SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (the "AGREEMENT") is made and entered
into as of April 16, 2010, by and among Xxxxxxx Xxxxx, an individual with an
address of c/o Kat Exploration, Inc., 0000 Xxxxxxx Xxxx, Xxxxx Xxxxx,
Xxxxxxxxxxxx X0X 0X0, Xxxxxx (the "PURCHASER"), Bella Viaggio, Inc., a Nevada
corporation (the "COMPANY") and Xxxxxx X. Xxxxx, an individual with an address
of 000 Xxxxxxx Xxxxx, Xxxxxxxxx, XX 00000 and Xxxxxx X. Xxxxxxx, an individual
with an address of 00000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxxx, XX 00000 (collectively,
the "SELLERS").
RECITALS
WHEREAS, the Sellers own of record and beneficially in the aggregate
2,043,333 shares (the "SHARES") of common stock of the Company, par value $0.001
per share (the "COMMON STOCK"), which shares constitute approximately 76.9% of
all the issued and outstanding shares of Common Stock as follows: Xx. Xxxxx,
1,043,333 Shares and Xx. Xxxxxxx, 1,000,000 Shares;
WHEREAS, the Sellers desire to sell to the Purchaser all such 2,043,333
Shares and the Purchaser desires to purchase from the Sellers all such 2,043,333
Shares (the "SHARE ACQUISITION"), upon the terms and subject to the conditions
set forth herein;
WHEREAS, other than (i) the 220,667 Other Shares (as defined below) being
purchased by the Purchaser in the Other Share Acquisition (as defined below),
(ii) the 380,500 shares of Common Stock owned by persons who are non-affiliates
of the Company (the "NON-AFFILIATED SHAREHOLDERS"), the Sellers and/or the
Purchaser and not being acquired pursuant to this Agreement or the Other
Acquisition, and (iii) the 2,043,333 Shares being acquired pursuant to this
Agreement, the Company has no other securities issued and outstanding;
WHEREAS, the sale of the Shares pursuant to this Agreement is being made,
inter alia, in accordance with and in reliance upon the exemptions from
securities registration for offers and sales under Section 4(1) and Section 4(2)
of the under the Securities Act of 1933, as amended (the "SECURITIES ACT");
WHEREAS, as a condition to the closing of the Share Acquisition pursuant
to this Agreement, the Purchaser pursuant to a stock purchase agreement by and
among the Purchaser and eleven (11) other sellers of Common Stock, dated of even
date herewith (the "OTHER SHARE ACQUISITION"), the Purchaser shall acquire
simultaneously with the closing of the Share Acquisition, 220,667 additional
shares of Common Stock (the "OTHER SHARES"); and
WHEREAS, following the closing of the Share Acquisition and the Other
Share Acquisition, the Company will have issued and outstanding 2,644,500 shares
of Common Stock, of which (i) the Purchaser shall own 2,264,000 shares of Common
Stock, constituting approximately 85.6% of such shares, and (ii) there shall be
380,500 shares of Common Stock owned by the Non-Affiliated Shareholders,
constituting approximately 14.4% of such shares.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties agree as follows:
CERTAIN DEFINITIONS
As used herein, each of the following terms has the meaning set forth
below, unless the context otherwise requires:
"AFFILIATE" means, with respect to any person, any other person
controlling, controlled by or under common control with such person. The term
"CONTROL" as used in the preceding sentence means, with respect to a
corporation, the right to exercise, directly or indirectly, more than 10% of the
voting rights attributable to the shares
of the controlled corporation and, with respect to any person other than a
corporation, the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such person.
"AVAILABLE CASH" means all cash and cash equivalents (including marketable
securities and short-term investments) held by the Company as of midnight on the
day before the Closing Date less the amount of cash and cash equivalents
necessary to cover outstanding checks which have been mailed or otherwise
delivered by the Company but have not cleared.
"COLLATERAL AGREEMENTS" means any or all of the exhibits to this Agreement
and any and all other agreements, instruments or documents required or expressly
provided under this Agreement to be executed and delivered in connection with
the transactions contemplated by this Agreement.
"COMPANY CONTROL PERSON" means each director, executive officer, promoter,
and such other Persons as may be deemed in control of the Company as defined by
Rule 405 under the Securities Act.
"CONTRACTS" means any and all contracts, agreements, franchises,
understandings, arrangements, leases, licenses, registrations, authorizations,
easements, servitudes, rights of way, mortgages, bonds, notes, guaranties,
Liens, evidence of indebtedness, approvals or other instruments or undertakings
to which such person is a party or to which or by which such person or the
property of such person is subject or bound, excluding any Permits.
"DAMAGES" means any and all damages, liabilities, obligations, penalties,
fines, judgments, claims, deficiencies, losses, costs, expenses and assessments
(including without limitation income and other taxes, interest, penalties and
attorneys' and accountants' fees and disbursements).
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as amended.
"FINANCIAL STATEMENTS" means any or all of the financial statements,
including balance sheets and related statements of income and statements of
changes in financial position and the accompanying notes thereto, of the
Company's business prepared in accordance with generally accepted accounting
principles consistently applied, except as may be otherwise provided herein.
"FUNDED INDEBTEDNESS" means the aggregate amount (including the current
portions thereof) of all (i) indebtedness for money borrowed from others,
capital lease obligations, dividends payable to the Seller, bonus payables to
employees, and purchase money indebtedness of the Company, (ii) indebtedness of
the type described in clause (i) above guaranteed, directly or indirectly, in
any manner by the Company, or in effect guaranteed, directly or indirectly, in
any manner by the Company, through an agreement, contingent or otherwise, to
supply funds to, or in any other manner invest in, the debtor, or to purchase
indebtedness, or to purchase and pay for property if not delivered or to pay for
services if not performed, primarily for the purpose of enabling the debtor to
make payment of the indebtedness or to assure the owners of the indebtedness
against loss, but excluding endorsements of checks and other instruments in the
ordinary course, (iii) indebtedness of the type described in clause (i) above
secured by any Lien upon property owned by the Company, even though the Company
has not in any manner become liable for the payment of such indebtedness and
(iv) interest expense accrued but unpaid, and all prepayment premiums, on or
relating to any of such indebtedness.
"GAAP" means U.S. generally accepted accounting principles.
"GOVERNMENTAL AUTHORITY" means any nation or country (including but not
limited to the United States) and any commonwealth, territory or possession
thereof and any political subdivision of any of the foregoing, including but not
limited to courts, departments, commissions, boards, bureaus, agencies,
ministries or other instrumentalities.
"LEGAL REQUIREMENTS" means any and all laws (statutory, judicial or
otherwise), ordinances, regulations, judgments, orders, directives, injunctions,
writs, decrees or awards of, and any Contracts with, any Governmental Authority,
in each case as and to the extent applicable to such person or such person's
business, operations or properties.
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"LIENS" means any lien, charge, mortgage interest, adverse claim, pledge,
security interest, encumbrance, right of first refusal, preemptive right or
other restrictions or limitations whatsoever.
"PERMITS" means any and all permits, rights, approvals, licenses,
authorizations, legal status, orders or Contracts under any Legal Requirement or
otherwise granted by any Governmental Authority.
"PERSON" means any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any governmental or political subdivision or any agency, department or
instrumentality thereof.
"PROPERTIES" means any and all properties and assets (real, personal or
mixed, tangible or intangible) owned or Used by the Company.
"SEC REPORTS" means all reports or other filings made by the Company with
the Securities and Exchange Commission under the Securities Act and the Exchange
Act.
"SUBSIDIARY" means any Person of which a majority of the outstanding
voting securities or other voting equity interests are owned, directly or
indirectly, by the Company.
"USED" means, with respect to the Properties, Contracts or Permits of the
Company, those owned, leased, licensed or otherwise held by the Company which
were acquired for use or held for use by the Company in connection with the
Company's business and operations, whether or not reflected on the Company's
books of account.
ARTICLE I
SALE AND PURCHASE OF THE 2,043,333 SHARES
1.1 SALE AND PURCHASE OF SHARES.
(a) On the terms and subject to the conditions of this Agreement,
at the Closing (as defined in SECTION 2.1 hereof), Sellers shall sell, convey,
assign, transfer and deliver to Purchaser, and Purchaser shall purchase, acquire
and accept delivery of the 2,043,333 Shares, free and clear of any and all
Liens.
(b) To effect the transfers contemplated by SECTION 1.1(a) hereof,
at the Closing, Sellers shall deliver or cause to be delivered to Purchaser,
against payment therefor in accordance with SECTION 1.2 hereof, stock
certificates representing the Shares, accompanied by stock powers duly executed
in blank and otherwise in form acceptable to Purchaser for transfer on the books
and records of the Company.
