ACQUISITION AGREEMENT
AGREEMENT, dated as of July , 1996 by and between Captain Tony's Pizza,
Inc. a New York corporation (hereinafter "Tony's"), and Xxxxxx X. Xxxxxx and
Xxxxxxx X. Xxxxxx (hereinafter "Shareholders") Shareholders of Pacific Foods
Limited, a British Virgin Islands corporation (hereinafter "Foods").
RECITALS
WHEREAS, the Shareholders are the owners of all of the issued and
outstanding shares of Foods;
WHEREAS, the Shareholders are desirous of exchanging their shares of Foods
after completion of the one for twenty reverse split for shares of common stock
("Common Stock") of Tony's;
WHEREAS, Tony's wishes to acquire all of the issued and outstanding shares
of Foods in exchange for shares of Common Stock of Tony's, $.001 par value per
share;
NOW THEREFORE, in consideration of the premises herein contained, the
adequacy of which is hereby acknowledged, and the mutual covenants hereinafter
set forth, the parties hereto have agreed, and by these presents, do hereby
contract as follows:
TERMS
1. Exchange of Securities. Subject to the terms and conditions hereinafter set
forth, at the time of the closing referred to in Section 6 hereof
(hereinafter the "Closing Date"), Tony's will issue and deliver, or cause
to be issued and delivered, to the Shareholders, 700,000 post reverse split
shares of Tony's common stock in exchange for all of the issued and
outstanding Common Stock of Foods.
2. Representations and Warranties of the shareholders. The Shareholders
represent and warrant to Tony's, all of which representations and
warranties shall be true and complete at the Closing Date, and shall
survive the Closing Date for a period of two (2) years from the Closing
Date, except as to the warranties and representations set forth in
subsection (f) hereof which shall survive for a period of three (3) years
from the Closing Date, and those set forth in subsection (h) which shall
survive for a period of six (6) months from the Closing Date, or from the
date when the accounts receivable become due and payable, whichever is the
later, that:
(a) Foods is corporation duly organized and validly existing and in good
standing under the laws of the British Virgin Islands and has the
corporate powers to own its property and carry on its business as and
where it is now being conducted. A Certified copy of the Memorandum
and Articles of Association of Foods which have hereto been furnished
by the Shareholders to Tony's, are a true and correct copy of the
Memorandum and Articles of Association and include all amendments to
the date hereof.
(b) The authorized capital stock of Foods consists of 50,000 shares of
Common Stock, $1.00 par value per share of which 200 shares have been
validly issued and are now outstanding.
(c) The Shareholders have the full power and authority to exchange the
shares of the capital stock of Foods upon the terms and conditions
provided for in this Agreement, and all such shares are duly and
validly issued and are free and clear of any lien or other
encumbrance.
(d) The unaudited balance sheet prepared by management, but which will be
audited by X.X. Xxxxx & Company, P.A., Certified Public Accountants,
as of May 31, 1996, attached hereto as Exhibit B, constitute true and
correct statements as of the date thereof of the financial condition
of Foods and of its assets and liabilities prepared in accordance with
generally accepted accounting principles consistently applied, and
that from May 31, 1996, and until the Closing Date, no dividends or
distributions of capital, surplus, or profits shall be paid or
declared by Foods in redemption of its outstanding shares or
otherwise, nor shall any additional shares be issued by Foods.
(e) Since May 31, 1996, Foods has not engaged in any transaction other
than transactions in the normal course of the operations of its
business, except as specifically authorized by Tony's in writing.
(f) Foods is not involved in any pending or threatened litigation which
would materially affect its financial condition as shown by its
balance sheets of May 31, 1996, shown on Exhibit B hereto, which has
not been provided for on such balance sheet, or referred to in such
balance sheet, or disclosed to Tony's in writing.
