Exhibit 1
PURCHASE AGREEMENT
BETWEEN
FATHOM BUSINESS SYSTEMS, INC.
AND
SHAREHOLDERS OF BGR Corporation
A NEVADA PUBLIC CORPORATION
AGREEMENT, made this 4th day of November 2003, by and between Fathom Business
Systems, Inc. ("FBS") and BGR Corporation ("Purchaser").
RECITALS
WHEREAS, Purchaser desires to acquire a controlling interest of the issued and
outstanding shares of common stock of FBS in exchange for 750,000 shares of the
Purchasers restricted common stock.
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
representations contained herein,
THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE I
ISSUANCE OF SHARES
1.1 Issuance of Shares. Subject to all of the terms and conditions of this
Agreement, FBS agrees to issue and deliver 100% of its common stock to the
Purchaser in exchange for 750,000 shares of the Purchasers restricted common
stock.
1.2 Exemption From Registration. The parties hereto intend that the common
stock to be issued by the Purchaser to FBS shall be exempt from the registration
requirements of the Securities Act of 1933, as amended ("the Act"), pursuant to
section 4(2) and or 3(b) of the Act and the rules and regulations promulgated
there under.
1.3 Restricted Securities. Purchaser represent that FBS is aware that the
shares are "restricted securities" as that term is defined in Rule 144 and the
general rules and regulations of the 1933 act. Purchaser further represents that
FBS is fully aware of the applicable limitations on the resale of restricted
securities and that these restrictions are set forth, for the most part, in Rule
144 of the act as promulgated by the Securities and Exchange Commission (SEC).
1.4 Restrictive Legend. Purchaser further represent that FBS understands
that any and all certificates representing the Shares shall bear the following
investment legend, which FBS understands:
"No sale, offer to sell, or transfer of the shares represented by this
certificate shall be made unless a registration statement under the Federal
Securities Act of 1933, as amended, with respect to such shares then in effect
or an exemption from the registration requirements of said act is then in fact
applicable to said shares."
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF FBS
FBS hereby represents and warrants to Purchaser that:
2.1 FBS will provide Purchaser with 100% of FBS's outstanding shares in
exchange for 750,000 shares of restricted common stock from Purchaser.
2.2 Organization. FBS is a corporation duly organized, validly existing and
in good standing under the laws of Arizona, has all necessary corporate powers
to own its property and to carry on its business as now owned and operated by
it, and is duly qualified to do business and is in good standing in each of the
states where its business requires qualification.
2.2 Capital. Management of FBS own control of FBS and therefore have the
right to vote for the completion of this transaction. FBS represents that there
are no other issued and outstanding open subscriptions, options, rights,
warrants, debentures, instruments, convertible securities, or other agreements
or commitments obligating FBS to issue or to transfer from treasury any
additional shares of its capital stock.
2.3 Financial Statements. The most recent financial statements of FBS are
attached as Exhibit A. The financial statements have been prepared in accordance
with generally accepted accounting principles and practices consistently
followed by FBS throughout the period indicated, and fairly represent the
financial position of each as of the date of the balance sheet included in the
financial statements.
2.4 Investigation of Financial Condition. Without in any manner reducing or
otherwise mitigating the representations contained herein, Purchaser and/or its
attorneys shall have the opportunity to meet with the accountants and attorneys
to discuss the financial condition of FBS. FBS shall make available to Purchaser
and/or its attorney all books and records of once reasonable notice of such
request has been given.
2.5 Authority. The Board of Directors of FBS have authorized the execution
of this Agreement and the consummation of transactions contemplated herein, and
FBS has full power and authority to execute, deliver, and perform this Agreement
and this Agreement is a legal, valid and binding obligation of FBS, and is
enforceable in accordance with its terms and conditions.
2.6 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by FBS of its obligations hereunder in the time and in the manner
contemplated will not cause, constitute or conflict with or result in (a) any
breach or violation of any of the provisions or constitute a default under any
license, indenture, mortgage, charter, instrument, articles of incorporation,
bylaws, or other agreement or instrument to which either is a party, or by which
it may be bound, nor will any consents or authorizations of any party other than
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those hereto be required, (b) an event that would permit any party to any
agreement or instrument to terminate it or to accelerate the maturity of any
indebtedness or other obligation of FBS, or (c) any event that would result in
the creation or imposition of any lien, charge, or encumbrance on any asset of
FBS.