1.2 PAYMENT FOR SHARES. As payment in full for the 2,043,333 Shares,
Purchaser shall pay to the Sellers (i) Two Hundred Seventy-Five Thousand, Two
Hundred Seventy-Two Dollars ($275,272), MINUS (ii) the amount of the Company's
Funded Indebtedness (as defined in SECTION 1.3 below) as of the Closing Date as
such term is defined in SECTION 2.1 below (the "PURCHASE PRICE"). Simultaneously
with the delivery to counsel to the Purchaser of certificates representing the
2,043,333 Shares duly endorsed in blank for transfer, or with appropriate stock
powers in blank attached, counsel to the Purchaser shall deliver to Xxxxxxx X.
Xxxxxx, PA, a professional association, as escrow agent (the "ESCROW AGENT"),
the Purchase Price in next day funds. The Purchase Price and the certificates
representing the 2,043,333 Shares shall be released upon the Purchaser's and the
Sellers' mutual written notification that each is ready to close.
1.3 FUNDED INDEBTEDNESS. At least three (3) business days prior to the
Closing Date, the Company will provide the Purchaser with pay-off letters in
form and substance satisfactory to the Purchaser from all holders of Funded
Indebtedness, and make arrangements satisfactory to the Purchaser for such
holders to provide to the Company, simultaneously with the Closing, recordable
form Lien releases, canceled notes, trademark and patent assignments and other
documents reasonably requested by the Purchaser. Sellers and the Company jointly
and severally represent and warrant to Purchaser that all Contracts evidencing
the Company's Funded Indebtedness
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are set forth on SCHEDULE 1.3 hereto.
ARTICLE II
CLOSING; DELIVERIES
2.1 CLOSING. Subject to the conditions stated in ARTICLE VII of this
Agreement, the closing of the transactions contemplated hereby (the "CLOSING")
shall be held at 10:00 a.m., EST, on April 23, 2010 or, if the conditions set
forth in SECTION 7.2 have not been satisfied or waived on such date, on the
first (1st) business day after all such conditions shall have been satisfied or
waived, at the offices of Gusrae Xxxxxx Xxxxx & Xxxxxxx PLLC, located at 000
Xxxx Xxxxxx, Xxx Xxxx, XX 00000. The date upon which the Closing occurs is
hereinafter referred to as the "CLOSING DATE."
2.2 DELIVERIES BY SELLERS. At or prior to the Closing, the Sellers shall
deliver to Purchaser:
(a) certificates representing the Shares duly endorsed in blank
for transfer, or with appropriate stock powers in blank attached;
(b) the resignations of all the officers and directors of the
Company, provided, that the resignation of Xxx Xxxxx as a member of the board of
directors of the Company shall be undated with the agreement that it shall be
accepted by the Company on or after the date that shall be ten (10) days
subsequent to the date that the Information Statement on Schedule 14F-1 is
mailed to the shareholders of the Company informing such shareholders of a
change in control of the board of directors of the Company;
(c) the bank accounts, stock book, stock ledger, minute books and
corporate seal of the Company;
(d) a certificate executed by each Seller to the effect that all
conditions set forth in SECTION 7.2 have been satisfied (the "SELLER'S
CERTIFICATE");
(e) possession of all originals and copies of agreements,
instruments, documents, deeds, books, records, files and other data and
information within the possession of the Sellers or any Affiliate of the Sellers
pertaining to the Company (collectively, the "RECORDS");
(f) evidence satisfactory to Purchaser that the Purchaser or his
designees shall be the only authorized signatories with respect to the Company's
various accounts, credit lines, safe deposit boxes or vaults set forth or
required to be set forth in SCHEDULE 3.14;
(g) all correspondence with the Securities and Exchange Commission
(the "SEC");
(h) all correspondence with the Financial Industry Regulatory
Authority ("FINRA");
(i) letters from each of the Sellers and each of the officers and
directors of the Company addressed to the Purchaser that all SEC Reports were
true and accurate when filed with the SEC (the "10b-5 LETTERS"), in the form
attached hereto as EXHIBIT A;
(j) a certificate dated within three (3) business days of the
Closing Date evidencing the Company's good standing in the State of Nevada;
(k) all Tax Returns (as defined in Section 8.1(k) below);
(l) all blue sky filings; and
(m) proof of the closing of the Other Share Acquisition.
2.3 DELIVERIES BY PURCHASER. At or prior to the Closing, Purchaser shall
deliver the amount of the
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Purchase Price required to be paid at Closing pursuant to SECTION 1.2 hereof to
the Sellers through the Escrow Agent.
2.4 TERMINATION IN ABSENCE OF CLOSING.
(a) Subject to the provisions of SECTION 2.4(b), if by the close
of business on April 23, 2010, the Closing has not occurred, then any party
hereto may thereafter terminate this Agreement by written notice to such effect,
to the other parties hereto, without liability of or to any party to this
Agreement or any shareholder, director, officer, employee or representative of
such party unless the reason for Closing having not occurred is (i) such party's
willful breach of the provisions of this Agreement, or (ii) if all of the
conditions to such party's obligations set forth in ARTICLE VII have been
satisfied or waived in writing by the date scheduled for the Closing pursuant to
SECTION 2.1, the failure of such party to perform its obligations under this
ARTICLE II on such date; provided, however, that the provisions of SECTION 9.2
through SECTION 9.6 shall survive any such termination; and provided further,
however, that any termination pursuant to this SECTION 2.4 shall not relieve any
party hereto who was responsible for Closing having not occurred as described in
clauses (i) or (ii) above of any liability for (x) such party's willful breach
of the provisions of this Agreement, or (y) if all of the conditions to such
party's obligations set forth in ARTICLE VII have been satisfied or waived in
writing by the date scheduled for the Closing pursuant to SECTION 2.1, the
failure of such party to perform its obligations under this ARTICLE II on such
date.
(b) Purchaser shall have the right to terminate this Agreement
without liability to any party by so notifying the Sellers at any time prior to
Closing if, in Purchaser's sole discretion:
(i) the results of the Purchaser's due diligence
investigation shall have revealed that any representation or warranty made
herein for the benefit of Purchaser, or any certificate, schedule or document
furnished to Purchaser pursuant to this Agreement, is untrue or incorrect in any
respect or otherwise be unsatisfactory to Purchaser;
(ii) The Company or either Seller shall have defaulted in any
material respect in the performance of any material obligation under this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE COMPANY
Each of the Sellers and the Company hereby jointly and severally
represents and warrants to Purchaser as of the date hereof and as of the Closing
Date that:
3.1 CORPORATE EXISTENCE AND QUALIFICATION. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada. The Company has the corporate power to own, manage, lease and
hold its Properties and to carry on its business as and where such Properties
are presently located and such business is presently conducted. Neither the
character of the Company's Properties nor the nature of the Company's business
requires the Company to be duly qualified to do business as a foreign
corporation in any jurisdiction outside those identified in SCHEDULE 3.1
attached hereto, and the Company is qualified as a foreign corporation and in
good standing in each listed jurisdiction.
3.2 AUTHORITY, APPROVAL AND ENFORCEABILITY. This Agreement has been duly
executed and delivered by the Company and the Sellers, and each of the Sellers
and the Company have all requisite power and legal capacity to execute and
deliver this Agreement and all Collateral Agreements executed and delivered or
to be executed and delivered in connection with the transactions provided for
hereby, to consummate the transactions contemplated hereby and by the Collateral
Agreements, and to perform its and their obligations hereunder and under the
Collateral Agreements. This Agreement and each Collateral Agreement to which any
of the Sellers and/or the Company is a party constitutes, or upon execution and
delivery will constitute, the legal, valid and binding obligation of such party,
enforceable in accordance with its terms.
3.3 CAPITALIZATION AND CORPORATE RECORDS.
(a) The Company's authorized capital stock consists solely of
70,000,000 shares of Common
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Stock and 5,000,000 shares of preferred stock (the "PREFERRED STOCK"), of which
there are 2,644,500 shares of Common Stock issued and outstanding and no shares
of Preferred Stock issued and outstanding. Immediately following the closing of
the Share Acquisition and the Other Share Acquisition, there will be 2,644,500
shares of Common Stock issued and outstanding, of which (i) the Purchaser shall
own 2,264,000 shares of Common Stock (constituting approximately 85.6% of the
issued and outstanding Common Stock), and (ii) Non-Affiliated Shareholders will
own in the aggregate 380,500 shares of Common Stock (constituting approximately
14.4% of the issued and outstanding shares of Common Stock). All of the
2,043,333 Shares are owned beneficially and of record by the Sellers as follows;
1,043,333 Shares by Xx. Xxxxx and 1,000,000 by Xx. Xxxxxxx, free and clear of
any and all Liens, and no shares of capital stock are held in the Company's
treasury. All of the outstanding shares of Common Stock are duly authorized,
validly issued, fully paid and non-assessable and were not issued in violation
of (i) any preemptive or other rights of any Person to acquire securities of the
Company, or (ii) any applicable federal or state securities laws, and the rules
and regulations promulgated thereunder (collectively, the "SECURITIES LAWS").
