EX-2 ACQUISITION AGREEMENT
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT is made as of September 25, 2003 by and
between Point Group Holdings, Inc., a Nevada corporation ("PGHI"), and
the shareholders of Xxxxxxx.xxx, LLC, a California limited liability
company ("VC").
RECITALS
WHEREAS, VC shareholders are the owners of all the issued and
outstanding shares ("Shares") of capital stock of VC; and,
WHEREAS, PGHI desires to purchase from VC, and VC desire to sell to
PGHI, all the Shares in accordance with the provisions of this
Agreement.
NOW, THEREFORE, in consideration of the respective covenants contained
herein and intending to be legally bound hereby, the parties hereto
agree as follows:
AGREEMENTS
1. Purchase and Sale. Subject to the terms and conditions contained
in this Agreement, on the Closing Date, the parties shall exchange its
common stock on a 1-for-1 basis. The current members of VC shall
sell, assign, transfer and deliver to PGHI all of the issued and
outstanding units of VC membership interest representing in the
aggregate Fourteen Million (14,000,000) shares. PGHI shall sell,
assign, transfer and deliver to the current members of VC Fourteen
Million (14,000,000) shares of its restricted common stock,
collectively referred to hereinafter as the "Purchase Price."
2. Closing. The closing (the "Closing") of the sale and purchase of
the Shares shall take place on September 25, 2003, or at such other
date, time or place as may be agreed upon in writing by the parties
hereto, but not later than September 30, 2003 ("Termination Date").
The date of the Closing is sometimes herein referred to as the
"Closing Date."
2.1 Items to be Delivered Immediately Prior to or at Closing; Escrowed
Shares. At the Closing:
(a) VC shall deliver to PGHI a certificate or certificates
representing Fourteen Million (14,000,000) shares, duly endorsed
in blank or accompanied by stock powers duly executed in blank
(Seven Million (7,000,000) to Xxxxx Xxxxxxx and Seven Million
(7,000,000) to Xxxx Xxxxxxx),
(b) PGHI shall deliver to VC the Purchase Price.
3. Representations and Warranties of VC. VC hereby represents and
warrants to PGHI the representations and warranties, as follows:
3.1 Corporate Status. VC is a limited liability company duly
organized, validly existing and in good standing under the Laws of the
State of California and is qualified to do business in any
jurisdiction where it is required to be so qualified.
3.2 Authorization. VC has the requisite power and authority to
execute and deliver the transaction documents to which it is a party
and to perform the transactions performed or to be performed by it.
Each transaction document executed and delivered by VC has been duly
executed and delivered by VC and constitutes a valid and binding
obligation of VC, enforceable against VC in accordance with its terms.
3.3 Consents and Approvals. Except for the filings, permits,
authorizations, consents and approvals under federal and/or state
laws, and applicable stock exchange regulations, which may be
applicable, neither the execution and delivery by VC of the
transaction documents to which it is a party, nor the performance of
the transactions performed or to be performed by VC, require any
filing, consent or approval, constitute a Default or cause any payment
obligation to arise. Consent of VC shareholders is attached hereto as
Exhibit A and incorporated herein by reference.
3.4 Capitalization. The authorized capital units of VC consists of
Twenty-Five Million (25,000,000) shares, of which Fourteen Million
(14,000,000) shares have been duly issued and are outstanding as fully
paid and non-assessable and the remainder are treasury shares.
3.5 Financial Statements. VC acknowledge that the books and records
fairly and correctly set out and disclose in all material respects, in
accordance with generally accepted accounting principles ("GAAP"), the
financial position of VC as at the date hereof, and all material
financial transactions of the VC relating to the Business have been
accurately recorded in such books and records. However, an audit of
said books and records shall be included in the required PGHI's year
closing of its corporate records. PGHI is acquiring all Assets and
Liabilities of VC and will assume payment of outstanding Balance Sheet
Debts (Exhibit "B" Credit Card Debt List).
