Exhibit 2.1
SALE OF ASSETS AGREEMENT
This Sale of Assets Agreement is entered into as of the 1st day of April 2003 by
and between G2 Companies, Inc., a Delaware corporation ("Seller") and G2
Ventures, Inc., a Texas Corporation ("Purchaser").
WHEREAS, the Seller was engaged in the business of managing and promoting
recording musicians and is the owner of assets including, but not limited to,
equipment, inventories, contract rights, and miscellaneous assets used in
connection with the operation of its business;
WHEREAS, the Purchaser desires to purchase, and the Seller desires to sell, all
the operating assets used or useful, or intended to be used, in the operation of
the Seller's business.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Assets Purchased.
The Seller agrees to sell to the Purchaser and the Purchaser agrees to purchase
from the Seller, on the terms and conditions set forth in this Agreement, the
assets set forth on Schedule 1 hereto ("Assets").
Section 2. Excluded Assets. Excluded from this sale and purchase are the
Seller's accounts receivable, cash, notes receivable, prepaid accounts, the
corporate seals, minute books, stock transfer books, general ledger and other
accounting records (except as otherwise provided herein), other records related
exclusively to the organization, existence or share capitalization of the
Seller, its affiliates, subsidiaries, and any other assets of the business not
specified in Schedule 1 hereto, together with the Seller's rights under any
contract between the Seller and any third party and to which consent to
assignment to the Purchaser is required, but has not been obtained on the
Closing Date. The Seller shall make its general ledger and other accounting
records available for inspection by the Purchaser from time to time upon
reasonable request.
Section 3. Liabilities Assumed.
3.1 Except as otherwise provided below, at Closing, the Purchaser agrees to
assume and pay, discharge or perform, as appropriate, only the liabilities and
obligations of the Seller specifically itemized on Schedule 3 hereto ("Assumed
Liabilities").
3.2 Notwithstanding Section 3.1, the Purchaser shall not assume, agree to pay,
discharge or perform, or incur, as the case may be, any of the following
liabilities:
3.2.1 liabilities (including principal and interest) arising out of
loans and other indebtedness owing to any person or entity, excluding only the
Assumed Liabilities;
3.2.2 liabilities of the Seller not arising in the ordinary course of
its business incurred or accrued prior to the Closing, unless an Assumed
Liability; and
3.2.3 any liability or obligation owing to current or former employees
of the Seller and/or arising out of or in connection with an employee benefit
plan, unless an Assumed Liability;
3.3 The obligations of the Purchaser under this Section are subject to whatever
rights the Purchaser may have under this Agreement or otherwise for breach by
the Seller of any representation, warranty, covenant or agreement contained in
this Agreement, including but not limited to any right of indemnification
provided by this Agreement.
Section 4. Purchase Price. The purchase price for the Assets shall be the
assumption of the liabilities set forth on Schedule 3 hereto.
Section 5. Closing.
5.1 Time and Place. The closing ("Closing") of the sale and purchase of the
Assets shall take place at the offices of Seller on April 1,2003 ("Closing
Date").
5.2 Obligations of Seller at the Closing. At the Closing, the Seller shall
deliver to the Purchaser the following:
5.2.1 one or more bills of sale from the Seller conveying all of the
Assets to the Purchaser;
5.2.2 a copy of the resolutions of the Seller's board of directors and
shareholders, authorizing the execution, delivery and performance of this
Agreement and any other agreement to be entered into by the Seller in connection
herewith, and the transactions contemplated hereby;
Section 6. Seller's Obligation Prior to Closing.
6.1 Seller's Operation of Business Prior to Closing. The Seller agrees that
between the date of this Agreement and the Closing Date, the Seller will:
6.1.1 Continue to operate the business that is the subject of this
Agreement in the usual and ordinary course and in substantial conformity with
all applicable laws, ordinances, regulations, rules, or orders, and will use its
best efforts to preserve its business organization and preserve the continued
operation of its business with its customers, suppliers, and others having
business relations with the Seller.
6.1.2 Not assign, sell, lease, or otherwise transfer or dispose of any
of the assets used in the performance of its business, whether now owned or
hereafter acquired, except in the normal and ordinary course of business and in
connection with its normal operation.