There are no direct or indirect outstanding subscriptions, options, convertible
securities, rights (preemptive or otherwise), warrants, calls or agreements
relating to any shares of capital stock of the Company, whether oral, in writing
and/or otherwise. Upon delivery to Purchaser at the Closing of certificates
representing the Shares duly endorsed in blank for transfer or accompanied by
stock powers duly endorsed in blank, good and valid title to the 2,043,333
Shares will pass to Purchaser, free and clear of all Liens of any kind.
(b) The copies of the Articles of Incorporation and Bylaws of the
Company attached hereto as EXHIBIT C are true, accurate, and complete and
reflect all amendments made through the date of this Agreement. The Company's
stock and minute books made available to Purchaser for review were correct and
complete as of the date of such review, no further entries have been made
through the date of this Agreement, and such minute books contain an accurate
record of all shareholder and corporate actions of the shareholders and
directors (and any committees thereof) of the Company taken by written consent
or at a meeting since its inception. All corporate actions taken by the Company
have been duly authorized or ratified. All accounts, books, ledgers and official
and other records of the Company fairly and accurately reflect all of the
Company's transactions, properties, assets and liabilities.
(c) Except for the subsidiaries of the Company listed on SCHEDULE
3.3(c), the Company does not own, directly or indirectly, any outstanding voting
securities of or other interests in any other corporation, partnership, joint
venture or other business entity. SCHEDULE 3.3(c) hereto sets forth the name of
each Subsidiary of the Company, and, with respect to each Subsidiary, the
jurisdiction in which it is incorporated or organized, the number of shares of
its authorized capital stock, the number and class of shares thereof duly issued
and outstanding, the names of all stockholders or other equity owners and the
number of shares of stock owned by each stockholder or the amount of equity
owned by each equity owner. The outstanding shares of capital stock or equity
interests of each Subsidiary are validly issued, fully paid and non-assessable,
and all such shares or other equity interests represented as being owned by
Company or another Subsidiary of the Company are owned by it free and clear of
any and all Liens. No shares of capital stock are held by any Subsidiary as
treasury stock. There is no existing option, warrant, call, commitment or
agreement to which any Subsidiary is a party requiring, and there are no
convertible securities of any Subsidiary outstanding which upon conversion would
require, the issuance of any additional shares of capital stock or other equity
interests of any Subsidiary or other securities convertible into shares of
capital stock or other equity interests of any Subsidiary or other equity
security of any Subsidiary. Each Subsidiary is a duly organized and validly
existing corporation or other entity in good standing under the laws of the
jurisdiction of its reorganization and is duly qualified to do business and is
in good standing under the laws of (i) each jurisdiction in which it owns or
leases real property and (ii) each other jurisdiction in which the conduct of
its business or the ownership of its assets requires such qualification. Each
Subsidiary has all requisite corporate power and authority to own its properties
and carry on its business as presently conducted.
3.4 NO SELLER DEFAULTS OR CONSENTS. The execution and delivery of this
Agreement and the Collateral Agreements by Sellers and the performance by each
Seller of their obligations hereunder and thereunder will not violate any
provision of law or any judgment, award or decree or any indenture, agreement or
other instrument to which the Seller is a party, or by which the properties or
assets of such Seller is bound or affected, or conflict with, result in a breach
of or constitute (with due notice or lapse of time or both) a default under, any
such indenture, agreement or other instrument.
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3.5 NO COMPANY DEFAULTS OR CONSENTS. Neither the execution and delivery
of this Agreement nor the carrying out of any of the transactions contemplated
hereby will:
(i) violate or conflict with any of the terms, conditions
or provisions of the charter or bylaws of the Company;
(ii) violate any Legal Requirements applicable to the
Company;
(iii) violate, conflict with, result in a breach of,
constitute a default under (whether with or without notice or the lapse of time
or both), or accelerate or permit the acceleration of the performance required
by, or give any other party the right to terminate, any Contract or Permit
binding upon or applicable to the Company;
(iv) result in the creation of any Lien on any Properties of
the Company; or
(v) require either of the Sellers or the Company to obtain
or make any waiver, consent, action, approval or authorization of, or
registration, declaration, notice or filing with, any private non-governmental
third party or any Governmental Authority.
3.6 NO PROCEEDINGS. No suit, action or other proceeding is pending or,
to the knowledge of the Company, threatened before any Governmental Authority
seeking to restrain the Company or either Seller or prohibit their entry into
this Agreement or prohibit the Closing, or seeking damages against the Company
or its Properties as a result of the consummation of this Agreement.
3.7 FINANCIAL STATEMENTS; LIABILITIES; ACCOUNTS RECEIVABLE; INVENTORIES.
(a) The Company has filed with the SEC: (i) the audited financial
statements with respect to the Company and its business as of and for the years
ended December 31, 2007, 2008 and 2009 (the "AUDITED FINANCIAL STATEMENTS") and
(ii) unaudited financial statements (the "QUARTERLY FINANCIAL STATEMENTS") as of
and for the three (3) months ended March 31, June 30 and September 30 since the
Company's inception (collectively, the "FINANCIAL STATEMENTS"). All of such
Financial Statements present fairly the financial condition and results of
operations of the Company for the dates or periods indicated thereon. The
Financial Statements complied in all material respects with the requirements of
the Exchange Act, and the rules and regulations of the SEC promulgated
thereunder. The Financial Statements have been prepared in accordance with GAAP
applied on a consistent basis during the periods involved.
(b) The Company does not have any liabilities or obligations
(whether accrued, absolute, contingent, known, unknown or otherwise, and whether
or not of a nature required to be reflected or reserved against in a balance
sheet in accordance with GAAP).
(c) The accounts receivable reflected on the December 31, 2009
balance sheet included in the Financial Statements referenced in SECTION 3.7(a)
and all of the Company's accounts receivable arising since December 31, 2009
(the "BALANCE SHEET DATE") arose from bona fide transactions in the ordinary
course of business, and the goods and services involved have been sold,
delivered and performed to the account obligors, and no further filings (with
governmental agencies, insurers or others) are required to be made, no further
goods are required to be provided and no further services are required to be
rendered in order to complete the sales and fully render the services and to
entitle the Company to collect the accounts receivable in full. No such account
has been assigned or pledged to any other person, firm or corporation, and,
except only to the extent fully reserved against as set forth in the December
31, 2009 balance sheet included in such Financial Statements, no defense or
set-off to any such account has been asserted by the account obligor or exists.
(d) The Company has and will have as of the Closing Date legal and
beneficial ownership of its Properties, free and clear of any and all Liens.
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3.8 ABSENCE OF CERTAIN CHANGES.
(a) Since the Balance Sheet Date, there has not been:
(i) any event, circumstance or change that had or might
have a material adverse effect on the business, operations, prospects,
Properties, financial condition or working capital of the Company;
(ii) any damage, destruction or loss (whether or not covered
by insurance) that had or might have a material adverse effect on the business,
operations, prospects, Properties or financial condition of the Company; or
(iii) Any material adverse change in the Company's sales
patterns, pricing policies, accounts receivable or accounts payable.
(b) Since the Balance Sheet Date, the Company has not done any of
the following:
(i) merged into or with or consolidated with, any other
corporation or acquired the business or assets of any Person;
(ii) purchased any securities of any Person;
(iii) created, incurred, assumed, guaranteed or otherwise
become liable or obligated with respect to any indebtedness, or made any loan or
advance to, or any investment in, any person, except in each case in the
ordinary course of business;
(iv) made any change in any existing election, or made any
new election, with respect to any tax law in any jurisdiction which election
could have an effect on the tax treatment of the Company or the Company's
business operations;
(v) entered into, amended or terminated any material
agreement;
(vi) sold, transferred, leased, mortgaged, encumbered or
otherwise disposed of, or agreed to sell, transfer, lease, mortgage, encumber or
otherwise dispose of, any Properties except (i) in the ordinary course of
business, or (ii) pursuant to any agreement specified in SCHEDULE 3.11;
(vii) settled any claim or litigation, or filed any motions,
orders, briefs or settlement agreements in any proceeding before any
Governmental Authority or any arbitrator;
(viii) incurred or approved, or entered into any agreement or
commitment to make, any expenditures in excess of $1,000 (other than those
arising in the ordinary course of business or those required pursuant to any
agreement specified in SCHEDULE 3.11);
(ix) maintained its books of account other than in the
usual, regular and ordinary manner in accordance with generally accepted
accounting principles and on a basis consistent with prior periods or made any
change in any of its accounting methods or practices that would be required to
be disclosed under generally accepted accounting principles;
(x) granted any increase in the compensation payable or to
become payable to directors, officers or employees (including, without
limitation, any such increase pursuant to any bonus, profit-sharing or other
plan or commitment);
(xi) suffered any extraordinary losses or waived any rights
of material value;
(xii) made any payment to any Affiliate or forgiven any
indebtedness due or owing from any Affiliate to the Company;
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(xiii) engaged in any one or more activities or transactions
with an Affiliate or outside the ordinary course of business;
(xiv) declared, set aside or paid any dividends, or made any
distributions or other payments in respect of its equity securities, or
repurchased, redeemed or otherwise acquired any such securities;
(xv) amended its charter or bylaws;
(xvi) issued any capital stock or other securities, or
granted, or entered into any agreement to grant, any options, convertible
rights, other rights, warrants, calls or agreements relating to its capital
stock; or
(xvii) committed to do any of the foregoing.