3.6 Real Property. VC has the corporate power to own or lease its
property and to carry on its business; it is duly qualified as a
corporation to do business and is in good standing with respect
thereto in each jurisdiction in which the nature of the business or
the property owned or leased by it makes such qualification necessary;
and it has or will have on the Closing Date all necessary licenses,
permits, authorizations and consents to operate its Business in
accordance with the terms of its business plan.
3.7 Liabilities. There are no material liabilities of VC of any kind
whatsoever, whether or not accrued and whether or not determined or
determinable, in respect of which PGHI may become liable on or after
the consummation of the transaction contemplated by this agreement,
other than liabilities which may be reflected on VC's Financial
Statements, liabilities disclosed or referred to in this agreement or
in the Schedules attached hereto, or liabilities incurred in the
ordinary course or business and attributable to the period since the
date of VC's financial statements, none of which has been materially
adverse to the nature of its business, results of operations, assets,
financial condition or manner of conducting the Business.
3.8 Taxes.
(a) VC has timely filed all tax returns (Federal & State Income,
Sales Tax For Required States) required to be filed on or before
the Closing Date and all such tax returns are true, correct and
complete in all respects. VC has paid in full on a timely basis
all taxes owed by it, whether or not shown on any tax return,
except where the failure to file such return or pay such taxes
would not have a material adverse effect. No claim has ever been
made by any authority in any jurisdiction where VC does not file
tax returns that VC may be subject to taxation in that jurisdiction.
(b) There are no ongoing examinations or claims against VC for
taxes, and no notice of any audit, examination or claim for
taxes, whether pending or threatened, has been received. VC has
not waived or extended the statute of limitations with respect to
the collection or assessment of any tax.
3.9 Subsidiaries. VC does not own, directly or indirectly, any
interest or investment (whether equity or debt) in any corporation,
partnership, limited liability company, trust, joint venture or other
legal entity.
3.10 Legal Proceedings and Compliance with Law. There is no
litigation that is pending or, to VC's knowledge, threatened against
VC. To VC's knowledge, there has been no default under any laws
applicable to VC, and VC has not received any notices from any
governmental entity regarding any alleged defaults under any laws.
There has been no default with respect to any court order applicable to VC.
3.11 Contracts. VC is not a party to or bound by any agreement or
guarantee, warranty, indemnification, assumption or endorsement or any
other like commitment of the obligations, liabilities (contingent or
otherwise) or indebtedness of any other person, firm or corporation,
or of any products related to its Business except for the disclosed
contract with KOA and our contracts with our current customers.
3.12 Intellectual Property. VC has good and valid title to and
ownership of all Intellectual Property (defined herein as trade marks,
trade names or copyrights, patents, domestic or foreign) necessary for
its business and operations (as now conducted and as proposed to be
conducted). There are no outstanding options, licenses or agreements
of any kind to which VC is a party or by which it is bound relating to
any Intellectual Property, whether owned by VC or another person. To
the knowledge of the VC, the business of VC as formerly and presently
conducted did not and does not conflict with or infringe upon any
Intellectual Property right, owned or claimed by another.
3.13 Corporate Records. The minute books of VC contain complete,
correct and current copies of its charter documents and bylaws and of
all minutes of meetings, resolutions and other proceedings of its
board of directors and VC. The stock record books of VC are complete,
correct and current. Corporate minute books/records will turned over
PGHI at closing. VC MUST PROVIDE STANDARD LLC RECORD BOOK AND
RECORDS. THIS MAY REQUIRE VC TO HAVE THIS COMPLETED PRIOR TO CLOSING DATE.
3.14 Finder's Fees. No person retained by VC or VC is or will be
entitled to any commission or finder's or similar fee in connection
with the transactions.
3.15 Accuracy of Information. To the VC's knowledge, no
representation or warranty by VC or VC in any transaction document,
and no information contained therein contains any untrue statement of
a material fact or omits to state any material fact necessary in order
to make the statements contained herein or therein not misleading in
light of the circumstances under which such statements were made.
3.16 Future Possible Sale of VC. In the case of a sale or public
offering of VC, the current owners of VC and PGHI will have equal
voting rights to determine the sale or public offering of VC. After
agreement is reached by all parties to sell or offer to the public VC
the parties shall divide the proceeds of said sale or offering in the
following percentages (current owners of VC forty percent (40%) and
PGHI receives sixty percent (60%.)
