SHARE EXCHANGE AGREEMENT
SHARE EXCHANGE AGREEMENT
Dated August 14, 201 5
by and am ong
a Delaware corporation
as the Acqui ror and Parent
and
SNÖBAR HOLDINGS, INC.,
a Delaware corporation
and
THE SHAREHOLDER S OF
SNÖBAR HOLDINGS, INC.
[EXECUTION COPY]
TABLE OF CONTENTS
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ARTICLE I REPRESENTATIONS, COVENANTS, AND WARRANTIES OF SNO AND THE SHAREHOLDERS | PAGE 1 |
| Section 1.01 Incorporation | 1 |
| Section 1.02 Authorized Shares and Capital | 2 |
| Section 1.03 Subsidiaries and Predecessor Corporations | 2 |
| Section 1.04 Financial Statements | 2 |
| Section 1.05 Information | 3 |
| Section 1.06 Options or Warrants | 3 |
| Section 1.07 Absence of Certain Changes or Events | 3 |
| Section 1.08 Litigation and Proceedings | 3 |
| Section 1.09 Contracts | 4 |
| Section 1.10 Compliance With Laws and Regulations | 4 |
| Section 1.11 Approval of Agreement | 4 |
| Section 1.12 SNO Schedules | 4 |
| Section 1.13 Valid Obligation | 4 |
| Section 1.14 Investment Representations | 5 |
| Section 1.15 Leak Out Agreements | 7 |
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| ARTICLE II REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE COMPANY | 7 |
| Section 2.01 Organization | 7 |
| Section 2.02 Capitalization | 7 |
| Section 2.03 Subsidiaries and Predecessor Corporations | 7 |
| Section 2.04 SEC Reports and Compliance | 7 |
| Section 2.05 Information | 8 |
| Section 2.06 Options or Warrants | 8 |
| Section 2.07 Absence of Certain Changes or Events | 8 |
| Section 2.08 Litigation and Proceedings | 9 |
| Section 2.09 Contracts | 9 |
| Section 2.10 No Conflict With Other Instruments | 9 |
| Section 2.11 Compliance With Laws and Regulations | 9 |
| Section 2.12 Approval of Agreement | 10 |
| Section 2.13 Material Transactions or Affiliations | 10 |
| Section 2.14 The Company Schedules | 10 |
| Section 2.15 Valid Obligation | 10 |
| Section 2.16 Financial Statements | 10 |
| Section 2.17 Shell Company | 10 |
| Section 2.18 DTC Eligible | 10 |
| Section 2.19 Anti-Dilution | 11 |
| Section 2.20 Registration Rights | 11 |
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| ARTICLE III SHARE EXCHANGE | 11 |
| Section 3.01 The Exchange and Other Issuance | 11 |
| Section 3.02 Closing | 11 |
| Section 3.03 Series E Preferred Stock Transfer | 12 |
| Section 3.04 Closing Events | 12 |
| Section 3.05 Termination | 12 |
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| ARTICLE IV SPECIAL COVENANTS | 12 |
| Section 4.01 Access to Properties and Records | 12 |
| Section 4.02 Delivery of Books and Records | 12 |
| Section 4.03 Third Party Consents and Certificates | 12 |
| Section 4.04 Actions Prior to Closing | 12 |
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| ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY | 13 |
| Section 5.01 Accuracy of Representations and Performance of Covenants | 13 |
| Section 5.02 Officer’s Certificate | 13 |
| Section 5.03 Good Standing | 14 |
| Section 5.04 Minimum SNO Shareholders | 14 |
| Section 5.05 No Governmental Prohibition | 14 |
| Section 5.06 Consents | 14 |
| Section 5.07 Other Items | 14 |
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| ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF SNO AND THE SNO SHAREHOLDERS | 14 |
| Section 6.01 Accuracy of Representations and Performance of Covenants | 14 |
| Section 6.02 Officer’s Certificate | 14 |
| Section 6.03 Good Standing | 14 |
| Section 6.04 No Governmental Prohibition | 15 |
| Section 6.05 Approval by the Company Board of Directors | 15 |
| Section 6.06 Consents | 15 |
| Section 6.07 Shareholder Report | 15 |
| Section 6.08 Other Items | 15 |
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| ARTICLE VII MISCELLANEOUS | 15 |
| Section 7.01 Brokers | 15 |
| Section 7.02 Governing Law | 15 |
| Section 7.03 Notices | 16 |
| Section 7.04 Attorney’s Fees | 16 |
| Section 7.05 Confidentiality | 16 |
| Section 7.06 Public Announcements and Filings | 16 |
| Section 7.07 Schedules; Knowledge | 16 |
| Section 7.08 Third Party Beneficiaries | 16 |
| Section 7.09 Expenses | 17 |
| Section 7.10 Entire Agreement | 17 |
| Section 7.11 Survival; Termination | 17 |
| Section 7.12 Counterparts | 17 |
| Section 7.13 Amendment or Waiver | 17 |
| Section 7.14 Best Efforts | 17 |
EXHIBITS
Exhibit A –
Shareholders’ Signature Pages
Exhibit B –
Other Issuance
Exhibit C –
Restated Certificate of Incorporation and Bylaws
THIS SHARE EXCHANGE AGREEMENT (hereinafter referred to as this “Agreement”) is entered into as
of this 14th day of August 2015, by and between PACIFIC VENTURES GROUP, INC., a Delaware corporation (the
“Company”), with offices at 000 Xxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxx 00000 and SNÖBAR HOLDINGS, INC., a
Delaware corporation (“SNO’’), with offices at 000 Xxxx 0xx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 and
the shareholders of SNO set forth on Composite Exhibit A (the “SNO Shareholders”), upon the following premises:
Premises
WHEREAS, the Company is a publicly held corporation organized under the laws of the State of
Delaware;
WHEREAS, SNO is a privately-held company organized under the laws of Delaware;
