directors, officers, employees, agents, affiliates, successors and
assigns) from and against any and all demands, claims, payments, defenses,
obligations, recoveries, deficiencies, fines, penalties, interest, assessments,
actions, liens, causes of action, suits, proceedings, judgments, losses, damages
(including without limitation punitive, exemplary or consequential damages, lost
income and profits, interruptions of business and diminution in the value of
stock), liabilities, costs, and expenses of any kind (including without
limitation (i) interest, penalties and reasonable attorneys' fees and expenses,
(ii) attorneys' fees and expenses necessary to enforce their rights to
indemnification hereunder, and (iii) consultants' fees and other costs of
defending or investigating any claim hereunder), whether accrued, absolute,
contingent, known, unknown, or otherwise as of the Closing Date or thereafter
asserted against, imposed upon or incurred by Buyer or its directors, officers,
employees, agents, affiliates, successors or assigns by reason of, resulting
from, arising out of, based upon, awarded or asserted against or otherwise in
respect of:
(a) any period or periods of Seller ending prior to the
Closing and which involve any claims against Seller, or their respective
properties or assets, relating to actions or inactions of Seller or its
officers, directors, shareholder, employees or agents prior to Closing, or the
operation of the business of Seller prior to the Closing unless such liability
relates to an Assumed Obligation;
(b) any breach of any representation and warranty contained in
this Agreement or any misrepresentation in or omission on the part of Seller
contained in any certificate furnished or to be furnished to Buyer by Seller
pursuant to this Agreement; and
(c) the remedy and right of recovery for any indemnity claim
covered hereby shall be limited to the recovery by Buyer of the consideration
paid hereunder. The indemnity herein contained shall expire one year following
the Closing; provided, however, that if an indemnity claim is asserted prior to
such expiration date, but is contested or otherwise not resolved at such
expiration date, this indemnity shall expire with respect to such claim only
upon resolution of the claim.
ARTICLE IX
CONDUCT OF THE PARTIES AFTER CLOSING
Section 9.01 Cooperation. The Buyer and the Seller will cooperate upon
and after the Closing Date in effecting the orderly transfer of the Purchased
18
Assets to the Buyer. Without limiting the generality of the foregoing, the
Seller, at the request of the Buyer without additional consideration, will
execute and deliver from time to time such further instruments of assignment,
conveyance and transfer, will sign any documents necessary or useful to ensure
that all of the right, title and interest in and to the Purchased Assets vests
in the Buyer, will cooperate in the conduct of litigation and the processing and
collection of insurance claims, and will take such other actions as may
reasonably be required to convey and deliver to the Buyer more effective title
to the Purchased Assets, or to confirm and perfect the Buyer's title thereto, as
contemplated by this Agreement.
Section 9.02 Access to Books and Records. As long as the Buyer retains
any books and records of Seller's business acquired by the Buyer hereunder, it
will provide the Seller with reasonable access during customary business hours
to such books and records and as long as the Seller retains the books and
records of the Seller's business retained by the Seller hereunder, it will
provide the Buyer with reasonable access during customary business hours to such
books and records. Prior to the disposal of any such books and records by any
party hereto, such party shall provide 60 days' prior written notice to the
other party and shall relinquish possession of such books and records to such
other party upon receipt of a written request therefor within the 60-day time
period.
Section 9.03 Use of Name. The Seller shall discontinue the use its name
or any derivation thereof effective upon the Closing Date. Promptly after the
Closing Date, the Seller shall change its corporate name to a name other than
"GOT PIZZA, INC." or any derivation thereof.
Section 9.04 Repayment of Obligations. The Seller agrees to pay all of
the Seller's liabilities and obligations (other than the Assumed Obligations) by
either: (a) paying such liabilities and obligations in full as they come due,
(b) entering into arrangements acceptable to the obligees of such liabilities
and obligations for the repayment of such liabilities and obligations, or (c)
reserving sufficient assets (in Seller's business judgment) to pay contingent or
disputed claims. The Seller agrees that, so long as any of the Seller's
liabilities and obligations (other than the Assumed Obligations) existing on the
Closing Date or arising thereafter remain unpaid, the Seller will not make any
dividend or distribution with respect to the Seller's capital stock from any
reserved assets, but Seller will otherwise make such distributions as are
appropriate to comply with its Plan of Liquidation and Dissolution.