3.9 COMPLIANCE WITH LAWS. The Company is and has been in compliance in
all respects with any and all Legal Requirements applicable to the Company,
other than failures to so comply that would not have an adverse effect on the
business, operations, prospects, Properties or financial condition of the
Company. The Company (x) has not received or entered into any citations,
complaints, consent orders, compliance schedules, or other similar enforcement
orders or received any written notice from any Governmental Authority or any
other written notice that would indicate that there is not currently compliance
with all such Legal Requirements, except for failures to so comply that would
not have an adverse effect on the business, operations, prospects, Properties or
financial condition of the Company, and (y) is not in default under, and no
condition exists (whether covered by insurance or not) that with or without
notice or lapse of time or both would constitute a default under, or breach or
violation of, any Legal Requirement or Permit applicable to the Company.
3.10 LITIGATION. There are no claims, actions, suits, investigations or
proceedings against the Company pending or, to the knowledge of the Company,
threatened in any court or before or by any Governmental Authority, or before
any arbitrator, that might have an adverse effect (whether covered by insurance
or not) on the business, operations, prospects, Properties or financial
condition of the Company and there is no basis for any such claim, action, suit,
investigation or proceeding. SCHEDULE 3.10 sets forth a true and correct listing
of all material actions, suits, investigations, claims or proceedings that were
pending, settled or adjudicated since the Company's inception.
3.11 COMMITMENTS.
(a) Except as otherwise set forth in SCHEDULE 3.11(a), the Company
is not a party to or bound by any of the following, whether written or oral:
(i) any Contract that cannot by its terms be terminated by
the Company with 30 days' or less notice without penalty or whose term continues
beyond one year after the date of this Agreement;
(ii) contract or commitment for capital expenditures by the
Company in excess of $1,000 per calendar quarter in the aggregate;
(iii) lease or license with respect to any Properties, real
or personal, whether as landlord, tenant, licensor or licensee;
(iv) agreement, contract, indenture or other instrument
relating to the borrowing of money or the guarantee of any obligation or the
deferred payment of the purchase price of any Properties;
(v) contract with any Affiliate of the Company (including
the Sellers) relating to the provision of goods or services by or to the
Company;
(vi) agreement for the sale of any assets;
(vii) agreement that purports to limit the Company's freedom
to compete freely in
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any line of business or in any geographic area;
(viii) preferential purchase right, right of first refusal, or
similar agreement; or
(ix) other Contract that is material to the business of the
Company.
(b) All of the Contracts listed or required to be listed in
SCHEDULE 3.11(a) are valid, binding and in full force and effect, and the
Company has not been notified or advised by any party thereto of such party's
intention or desire to terminate or modify any such Contract in any respect.
Neither the Company nor, to the knowledge of the Company, any other party is in
breach of any of the terms or covenants of any Contract listed or required to be
listed in SCHEDULE 3.11(a). Following the Closing, the Company will continue to
be entitled to all of the benefits currently held by the Company under each
Contract listed or required to be listed in SCHEDULE 3.11(a).
(c) Except as otherwise set forth in SCHEDULE 3.11(c), the Company
is not a party to or bound by any Contract or Contracts the terms of which were
arrived at by or otherwise reflect less-than-arm's-length negotiations or
bargaining.
3.12 TITLE TO ASSETS. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them that is
material to the business of the Company and the Subsidiaries, and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens. Any real property and facilities held under lease by the Company and the
Subsidiaries are held by them under valid, subsisting, assignable with no
impediment and enforceable leases of which the Company and the Subsidiaries are
in compliance. The purchase of the Shares will not in any way affect the
Company's title to, or lease of, such real property or to dispose of it in any
way whatsoever.
3.13 PATENTS AND TRADEMARKS. The Company and the Subsidiaries have, or
have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights necessary or material for use in connection with their respective
businesses and where the failure to so have such rights could have a Material
Adverse Effect (collectively, the "INTELLECTUAL PROPERTY RIGHTS"). Neither the
Company nor any Subsidiary has received a written notice that the Intellectual
Property Rights used by the Company or any Subsidiary violates or infringes upon
the rights of any Person. All such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the
Intellectual Property Rights of others. All Intellectual Property Rights are set
forth on SCHEDULE 3.13 hereof.
3.14 BANKS. SCHEDULE 3.14 sets forth (i) the name of each bank, trust
company or other financial institution and stock or other broker with which the
Company has an account, credit line or safe deposit box or vault, (ii) the names
of all persons authorized to draw thereon or to have access to any safe deposit
box or vault, (iii) the purpose of each such account, safe deposit box or vault,
and (iv) the names of all persons authorized by proxies, powers of attorney or
other like instrument to act on behalf of the Company in matters concerning any
of its business or affairs. No such proxies, powers of attorney or other like
instruments are irrevocable. The Company has furnished the Purchaser with true
and complete copies of all such accounts, credit lines, and safe deposit boxes
or vaults and any other such document that it has had since its inception.
3.15 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither the Company, either
Seller nor any other Affiliate or agent of the Company, or any other person
acting on behalf of or associated with the Company, acting alone or together,
has (a) received, directly or indirectly, any rebates, payments, commissions,
promotional allowances or any other economic benefits, regardless of their
nature or type, from any customer, supplier, employee or agent of any customer
or supplier; or (b) directly or indirectly given or agreed to give any money,
gift or similar benefit to any customer, supplier, employee or agent of any
customer or supplier, any official or employee of any government (domestic or
foreign), or any political party or candidate for office (domestic or foreign),
or other person who was, is or may be in a position to help or hinder the
business of the Company (or assist the Company in connection with any actual or
proposed transaction), in each case which (i) may subject the Company to any
damage or penalty in any civil, criminal or governmental litigation or
proceeding, (ii) if not given in the past, may have had an adverse effect on the
assets, business, operations or prospects of the Company, or (iii) if not
continued in the future, may adversely
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affect the assets, business, operations or prospects of the Company.
3.16 TRANSACTIONS WITH AFFILIATES. Except as set forth on SCHEDULE 3.16,
the Company has not purchased, acquired or leased any property or services from,
or sold, transferred or leased any property or services to, or loaned or
advanced any money to, or borrowed any money from, or entered into or been
subject to any management, consulting or similar agreement with, or engaged in
any other significant transaction with either Seller or any other officer,
director or shareholder of the Company or any of their respective Affiliates.
Except as set forth on SCHEDULE 3.16, neither one of the Sellers nor any other
Affiliate of the Company is indebted to the Company for money borrowed or other
loans or advances, and the Company is not indebted to any such Affiliate.
3.17 ABSENCE OF CERTAIN COMPANY CONTROL PERSON ACTIONS OR EVENTS. To the
Company's knowledge, none of the following has occurred during the past three
(3) years with respect to a Company Control Person:
(a) A petition under the federal bankruptcy laws or any provincial
or state insolvency law was filed by or against, or a receiver, fiscal agent or
similar officer was appointed by a court for the business or property of such
Company Control Person, or any partnership in which he was a general partner at
or within two (2) years before the time of such filing, or any corporation or
business association of which he was an executive officer at or within two years
before the time of such filing;
(b) Such Company Control Person was convicted in a criminal
proceeding or is a named subject of a pending criminal proceeding (excluding
traffic violations and other minor offenses);
(c) Such Company Control Person was the subject of any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining him from,
or otherwise limiting, his engagement in (A) any type of business practice, or
(B) any activity in connection with the purchase or sale of any security or
commodity or in connection with any violation of federal or state securities
laws or federal commodities laws;
(d) Such Company Control Person was the subject of any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any
federal or state authority barring, suspending or otherwise limiting for more
than sixty (60) days the right of such Company Control Person to engage in any
activity described in paragraph (c) of this item, or to be associated with
Persons engaged in any such activity; or
(e) Such Company Control Person was found by a court of competent
jurisdiction in a civil action or by the SEC to have violated any federal or
state securities law, and the judgment in such civil action or finding by the
SEC has not been subsequently reversed, suspended, or vacated.