WHEREAS, the Company agrees to acquire at least 21,285,000 and up to 21,500,000 shares of SNO’s
Class A Common Stock, par value $0.001 per share (“SNO Class A Common Stock”), and 1,000,000 shares of
SNO’s Class B Common Stock, par value $0.001 per share (“SNO Class B Common Stock”; together with “SNO
Class A Common Stock”, referred to herein as “SNO Common Stock”), (collectively, representing between 99%
to 100% of SNO’s issued and outstanding common stock) from the SNO Shareholders in exchange for the
issuance of at least 22,285,000 and up to 22,500,000 shares (“Exchange Shares”) of the Company’s common
stock, par value $0.01 per share (“Company Common Stock”) for each share of SNO Common Stock (the
“Exchange”) with a simultaneous issuance of 2,500,000 shares (“Other Issued Shares”) of the Company Common
Stock (“Other Issuance”) to certain other persons as listed on Exhibit B hereto (“Other Persons”) in exchange for,
among other things, the forgiveness of debt owed by the Company to Other Persons. On the Closing Date (as
defined in Section 3.02 herein), the SNO Shareholders will become shareholders of the Company and SNO will
become a majority owned or wholly-owned subsidiary of the Company. Immediately after the Exchange, Other
Issuance and other transactions set forth herein, there will be at least 25,172,000 and up to 25,387,000 shares of
the Company Common Stock outstanding with at least 22,285,000 and up to 22,500,000 shares or
approximately 89% thereof owned by the SNO Shareholders and 1,000,000 shares of the Company’s Series E
Preferred Stock with 100% thereof owned by a SNO Shareholder, namely Xxxxxxx Xxxxxxx; and
WHEREAS, for Federal income tax purposes, it is intended that the Exchange qualify as a reorganization
under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”).
Agreement
NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and
agreements hereinafter set forth and the mutual benefits to the parties to be derived herefrom, and intending to be
legally bound hereby, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF SNO AND THE SHAREHOLDERS
As an inducement to, and to obtain the reliance of the Company , except as set forth in the SNO
Schedules (as hereinafter defined), SNO represents and warrants to the Company that as of the date hereof
and the Closing Date (as hereinafter defined), as follows:
Section 1.01 Incorporation. SNO is a company duly organized, validly existing, and in good
standing under the laws of Delaware and has the corporate power and is duly authorized under all applicable laws,
regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now
being conducted. Included in the SNO Schedules is a complete and correct copy of the Certificate of Incorporation
of SNO as in effect on the date hereof. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, violate any provision of SNO’s Certificate of
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Incorporation. SNO has taken all actions required by law, its Certificate of Incorporation, or otherwise to authorize
the execution, delivery and performance of this Agreement. SNO has full power, authority, and legal capacity and
has taken all action required by law, it’s Certificate of Incorporation, and otherwise to consummate the transactions
herein contemplated.
Section 1.02
Authorized Shares and Capital. The authorized capital stock of the SNO consists
of: (i) 30,000,000 shares of Class A Common Stock, par value $0.001 per share, of which 21,500,000 shares are
issued and outstanding; (ii) 10,000,000 shares of Class B Common Stock, par value $0.001 per share, of which
1,000,000 shares are issued and outstanding; and (iii) 10,000,000 shares of preferred stock, par value $0.001 per
share, none of which are issued and outstanding and all of which are undesignated. The issued and outstanding
shares of Class A Common Stock, Class B Common Stock and preferred stock are validly issued, fully paid, and
non-assessable, were not issued in violation of the preemptive or other rights of any person, and were issued pursuant
to a valid registration, or a valid exemption from registration, under the Securities Act of 1933, as amended, and all
applicable state securities laws. SNO has no obligation to issue any additional Class A Common Stock, Class B
Common Stock, preferred stock or securities convertible or exchangeable for Class A Common Stock, Class B
Common Stock, preferred stock, or options or warrants for the purchase of (a) any Class A Common Stock, Class B
Common Stock or preferred stock or (b) any securities convertible into or exchangeable for any Class A Common
Stock, Class B Common Stock or preferred stock. There are no outstanding rights to either demand registration of
any Class A Common Stock, Class B Common Stock or preferred stock under the Securities Act of 1933, as
amended, or to sell any Class A Common Stock, Class B Common Stock or preferred stock in connection with such
a registration of Class A Common Stock, Class B Common Stock or preferred stock.
Section 1.03
Subsidiaries and Predecessor Corporations. SNO does not have any predecessor
corporation(s), no subsidiaries, and does not own, beneficially or of record, any shares of any other corporation.