ARTICLE X
MISCELLANEOUS
Section 10.01 144 Legend. To the extent required by law, the securities
of Buyer to be issued hereunder shall be characterized as "restricted
securities" for purposes of Rule 144 under the Securities Act, and each
certificate representing any of such shares shall bear a legend identical or
similar in effect to the following legend (together with any other legend or
legends required by applicable state securities laws or otherwise):
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED.
To the extent permitted by law, Buyer will permit the shareholders of Seller to
tack the Rule 144 holding period on to the shares of Buyer common stock to be
issued and delivered hereunder.
Section 10.02 Further Assurances. Each party hereto shall execute and
cause to be delivered to each other party hereto such instruments and other
documents, and shall take such other actions, as such other party may reasonably
request (prior to, at, or after the Closing) for the purpose of carrying out or
evidencing any of the transactions contemplated by this Agreement.
Section 10.03 Fees and Expenses. All fees, costs and expenses
(including legal fees and accounting fees) that have been incurred or that are
incurred in the future by any party in connection with the transactions
contemplated by this Agreement, including all fees, costs and expenses incurred
by such party in connection with or by virtue of (a) any investigation and
review conducted by such party of the other party's business (and the furnishing
of information in connection with such investigation and review), (b) the
negotiation, preparation and review of this Agreement and all agreements,
certificates, opinions and other instruments and documents delivered or to be
delivered in connection with the transactions contemplated by this Agreement,
(c) the preparation and submission of any filing or notice required to be made
or given in connection with any of the transactions contemplated by this
Agreement, and the obtaining of any Consent required to be obtained in
connection with any of such transactions, and (d) the consummation of the
transactions contemplated hereby shall be paid: (i) by Buyer, if incurred by
Buyer; and (ii) by Seller, if incurred by Seller.
Section 10.04 Attorneys' Fees. If any action or proceeding relating to
this Agreement or the enforcement of any provision of this Agreement is brought
against any party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other
relief to which the prevailing party may be entitled).
Section 10.05 Notices. Any notice or other communication required or
permitted to be delivered to any party under this Agreement shall be in writing
and shall be deemed properly delivered, given and received when delivered (by
hand, by registered mail, by courier or express delivery service or by
facsimile) to the address or facsimile telephone number set forth beneath the
name of such party below (or to such other address or facsimile telephone number
as such party shall have specified in a written notice given to the other
parties hereto):
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if to Buyer or Buyer:
BLUE MOON GROUP, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
if to Seller:
GOT PIZZA, INC.
-------------------------
-------------------------
Attention: President
Section 10.06 Severability. In the event that any provision of this
Agreement, or the application of any such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to Persons or circumstances other than those as to
which it is determined to be invalid, unlawful, void or unenforceable, shall not
be impaired or otherwise affected and shall continue to be valid and enforceable
to the fullest extent permitted by law.
Section 10.07 Headings. The Section headings contained in this
Agreement are for convenience of reference only, shall not be deemed to be a
part of this Agreement and shall not be referred to in connection with the
construction or interpretation of this Agreement.
Section 10.08 Counterparts. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
Section 10.09 Governing Law; Venue.
(a) This Agreement shall be construed in accordance with, and
governed in all respects by, the internal laws of the State of Florida (without
giving effect to principles of conflicts of laws).
(b) Any legal action or other legal proceeding relating to
this Agreement or the enforcement of any provision of this Agreement shall be
brought in or otherwise commenced in any state or federal court located in
Hillsborough County, Florida. Each party to this Agreement:
(i) expressly and irrevocably consents and submits to
the jurisdiction of each state and federal court located in
Hillsborough County, Florida in connection with any such legal
proceeding;
(ii) agrees that each state and federal court located
in Hillsborough County, Florida shall be deemed to be a convenient
forum; and
21
(iii) agrees not to assert (by way of motion, as a
defense or otherwise), in any such legal proceeding commenced in any
state or federal court located in Hillsborough County, Florida, any
claim that such party is not subject personally to the jurisdiction of
such court, that such legal proceeding has been brought in an
inconvenient forum, that the venue of such proceeding is improper or
that this Agreement or the subject matter of this Agreement may not be
enforced in or by such court.