(g) Foods has and will have at the Closing Date, good and marketable title
to all of its property and assets shown on Exhibit B hereto, free and
clear of any and all liens or encumbrances or restrictions, except as
shown on Exhibit B hereto, and except for taxes and assessments due
and payable after the Closing Date and easements or minor restrictions
with respect to its real property which do not materially affect the
present use of such real property.
(h) The accounts receivable of Foods, as reflected in Exhibit B and as
specifically set forth in separate schedules furnished by Foods prior
to the execution hereof, which shall become due and payable on or
before the closing shall be good and collectible and can reasonably be
anticipated to be paid within 180 days after the Closing Date.
(i) Foods does not now have nor will it have on the Closing Date any
long-term contracts ("long-term" being defined as more than one year)
except for such contracts as are set forth as Exhibit C.
(j) Foods does not now have nor will it have on the Closing Date any
pension plan, profit-sharing plan, or stock-purchase plan for any of
its employees.
2
3. Representations and Warranties by Tony's. Tony's represents and warrants to
the Shareholders of Foods, all of which representations and warranties
shall be true at the Closing Date, and shall survive the closing for a
period of three (3) years from the Closing Date as follows:
(a) Tony's is a corporation duly organized and validly existing and in
good standing under the laws of the State of New York and has the
corporate powers to own its properties and carry on its business as
now being conducted and has authorized capital stock consisting of
150,000,000 shares of Common Stock, $.001 par value per share, of
which 8,131,161 shares are issued and outstanding. These shares will
be reverse split as a one for twenty basis prior to closing.
(b) Tony's has the corporate power to execute and perform this Agreement
and to deliver the stock required to be delivered to the Shareholders
of Foods hereunder.
(c) The execution and delivery of this Agreement, and the issuance of the
stock required hereunder, have been duly authorized by all necessary
corporate action, and neither the execution nor delivery of this
Agreement, nor the issuance of the stock, nor the performance,
observance or compliance with the terms and provisions of this
Agreement will violate any provision of law, any order of any court or
other governmental agency, the Certificate of Incorporation or By-Laws
of Tony's or any indenture, agreement or other instrument to which
Tony's is a party, or by which Tony's is bound or by which any of its
property is bound.
(d) The shares of Tony's Common Stock deliverable hereunder will, on
delivery in accordance with the terms hereof, be duly authorized,
validly issued, fully paid and nonassessable. Such shares will be
restricted shares and cannot be sold or exchanged except pursuant to
registration or an exemption therefrom.
(e) The financial statements prepared by Xxxxxx, Xxxxxxx Xxxx & Co.,
Certified Public Accountants, for the year ending June 30, 1995,
attached hereto as Exhibit E constitute true and correct statements as
of such date of the financial condition of Tony's and of its assets,
liabilities and income prepared in accordance with generally accepted
accounting principles consistently applied and that from June 30,
1995, and until the Closing Date, no dividends or distributions of
capital, surplus, or profits have been paid or declared by Tony's in
redemption of its outstanding shares or otherwise, nor have any
additional shares been issued by Tony's.
(f) Since June 30, 1995, Tony's has not engaged in any transaction other
than transactions in the normal course of the operations of its
business, except as specifically authorized by the Shareholders of
Foods in writing. Such authorization specifically includes a bonus to
Xxxxxxxx of Tony's cash, which distribution shall occur at Closing.
(g) Tony's is not involved in any pending or threatened litigation which
would materially adversely affect its financial condition as shown by
the balance sheets of December 31, 1995, attached hereto as Exhibit E,
which has not been provided for on such balance sheet or referred to
in such balance sheet or disclosed to the Shareholders of Foods in its
10-KSB or other filings.