Section 1.04
Financial Statements.
(a)
Prior to Closing, SNO shall provide the Company with SNO’s balance sheets as of
December 31, 2014 and December 31, 2013, and the related statements of operations, stockholders’
equity and cash flows for the periods ended December 31, 2014 and December 31, 2013 prepared in
accordance with GAAP and audited by a PCAOB independent auditor (the “SNO 2014 and 2013
Financial Statements”).
(b)
Prior to Closing, SNO shall provide the Company with SNO’s balance sheet as of June
30, 2015, and the related statements of operations, stockholders’ equity and cash flows for the period
ended J une 30, 2015 prepared in accordance with GAAP and reviewed, but not audited, by a
PCAOB independent auditor (the “SNO June 2015 Financial Statements”; together with the SNO 2014
and 2013 Financial Statements, referred to herein as “SNO Financial Statements”).
(c)
All such financial statements shall be prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods involved. The SNO
balance sheets shall be true and accurate and present fairly as of their respective dates the financial
condition of SNO. As of the date of such balance sheets, except as and to the extent reflected or
reserved against therein, SNO shall have no liabilities or obligations (absolute or contingent) which
should be reflected in the balance sheets or the notes thereto prepared in accordance with generally
accepted accounting principles, and all assets reflected therein will be properly reported and present
fairly the value of the assets of SNO, in accordance with generally accepted accounting principles.
The statements of operations, stockholders’ equity and cash flows will reflect fairly the information
required to be set forth therein by generally accepted accounting principles.
(d)
SNO has duly and punctually paid all Governmental fees and taxes which it has become
liable to pay and has duly allowed for all taxes reasonably foreseeable and is under no liability to pay any
penalty or interest in connection with any claim for governmental fees or taxes and SNO has made any
and all proper declarations and returns for tax purposes and all information contained in such declarations
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and returns is true and complete and full provision or reserves have been made in its financial statements
for all Governmental fees and taxes.
(e)
The books and records, financial and otherwise, of SNO are in all material aspects
complete and correct and have been maintained in accordance with good business and accounting
practices.
(f)
All of SNO’s assets are reflected on its financial statements, and, except as set forth in the
SNO Schedules or the financial statements of SNO or the notes thereto, SNO has no material liabilities,
direct or indirect, matured or unmatured, contingent or otherwise.
Section 1.05
Information. The information concerning SNO set forth in this Agreement and in
the SNO Schedules is complete and accurate in all material respects and does not contain any untrue statement of a
material fact or omit to state a material fact required to make the statements made, in light of the circumstances under
which they were made, not misleading. In addition, SNO has fully disclosed in writing to the Company (through
this Agreement or the SNO Schedules) all information relating to matters involving SNO or its assets or its present
or past operations or activities which (i) indicated or may indicate, in the aggregate, the existence of a greater than
$10,000 liability, (ii) have led or may lead to a competitive disadvantage on the part of SNO or (iii) either alone or in
aggregation with other information covered by this Section, otherwise have led or may lead to a material adverse
effect on SNO, its assets, or its operations or activities as presently conducted or as contemplated to be conducted
after the Closing Date, including, but not limited to, information relating to governmental, employee, environmental,
litigation and securities matters and transactions with affiliates.
Section 1.06
Options or Warrants. There are no existing options, warrants, calls, or
commitments of any character relating to the authorized and unissued stock of SNO.
Section 1.07
Absence of Certain Changes or Events. Since June 30, 2015 or such other date as
provided for herein:
(a)
there has not been any material adverse change in the business, operations,
properties, assets, or condition (financial or otherwise) of SNO;
(b)
SNO has not (i) amended its Certificate of Incorporation since formation; (ii) declared
or made, or agreed to declare or make, any payment of dividends or distributions of any assets of any
kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem, any of its
shares; (iii) made any material change in its method of management, operation or accounting; (iv)
entered into any other material transaction other than sales in the ordinary course of its business; or (v)
made any increase in or adoption of any profit sharing, bonus, deferred compensation, insurance,
pension, retirement, or other employee benefit plan, payment, or arrangement made to, for, or with its
officers, directors, or employees; and
(c)
SNO has not (i) granted or agreed to grant any options, warrants or other rights for its
stocks, bonds or other corporate securities calling for the issuance thereof, (ii) borrowed or agreed to
borrow any funds or incurred, or become subject to, any material obligation or liability (absolute or
contingent) except as disclosed herein and except liabilities incurred in the ordinary course of business;
sold or transferred, or agreed to sell or transfer, any of its assets, properties, or rights or canceled, or
agreed to cancel, any debts or claims; or (iv) issued, delivered, or agreed to issue or deliver any stock,
bonds or other corporate securities including debentures (whether authorized and unissued or held as
treasury stock) except in connection with this Agreement.
Section 1.08
Litigation and Proceedings. There are no actions, suits, proceedings, or
investigations pending or, to the knowledge of SNO after reasonable investigation, threatened by or against SNO or
affecting SNO or its properties, at law or in equity, before any court or other governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind. SNO does not have any knowledge of any
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material default on its part with respect to any judgment, order, injunction, decree, award, rule, or regulation of any
court, arbitrator, or governmental agency or instrumentality or of any circumstances which, after reasonable
investigation, would result in the discovery of such a default.