Section 10.10 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. This Agreement may not be assigned by any party.
Seller's shareholders are intended third-party beneficiaries hereof, but there
are no other intended third-party beneficiaries hereof.
Section 10.11 Remedies Cumulative; Specific Performance. The rights and
remedies of the parties hereto shall be cumulative (and not alternative). The
parties to this Agreement agree that, in the event of any breach or threatened
breach by any party to this Agreement of any covenant, obligation or other
provision set forth in this Agreement for the benefit of any other party to this
Agreement, such other party shall be entitled (in addition to any other remedy
that may be available to it) to (a) a decree or order of specific performance or
mandamus to enforce the observance and performance of such covenant, obligation
or other provision, and (b) an injunction restraining such breach or threatened
breach.
22
Section 10.12 Waiver.
(a) No failure on the part of any party to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
party in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.
(b) No party shall be deemed to have waived any claim arising
out of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such party; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
Section 10.13 Amendments. This Agreement may not be amended, modified,
altered or supplemented other than by means of a written instrument duly
executed and delivered on behalf of all of the parties hereto.
Section 10.14 Entire Agreement. This Agreement and the attached
Exhibits and Schedules sets forth the entire understanding of the parties hereto
relating to the subject matter hereof and thereof and supersedes all prior
agreements and understandings among or between any of the parties relating to
the subject matter hereof.
Section 10.15 Board Appointment. Intentionally left blank.
Section 10.16 Share Combination. Intentionally left blank.
23
The parties hereto have caused this Agreement to be executed and
delivered as of the date first above written.
BLUE MOON GROUP, INC. a Delaware corporation
By:
--------------------------------------------
Its:
GOT PIZZA, INC., an Illinois corporation
By:
-------------------------------------------
Its:
24
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
CONSENT. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including from a Governmental Body).
CONTRACT. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan, or legally binding commitment or undertaking of
any nature.
ENTITY. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.
GOVERNMENTAL BODY. "Governmental Body" shall mean any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city, local or other political subdivision.
LEGAL PROCEEDING. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
LEGAL REQUIREMENT. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitute, principle of common
law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Body.
MATERIAL ADVERSE EFFECT. A violation or other matter will be deemed to
have a "Material Adverse Effect" on a Person if such violation or other matter
(considered together with all other matters that would constitute exceptions to
the representations and warranties set forth in the Agreement or in any Closing
Certificate but for the presence of "Material Adverse Effect" or other
materiality qualifications, or any similar qualifications, in such
representations and warranties) would have a material adverse effect on such
Person's business, condition, assets, liabilities, operations, financial
performance or prospects.
PERSON. "Person" shall mean any individual, Entity or Governmental
Body.
TAX. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.
TAX RETURN. "Tax Return" shall mean any return (including any
information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
EXHIBIT C
ALLOCATION OF PURCHASE PRICE
Asset Category Allocated Amount
-------------- ----------------
Equipment $80,000
Leasehold Improvements 20,000
Goodwill 25,000
EXHIBIT D
▇▇▇▇ OF SALE AND ASSIGNMENT
KNOW ALL MEN BY THESE PRESENTS THAT, for value received, the
undersigned, GOT PIZZA, INC., an Illinois corporation ("Seller"), does hereby
sell, assign, convey and transfer unto BLUE MOON GROUP, INC., a Delaware
corporation ("Buyer"), all of Seller's right, title and interest in and to the
personal property more particularly described on Exhibit "A" attached hereto and
made a part hereof.