3.18 SEC REPORTS. All SEC Reports of the Company since inception complied
in all material respects with the requirements of the Securities Act, the
Exchange Act, and the rules and regulations promulgated thereunder. None of such
SEC Reports contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
3.19 BOOKS AND RECORDS; INTERNAL ACCOUNTING CONTROLS. The books and
records of the Company and its Subsidiaries accurately reflect in all material
respects the information relating to the business of the Company and the
Subsidiaries, the location and collection of their assets, and the nature of all
transactions giving rise to the obligations or accounts receivable of the
Company or any Subsidiary to the extent required to be contained therein. The
Company and each of its Subsidiaries maintain a system of internal accounting
controls sufficient, in the judgment of the Company, to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP (except
with respect to the non-US Subsidiaries) and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management's general
or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
actions is taken with respect to any differences. All such books and records and
a description of the internal accounting controls are attached hereto on
SCHEDULE 3.19.
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3.20 NO INTEGRATED OFFERING. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would prevent the Company from selling
securities within the six (6) months following the Closing Date, whether
pursuant to Rule 506 under the Securities Act or otherwise.
3.21 COMMON STOCK SYMBOL. The Common Stock is currently quoted on the OTC
BB under the symbol "BVIG"
3.22 NO SEC OR FINRA INQUIRIES. To the best of the Company's knowledge,
the Company is not, and has never been, the subject of any formal or informal
inquiry or investigation by the SEC or FINRA.
3.23 DISCLOSURE OF MATERIAL INFORMATION. Neither the Company nor any
other Person acting on its behalf has provided or will provide the Purchaser or
its agents or counsel with any information that the Company and/or the Sellers
believe constitutes material non-public information (other than with respect to
the transactions contemplated by this Agreement), unless prior thereto the
Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information. The Company and Sellers understand and confirm that
the Purchaser will be relying on the foregoing representations in effecting
transactions in securities of the Company.
3.24 FULL DISCLOSURE. The information furnished by the Sellers and the
Company to Purchaser pursuant to this Agreement (including, without limitation,
information contained in the exhibits hereto, the schedules identified herein,
the instruments referred to in such schedules and the certificates and other
documents to be executed or delivered pursuant hereto by the Sellers and/or the
Company at or prior to the Closing) is not, nor at the Closing will be, false or
misleading in any material respect, or contains, or at the Closing will contain,
any misstatement of material fact, or omits, or at the Closing will omit, to
state any material fact required to be stated in order to make the statements
therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers hereby represent and warrant to the Purchaser that the Sellers
are the true and lawful registered holders and beneficial owners of the Shares
listed opposite the name of each such Seller attached hereto as ANNEX A, all of
which Shares are free and clear of all Liens. Upon the payment of the Purchase
Price, the Purchaser will receive good and valid title to the Shares, free and
clear of all Liens. Other than the rights and obligations arising under this
Agreement, none of the Shares is subject to any rights of any other Person to
acquire the same.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Sellers that:
5.1 AUTHORITY, APPROVAL AND ENFORCEABILITY. This Agreement has been duly
executed and delivered by Purchaser and Purchaser has all requisite power and
legal capacity to execute and deliver this Agreement and all Collateral
Agreements executed and delivered or to be executed and delivered by Purchaser
in connection with the transactions provided for hereby, to consummate the
transactions contemplated hereby and by the Collateral Agreements, and to
perform his obligations hereunder and under the Collateral Agreements. This
Agreement and each Collateral Agreement to which Purchaser is a party
constitutes, or upon execution and delivery will constitute, the legal, valid
and binding obligation of Purchaser, enforceable in accordance with its terms,
except as such enforcement may be limited by general equitable principles or by
applicable bankruptcy, insolvency, moratorium, or similar laws and judicial
decisions from time to time in effect which affect creditors' rights generally.
5.2 NO DEFAULT OR CONSENTS. Neither the execution and delivery of this
Agreement by the Purchaser nor his carrying out of the transactions contemplated
hereby will:
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(a) violate any Legal Requirements applicable to Purchaser;
(b) result in the creation of any Lien; or
(c) require Purchaser to obtain or make any waiver, consent,
action, approval or authorization of, or registration, declaration, notice or
filing with, any private non-governmental third party or any Governmental
Authority.
ARTICLE VI
OBLIGATIONS PRIOR TO CLOSING
From the date of this Agreement through the Closing:
6.1 PURCHASER'S ACCESS TO INFORMATION AND PROPERTIES. The Company and
the Sellers shall permit Purchaser and its authorized employees, agents,
accountants, legal counsel and other representatives to have access to the
books, records, employees, counsel, accountants, engineers and other
representatives of the Company at all times reasonably requested by Purchaser
for the purpose of conducting an investigation of the Company's financial
condition, corporate status, operations, prospects, business and Properties. The
Company shall make available to Purchaser for examination and reproduction all
documents and data of every kind and character relating to the Company in
possession or control of, or subject to reasonable access by, the Company and/or
the Sellers, including, without limitation, all files, records, data and
information relating to the Properties (whether stored in paper, magnetic or
other storage media) and all agreements, instruments, contracts, assignments,
certificates, orders, and amendments thereto. Furthermore, the Company shall
allow Purchaser access to, and the right to inspect, the Properties, except to
the extent that such Properties are operated by a third-party operator, in which
case the Company shall use its best efforts to cause the operator of such
Properties to allow Purchaser access to, and the right to inspect, such
Properties.
6.2 NOTICE REGARDING CHANGES. The Company and the Sellers shall promptly
inform Purchaser in writing of any change in facts and circumstances that could
render any of the representations and warranties made herein by the Company
and/or the Seller inaccurate or misleading if such representations and
warranties had been made upon the occurrence of the fact or circumstance in
question. The Purchaser shall promptly inform the Sellers in writing of any
change in facts and circumstances that could render any of the representations
and warranties made herein by it inaccurate or misleading if such
representations and warranties had been made upon the occurrence of the fact or
circumstance in question.
6.3 ENSURE CONDITIONS MET. Subject to the terms and conditions of this
Agreement, each party hereto shall use all reasonable commercial efforts to take
or cause to be taken all actions and do or cause to be done all things required
under applicable Legal Requirements in order to consummate the transactions
contemplated hereby, including, without limitation, (i) obtaining all Permits,
authorizations, consents and approvals of any Governmental Authority or other
person which are required for or in connection with the consummation of the
transactions contemplated hereby and by the Collateral Agreements, (ii) taking
any and all reasonable actions necessary to satisfy all of the conditions to
each party's obligations hereunder as set forth in ARTICLE VII, and (iii)
executing and delivering all agreements and documents required by the terms
hereof to be executed and delivered by such party on or prior to the Closing.
6.4 PAYOFF AND ESTOPPEL LETTERS. Prior to Closing, (a) the Company shall
request payoff and estoppel letters with respect to all Funded Indebtedness,
which letters shall contain payoff amounts, per diems, wire transfer
instructions and an agreement to deliver, upon full payment, UCC-3 termination
statements, other appropriate releases and any original promissory notes or
other evidences of indebtedness marked canceled, and (b) the Company shall
provide Purchaser with evidence of satisfaction in full or release of all
guarantees, notes, or obligations of the Company to or on behalf of the Seller
or any other Affiliate of the Company.
6.5 NO SHOP. Neither Sellers nor the Company shall, and the Sellers and
the Company shall jointly cause the Company's shareholders, officers, directors,
employees and other agents not to, directly or indirectly (i) make, (ii) accept
or (iii) take any action to solicit, initiate or encourage, any offer or
proposal or indication of interest
- 13 -
in a merger, consolidation or other business combination involving any equity
interest in, or a substantial portion of the assets of the Company, other than
in connection herewith. Sellers and the Company shall immediately advise the
Purchaser of the terms of any offer, proposal or indication of interest that it
receives or otherwise becomes aware of.
6.6 REPORTING STATUS. The Company shall timely file all reports required
to be filed with the SEC pursuant to the Exchange Act, and the Company shall not
terminate its status as an issuer required to file reports under the Exchange
Act even if the Exchange Act or the rules and regulations thereunder would
permit such termination.
6.7 ISSUANCE OF SECURITIES. The Company shall not issue any securities
to any Person.