4. Representations and Warranties of PGHI. PGHI hereby represents and
warrants to VC as follows:
4.1 Corporate Status. PGHI is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Nevada
and is qualified to do business in any jurisdiction where it is
required to be so qualified. The charter documents of PGHI that have
been delivered to VC as of the date hereof are effective under
applicable laws and are current, correct and complete.
4.2 Authorization. PGHI has the requisite power and authority to own
its assets and to carry on its business. PGHI has the requisite power
and authority to execute and deliver the transaction documents to
which it is a party and to perform the transactions performed or to be
performed by it. Such execution, delivery and performance by PGHI
have been duly authorized by all necessary corporate action. Each
transaction document executed and delivered by PGHI has been duly
executed and delivered by PGHI and constitutes a valid and binding
obligation of PGHI, enforceable against PGHI in accordance with its terms.
4.3 Consents and Approvals. Except for the filings, permits,
authorizations, consents and approval under federal and/or state laws,
and applicable stock exchange regulations, which may be applicable,
neither the execution and delivery by PGHI of the transaction
documents to which it is a party, nor the performance of the
transactions performed or to be performed by PGHI, require any filing,
consent or approval, constitute a default or cause any payment
obligation to arise.
4.4 Capitalization. The authorized capital stock of PGHI consists of
Nine Hundred Million (900,000,000) shares of common stock, of which
approximately Three Hundred Seventeen Million (317,000,000) shares
have been duly issued and are outstanding as fully paid and non-assessable.
4.5 Financial Statements. PGHI acknowledges that the books and records
fairly and correctly set out and disclose in all material respects, in
accordance with GAAP, the financial position of PGHI as at the date
hereof, and all material financial transactions of the PGHI relating
to the business have been accurately recorded in such books and records.
4.6 Real Property. PGHI has the corporate power to own or lease its
property and to carry on the business; it is duly qualified as a
corporation to do business and is in good standing with respect
thereto in each jurisdiction in which the nature of the business or
the property owned or leased by it makes such qualification necessary;
and it has or will have on the Closing Date all necessary licenses,
permits, authorizations and consents to operate its business in
accordance with the terms of its business plan.
4.7 Liabilities. There are no material liabilities of PGHI of any
kind whatsoever, whether or not accrued and whether or not determined
or determinable, in respect of which VC may become liable on or after
the consummation of the transaction contemplated by this agreement,
other than liabilities which may be reflected on PGHI's financial
statements, liabilities disclosed or referred to in this agreement or
in the Schedules attached hereto, or liabilities incurred in the
ordinary course or business and attributable to the period since the
date of PGHI's financial statements, none of which has been
materially adverse to the nature of its business, results of
operations, assets, financial condition or manner of conducting the
business.
4.8 Taxes.
(a) PGHI has timely filed all tax returns required to be filed
on or before the Closing Date and all such tax returns are true,
correct and complete in all respects. PGHI has paid in full on a
timely basis all taxes owed by it, whether or not shown on any
tax return, except where the failure to file such return or pay
such taxes would not have a material adverse effect. No claim has
ever been made by any authority in any jurisdiction where PGHI
does not file tax returns that PGHI may be subject to taxation in
that jurisdiction.
(b) There are no ongoing examinations or claims against PGHI for
taxes, and no notice of any audit, examination or claim for
taxes, whether pending or threatened, has been received. PGHI has
not waived or extended the statute of limitations with respect to
the collection or assessment of any tax.
4.9 Subsidiaries. PGHI does not own, directly or indirectly, any
interest or investment (whether equity or debt) in any corporation,
partnership, limited liability company, trust, joint venture or other
legal entity, other than as set forth in the attached Schedule C.
4.10 Legal Proceedings and Compliance with Law. There is no
litigation that is pending or, to PGHI's knowledge, threatened against
PGHI. To PGHI's knowledge, there has been no default under any laws
applicable to PGHI, and PGHI has not received any notices from any
governmental entity regarding any alleged defaults under any laws.