Section 1.09
Contracts.
(a)
All “material” contracts, agreements, franchises, license agreements, debt
instruments or other com mitment s to wh ich SNO is a part y or by wh ich it or any of its assets ,
pro du cts , techn olog y, or pro perti es are bound other than tho se incurred in the ordi nary course of
business have been previously disclosed to the Company or the SNO Shareholders. A “material”
contract, agreement, franchise, license agreem ent , debt instrument or com mitment is on e which (i)
will remain in effect for more than six (6) months aft er the date of this Ag reem ent or (ii) involves
aggregate obligation s of at least ten tho usand dollars ($10,000);
(b)
All contracts, agreements, franchises, license agreements, and other commitments to
which SNO is a party or by which its properties are bound and which are material to the operations of
SNO taken as a whole are valid and enforceable by SNO in all respects, except as limited by bankruptcy
and insolvency laws and by other laws affecting the rights of creditors generally; and
(c)
Except as previously disclosed to the Company or the SNO Shareholders or reflected in
the most recent SNO balance sheet, SNO is not a party to any oral or written (i) contract for the
employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option,
severance pay, pension benefit or retirement plan, (iii) agreement, contract, or indenture relating to the
borrowing of money, (iv) guaranty of any obligation; (vi) collective bargaining agreement; or (vii)
agreement with any present or former officer or director of SNO.
Section 1.10
Compliance With Laws and Regulations. To the best of its knowledge, SNO has
complied with all applicable statutes and regulations of any federal, state, or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations,
properties, assets, or condition of SNO or except to the extent that noncompliance would not result in the occurrence
of any material liability for SNO.
Section 1.11
Approval of Agreement. This Agreement has been duly and validly authorized
and executed and delivered on behalf of SNO and the SNO Shareholders and this Agreement constitutes a valid and
binding agreement of SNO and the SNO Shareholders enforceable in accordance with its terms.
Section 1.12
SNO Schedules. SNO has delivered to the Company the following schedules,
which are collectively referred to as the “SNO Schedules” and which consist of separate schedules dated as of the
date of execution of this Agreement, all certified by the President of SNO as complete, true, and correct as of the date
of this Agreement in all material respects:
(a)
a schedule containing complete and correct copies of the Articles of Incorporation of
SNO and the Bylaws, each as in effect as of the date of this Agreement;
(b)
a schedule containing the financial statements of SNO identified in paragraph 1.04(a);
(c)
a schedule setting forth any information, together with any required copies of documents,
required to be disclosed in the Company Schedules by Sections 1.01 through 1.11.
SNO shall cause the SNO Schedules and the instruments and data delivered to the Company hereunder to
be promptly updated after the date hereof up to and including the Closing Date.
Section 1.13
Valid Obligation. This Agreement and all agreements and other documents
executed by SNO in connection herewith constitute the valid and binding obligations of SNO, enforceable in
accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar
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laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of
equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.
Section 1.14
Investment Representations.
(a)
Investment Purpose. As of the date hereof, the SNO Shareholders understand and agree
that the consummation of this Agreement including the delivery of the Exchange Consideration (as
hereinafter defined) to the SNO Shareholders in exchange for the Securities as contemplated hereby
constitutes the offer and sale of securities under the Securities Act of 1933, as amended (the “Securities
Act ”) and applicable state statutes and that the Securities are being acquired for the SNO Shareholders’
own account and not with a present view towards the public sale or distribution thereof, except pursuant to
sales registered or exempted from registration under the Securities Act; provided, however, that by
making the representations herein, the SNO Shareholders do not agree to hold any of the Exchange
Consideration for any minimum or other specific term and reserves the right to dispose of the Exchange
Consideration at any time in accordance with or pursuant to a registration statement or an exemption
under the Securities Act.
(b)
Accredited Investor Status. Each of the SNO Shareholders is an “accredited investor” as
that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”) or a sophisticated investor
who has such knowledge and experience in financial and business matters to be capable of evaluating
the merits and risks of this Agreement and the underlying transactions. Each SNO Shareholder has been
furnished with all documents and materials relating to the business, finances and operations of the
Company and its subsidiaries and information that such SNO Shareholder requested and deemed material
to making an informed decision regarding this Agreement and the underlying transactions.
(c)
Reliance on Exemptions. Each of the SNO Shareholders understands that the Exchange
Consideration is being offered and sold to the SNO Shareholders in reliance upon specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company
is relying upon the truth and accuracy of, and the SNO Shareholders’ compliance with, the
representations, warranties, agreements, acknowledgments and understandings of the SNO Shareholders
set forth herein in order to determine the availability of such exemptions and the eligibility of the SNO
Shareholders to acquire the Exchange Consideration.
(d)
Information. The SNO Shareholders and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company and materials relating to the
offer and sale of the Exchange Consideration which have been requested by the SNO Shareholders or its
advisors. The SNO Shareholders and its advisors, if any, have been afforded the opportunity to ask
questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the SNO
Shareholders any material nonpublic information and will not disclose such information unless such
information is disclosed to the public prior to or promptly following such disclosure to the SNO
Shareholders. The SNO Shareholders understands that its investment in the Exchange Consideration
involves a significant degree of risk. The SNO Shareholders is not aware of any facts that may constitute
a breach of any of the Company's representations and warranties made herein.