2.7 Full Disclosure. None of the representations and warranties made by FBS
herein, or in any exhibit, certificate or memorandum furnished or to be
furnished by either, or on their behalf, contains or will contain any untrue
statement of material fact, or omit any material fact the omission of which
would be misleading.
2.8 Good Title. Other than as described in Exhibit A, FBS has good and
marketable title to all of its property free and clear of any liens, claims and
encumbrances of any nature, form or description.
2.9 Indemnification. FBS agrees to defend and hold Purchaser harmless
against and in respect of any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries, and deficiencies, including
interest, penalties, and reasonable attorney's fees, that it shall incur or
suffer, which arise out of, result from or relate to any breach of, or failure
by FBS to perform any of its representations, warranties, covenants and
agreements in this Agreement or in any exhibit or other instrument furnished or
to be furnished by FBS under this Agreement.
2.10 Settlements. FBS agrees to negotiate of the settlement all outstanding
obligations of FBS as represented on Schedule B.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF Purchaser
Purchaser hereby represents and warrants to FBS that:
3.1 Financial Ability. Purchaser is a corporation duly organized, validly
existing and in good standing, and has the necessary wherewith all to complete
this agreement through it's legal counsel.
3.2 Authority. Purchaser has authorized the execution of this Agreement and
the consummation of transactions contemplated herein through its legal counsel.
The purchaser's legal counsel has full power and authority to execute, deliver,
and perform this Agreement and this Agreement is a legal, valid and binding
obligation of Purchaser, and is enforceable in accordance with its terms and
conditions.
3.3 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by Purchaser and the performance by Purchaser of its obligations
hereunder in the time and in the manner contemplated will not cause, constitute
or conflict with or result in (a) any breach or violation of any of the
provisions or constitute a default under any license, indenture, mortgage,
charter, instrument, articles of incorporation, bylaws, or other agreement or
instrument to which Purchaser is a party, or by which it may be bound, nor will
any consents or authorizations of any party other than those hereto be required
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except approvals required by law, if any, (b) an event that would permit any
party to any agreement or instrument to terminate it or to accelerate the
maturity of any indebtedness or other obligation of Purchaser, or (c) any event
that would result in the creation or imposition of any lien, charge, or
encumbrance on any asset of Purchaser.
3.4 Full Disclosure. None of the representations and warranties made by
Purchaser herein, or in any exhibit, certificate or memorandum furnished or to
be furnished by Purchaser, or on its behalf, contains or will contain any untrue
statement of material fact, or omit any material fact the omission of which
would be misleading.
3.5 Indemnification. Purchaser agrees to defend and hold FBS harmless
against and in respect of any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries, and deficiencies, including
interest, penalties, and reasonable attorney's fees, that it shall incur or
suffer, which arise out of, result from or relate to any breach of, or failure
by Purchaser to perform any of its respective representations, warranties,
covenants and agreements in this Agreement or in any exhibit or other instrument
furnished or to be furnished by Purchaser under this Agreement.
ARTICLE IV
COVENANTS
4.1 Investigative Rights. From the date of this Agreement until the Closing
date, FBS shall provide the other full access during normal business hours to
all properties, books, contracts, commitments, and records for the purpose of
examining same.
4.2 Conduct of Business. Prior to the Closing, FBS shall each conduct its
business in the normal course and shall not sell, pledge or assign any assets
without the prior written consent of Purchaser. Neither Purchaser or FBS shall
amend its articles of incorporation or Bylaws, declare dividends, redeem or sell
stock or other securities, incur additional or newly-funded liabilities, acquire
or dispose of fixed assets or settle or discharge any balance sheet receivable
other than in the normal course of business.
4.3 Required Corporate Action by Purchaser. Purchaser and its officers and
directors shall cause a meeting to be held as soon as practicable for the
purpose of voting on the approval of this Agreement.
4.4 Officers and Directors. Effective on the Date of Closing, the officers
and directors of FBS shall appoint appoint additional officers and/or directors
as recommended by BGR
ARTICLE V
CONDITIONS PRECEDENT TO PURCHASER'S PERFORMANCE
5.1 Conditions. Purchaser's obligations hereunder shall be subject to the
satisfaction, at or before the Closing, of all the conditions set forth in this
Article V. Purchaser may waive any of these conditions in whole or in part
without prior notice; provided however, that no such waiver of a condition shall
constitute a waiver by Purchaser of any other condition of or any of Purchaser's
other rights or remedies, at law or in equity, if FBS shall be in default of any
of their representations, warranties, or covenants under this Agreement.