There has been no default with respect to any court order applicable to PGHI.
4.11 Contracts. PGHI is not a party to or bound by any agreement or
guarantee, warranty, indemnification, assumption or endorsement or any
other like commitment of the obligations, liabilities (contingent or
otherwise) or indebtedness of any other person, firm or corporation,
or of any products related to VC's business.
4.12 Intellectual Property. PGHI has good and valid title to and
ownership of all Intellectual Property necessary for its business and
operations (as now conducted and as proposed to be conducted). There
are no outstanding options, licenses or agreements of any kind to
which PGHI is a party or by which it is bound relating to any
Intellectual Property, whether owned by PGHI or another person. To the
knowledge of the PGHI, the business of PGHI as formerly and presently
conducted did not and does not conflict with or infringe upon any
Intellectual Property right, owned or claimed by another.
4.13 Corporate Records. The minute books of PGHI contain complete,
correct and current copies of its charter documents and bylaws and of
all minutes of meetings, resolutions and other proceedings of its
board of directors and PGHI. The stock record books of PGHI are
complete, correct and current.
4.14 Finder's Fees. No Person retained by PGHI or PGHI is or will be
entitled to any commission or finder's or similar fee in connection
with the transactions.
4.15 Accuracy of Information. To PGHI's knowledge, no representation
or warranty by PGHI in any transaction document, and no information
contained therein contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances under which such statements were made.
5. Covenants of VC.
5.1 Fulfillment of Closing Conditions. At and prior to the Closing,
VC shall use commercially reasonable efforts to fulfill the conditions
specified in this Agreement to the extent that the fulfillment of such
conditions is within its control. In connection with the foregoing,
each such party will (a) refrain from any actions that would cause any
of its representations and warranties to be inaccurate in any material
respect as of the Closing, (b) execute and deliver the applicable
agreements and other documents referred to herein, (c) comply in all
material respects with all applicable Laws in connection with its
execution, delivery and performance of this Agreement and the
transactions, (d) use commercially reasonable efforts to obtain in a
timely manner all necessary waivers, consents and approvals required
under any laws, contracts or otherwise, and (e) use commercially
reasonable efforts to take, or cause to be taken, all other actions
and to do, or cause to be done, all other things reasonably necessary,
proper or advisable to consummate and make effective as promptly as
practicable the transactions.
5.2 Access to Information. From the date of this Agreement to the
Closing Date, the VC shall cause VC to give to PGHI and its officers,
employees, counsel, accountants and other representatives access to
and the right to inspect, during normal business hours, all of the
assets, records, contracts and other documents relating to VC as the
other party may reasonably request. PGHI shall not use such
information for purposes other than in connection with the
transactions contemplated by this Agreement and shall otherwise hold
such information in confidence until such time as such information
otherwise becomes publicly available and will sign such standard and
customary non-disclosure agreements as are reasonably requested by VC.
5.3 No Solicitation. From and after the date hereof until the
earlier of the Termination Date or the date of termination of this
Agreement pursuant to Section 11, without the prior written consent of
PGHI, VC and VC will not, and will not authorize or permit VC
representatives to, directly or indirectly, solicit, initiate or
encourage (including by way of furnishing information) or take any
other action to facilitate knowingly any inquiries or the making of
any proposal that constitutes or may reasonably be expected to lead to
an acquisition proposal from any person, or engage in any discussion
or negotiations relating thereto or accept any Acquisition Proposal.
If VC receives any such inquiries, offers or proposals shall (a)
notify PGHI orally and in writing of any such inquiries, offers or
proposals (including the terms and conditions of any such proposal and
the identity of the person making it), within 48 hour of the receipt
thereof, (b) keep PGHI informed of the status and details of any such
inquiry, offer or proposal, and (c) give PGHI five days' advance
notice of any agreement to be entered into with, or any information to
be supplied to, any person making such inquiry, offer or proposal. As
used herein, "Acquisition Proposal" means a proposal or offer (other
than pursuant to this Agreement) for a tender or exchange offer,
merger, consolidation or other business combination involving any or
any proposal to acquire in any manner a substantial equity interest
in, or all or substantially all of the Assets. Notwithstanding the
foregoing, the VC will remain free to participate in any discussions
or negotiations regarding, furnish any information with respect to,
assist or participate in, or facilitate in any other manner, any
effort or attempt by any Person to do or seek any of the foregoing to
the extent their fiduciary duties may require.