(e)
Governmental Review. Each of the SNO Shareholders understands that no United States
federal or state agency or any other government or governmental agency has passed upon or made any
recommendation or endorsement of the Exchange Consideration.
(f)
Transfer or Resale. Each of the SNO Shareholders understands that (i) the sale or re-sale
of the Exchange Consideration has not been and is not being registered under the Securities Act or any
applicable state securities laws, and the Exchange Consideration may not be transferred unless (a) the
Exchange Consideration is sold pursuant to an effective registration statement under the Securities Act,
(b) the SNO Shareholders shall have delivered to the Company, at the cost of the SNO Shareholders, an
opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in
comparable transactions to the effect that the Exchange Consideration to be sold or transferred may be
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sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by
the Company, (c) the Exchange Consideration is sold or transferred to an “affiliate” (as defined in Rule
144 promulgated under the Securities Act (or a successor rule) (“Rule 144”)) of the SNO Shareholders
who agree to sell or otherwise transfer the Exchange Consideration only in accordance with this Section
and who is an Accredited Investor, (d) the Exchange Consideration is sold pursuant to Rule 144, or (e) the
Exchange Consideration is sold pursuant to Regulation S under the Securities Act (or a successor rule)
(“Regulation S”), and the SNO Shareholders shall have delivered to the Company, at the cost of the SNO
Shareholders, an opinion of counsel that shall be in form, substance and scope customary for opinions of
counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such
Exchange Consideration made in reliance on Rule 144 may be made only in accordance with the terms of
said Rule and further, if said Rule is not applicable, any re-sale of such Exchange Consideration under
circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may require compliance with some other
exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (iii) neither the
Company nor any other person is under any obligation to register such Exchange Consideration under the
Securities Act or any state securities laws or to comply with the terms and conditions of any exemption
thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the
contrary, the Exchange Consideration may be pledged as collateral in connection with a bona fide margin
account or other lending arrangement.
(g)
Legends. Each of the SNO Shareholders understand that the shares of the Company’s
common stock that comprise the Exchange Consideration (the “Securities”) and, until such time as the
Securities has been registered under the Securities Act may be sold pursuant to Rule 144 or Regulation S
without any restriction as to the number of securities as of a particular date that can then be immediately
sold, the Securities may bear a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL
BE SELECTED BY THE COMPANY), IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
The legend set forth above shall be removed and the Company shall issue a certificate without
such legend to the holder of any Securities upon which it is stamped, if, unless otherwise required by
applicable state securities laws, (a) the Securities are registered for sale under an effective registration
statement filed under the Securities Act or otherwise may be sold pursuant to Rule 144 or Regulation S
without any restriction as to the number of securities as of a particular date that can then be immediately
sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of
such Exchange Shares may be made without registration under the Securities Act, which opinion shall be
accepted by the Company so that the sale or transfer is effected. Each of the SNO Shareholders agrees to
sell all Securities, including those represented by a certificate(s) from which the legend has been removed,
in compliance with applicable prospectus delivery requirements, if any.
(h)
Residency. Each of the SNO Shareholders is a resident of the jurisdiction set forth
immediately below the SNO Shareholders’ name on the signature pages hereto or provided separately to
the Company.
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Section 1.15 Leak Out Agreements. Certain SNO Shareholders (including Xxxxxxx Xxxxxxx)
shall agree to execute leak out agreements whereby beginning twelve months following the Closing Date,
they will not sell more than three percent (3%) of their holdings in any ninety (90) day period for the first
twelve months.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE COMPANY
As an inducement to, and to obtain the reliance of SNO and the SNO Shareholders, except as set forth in
the Company Schedules (as hereinafter defined), the Company represents and warrants, as of the date hereof and
as of the Closing Date, as follows:
Section 2.01
Organization. The Company is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware and has the corporate power and is duly authorized under all
applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material
respects as it is now being conducted. Included in the Company Schedules are complete and correct copies of the
articles of incorporation and bylaws of the Company as in effect on the date hereof. The execution and delivery of
this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any
provision of the Company’s articles of incorporation or bylaws. The Company has taken all action required by law,
its articles of incorporation, its bylaws, or otherwise to authorize the execution and delivery of this Agreement, and
the Company has full power, authority, and legal right and has taken all action required by law, its articles of
incorporation, bylaws, or otherwise to consummate the transactions herein contemplated.
Section 2.02
Capitalization. At Closing, the Company’s authorized capitalization will consist
of (a) 100,000,000 shares of common stock, par value $0.01 per share (“the Company Common Stock”), of which
25,387,000 shares will be issued and outstanding, and (b) 10,000,000 shares of preferred stock, par value $0.01 per
share, of which 1,000,000 is Series E Preferred Stock, par value $0.01 per share (with a 10 to 1 voting preference
over common stock), of which 1,000,000 will be issued and outstanding. The Series E Preferred Stock is not
convertible into any other class of stock of the Company and has no preference to dividends or liquidation rights. All
issued and outstanding shares are legally issued, fully paid, and non-assessable and not issued in violation of the
preemptive or other rights of any person.