3
4. Conditions to the Obligations of Tony's. The obligations of Tony's
hereunder shall be subject to the conditions that:
(a) Tony's shall not have discovered any material error or misstatement in
any of the representations and warranties made by the Shareholders of
Foods herein and all the terms and conditions of this Agreement to be
performed and complied with shall have been performed and complied
with. (b) There shall have been no substantial adverse changes in the
conditions, financial, business or otherwise of Foods from May 31,
1996, to the Closing Date, except for changes resulting from those
operations in the usual and ordinary course of the business, and
between such dates the business and assets of Foods shall not have
been materially adversely affected as the result of any fire,
explosion, earthquake, flood, accident, strike, lockout, combination
or workmen, taking over of any such assets by any governmental
authorities, riot, activities or armed forces, or acts of God or of
the public enemies.
(c) Tony's shall have received the opinion of Messrs. Vanderkam & Xxxxxxx,
legal counsel for Foods, to the effect that (1) Foods is duly
organized and validly existing under the laws of the jurisdiction of
its incorporation and has the power and authority to own their
properties and to carry on their respective business wherever the same
may be located and operated as of the Closing Date, and (2) the
Agreement has been duly executed, and when delivered by the
Shareholders is enforceable in accordance with its terms.
d) An Employment Contract with Xxxxxxx Xxxxxxxx providing for his
continued employment with the surviving entity of Tony's shall have
been executed by all parties a signator thereto and shall constitute a
valid and binding obligation of Tony's after the acquisition of Foods.
5. Conditions to the Obligations of the Shareholders of Foods. The obligations
of the Shareholders of Foods hereunder are subject to the conditions that:
(a) The Shareholders shall not have discovered any material error or
misstatement in any of the representations or warranties made by
Tony's herein and all the terms and conditions of this Agreement to be
performed and complied with by Tony's shall have been performed and
complied with.
(b) The Shareholders shall have received the opinion of Xxxxxxx X. Xxxx,
P.C., counsel for Tony's, to the effect that (1) Tony's is a
corporation duly organized and validly existing under the laws of the
State of New York, and has the power to own and operate its properties
wherever the same shall be located as of the Closing Date; (2) the
execution, delivery and performance of Tony's has been duly authorized
by all necessary corporate action including approval by the
shareholders at a lawfully convened meeting and constitutes a legal,
valid and binding obligation of Tony's enforceable in accordance with
its terms; (3) the stock to be delivered to Tony's puruant to the
terms of this Agreement has been validly issued, is fully paid and
nonassessable; and (4) the exchange of the stock herein contemplated
does not require the registration of the Tony's Common Stock pursuant
to any Federal law dealing with the issuance, sale, transfer, and/or
exchange of corporate securities as the shares issued are exempt from
registration under the provisions of Regulation D of Rule 506. Tony's
common shares will however bear a Rule 144 Restrictive Legend.
4
6. Closing Date. The closing shall take place at 10:00 A.M. Central Standard
Time, on July , 1996, at the offices of Vanderkam & Xxxxxxx in Houston,
Texas, or at such other time and place as the parties hereto shall agree
upon. This Agreement shall be effective as of the close of business on the
Closing Date.
7. Actions at the Closing. At the closing, Tony's and the Shareholders of
Foods will each deliver, or cause to be delivered to the other, the
securities to be exchanged in accordance with Section 1 of this Agreement
and each party shall pay any and all Federal and State taxes required to be
paid in connection with the issuance and the delivery of their own party to
which the same are deliverable.
In addition, the following transactions will take place.
(a) Tony's will deliver to the Shareholders of Foods:
(i) Duly certified copies of all corporate resolutions and other
corporate proceedings taken by Tony's to authorize the execution,
delivery and performance of this Agreement.
(ii) The opinion of Xxxxxxx X. Xxxx, P.C., counsel for Tony's, as
provided in Section 5 (b) of this Agreement.
(iii)A Certificate executed by a principal officer of Tony's
attesting to the fact that all of the representations and
warranties of Tony's are true and correct as of the Closing Date,
and that all of the conditions to the obligations of the
Shareholders of Foods to be performed by Tony's have been
performed as of the Closing Date.
(iv) A Certificate of Incumbency and Signatures of the officers of
Tony's dated as of the date of this Agreement.