ARTICLE VII
CONDITIONS TO SELLERS' AND PURCHASER'S OBLIGATIONS
7.1 CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligations of the
Sellers to carry out the transactions contemplated by this Agreement are
subject, at the option of the Sellers, to the satisfaction or waiver by the
Sellers of the following conditions:
(a) All representations and warranties of Purchaser contained in
this Agreement shall be true and correct in all material respects at and as of
the Closing, and Purchaser shall have performed and satisfied in all material
respects all covenants and agreements required by this Agreement to be performed
and satisfied by Purchaser at or prior to the Closing.
(b) As of the Closing Date, no suit, action or other proceeding
(excluding any such matter initiated by or on behalf of the Company or Sellers)
shall be pending or threatened before any Governmental Authority seeking to
restrain the Company or prohibit the Closing or seeking Damages against the
Company as a result of the consummation of this Agreement.
7.2 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of the
Purchaser to carry out the transactions contemplated by this Agreement are
subject, at the option of the Purchaser, to the satisfaction or waiver by the
Purchaser of the following conditions:
(a) All representations and warranties of the Company and the
Sellers contained in this Agreement shall be true and correct in all material
respects at and as of the Closing, and the Company and the Sellers shall have
performed and satisfied in all material respects all agreements and covenants
required by this Agreement to be performed and satisfied by them at or prior to
the Closing.
(b) As of the Closing Date, no suit, action or other proceeding
(excluding any such matter initiated by or on behalf of Purchaser) shall be
pending or threatened before any court or governmental agency seeking to
restrain Purchaser or prohibit the Closing or seeking Damages against Purchaser
or the Company or its Properties as a result of the consummation of this
Agreement.
(c) The Other Shares shall have been acquired by the Purchaser
pursuant to the Other Share Acquisition.
(d) Since the Balance Sheet Date and up to and including the
Closing, there shall not have been any event, circumstance, change or effect
that, individually or in the aggregate, had or might have a material adverse
effect on the Company's business, operations, prospects, Properties or financial
condition.
(e) The Company shall have furnished Purchaser with a certified
copy of all necessary corporate action on its behalf approving the Company's
execution, delivery and performance of this Agreement.
(f) All agreements, commitments and understandings between the
Company and any Affiliate thereof shall have been terminated in all respects on
terms satisfactory to Purchaser, and all obligations,
- 14 -
claims or entitlements thereunder shall be unconditionally waived and released
by such Affiliates and written evidence thereof satisfactory in form and
substance to Purchaser shall have been delivered to Purchaser.
(g) Purchaser shall have completed its due diligence
investigation, and the results thereof shall not have revealed that any of the
representations of the Company or the Sellers set forth herein are untrue or
incorrect in any respect or otherwise be unsatisfactory to Purchaser.
(h) All proceedings to be taken by the Company in connection with
the transactions contemplated hereby and all documents incident thereto shall be
satisfactory in form and substance to Purchaser and its counsel, and Purchaser
and said counsel shall have received all such counterpart originals or certified
or other copies of such documents as it or they may reasonably request.
(i) No proceeding in which the Sellers or the Company shall be a
debtor, defendant or party seeking an order for its own relief or reorganization
shall have been brought or be pending by or against such person under any United
States or state bankruptcy or insolvency law.
(j) The Company shall not have any liabilities or obligations
(whether accrued, absolute, contingent, known, unknown or otherwise, and whether
or not of a nature required to be reflected or reserved against in a balance
sheet in accordance with GAAP) and the Purchaser shall have received copies of
"payoff" or "estoppel" letters or other evidence, reasonably satisfactory to it,
of the termination, at or prior to Closing, of all Funded Indebtedness and any
and all Liens that encumber the Company's Properties pursuant thereto.
(k) The Purchaser shall have received 10b-5 Letters from each of
the Sellers and each of the officers and directors of the Company addressed to
the Purchaser.
(l) The shares of Common Stock shall be quoted for trading on the
Over-the-Counter Bulletin Board under the symbol "BVIG" and there shall be at
least one broker-dealer registered with the SEC and a member of FINRA and SIPC
making a market in such shares.
(m) The shareholder list theretofore furnished by the Company
shall have been certified as to accuracy and completeness by the Company's
transfer agent and the information contained therein shall be satisfactory to
the Purchaser in its sole discretion.
(n) The Company and Sellers shall have furnished the Purchaser
with a Non-Objecting Beneficial Owners list dated within three (3) business days
prior to the Closing Date.
(o) The Company shall have delivered to the Purchaser a
certificate of an executive officer of the Company, dated as of the Closing
Date, confirming the accuracy of the Company's representations, warranties and
covenants as of the Closing Date and confirming the compliance by the Company
with the conditions precedent set forth in this SECTION 7.2 as of the Closing
Date.
(p) The Company shall have delivered to the Purchaser a
secretary's certificate, dated as of the Closing Date, as to (i) the resolutions
adopted by the Company's Board of Directors or any committee thereof approving
the transactions contemplated hereby, (ii) the Articles of Incorporation, (iii)
the Bylaws, each as in effect at the Closing, and (iv) the authority and
incumbency of the officers of the Company executing this Agreement and any other
documents required to be executed or delivered in connection therewith.
(q) Each of the Sellers shall have delivered his respective
Seller's Certificate and such other certificates and documents as the Purchaser
shall reasonably require incident to the Closing, including but not limited to
the certificate representing his, her or its Shares duly endorsed in blank for
transfer, or with appropriate stock powers in blank attached.
(r) The shares of Common Stock shall be DTC eligible and proof
thereof shall be furnished to the Purchaser.
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(s) The Company shall have appointed Xxxxxxx Xxxxx (i) to its
board of directors, which board of directors shall subsequent to such
appointment consist of two (2) directors, and (ii) as its Chief Executive
Officer and President, and delivered proof thereof.
(t) The Company shall have obtained the resignation of all its
present officers and directors, provided, that the resignation of Xxx Xxxxx as a
member of the board of directors of the Company shall be undated with the
agreement that it shall be accepted by the Company on or after the date that
shall be ten (10) days subsequent to the date that the Information Statement on
Schedule 14F-1 is mailed to the shareholders of the Company, and delivered
evidence of such resignations.
ARTICLE VIII
TAX MATTERS
8.1 REPRESENTATIONS AND OBLIGATIONS REGARDING TAXES. The Company and the
Sellers jointly and severally represent and warrant to and agree with the
Purchaser as follows:
(a) The Company has filed all Tax Returns that it was required to
file. All such Tax Returns were correct and complete in all respects. All Taxes
owed by the Company (whether or not shown on any Tax Return and whether or not
any Tax Return was required) have been paid. The Company is not currently the
beneficiary of any extension of time within which to file any Tax Return. No
claim has ever been made by a taxing authority in a jurisdiction where the
Company does not file Tax Returns that it is or may be subject to taxation by
that jurisdiction. There are no Liens on any of the assets of the Company that
arose in connection with any failure (or alleged failure) to pay any Tax, except
for Liens for Taxes not yet due.
(b) The Company has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party.
(c) No director or officer (or employee responsible for Tax
matters) of the Company expects any taxing authority to assess any additional
Taxes for any period for which Tax Returns have been filed. There is no dispute
or claim concerning any Tax liability of the Company either (i) claimed or
raised by any taxing authority in writing or (ii) as to which any of the
directors or officers (or employees responsible for Tax matters) of the Company
has actual knowledge (after reasonable investigation) based upon personal
contact with any agent of such taxing authority. SCHEDULE 8.1(c) lists all
Federal, state, local and foreign income Tax Returns filed with respect to the
Company for taxable periods ended on or after December 31, 2007, indicates those
Tax Returns that have been audited and indicates those Tax Returns that
currently are the subject of audit or in respect of which any written or
unwritten notice of any audit or examination has been received by the Company.
Except as set forth on SCHEDULE 8.1(c), no issue relating to Taxes has been
raised in writing by a taxing authority during any pending audit or examination,
and no issue relating to Taxes was raised in writing by a taxing authority in
any completed audit or examination, that reasonably can be expected to recur in
a later taxable period. The Company has delivered to Purchaser correct and
complete copies of all Federal, state, local and foreign income Tax Returns,
examination reports and statements of deficiencies assessed against or agreed to
by the Company since its inception.
(d) SCHEDULE 8.1(d) sets forth the following information with
respect to the Company as of the most recent practicable date (as well as on an
estimated pro forma basis as of the Closing giving effect to the consummation of
the transactions contemplated hereby): (i) the basis of the Company in its
assets, and (ii) the amount of any net operating loss, net operating loss
carryover, net capital loss, net capital loss carryover, Tax credit, Tax credit
carryover or excess charitable contribution of the Company.