5.4 Confidentiality. VC agrees that after receipt (a) all
information received by it pursuant to this Agreement and (b) any
other information that is disclosed by PGHI to it and is identified by
the PGHI as being confidential or proprietary, shall be considered
confidential information. Each party further agrees that it shall
hold all such confidential information in confidence and shall not
disclose any such confidential information to any third party except
as required by law, regulation (including the Listing Rules) or
applicable process, provided that to the extent possible PGHI shall
have been provided with reasonable notice and the opportunity to seek
a protective order to the extent possible prior to such disclosure,
other than its counsel or accountants nor shall it use such
confidential information for any purpose other than its investment in
PGHI; provided, however, that the foregoing obligation to hold in
confidence and not to disclose confidential information shall not
apply to any information that (1) was known to the public prior to
disclosure by PGHI, (2) becomes known to the public through no fault
VC, (3) is disclosed to VC on a non-confidential basis by a third
party having a legal right to make such disclosure or (4) is
independently developed by VC.
5.5 Transfer of Assets and Business. VC shall, and shall cause VC
to, take such reasonable steps as may be necessary or appropriate, in
the judgment of PGHI, so that PGHI shall be placed in actual
possession and control of all of the assets and the business, and VC
shall be owned and operated as a wholly owned subsidiary of PGHI.
5.6 Disclosure of Fundraising. VC will disclose to PGHI any fund
raising activities, which shall occur prior to the date of closing.
Further, VC will assure that all regulations, rules and laws governing
such fundraising are complied with and that such funds will only be
used in the furtherance of VC's corporate purpose and business plan.
Prior written approval of PGHI is required to use funds for any other
purposes.
6. Covenants of PGHI.
6.1 Fulfillment of Closing Conditions. At and prior to the Closing,
PGHI shall use commercially reasonable efforts to fulfill the
conditions specified in this Agreement to the extent that the
fulfillment of such conditions is within its control. In connection
with the foregoing, each such party will (a) refrain from any actions
that would cause any of its representations and warranties to be
inaccurate in any material respect as of the Closing, (b) execute and
deliver the applicable agreements and other documents referred to
herein, (c) comply in all material respects with all applicable Laws
in connection with its execution, delivery and performance of this
Agreement and the transactions, (d) use commercially reasonable
efforts to obtain in a timely manner all necessary waivers, consents
and approvals required under any laws, contracts or otherwise, and (e)
use commercially reasonable efforts to take, or cause to be taken, all
other actions and to do, or cause to be done, all other things
reasonably necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions.
6.2 Access to Information. From the date of this Agreement to the
Closing Date, the PGHI shall cause PGHI to give to VC and its
officers, employees, counsel, accountants and other representatives
access to and the right to inspect, during normal business hours, all
of the assets, records, contracts and other documents relating to PGHI
as the other party may reasonably request. VC shall not use such
information for purposes other than in connection with the
transactions contemplated by this Agreement and shall otherwise hold
such information in confidence until such time as such information
otherwise becomes publicly available and will sign such standard and
customary non-disclosure agreements as are reasonably requested by PGHI.
6.3 No Solicitation. From and after the date hereof until the
earlier of the Termination Date or the date of termination of this
Agreement pursuant to Section 11, without the prior written consent of
VC, PGHI will not, and will not authorize or permit PGHI
representatives to, directly or indirectly, solicit, initiate or
encourage (including by way of furnishing information) or take any
other action to facilitate knowingly any inquiries or the making of
any proposal that constitutes or may reasonably be expected to lead to
an acquisition proposal from any person, or engage in any discussion
or negotiations relating thereto or accept any acquisition proposal.