6.1.3 Maintain all of its assets other than inventories in its present
condition, reasonable wear and tear and ordinary usage excepted, and maintain
the inventories at levels normally maintained.
6.2 Access to Premises and Information. At reasonable times prior to the Closing
Date, the Seller will provide the Purchaser and its representatives with
reasonable access during business hours to the assets, titles, contracts, and
records of the Seller and furnish such additional information concerning the
Seller's business as the Purchaser from time to time may reasonably request.
6.3 Conditions and Best Efforts. The Seller will use its best efforts to
effectuate the transactions contemplated by this Agreement and to fulfill all
the conditions of the obligations of the Seller under this Agreement, and will
do all acts and things as may be required to carry out its respective
obligations under this Agreement and to consummate and complete this Agreement.
Section 7. Covenants of Purchaser Prior to Closing.
7.1 Conditions and Best Efforts. The Purchaser will use its best efforts to
effectuate the transactions contemplated by this Agreement and to fulfill all
the conditions of the Purchaser's obligations under this Agreement, and shall do
all acts and things as may be required to carry out the Purchaser's obligations
and to consummate this Agreement.
7.2 Confidential Information. If for any reason the sale of Assets is not
closed, the Purchaser will not disclose to third parties any confidential
information received from the Seller in the course of investigating,
negotiating, and performing the transactions contemplated by this Agreement.
Section 8. Seller's Representations and Warranties. The Seller represents and
warrants to the Purchaser as follows:
8.1 Corporate Existence. The Seller is now, and on the Closing Date will be, a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, has all requisite corporate power and authority to own
its properties and assets and carry on its business and is good standing in each
jurisdiction in which such qualification is required.
8.2 Corporation Power and Authorization. The Seller has full corporate authority
to execute and deliver this Agreement and any other agreement to be executed and
delivered by the Seller in connection herewith, and to carry out the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate and shareholder action. No other corporate
proceedings by the Seller will be necessary to authorize this Agreement or the
carrying out of the transactions contemplated hereby. This Agreement constitutes
a valid and binding Agreement of the Seller in accordance with its terms.
8.3 Conflict with Other Agreements, Consents and Approvals. With respect to (i)
the articles of incorporation or bylaws of the Seller, (ii) any applicable law,
statute, rule or regulation, (iii) any contract to which the Seller is a party
or may be bound, or (iv) any judgment, order, injunction, decree or ruling of
any court or governmental authority to which the Seller is a party or subject,
the execution and delivery by the Seller of this Agreement and any other
agreement to be executed and delivered by the Seller in connection herewith and
the consummation of the transactions contemplated hereby will not (a) result in
any violation, conflict or default, or give to others any interest or rights,
including rights of termination, cancellation or acceleration, (b) require any
authorization, consent, approval, exemption or other action by any court or
administrative or governmental body which has not been obtained, or any notice
to or filing with any court or administrative or governmental body which has not
been given or done.
8.4 Compliance with Law. The Seller's use and occupancy of the Assets, wherever
located, has been in compliance with all applicable federal, state, local or
other governmental laws or ordinances, the non-compliance with which, or the
violation of which, might have a material adverse affect on the Assets, the
Assumed Liabilities or the financial condition, results of operations or
anticipated business prospects of the Purchaser, and the Seller has received no
claim or notice of violation with respect thereto. Without in any way limiting
the generality of the foregoing, the Seller is in compliance with, and is
subject to no liabilities under, any and all applicable laws, governmental
rules, ordinances, regulations and orders pertaining to the presence,
management, release, discharge, or disposal of toxic or hazardous waste material
or substances, pollutants (including conventional pollutants) and contaminants.
The Seller has obtained all material permits, licenses, franchises and other
authorizations necessary for the conduct of its business.
8.5 Financial Statements. Attached hereto on Schedule 8.5 are the Seller's
audited (reviewed) financial statements for the period ended December 31, 2002
("Financial Statements"). The Financial Statements are in accordance with the
books and records of the Seller and are true, correct, and complete; fairly
present financial conditions of the Seller at the dates of such Financial
Statements and the results of its operations for the periods then ended; and
were prepared in accordance with generally accepted accounting principles
applied on a basis consistent with prior accounting periods. Except as described
in this Agreement, since December 31, 2002 there has been no material adverse
change in the financial condition of the Seller.