Seller hereby warrants to Buyer, its successors and assigns, that
Seller is the rightful owner of the property conveyed; that Seller is conveying
to Buyer good and merchantable title to all of the property conveyed, free and
clear of all liabilities, obligations, claims, and encumbrances of any kind or
nature; and that Seller (and Seller's successors and assigns) will warrant and
defend this sale against the claims and demands of all persons whomsoever.
Seller hereby covenants and agrees that it will, at the request of
Buyer and without further consideration, execute and deliver, and will cause its
employees to execute and deliver, such other instruments of sale, transfer,
conveyance and assignment, and take such other action as may be reasonably
necessary to vest in Buyer, its successors and assigns, good and merchantable
title to the property conveyed, free and clear of all liabilities, obligations,
claims, and encumbrances of any kind or nature and to put Buyer in control and
possession thereof.
Seller does hereby irrevocably constitute Buyer, its successors and
assigns, as Seller's true and lawful attorney-in-fact, with full power of
substitution, in Seller's or Buyer's name, to claim, demand, collect and receive
the property conveyed.
This instrument shall be binding on Seller and its successors and
assigns, and shall inure to the benefit of Buyer and its successors and assigns.
Dated this 1st day of September, 2004.
SELLER:
GOT PIZZA, INC.
By:
------------------------------
Its:
EXHIBIT "A"
EXHIBIT F
ASSUMPTION AND RELEASE AGREEMENT
This is an Agreement dated this 1ST day of September, 2004, between
BLUE MOON GROUP, INC., a Delaware corporation (""BMOO) and GOT PIZZA, INC., an
Illinois corporation ("GP").
BACKGROUND
BMOO and GP are parties to an Asset Acquisition Agreement ("Asset
Agreement") pursuant to which GP has sold substantially all its assets to BMOO.
BMOO has agreed to assume certain indebtedness owed by GP and others. In
consideration of the foregoing, and of the covenants herein contained herein,
the parties agree as follows:
AGREEMENT
1. Recitals. The foregoing recitals, entitled "Background," are
incorporated herein by reference.
2. Assumption. For Ten Dollars ($10.00) in hand paid and other good and
valuable considerations, the receipt of which is hereby acknowledged, BMOO does
hereby assume and agree to pay and perform in accordance with their respective
terms all obligations relating to the Assumed Obligations (as that term is
defined in the Asset Agreement) owed to any Person (as that term is defined in
the Asset Agreement).
3. Indemnity. For Ten Dollars ($10.00) in hand paid and other good and
valuable considerations, the receipt of which is hereby acknowledged, BMOO does
hereby agree to protect, defend, indemnify, and hold GP harmless from and
against and with respect to any loss, liability, claim, demand, suit, action, or
proceeding directly or indirectly arising out of or connected with, or incurred
as a result of any of the Assumed Obligations. This indemnity also includes all
costs, attorneys' fees, and expenses incurred by GP as a result of the making of
any of the claims hereby indemnified against; provided, however, that if BMOO
assumes the defense of any claim, it shall not be liable for attorneys' fees
thereafter incurred by GP. If any liability, suit, action or claim that is or
may be subject to this indemnity shall be asserted against GP, it shall promptly
notify BMOO and BMOO shall undertake to defend, settle or compromise such
matter. GP shall fully cooperate with BMOO in any such defense. If BMOO fails to
undertake to defend, compromise, or settle such matter within twenty (20) days
after receipt of notice thereof, GP may take such actions as they deem
appropriate with respect to the liability, suit, action, or claim. Upon
ascertainment by GP of any loss, compromise, or settlement for any matter hereby
indemnified against, or upon entry of a final judgment against GP with respect
to any such matter, BMOO shall be liable to GP for the amount of such loss,
settlement, compromise, or judgment, plus, in each case, attorneys' fees, costs,
and expenses incurred by GP attributable thereto. If GP becomes aware of any
liability, suit, action, or claim that is subject to this indemnity and fails to
promptly notify BMOO of the existence and nature thereof, or if GP fails to
fully cooperate with the defense thereof, the indemnity herein contained shall
be deemed waived.