If PGHI receives any such inquiries, offers or proposals shall (a)
notify VC orally and in writing of any such inquiries, offers or
proposals (including the terms and conditions of any such proposal and
the identity of the person making it), within 48 hour of the receipt
thereof, (b) keep VC informed of the status and details of any such
inquiry, offer or proposal, and (c) give VC five days' advance notice
of any agreement to be entered into with, or any information to be
supplied to, any person making such inquiry, offer or proposal.
Notwithstanding the foregoing, the PGHI will remain free to
participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate
in any other manner, any effort or attempt by any person to do or seek
any of the foregoing to the extent their fiduciary duties may require.
6.4 Confidentiality.
PGHI agrees that after receipt (a) all information received by it
pursuant to this Agreement and (b) any other information that is
disclosed by VC to it and is identified by the VC as being
confidential or proprietary, shall be considered confidential
information. Each party further agrees that it shall hold all such
confidential information in confidence and shall not disclose any such
confidential information to any third party except as required by law,
regulation (including the listing rules) or applicable process,
provided that to the extent possible VC shall have been provided with
reasonable notice and the opportunity to seek a protective order to
the extent possible prior to such disclosure, other than its counsel
or accountants nor shall it use such confidential information for any
purpose other than its investment in VC; provided, however, that the
foregoing obligation to hold in confidence and not to disclose
confidential information shall not apply to any information that (1)
was known to the public prior to disclosure by PGHI, (2) becomes
known to the public through no fault PGHI, (3) is disclosed to PGHI on
a non-confidential basis by a third party having a legal right to make
such disclosure or (4) is independently developed by PGHI.
6.5 Disclosure of Fundraising. PGHI will disclose to VC any fund
raising activities, which shall occur prior to the date of closing.
Further, PGHI will assure that all regulations, rules and laws
governing such fundraising are complied with and that such funds will
only be used in the furtherance of PGHI's corporate purpose and
business plan. Prior written approval of VC is required to use funds
for any other purposes.
7. Mutual Covenants.
7.1 Disclosure of Certain Matters. VC on the one hand, and PGHI, on
the other hand, shall give PGHI and VC, respectively, prompt notice of
any event or development that occurs that (a) had it existed or been
known on the date hereof would have been required to be disclosed by
such party under this Agreement, (b) would cause any of the
representations and warranties of such party contained herein to be
inaccurate or otherwise misleading, except as contemplated by the
terms hereof, or (c) gives any such party any reason to believe that
any of the conditions set forth in this Agreement will not be
satisfied prior to the Termination Date (defined below).
7.2 Public Announcements. VC and PGHI shall consult with each other
before issuing any press release or making any public statement with
respect to this Agreement and the transactions and, except as may be
required by applicable law, none of such parties nor any other parties
shall issue any such press release or make any such public statement
without the consent of the other parties hereto.
7.3 Confidentiality. If the transactions are not consummated, each
party shall treat all information obtained in its investigation of
another party or any affiliate thereof, and not otherwise known to
them or already in the public domain, as confidential and shall not
use or otherwise disclose such information to any third party and
shall return to such other party or affiliate all copies made by it or
its representatives of confidential information provided by such other
party or affiliate.
8. Conditions Precedent to Obligations of VC. All obligations of VC
to consummate the Transactions are subject to the satisfaction prior
thereto of each of the following conditions:
8.1 Representations and Warranties. The representations and
warranties of PGHI contained in this Agreement shall be true and
correct on the date hereof and (except to the extent such
representations and warranties speak as of an earlier date) shall also
be true and correct on and as of the Closing Date with the same force
and effect as if made on and as of the Closing Date.
8.2 Agreements, Conditions and Covenants. PGHI shall have performed
or complied with all agreements, conditions and covenants required by
this Agreement to be performed or complied with by it on or before the
Closing Date.
8.3 Legality. No law or court order shall have been enacted,
entered, promulgated or enforced by any court or governmental
authority that is in effect and has the effect of making the purchase
and sale of the assets illegal or otherwise prohibiting the
consummation of such purchase and sale.