Section 2.03
Subsidiaries and Predecessor Corporations. The Company (which was formerly
known as American Eagle Group, Inc., which was formerly known as AOA Corporation) does not have any
predecessor corporation(s), no subsidiaries, and does not own, beneficially or of record, any shares of any other
corporation.
Section 2.04
SEC Reports and Compliance.
(a)
The Company has filed all reports required to be filed by it by the Securities Exchange
Act of 1934, as amended.
(b)
The Company is not an investment company within the meaning of Section 3 of the
Investment Company Act of 1940, as amended.
(c)
The shares of Company Common Stock are quoted on the OTC Markets Group –
OTCQB Tier (the “OTC Markets”) under the symbol “PACV” and Company is, and has no reason to believe that
it will not in the foreseeable future continue to be, in compliance in all material respects with all rules and
regulations of the OTC Markets applicable to it and the Company Common Stock. The issuance of Company
Common Stock under this Agreement does not contravene the rules and regulations of the trading market on
which the Company Common Stock is currently listed or quoted, and no approval of the stockholders of
Company is required for Company to issue and deliver the Company Common Stock contemplated by this
Agreement.
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(d)
Between the date hereof and the Effective Time, Company shall continue to satisfy the
filing requirements of the Exchange Act and all other requirements of applicable securities laws and of the OTC
Markets.
(e)
The Company SEC Documents include all certifications and statements required of it,
if any, by (i) Rule 13a-14 or 15d-14 under the Exchange Act, and (ii) 18 U.S.C. Section 1350 (Section 906 of the
Xxxxxxxx-Xxxxx Act of 2002), and each of such certifications and statements contain no qualifications or
exceptions to the matters certified therein other than a knowledge qualification, permitted under such provision,
and have not been modified or’ withdrawn and neither Parent nor any of its officers has received any notice from
the Commission questioning or challenging the accuracy, completeness, form or manner of filing or submission
of such certifications or statements.
Section 2.05
Information. The information concerning the Company set forth in this
Agreement and the Company Schedules is complete and accurate in all material respects and does not contain any
untrue statements of a material fact or omit to state a material fact required to make the statements made, in light of
the circumstances under which they were made, not misleading. In addition, the Company has fully disclosed in
writing to the SNO Shareholders (through this Agreement or the Company Schedules) all information relating to
matters involving the Company or its assets or its present or past operations or activities which (i) indicated or may
indicate, in the aggregate, the existence of a greater than $10,000 liability, (ii) have led or may lead to a competitive
disadvantage on the part of the Company or (iii) either alone or in aggregation with other information covered by this
Section, otherwise have led or may lead to a material adverse effect on the Company, its assets, or its operations or
activities as presently conducted or as contemplated to be conducted after the Closing Date, including, but not
limited to, information relating to governmental, employee, environmental, litigation and securities matters and
transactions with affiliates.
Section 2.06
Options or Warrants. There are no options, warrants, convertible securities,
subscriptions, stock appreciation rights, phantom stock plans or stock equivalents or other rights, agreements,
arrangements or commitments (contingent or otherwise) of any character issued or authorized by the Company
relating to the issued or unissued capital stock of the Company (including, without limitation, rights the value of
which is determined with reference to the capital stock or other securities of the Company) or obligating the
Company to issue or sell any shares of capital stock of, or options, warrants, convertible securities, subscriptions or
other equity interests in, the Company. There are no outstanding contractual obligations of the Company to
repurchase, redeem or otherwise acquire any shares of the Company Common Stock of the Company or to pay any
dividend or make any other distribution in respect thereof or to provide funds to, or make any investment (in the form
of a loan, capital contribution or otherwise) in, any person.
Section 2.07
Absence of Certain Changes or Events. Since June 30, 2015 and except as
disclosed in the SEC Reports:
(a)
there has not been (i) any material adverse change in the business, operations, properties,
assets or condition of the Company or (ii) any damage, destruction or loss to the Company (whether or not covered
by insurance) materially and adversely affecting the business, operations, properties, assets or condition of the
Company;
(b)
the Company has not (i) amended its certificate of incorporation or bylaws except as
required by this Agreement; (ii) declared or made, or agreed to declare or make any payment of dividends or
distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase
or redeem, any of its capital stock; (iii) waived any rights of value which in the aggregate are outside of the
ordinary course of business or material considering the business of the Company; (iv) made any material change
in its method of management, operation, or accounting; (v) entered into any transactions or agreements other than
in the ordinary course of business; (vi) made any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any present or former officer or employee; (vii)
increased the rate of compensation payable or to become payable by it to any of its officers or directors or any of
its salaried employees whose monthly compensation exceed $1,000; or (viii) made any increase in any profit
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sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment,
or arrangement, made to, for or with its officers, directors, or employees;
(c)
The Company has not (i) granted or agreed to grant any options, warrants, or other rights
for its stock, bonds, or other corporate securities calling for the issuance thereof; (ii) borrowed or agreed to borrow
any funds or incurred, or become subject to, any material obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of business; (iii) paid or agreed to pay any material obligations or
liabilities (absolute or contingent) other than current liabilities reflected in or shown on the most recent the
Company balance sheet and current liabilities incurred since that date in the ordinary course of business and
professional and other fees and expenses in connection with the preparation of this Agreement and the
consummation of the transaction contemplated hereby; (iv) sold or transferred, or agreed to sell or transfer, any of
its assets, properties, or rights (except assets, properties, or rights not used or useful in its business which, in the
aggregate have a value of less than $1,000), or canceled, or agreed to cancel, any debts or claims (except debts or
claims which in the aggregate are of a value less than $1,000); (v) made or permitted any amendment or
termination of any contract, agreement, or license to which it is a party if such amendment or termination is
material, considering the business of the Company; or (vi) issued, delivered or agreed to issue or deliver, any
stock, bonds or other corporate securities including debentures (whether authorized and unissued or held as
treasury stock), except in connection with this Agreement; and
(d)
to its knowledge, the Company has not become subject to any law or regulation which
materially and adversely affects, or in the future, may adversely affect, the business, operations, properties, assets
or condition of the Company.