(v) The written resignations of all directors and such officers and
auditors of Tony's as are requested by the Shareholders, which
resignations shall contain an acknowledgment from each resignee
that they have no claims against Tony's for loss of office or
otherwise.
(vi) All registration certificates, statutory books, minutes books and
common seals of Tony's, all accounts books and all documents of
title relating to Tony's's assets (unless already in the
possession of the Shareholders) as are required by the
Shareholders.
(vii)In addition, Xxxxxxxx shall receive a bonus equal to one-hundred
percent of the cash on hand at Tony's.
(b) The Shareholders of Foods will deliver to Tony's: (i) The
opinion of Vanderkam & Xxxxxxx, counsel for the Shareholders
of Foods, as provided for in Section 4(c) hereof.
(ii) A Certificate from the Shareholders of Foods signed by
all the Shareholders that each of the representations
and warranties of the Shareholders are true and correct
as of the Closing Date and that all of the conditions
to the obligations of Tony's to be performed by the
Shareholders have been performed as of the Closing
Date.
(iii)All of the outstanding common share certificates of
Foods.
5
8. Conduct and Business, etc. Between the date hereof and the Closing Date,
Foods shall conduct its business in the same manner in which it has
heretofore been conducted and the Shareholders will not permit it to (1)
enter into any contract, etc., other than in the ordinary course of
business, or (2) declare or make any distribution of any kind to the
Shareholders, without first obtaining the written consent of Tony's.
9. Access to the Properties and Books of Foods. The Shareholders of Foods
hereby grant to Tony's, through its duly authorized representatives and
during normal business hours between the date hereof and the Closing Date,
the right of full and complete access to the properties of Foods, and full
opportunity to examine Foods's books and records. A similar access to
Tony's's properties, books and records in likewise granted to the
Shareholders of Foods.
10. Costs and Expenses. Foods shall pay the expenses and costs incident to the
preparation of this Agreement and to the consummation of the transaction
contemplated herein.
11. Funding of Captain Tony's Pizza. The Shareholders agree to fund the Pizza
franchising business with a minimum of two million dollars during the
twelve months following the date of this agreement for expansion and
working capital.
6
12. Miscellaneous.
(a) This Agreement shall be controlled, construed and enforced in
accordance with the laws of the State of New York.
(b) This Agreement shall not be assignable by either party without the
prior written consent of the other.
(c) All paragraph headings herein are inserted for the parties convenience
in identifying the provisions of this Agreement, and shall not effect
the construction or interpretation of the provisions of this
Agreement.
(d) This Agreement sets forth the entire understanding between the
parties, there being no terms, conditions, warranties or
representations other than those contained herein, and no amendments
hereto shall be valid unless made in writing and signed by the parties
hereto.
(e) This Agreement shall be binding upon and shall inure to the benefit of
the heirs, executors, administrators and assigns of Foods and upon the
successors and assigns of Tony's.
(f) The company "Tony's" shall change its Name to "Am Pac Corporation"
(g) All notices, requests, instructions, or other documents to be given
hereunder shall be in writing and sent by registered mail:
7
If to the Share Xxxxxx X. Xxxxxx
holders of Foods: Xxxxxx X. Xxxxxx
0000 X. Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, XX 00000
with copies to: Messrs. Vanderkam & Xxxxxxx
1111 Xxxxxxxx, Ste. 2905
Xxxxxxx, Xxxxx 00000
If to Tony's: Captain Tony's Pizza, Inc.
X.X. Xxx 00
Xxxxxx, XX 00000
with copies to: Xxxxxxx X. Xxxx
(h) For purposes of this Agreement only, facsimile signatures shall be
considered original signatures.
(i) This agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when
so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date and year first above written.
CAPTAIN TONY'S PIZZA, INC.
By:
--------------------------------
President
ATTEST:
By:
---------------------
Its:
--------------------
-------------------------------
Xxxxxx Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx
SHAREHOLDERS OF
PACIFIC FOODS LIMITED
8