9. Conditions Precedent to Obligations of PGHI. All obligations of
PGHI to consummate the transactions are subject to the satisfaction
(or waiver) prior thereto of each of the following conditions:
9.1 Representations and Warranties. The representations and
warranties of VC contained in this Agreement shall be true and correct
on the date hereof and (except to the extent such representations and
warranties speak as of an earlier date) shall also be true and correct
on and as of the Closing Date, except for changes contemplated by this
Agreement, with the same force and effect as if made on and as of the
Closing Date.
9.2 Agreements, Conditions and Covenants. VC shall have performed or
complied in all material respects with all agreements, conditions and
covenants required by this Agreement to be performed or complied with
by them on or before the Closing Date.
9.3 Legality. No law or court order shall have been enacted,
entered, promulgated or enforced by any court or governmental
authority that is in effect and (a) has the effect of making the
purchase and sale of the assets illegal or otherwise prohibiting the
consummation of such purchase and sale or (b) has a reasonable
likelihood of causing a material adverse effect.
10. Post-Closing Obligations.
10.1 Audit. PGHI will cause an audit to be completed of VC records
during PGHI's year-end closing.
10.2 $2,000,000 Raise. Following the Closing Date, PGHI shall use
its best efforts to raise working capital in the amount of Two Million
Dollars during the 12 months immediately following closing. The
capital funding will be used for inventory purchases or other normal
business related expenses that are approved for payment by PGHI (Does
include any Salaries, Bonuses, Commissions or management wages.) The
first Five Hundred Thousand Dollars ($500,000) must be raised within
six (6) months following the closing and the Two Million Dollars
($2,000,000) must be raised within (12) months following the closing,
should this not occur, the parties may choose to cancel this agreement
by the current members of VC returning stock issued (14 million PGHI
Stock) to PGHI and PGHI returning corporate records, assets, trade
secrets and units to the current members of VC. If parties cancel
this agreement, the current members of VC will return to PGHI any and
all capital invested in VC in the form of cash and/or inventory (fair
market value at the time not cost) equal to the capital invested to
date, not to include any salaries and/or bonuses previously paid
pursuant to the consulting agreements.
10.3 Share of Earnings. For any calendar quarter, should the
earnings before income taxes ("EBIT") exceed ten percent (10%) then
the excess amount shall be retained by the current shareholders of VC.
10.4 Employment Contracts. The current shareholders of VC shall be
retained as consultants for PGHI for a period of five (5) years with a
renewal for an additional five years as agreed between current VC
owners and PGHI following the Closing Date, under the following terms
and conditions: Attached Consulting Agreements (Exhibit D).
10.4 Spamming and Other Prohibited Activities. The officers,
directors, employees, agents and consultants of VC, on the one hand,
and the officers, directors, employees, agents and consultants of PGHI
on the other, shall refrain from disseminating email blasts, blast
faxes and participating in online chat rooms in connection with the
transaction and the business of VC and/or PGHI.
11. Termination
11.1 Grounds for Termination. This Agreement may be terminated at any
time before the Closing Date:
(a) By mutual written consent of VC and PGHI;
(b) By VC or PGHI if the Closing shall not have been consummated
on or before the Termination Date; provided, however, that the
right to terminate this Agreement shall not be available to any
party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of
the Closing to occur on or before the Termination Date;
(c) By VC or PGHI if a court of competent jurisdiction or govern
mental, regulatory or administrative agency or commission shall
have issued a court order (which court order the parties shall
use commercially reasonable efforts to lift) that permanently
restrains, enjoins or otherwise prohibits the transactions, and
such court order shall have become final and non-appealable;
(d) By PGHI, if VC shall have breached, or failed to comply
with, any of its obligations under this Agreement or any
representation or warranty made by VC shall have been incorrect
when made, and such breach, failure or misrepresentation is not
cured within twenty (20) days after notice thereof, including
failure to keep the PGHI current in its filings and honor
existing agreements; and
(e) By VC, if PGHI shall have breached, or failed to comply with
any of its obligations under this Agreement or any representation
or warranty made by it shall have been incorrect when made, and
such breach, failure or misrepresentation is not cured within
twenty (20) days after notice thereof, and in either case, any
such breaches, failures or misrepresentations, individually or in
the aggregate, results or would reasonably be expected to affect
materially and adversely the benefits to be received by the VC
hereunder.