4. Release. For Ten Dollars ($10.00) in hand paid and other good and
valuable considerations, the receipt of which is hereby acknowledged, BMOO
does hereby release GP from any and all liabilities and obligations under the
GP Notes.
5. Governing Law. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Florida, excluding those
provisions relating to the resolution of conflicts of laws of different
jurisdictions if the application of such provisions would cause this Agreement
to be governed by, construed, or enforced in accordance with the laws of a
jurisdiction other than Florida.
6. Headings. The headings contained in this Agreement have been
inserted for convenient reference, are not a part hereof, and shall not affect
the meaning or interpretation of the terms hereof.
7. Amendment. This Agreement may not be amended, modified, or
supplemented, except by a written instrument signed by the party against whom
enforcement of any amendment, modification, or supplement is sought. No waiver
of any provision of this Agreement shall be effective unless in writing,
signed by the party against whom the effect of the waiver is to be charged. A
waiver of any breach of this Agreement shall not be considered a waiver of any
subsequent breach.
8. Construction. As used herein, words denoting the masculine gender
shall be deemed inclusive of the feminine and neuter, and words of singular
number shall be deemed to include the plural, and vice-versa. Capitalized
terms not defined herein shall have the meanings ascribed to them in the Asset
Agreement.
9. Notices. All notices, demands, or other communications hereunder
shall be in writing and shall be deemed effective (i) upon actual receipt if
delivered by courier, facsimile transmission or regular U.S. Mail; (ii) one
business day after deposit with a national overnight delivery service; or
(iii) three (3) business days after mailing by certified or registered mail to
the parties at their respective addresses set forth below:
Each party may change its address for the giving of notice as provided in this
paragraph.
IN WITNESS WHEREOF, the undersigned have executed this Agreement this
1st day of September, 2004.
GOT PIZZA, INC., an Illinois corporation
By:
------------------------------------------------
Its:
-----------------------------------------------
BLUE MOON GROUP, INC.., a Delaware corporation
By:
------------------------------------------------
Its:
------------------------------------------------
SCHEDULE 1.01(a)
PATENTS, TRADEMARKS, AND APPLICATIONS
SCHEDULE 101(C)
ASSETS PURCHASED
SCHEDULE 1.01(j)
LIST OF LEASED ASSETS
SCHEDULE 1.02
ASSUMED OBLIGATIONS
Buyer will assume the following obligations of Seller and no others:
SCHEDULE 4.02
SHARE RESTRICTIONS, ETC.
SCHEDULE 4.03
FINANCIAL STATEMENT EXCEPTIONS
None.
SCHEDULE 4.04
TAX EXCEPTIONS
Federal and state income tax returns for FYE 2002 are unfiled. Extensions have
been procured.
SCHEDULE 4.05
INSURANCE
None.
SCHEDULE 4.06
LEGAL PROCEEDINGS
SCHEDULE 4.07
LIENS AND ENCUMBRANCES
None.
SCHEDULE 4.08
REAL PROPERTY LEASES
None.
SCHEDULE 4.14
MATERIAL CONTRACTS
SCHEDULE 4.15
EMPLOYEE BENEFITS PLANS
None.
SCHEDULE 4.16
INTELLECTUAL PROPERTY EXCEPTIONS
None.
SCHEDULE 5.02
FINANCIAL STATEMENT EXCEPTIONS
None.
SCHEDULE 5.03
TAX EXCEPTIONS
None
SCHEDULE 5.04
INSURANCE
GP maintains a hazard insurance policy having coverage limits of $2,000,000
(blanket premises), and $200,000 (personal property), and supplementary
coverages. GP maintains a commercial and products liability policy having
coverage limits of $5,000,000 (aggregate). GP also maintains workers'
compensation and employer liability policies in each state where it is required
to do so.
SCHEDULE 5.05
LEGAL PROCEEDINGS
None.
SCHEDULE 5.06
LIENS AND ENCUMBRANCES
SCHEDULE 5.07
REAL PROPERTY LEASES
SCHEDULE 5.13
MATERIAL CONTRACTS
SCHEDULE 5.14
INTELLECTUAL PROPERTY EXCEPTIONS