Section 2.08
Litigation and Proceedings. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of the Company after reasonable investigation, threatened by or against
the Company or affecting the Company or its properties, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of any kind except as disclosed in the
Company Schedules. The Company has no knowledge of any default on its part with respect to any judgment, order,
writ, injunction, decree, award, rule or regulation of any court, arbitrator, or governmental agency or instrumentality
or any circumstance which after reasonable investigation would result in the discovery of such default.
Section 2.09
Contracts.
(a)
The Company is not a party to, and its assets, products, technology and properties are not
bound by, any leases, contract, franchise, license agreement, agreement, debt instrument, obligation, arrangement,
understanding or other commitments whether such agreement is in writing or oral (“Contracts”).
(b)
The Company is not a party to or bound by, and the properties of the Company are not
subject to any Contract, agreement, other commitment or instrument; any charter or other corporate restriction; or
any judgment, order, writ, injunction, decree, or award; and
(c)
The Company is not a party to any oral or written (i) contract for the employment of any
officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension
benefit or retirement plan, (iii) agreement, contract, or indenture relating to the borrowing of money, (iv) guaranty
of any obligation, (vi) collective bargaining agreement; or (vii) agreement with any present or former officer or
director of the Company.
Section 2.10
No Conflict With Other Instruments. The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not result in the breach of any term or
provision of, constitute a default under, or terminate, accelerate or modify the terms of, any indenture, mortgage,
deed of trust, or other material agreement or instrument to which the Company is a party or to which any of its assets,
properties or operations are subject.
Section 2.11
Compliance With Laws and Regulations. The Company has complied with all
United States federal, state or local or any applicable foreign statute, law, rule, regulation, ordinance, code, order,
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judgment, decree or any other applicable requirement or rule of law (a “Law”) applicable to the Company and the
operation of its business. This compliance includes, but is not limited to, the filing of all reports to date with federal
and state securities authorities.
Section 2.12
Approval of Agreement. The Board of Directors of the Company has authorized
the execution and delivery of this Agreement by the Company and has approved this Agreement and the transactions
contemplated hereby.
Section 2.13
Material Transactions or Affiliations. Except as disclosed herein and in the
Company Schedules, there exists no contract, agreement or arrangement between the Company and any predecessor
and any person who was at the time of such contract, agreement or arrangement an officer, director, or person
owning of record or known by the Company to own beneficially, 5% or more of the issued and outstanding common
stock of the Company and which is to be performed in whole or in part after the date hereof or was entered into not
more than three years prior to the date hereof. Neither any officer, director, nor 5% Shareholders of the Company
has, or has had since inception of the Company, any known interest, direct or indirect, in any such transaction with
the Company which was material to the business of the Company. The Company has no commitment, whether
written or oral, to lend any funds to, borrow any money from, or enter into any other transaction with, any such
affiliated person.
Section 2.14
The Company Schedules. The Company has delivered to the SNO Shareholders
the following schedules, which are collectively referred to as the “Company Schedules” and which consist of
separate schedules, which are dated the date of this Agreement, all certified by the chief executive officer of the
Company to be complete, true, and accurate in all material respects as of the date of this Agreement.
(a)
a schedule containing complete and accurate copies of the certificate of incorporation, as
amended, and bylaws of the Company as in effect as of the date of this Agreement;
(b)
a schedule setting forth any information, together with any required copies of documents,
required to be disclosed in the Company Schedules by Sections 2.01 through 2.13.
The Company shall cause the Company Schedules and the instruments and data delivered to the SNO
Shareholders hereunder to be promptly updated after the date hereof up to and including the Closing Date.
Section 2.15
Valid Obligation. This Agreement and all agreements and other documents
executed by the Company in connection herewith constitute the valid and binding obligation of the Company,
enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the
availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may
be brought.
Section 2.16
Financial Statements. The balance sheets and statements of operations,
stockholders’ equity and cash flows contained in the Company SEC Documents (a) comply as to form in all
material respects with applicable accounting requirements and rules and regulations of the Commission with
respect thereto, have been prepared in accordance with U. S. GAAP applied on a basis consistent with prior periods
(and, in the case of unaudited financial information, on a basis consistent with year-end audits), (c) are in
accordance with the books and records of the Company and (d) present fairly in all material respects the financial
condition of the Company at the dates therein specified and the results of its operations and changes in financial
position for the periods therein specified.