8.5 Tax and Other Returns and Reports. (i) All federal, state, local and foreign
tax returns and reports (including without limitation all income tax, social
security, payroll, unemployment compensation, sales and use, excise, privilege,
property, ad valorem, franchise, license, and school) required to be filed by
the Seller by the Closing ("Tax Returns") have been filed with the appropriate
governmental agencies in all jurisdictions in which such returns and reports are
required to be filed, and all such returns and reports properly reflect the
taxes of the Seller for the periods covered thereby; (ii) all federal, state,
and local taxes, assessments, interest, penalties, deficiencies, fees and other
governmental charges or impositions, including those enumerated above with
respect to the Tax Returns, which are called for by the Tax Returns, or which
are claimed to be due from the Seller by notice from any taxing authority, or
upon or measured by its properties, assets or income ("Taxes"), have been
properly accrued or paid by or at the Closing if then due and payable; and (iii)
the reserves for Taxes contained in the Financial Statements are adequate to
cover the tax liabilities of the Seller as of that date, and nothing other than
tax on operations subsequent to the date of the Financial Statements has
occurred subsequent to that date to make any of such reserves inadequate.
8.6 Title to Assets. Except as described in Schedule 1 of this Agreement, the
Seller holds good and marketable title to the Assets, free and clear of
restrictions on or conditions to transfer or assignment, and free and clear of
liens, pledges, charges, or encumbrances.
8.7 Litigation. The Seller has no knowledge of any claim, litigation,
proceeding, or investigation pending or threatened against the Seller that might
result in any material adverse change in the business or condition of Assets
being conveyed under this Agreement.
8.8 Accuracy of Representations and Warranties. None of the representations or
warranties of the Seller contain or will contain any untrue statement of a
material fact or omit or will omit or misstate a material fact necessary in
order to make statements in this Agreement not misleading. The Seller knows of
no fact that has resulted, or that in its reasonable judgment will result in a
material change in the business, operations, or assets of the Seller that has
not been set forth in this Agreement or otherwise disclosed to the Purchaser.
Section 9. Representations of Purchaser. The Purchaser represents and warrants
to Seller as follows:
9.1 Authorization. The Purchaser has full authority to execute and deliver this
Agreement and any other agreement to be executed and delivered by the Purchaser
in connection herewith, and to carry out the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action. No other corporate proceedings by the Purchaser will be necessary to
authorize this Agreement or the carrying out of the transactions contemplated
hereby. This Agreement constitutes a valid and binding Agreement of Purchaser,
in accordance with its terms.
9.2 Accuracy of Representations and Warranties. None of the representations or
warranties of the Purchaser contains or will contain any untrue statement of a
material fact or omit or will omit or misstate a material fact necessary in
order to make the statements contained herein not misleading.
Section 10. Conditions Precedent to Purchaser's Obligations. The obligation of
the Purchaser to purchase the Assets is subject to the fulfillment, prior to or
at the Closing Date, of each of the following conditions, any one or portion of
which may be waived in writing by the Purchaser:
10.1 Representations, Warranties and Covenants of Seller. The representations
and warranties of the Seller contained herein and the information contained in
the Schedules and any other documents delivered by the Seller in connection with
this Agreement shall be true and correct in all material respects at the
Closing; and the Seller shall have performed all obligations and complied with
all agreements, undertakings, covenants and conditions required by this
Agreement to be performed or complied with by it prior to the Closing.
10.2 Conditions of the Business. There shall have been no material adverse
change in the manner of operation of the Seller's business prior to the Closing
Date.
10.3 No Suits or Actions. At the Closing Date no suit, action, or other
proceeding shall have been threatened or instituted to restrain, enjoin, or
otherwise prevent the consummation of this Agreement or the contemplated
transactions.