(e) The Company is not a party to any joint venture, partnership
or other arrangement or contract that could be treated as a partnership for
Federal income tax purposes.
(f) The Company has never been an S corporation (within the
meaning of Section 1361(a)(1) of the Code).
- 16 -
(g) All material elections with respect to Taxes affecting the
Company are disclosed or attached to a Tax Return of the Company.
(h) The Company shall grant to Purchaser or its designees access
at all reasonable times to all of the Company's books and records (including tax
workpapers and returns and correspondence with tax authorities), including the
right to take extracts therefrom and make copies thereof, to the extent such
books and records relate to taxable periods ending on or prior to or that
include the Closing Date. The Sellers shall (i) grant to Purchaser access at all
reasonable times to all of the Company's books and records (including tax
workpapers and returns and correspondence with tax authorities), including the
right to take extracts therefrom and make copies thereof, to the extent that
such books and records relate to the operations of the Company during taxable
periods ending on or prior to or that include the Closing Date, and (ii)
otherwise cooperate with Purchaser in connection with any audit of Taxes that
relate to the business of the Company prior to Closing.
(i) The transfer of the Shares to Purchaser pursuant to the terms
of this Agreement will not result in any Tax liability to the Company or result
in a reduction of the amount of any net operating loss, net operating loss
carryover, net capital loss, net capital loss carryover, Tax credit, Tax credit
carryover, excess charitable contribution or basis of property that otherwise
would be available to the Company by reason or as a result of deferred
intercompany transactions, excess loss accounts, or otherwise.
(j) Neither of the Sellers nor the Company has taken or will take
any action that could result in a deemed election under section 338 of the Code
with respect to Purchaser's purchase of the Shares.
(k) As used in this Agreement, "AFFILIATED GROUP" means any
affiliated group within the meaning of Section 1504(a) of the Code or any
similar group defined under a similar provision of state, local or foreign law;
"CODE" means the Internal Revenue Code of 1986, as amended; "COMPANY" means the
Company and/or any corporation that at any time has been a subsidiary of the
Company; "PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity (or any department, agency or political
subdivision thereof); "TAX" means any Federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Section 59A of the Code), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated or other tax of any kind whatsoever,
including any interest, penalty or addition thereto, whether disputed or not,
and "TAXES" means any or all of the foregoing collectively; and "TAX RETURN"
means any return, declaration, report, claim for refund or information return or
statement relating to Taxes, including any schedule or attachment thereto and
including any amendment thereof.
ARTICLE IX
MISCELLANEOUS
9.1 INDEMNIFICATION.
(a) The Seller hereby agrees to indemnify the Purchaser and each
of its officers, directors, employees, agents and Affiliates, including, after
the Closing, the Company (herein collectively called "PURCHASER PARTIES" and
individually called a "PURCHASER PARTY") free and harmless from and against any
and all claims, demands, actions, causes of action, suits, losses, costs
(including, without limitation, all documentary, recording, filing, mortgage or
other stamp taxes or duties), charges, liabilities and damages, and expenses in
connection therewith (irrespective of whether such Purchaser Party is a party to
the action for which indemnification hereunder is sought), and including,
without limitation, reasonable attorneys' fees and disbursements (referred to in
this SECTION 9.1 as the "INDEMNIFIED LIABILITIES"), of any and every kind
whatsoever paid, incurred or suffered by, or asserted against, the Purchaser
Party for, with respect to, arising directly or indirectly, out of or as a
direct or indirect result of:
(i) A claim by any taxing authority for (A) any Taxes of the
Company allocable to any period ending on or prior to the Closing Date or
allocable to any period that begins before and ends after the
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Closing Date, and (B) any Taxes of the Company or any corporation that is or was
a member of an Affiliated Group of which the Company was or is a member;
(ii) A claim by any taxing authority for any Taxes arising
from or occasioned by the sale of the Company's capital stock pursuant to this
Agreement;
(iii) Any misrepresentation or breach of, or the failure to
perform or satisfy any of, the representations, warranties, covenants and
agreements made by the Seller and/or the Company in this Agreement or in any
document or certificate delivered by the Seller and/or the Company at the
Closing pursuant hereto;
(iv) The occurrence of any event on or prior to the date of
Closing that is (or would be, but for any deductible thereunder) covered by
individual policies of insurance, blanket insurance policies or self insurance
programs maintained by the Company; and
(v) The existence of any liabilities or obligations of the
Company (whether accrued, absolute, contingent, known or unknown, or otherwise,
and whether or not of a nature appropriate for inclusion in a balance sheet in
accordance with GAAP).
(b) Upon notice from the Purchaser to a Seller that a Purchaser
Party is entitled to an indemnification payment for an Indemnified Liability
pursuant hereto, such Seller shall thereupon pay to the Indemnified Taxpayer an
amount that, net of any Taxes imposed on the Indemnified Taxpayer with respect
to such payment, will indemnify and hold the Purchaser Party harmless from such
Loss.
(c) Anything to the contrary in this Agreement notwithstanding,
the indemnification obligations of the Sellers under this ARTICLE IX shall
survive the Closing until the end of the applicable statutes of limitations.
With respect to any indemnification obligation for any Tax for which a taxing
authority asserts a claim within 90 days before the end of the applicable
statute of limitations, a Purchaser Party shall be treated as having provided
timely notice to Sellers by providing written notice to Seller on or before the
90th day after the Indemnified Taxpayer's receipt of a written assertion of the
claim by the taxing authority.
(d) All transfer, documentary, sales, use, stamp, registration and
other such Taxes and fees (including any penalties and interest) incurred in
connection with this Agreement shall be paid by each Seller when due, and each
Seller will, at its own expense, file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use, stamp,
registration and other Taxes and fees, and, if required by applicable law,
Purchaser will, and will cause its Affiliates to, join in the execution of any
such Tax Returns and other documentation.
(e) To the extent that the foregoing undertaking may be
unenforceable for any reason, the Company agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. All obligations provided
for in this SECTION 9.1 shall survive any termination of this Agreement and
repayment in full of all other Liabilities and shall not be reduced or impaired
by any investigation made by or on behalf of any Purchaser Party.
9.2 CONFIDENTIALITY.
(a) Prior to the Closing, Purchaser shall, and shall cause its
Affiliates and its and their employees, agents, accountants, legal counsel and
other representatives and advisers to, hold in strict confidence all, and not
divulge or disclose any, information of any kind concerning the Company and its
business; provided, however, that the foregoing obligation of confidence shall
not apply to (i) information that is or becomes generally available to the
public other than as a result of a disclosure by Purchaser or its Affiliates or
any of its or their employees, agents, accountants, legal counsel or other
representatives or advisers, (ii) information that is or becomes available to
Purchaser or its Affiliates or any of its or their employees, agents,
accountants, legal counsel or other representatives or advisers on a
nonconfidential basis prior to its disclosure by Purchaser or its Affiliates or
any of its or their employees, agents, accountants, legal counsel or other
representatives or advisers and (iii) information that is required to be
disclosed by Purchaser or its Affiliates or any of its or their employees,
agents, accountants,
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legal counsel or other representatives or advisers as a result of any applicable
law, rule or regulation of any Governmental Authority; and provided further that
Purchaser promptly shall notify the Company of any disclosure pursuant to clause
(iii) of this SECTION 9.2(a); and, provided, further, that the foregoing
obligation of confidence shall not apply to the furnishing of information by
Purchaser in bona fide discussions or negotiations with prospective lenders.
(b) The Company and the Sellers shall, and shall cause its or his
Affiliates and their respective employees, agents, accountants, legal counsel
and other representatives and advisers to, hold in strict confidence all, and
not divulge or disclose any, information of any kind concerning the transactions
contemplated by this Agreement, the Company, Purchaser or their respective
businesses; provided, however, that the foregoing obligation of confidence shall
not apply to (i) information that is or becomes generally available to the
public other than as a result of a disclosure by the Company, the Sellers or its
or their Affiliates or any of their respective employees, agents, accountants,
legal counsel or other representatives or advisers, (ii) information that is or
becomes available to the Company, the Sellers or its or their Affiliates or any
of their respective employees, agents, accountants, legal counsel or other
representatives or advisers after the Closing on a nonconfidential basis prior
to its disclosure by the Company, the Sellers or its or their Affiliates or any
of their respective employees, agents, accountants, legal counsel or other
representatives or advisers and (iii) information that is required to be
disclosed by the Company, the Sellers or its or their Affiliates or any of their
respective employees, agents, accountants, legal counsel or other
representatives or advisers as a result of any applicable law, rule or
regulation of any Governmental Authority; and provided further that the Company
shall promptly shall notify Purchaser of any disclosure pursuant to clause (iii)
of this SECTION 9.2(b).