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5.2 FBS Performance. FBS shall have performed, satisfied and complied with
all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it, on or before the Closing Date.
5.3 Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties by FBS in this Agreement or in any
written statement that shall be delivered to Purchaser by FBS under this
Agreement shall be true and accurate on and as of the Closing Date as though
made at that time.
5.4 Acceptance by Purchaser. The holders of an aggregate of not less than
51% of the issued and outstanding shares of common stock of FBS shall have
executed this agreement below thereby acknowledging their agreement to exchange
issuance of control to Purchaser of common stock as described in paragraph 1.1.
above.
ARTICLE VI
CONDITIONS PRECEDENT TO FBS PERFORMANCE
6.1 Conditions. FBS obligations hereunder shall be subject to the
satisfaction, at or before the Closing, of all the conditions set forth in this
Article VI. FBS may waive any of these conditions in whole or in part without
prior notice; provided however, that no such waiver of a condition shall
constitute a waiver by FBS of any other condition of or any of FBS other rights
or remedies, at law or in equity, if Purchaser shall be in default of any of
their representations, warranties, or covenants under this Agreement.
6.2 Purchaser Performance. Purchaser shall have performed, satisfied and
complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by it, on or before the Closing Date.
6.3 Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties by Purchaser in this Agreement or
in any written statement that shall be delivered to FBS by Purchaser under this
Agreement shall be true and accurate on and as of the Closing Date as though
made at that time.
ARTICLE VII
CLOSING
7.1 Closing. The Closing of this transaction shall be held at a place and
on a date mutually acceptable to the parties.
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At the Closing the parties shall deliver the following in form acceptable
to counsel to the parties or as set forth herein:
By Purchaser:
A. 750,000 shares of the Purchasers restricted common stock.
By FBS:
A. 100% shares of its common stock.
ARTICLE VIII
REMEDIES
8.1 Legal Action and Costs. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorney's fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled.
8.2 Termination. In addition to the other remedies, any of the parties
hereto may terminate this Agreement, without liability:
(i) upon the failure of any condition not otherwise waived by the
parties; or
(ii) upon mutual consent of the respective boards of directors of
Purchaser and FBS.
ARTICLE IX
MISCELLANEOUS
9.1 Captions and Headings. The Article and paragraph headings throughout
this Agreement are for convenience and reference only, and shall in no way be
deemed to define, limit, or add to the meaning of any provision of this
Agreement.
9.2 No Oral Change. This Agreement and any provisions hereof, may not be
waived, changed, modified or discharged orally, but it can be changed by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or, discharge is sought.
9.3 Non-Waiver. Except as other wise expressly provided herein, no waiver
of any covenant, condition, or provision of this Agreement shall be deemed to
have been made unless expressly in writing and signed by the party against whom
such waiver is charged.
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9.4 Time of Essence. Time is of the essence of this Agreement and each and
every part hereof.
9.5 Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings and merges any all such prior discussions and/or agreements
herein.
9.6 Choice of Law. This Agreement and its application shall be governed by
the laws of the State of Arizona.
9.7 Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument.
9.8 Notices. All notices, requests, demands, and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally on the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid, and
properly addressed as follows:
Purchaser Representative:
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FBS Representative:
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9.9 Binding Effect. This Agreement shall inure to and be binding upon the
heirs, executors, personal representatives successors and assigns of each of the
parties to this Agreement.
9.10 Effect of Closing. All representations, warranties, covenants, and
agreements of the parties contained in this Agreement, or in any instrument,
certificate, opinion, or other writing provided for in it, shall survive the
Closing of this Agreement.
9.11 Brokers. The parties hereto represent that no finder's fee has been
paid or is payable by any party.
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9.12 Expenses. Each party will pay its own legal, accounting and any other
rout of pocket expenses reasonably incurred in connection with this transaction,
whether or not the transaction contemplated hereby is consummated.
9.13 Facsimile Signatures as Originals. Original signatures transmitted by
facsimile communication shall constitute originals for the purpose of validly
executing this Agreement.
AGREED TO AND ACCEPTED as of the date first above written.
Fathom Business Systems, Inc.
By___________________________
Xxxxx Xxxxxxxx, President & C.E.O.
BGR Corporation
By______________________________
Xxxxx Xxxxx, President
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