11.2 Effect of Termination. If this Agreement is terminated pursuant
to Section 11.1, the agreements contained in Section 7.4 shall survive
the termination hereof and any party may pursue any legal or equitable
remedies that may be available if such termination is based on a
breach of another party.
12. General Matters.
12.1 Arbitration. Any dispute concerning the interpretation or
execution of this agreement, which cannot be settled amicably between
the parties, shall be referred, at the request of one of the parties,
to an arbitrator designated by mutual agreement between the said
parties. If the parties are unable to designate an arbitrator within
thirty days of receipt of the notification of a request for
arbitration, the arbitrator shall be appointed, at the request of one
of the parties, by the States. The place of arbitration shall be San
Diego, California. The arbitrator's decision shall be final and
binding and no appeal to a court or any other jurisdiction shall be allowed.
12.2 Contents of Agreement. This Agreement and attached exhibits,
together with the other transaction documents, sets forth the entire
understanding of the parties with respect to the transactions and
supersedes all prior agreements or understandings among the parties
regarding those matters.
12.3 Amendment, Parties in Interest, Assignment, Etc. This Agreement
may be amended, modified or supplemented only by a written instrument
duly executed by each of the parties hereto. If any provision of 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 hereof, and this
Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. This
Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective heirs, legal representatives, successors
and permitted assigns of the parties. Nothing in this Agreement shall
confer any rights upon any person other than the current members of VC
and PGHI and their respective heirs, legal representatives, successors
and permitted assigns. No party hereto shall assign this Agreement or
any right, benefit or obligation hereunder. Any term or provision of
this Agreement may be waived at any time by the party entitled to the
benefit thereof by a written instrument duly executed by such party.
12.4 Further Assurances. At and after the Closing, the current
members of VC and PGHI shall execute and deliver any and all documents
and take any and all other actions that may be deemed reasonably
necessary by their respective counsel to complete the transactions.
12.5 Interpretation. Unless the context of this Agreement clearly
requires otherwise, (a) references to the plural include the singular,
the singular the plural, the part the whole, (b) references to any
gender include all genders, (c) "or" has the inclusive meaning
frequently identified with the phrase "and/or," (d) "including" has
the inclusive meaning frequently identified with the phrase "but not
limited to" and (e) references to "hereunder" or "herein" relate to
this Agreement. The section and other headings contained in this
Agreement are for reference purposes only and shall not control or
affect the construction of this Agreement or the interpretation
thereof in any respect. Section, subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified. Each
accounting term used herein that is not specifically defined herein
shall have the meaning given to it under GAAP. Any reference to a
party's being satisfied with any particular item or to a party's
determination of a particular item presumes that such standard will
not be achieved unless such party shall be satisfied or shall have
made such determination in its sole or complete discretion.
12.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be binding as of the date first
written above, and all of which shall constitute one and the same
instrument. Each such copy shall be deemed an original.
12.7 Schedules. Any items listed or described on Schedules shall be
listed or described under a caption that identifies the Sections of
this Agreement to which the item relates.
13. Notices. All notices that are required or permitted hereunder
shall be in writing and shall be sufficient if personally delivered or
sent by mail, facsimile message or Federal Express or other delivery
service. Any notices shall be deemed given upon the earlier of the
date when received at, or the third day after the date when sent by
registered or certified mail or the day after the date when sent by
Federal Express to, the address or fax number set forth below, unless
such address or fax number is changed by notice to the other party hereto:
If to VC:
00000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Facsimile: (000) 000-0000
If to PGHI:
0000 Xxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Facsimile: (000) 000-0000
With copies to:
00000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx Xxxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
14. Governing Law. This Agreement shall be construed and interpreted
in accordance with the laws of the State of California without regard
to its provisions concerning conflict of laws.
IN WITNESS WHEREOF, this Acquisition Agreement has been executed by
the parties hereto as of the day and year first written above.
POINT GROUP HOLDINGS, INCORPORATED
By: /s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx, President
SHAREHOLDERS OF XXXXXXX.XXX, LLC
/s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
/s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