9.3 BROKERS. Regardless of whether the Closing shall occur, (i) the
Sellers shall, jointly and severally, indemnify and hold harmless Purchaser from
and against any and all liability for any brokers or finders' fees arising with
respect to brokers or finders retained or engaged by the Company or either
Seller in respect of the transactions contemplated by this Agreement, and (ii)
Purchaser shall indemnify and hold harmless the Company from and against any and
all liability for any brokers' or finders' fees arising with respect to brokers
or finders retained or engaged by Purchaser in respect of the transactions
contemplated by this Agreement.
9.4 COSTS AND EXPENSES. Each of the parties to this Agreement shall bear
his or its own expenses incurred in connection with the negotiation,
preparation, execution and closing of this Agreement and the transactions
contemplated hereby (the "TRANSACTION EXPENSES"); provided, however, that
Sellers shall be responsible for and shall discharge all Transaction Expenses
incurred by or on behalf of Sellers, the Sellers and/or the Company (it being
the parties' agreement that the Company shall not bear or otherwise be liable
for any such expenses).
9.5 NOTICES. Any notice, request, instruction, correspondence or other
document to be given hereunder by any party hereto to another (herein
collectively called "NOTICE") shall be in writing and delivered personally or
mailed by registered or certified mail, postage prepaid and return receipt
requested, or by telecopier, as follows:
IF TO PURCHASER: XXXXXXX XXXXX
c/o Kat Exploration, Inc.
0000 Xxxxxxx XX
Xxxxx Xxxxx, XX X0X 0X0, Xxxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
E-mail: xxxxxx@xxxxxxxxxxxxxx.xxx
IF TO THE COMPANY: BELLA VIAGGIO, INC.
0000 0xx Xxxxxx XX
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxx or Xxxxxx Xxxxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
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E-mail: xxxxxxxxxxxxxxxx@xxxxxxx.xxx
IF TO XXXXXX X. XXXXX: Xx. Xxxxxx X. Xxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Tel. No.:__________________________
Fax No.: __________________________
E-mail: xxxxxxxxxxxxxxxx@xxxxxxx.xxx
IF TO XXXXXX X. XXXXXXX: Xx. Xxxxxx X. Xxxxxxx
00000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Tel. No.:__________________________
Fax No.: __________________________
E-mail: xxxxxxxxxx@xxxxx.xxx
Each of the above addresses for notice purposes may be changed by
providing appropriate notice hereunder. Notice given by personal delivery or
registered mail shall be effective upon actual receipt. Notice given by
telecopier shall be effective upon actual receipt if received during the
recipient's normal business hours, or at the beginning of the recipient's next
normal business day after receipt if not received during the recipient's normal
business hours. All Notices by telecopier shall be confirmed by the sender
thereof promptly after transmission in writing by registered mail or personal
delivery. Anything to the contrary contained herein notwithstanding, notices to
any party hereto shall not be deemed effective with respect to such party until
such Notice would, but for this sentence, be effective both as to such party and
as to all other persons to whom copies are provided above to be given.
9.6 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be
governed by and construed solely and exclusively under and pursuant to the laws
of the State of New York as applied to agreements among New York residents
entered into and to be performed entirely within New York. Each of the Company,
the Sellers and the Purchaser (i) hereby irrevocably submits to the jurisdiction
of the United States District Court sitting in the Southern District of New York
and the courts of the State of New York located in New York, New York for the
purposes of any suit, action or proceeding arising out of or relating to this
Agreement or any of the other Transaction Documents or the transactions
contemplated hereby or thereby and (ii) hereby waives, and agrees not to assert
in any such suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such court, that the suit, action or proceeding
is brought in an inconvenient forum or that the venue of the suit, action or
proceeding is improper. Each of the Company, the Sellers and the Purchaser
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof.
9.7 JURY TRIAL; WAIVER. The Company, the Sellers and the Purchaser
hereby waive a trial by jury in any action, proceeding or counterclaim brought
by any of the parties hereto against the other in respect of any matter arising
out or in connection with this Agreement and the transactions and developments
contemplated hereby.
9.8 FURTHER ASSURANCES. Following the Closing, the Company, the Sellers
and the Purchaser shall execute and deliver such documents, and take such other
action, as shall be reasonably requested by any other party hereto to carry out
the transactions contemplated by this Agreement.
9.9 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement, together
with all exhibits and schedules attached hereto, constitutes the entire
agreement between and among the parties hereto pertaining to the subject matter
hereof and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as set forth specifically
herein or contemplated hereby. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of
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any other provision hereof (regardless of whether similar), nor shall any such
waiver constitute a continuing waiver unless otherwise expressly provided.
9.10 BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective permitted
successors and assigns; but neither this Agreement nor any of the rights,
benefits or obligations hereunder shall be assigned, by operation of law or
otherwise, by any party hereto without the prior written consent of the other
party, provided, however, that nothing herein shall prohibit the assignment of
Purchaser's rights and obligations to any direct or indirect subsidiary or
prohibit the assignment of Purchaser's rights (but not obligations) to any
lender. Nothing in this Agreement, express or implied, is intended to confer
upon any person or entity other than the parties hereto and their respective
permitted successors and assigns, any rights, benefits or obligations hereunder.
9.11 REMEDIES. The rights and remedies provided by this Agreement are
cumulative, and the use of any one right or remedy by any party hereto shall not
preclude or constitute a waiver of its right to use any or all other remedies.
Such rights and remedies are given in addition to any other rights and remedies
a party may have by law, statute or otherwise.
9.12 DRAFTING. The drafting and negotiation of this Agreement have been
participated in by each of the parties, and for all purposes this Agreement
shall be deemed to have been drafted jointly by each of the parties. No
ambiguity will be construed against any party for having "drafted" this
Agreement.
9.13 REPRESENTATION BY COUNSEL. Each party is represented by counsel and
has read and fully understands the terms of this Agreement.
9.14 EXHIBITS AND SCHEDULES. The exhibits and schedules referred to
herein are attached hereto and incorporated herein by this reference. Disclosure
of a specific item in any one schedule shall be deemed restricted only to the
Section to which such disclosure specifically relates except where (i) there is
an explicit cross-reference to another schedule, and (ii) Purchaser could
reasonably be expected to ascertain the scope of the modification to a
representation intended by such cross-reference.
9.15 MULTIPLE COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.16 REFERENCES AND CONSTRUCTION.
(a) Whenever required by the context, and is used in this
Agreement, the singular number shall include the plural and pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine, neuter,
singular or plural, as the identification the person may require. References to
monetary amounts, specific named statutes and generally accepted accounting
principles are intended to be and shall be construed as references to United
States dollars, statutes of the United States of the stated name and United
States generally accepted accounting principles, respectively, unless the
context otherwise requires.
(b) The provisions of this Agreement shall be construed according
to their fair meaning and neither for nor against any party hereto irrespective
of which party caused such provisions to be drafted. Each of the parties
acknowledges that it has been represented by an attorney in connection with the
preparation and execution of this Agreement.
9.17 SURVIVAL. Any provision of this Agreement which contemplates
performance or the existence of obligations after the Closing Date, and any and
all representations and warranties set forth in this Agreement, shall not be
deemed to be merged into or waived by the execution and delivery of the
instruments executed at the Closing, but shall expressly survive Closing and
shall be binding upon the party or parties obligated thereby in accordance with
the terms of this Agreement, subject to any limitations expressly set forth in
this Agreement.
9.18 RISK OF LOSS. Prior to the Closing, the risk of loss of damage to,
or destruction of, any and all of the Company's assets, including without
limitation the Properties, shall remain with the Company, and the legal
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doctrine known as the "Doctrine of Equitable Conversion" shall not be applicable
to this Agreement or to any of the transactions contemplated hereby.
9.19 SEVERABILITY. The provisions of this Agreement are severable and, in
the event that any court of competent jurisdiction shall determine that any one
or more of the provisions or part of the provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement and such provision
shall be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of such provision, had never been contained herein, so that
such provisions would be valid, legal and enforceable to the maximum extent
possible.
[SIGNATURE ON NEXT FOLLOWING PAGE]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
Purchaser, the Seller and the Company as of the date first above written.
THE COMPANY: BELLA VIAGGIO, INC.
By: ________________________________
Name: Xxxxxx X. Xxxxx
Title: Director, President and Chief Executive Officer
THE SELLERS: XXXXXX X. XXXXX
By: ________________________________
Name: Xxxxxx X. Xxxxx
Title: An individual
XXXXXX X. XXXXXXX
By: ________________________________
Name: Xxxxxx X. Xxxxxxx
Title: An individual
THE PURCHASER: XXXXXXX XXXXX
By: ________________________________
Name: Xxxxxxx Xxxxx
Title: An individual
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