Section 11. Conditions Precedent to Obligations of the Seller. The obligations
of the Seller to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, prior to or at the Closing Date, of each of the
following conditions, any one or a portion of which may be waived in writing by
the Seller:
11.1 Representations, Warranties, and Covenants of Purchaser. All
representations and warranties made in this Agreement by the Purchaser shall be
true as of the Closing Date as fully as though such representations and
warranties had been made on and as of the Closing Date, and the Purchaser shall
not have violated or shall not have failed to perform in accordance with any
covenant contained in this Agreement.
Section 12. Purchaser's Acceptance. The Purchaser represents and acknowledges
that it has entered into this Agreement on the basis of its own examination,
personal knowledge, and opinion of the value of the business. The Purchaser has
not relied on any representations made by the Seller other than those specified
in this Agreement. The Purchaser further acknowledges that the Seller has not
made any agreement or promise to repair or improve any of the leasehold
improvements, equipment, or other real or personal property being sold to the
Purchaser under this Agreement, and that the Purchaser takes all such property
in the condition existing on the date of this Agreement, except as otherwise
provided in this Agreement.
Section 13. Risk of Loss. The risk of loss, damage, or destruction to any of the
equipment, inventory, or other personal property to be conveyed to the Purchaser
under this Agreement shall be borne by the Seller to the time of Closing. In the
event of such loss, damage, or destruction, the Seller, to the extent
reasonable, shall replace the lost property or repair or cause to repair the
damaged property to its condition prior to the damage. If replacement, repairs,
or restorations are not completed prior to Closing, then the purchase price
shall be adjusted by an amount agreed upon by the Purchaser and the Seller that
will be required to complete the replacement, repair, or restoration following
Closing. If the Purchaser and the Seller are unable to agree, then the
Purchaser, at its sole option and notwithstanding any other provision of this
Agreement, upon notice to the Seller, may rescind this Agreement and declare it
to be of no further force and effect, in which event there shall be no Closing
of this Agreement and all the terms and provisions of this Agreement shall be
deemed null and void. If, prior to Closing, any of the real properties that are
included in the Assets are materially damaged or destroyed, then the Purchaser
may rescind this Agreement in the manner provided above unless arrangements for
repair satisfactory to all parties involved are made prior to Closing.
Section 14. Miscellaneous Provisions.
Section 14.1 Notices. Any notices permitted or required under this Agreement
shall be deemed given upon the date of personal delivery or 48 hours after
deposit in the United States mail, postage fully prepaid, return receipt
requested, addressed to Seller at:
00000 X. Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Purchaser at:
00000 X. Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
or at any other address as any party may, from time to time, designate by notice
given in compliance with this section.
Section 14.2 Survival. Any of the terms and covenants contained in this
Agreement which require the performance of either party after the Closing shall
survive the Closing.
Section 14.3 Waiver. The waiver by either party of the breach of any provision
of this Agreement by the other party shall not operate or be construed as a
waiver of any subsequent breach.
Section 14.4 Assignment. Except as otherwise provided within this Agreement,
neither party hereto may transfer or assign this Agreement without prior written
consent of the other party.
Section 14.5 Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
Section 14.5 Titles and Captions. All article, section and paragraph titles or
captions contained in this Agreement are for convenience only and shall not be
deemed part of the context nor affect the interpretation of this Agreement.
Section 14.6 Entire Agreement. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
Section 14.7 Agreement Binding. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
Section 14.8 Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of this Agreement.
Section 14.9 Good Faith, Cooperation and Due Diligence. The parties hereto
covenant, warrant and represent to each other good faith, complete cooperation,
due diligence and honesty in fact in the performance of all obligations of the
parties pursuant to this Agreement. All promises and covenants are mutual and
dependent.
Section 14.10 Counterparts. This Agreement may be executed in several
counterparts and all so executed shall constitute one Agreement, binding on all
the parties hereto even though all the parties are not signatories to the
original or the same counterpart.
Section 14.11 Parties in Interest. Nothing herein shall be construed to be to
the benefit of any third party, nor is it intended that any provision shall be
for the benefit of any third party.
Section 14.13 Savings Clause. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
Signed this 1st day of April 2003.
Seller Purchaser
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G2 Companies, Inc. G2 Ventures, Inc.
By:______________________ By:______________________
Xxxx Xxxxxx, President Xxxx Xxxxxx, President