Section 2.17
Shell Company. The Company is not now nor has it ever been a “shell company”
as that term is defined in Reg. 405 of the Securities Act of 1933, as amended.
Section 2.18
DTC Eligible. The Company’s Common Stock is DTC eligible and is not subject
to any outstanding DTC “chills” or “freezes”.
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Section 2.19
Anti-Dilution. To prevent dilution, for a period of two (2) years after the Closing
Date, the Company shall set a minimum purchase price (“floor price”) of $0.50 per share of the Company Common
Stock for all new share issuances of the Company Common Stock. In other words, upon consummation of the
Exchange, the Company shall not issue shares of Company Common Stock at a purchase price of less than $0.50
per share or issue options with an exercise price of less than $0.50 per share.
Section 2.20
Piggyback Registration Rights. The Exchange Shares and Other Issued Shares
shall have piggyback registration rights.
ARTICLE III
SHARE EXCHANGE
Section 3.01
The Exchange and Other Issuance. On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date (as defined in Section 3.02), the SNO Shareholders listed in Composite
Exhibit A, representing an aggregate of at least 21,285,000 and up to 21,500,000 shares of SNO’s Class A Common
Stock (“SNO Class A Common Stock”) and 1,000,000 shares of SNO’s Class B Common Stock (“SNO Class B
Common Stock”; together with “SNO Class A Common Stock”, referred to herein as “SNO Common Stock”)
(collectively, representing at least 99% and up to 100% of SNO’s issued and outstanding common stock), upon their
agreement, shall sell, assign, transfer and deliver to the Company, free and clear of all liens, pledges, encumbrances,
charges, restrictions or known claims of any kind, nature, or description, all of the shares of SNO held by them as set
forth on Composite Exhibit A; the objective of such purchase (the “Exchange”) being the acquisition by the
Company of at least 99% and up to 100% of the issued and outstanding shares of SNO Class A Common Stock and
100% of the issued and outstanding shares of SNO Class B Common Stock. In exchange for the transfer of such
securities by the SNO Shareholders as set forth on Composite Exhibit A, the Company shall deliver to each such
SNO Shareholder one (1) share (the “Exchange Shares”) of the Company’s common stock (“Company Common
Stock”) for each share of their SNO Common Stock (an aggregate of at least 22,285,000 and up to 22,500,000 shares
of the Company Common Stock). Simultaneously, the Company shall issue an aggregate of 2,500,000 shares
(“Other Issued Shares”) of the Company Common Stock (“Other Issuance”) to certain other persons (“Other
Persons”) as set forth in Exhibit B in exchange for, among other things, the forgiveness of the total debt to date owed
by the Company to Danzig Ltd (which is an affiliate of Xxxxxxx Xxxxxxxx) in the approximate amount of $20,522.
After the Exchange, Other Issuance and other transactions set forth herein have been completed, the SNO
shareholders will own at least 22,285,000 and up to 22,500,000 restricted shares of Company Common Stock or
ap pro x im ate ly 89% of the total outstanding shares of Com pany Com m on Stock. Upon completion of the
issuance of at least 22,285,000 and up to 22,500,000 shares of the Com pany Com m on Stock to the SNO
Shareholders and 2,500,000 shares of Company Common Stock to the Other Persons, there will be a total of
at least 25,172,000 and up to 25,387,000 shares of the Company Common Stock outstanding and 1,000,000
shares of the Company ’s Series E Preferred Stock outstanding. No other securities of the Company will be
outstanding. The Exchange Shares are hereinafter referred to as the “Exchange Consideration” or the
“Securities”. At the Closing, the SNO Shareholders shall, on surrender of their certificates representing their
SNO shares to the Company or its registrar or transfer agent, be entitled to receive a certificate or certificates
evidencing their ownership of the Exchange Shares.
Section 3.02
Closing. The closing (“Initial Closing”) of the transactions contemplated by this
Agreement shall occur following completion of the conditions set forth in Articles V and VI, and upon delivery of
the Exchange Consideration as described in Section 3.01 herein. The Initial Closing shall take place at a mutually
agreeable time and place and is anticipated to close by no later than August 31, 2015, but in no event before this
Agreement has been signed by SNO Shareholders holding at least 80% of the shares of SNO common stock
outstanding (the “Initial Closing Date”). Subsequent to the Initial Closing Date, the Company may complete one or
more additional Closings to complete the exchanges provided for in this Agreement to allow the Company to
complete the acquisition of at least 99% and up to 100% of the SNO common stock for a period of up to 30 days after
the Initial Closing Date. Each closing that occurs after the Initial Closing Date, along with the Initial Closing shall be
collectively be referred to as the “Closing” or “Closing Date”.
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Section 3.03
Series E Preferred Stock Transfer. Concurrently with the Initial Closing of the
transactions contemplated by this Agreement, Xxxxx Bartolami will sell all of his 1,000,000 shares of Series E
Preferred Stock, par value $0.01 per share, of the Company to Xxxxxxx Xxxxxxx for an aggregate purchase price of
$100.
Section 3.04
Closing Events. At the Closing, the Company and SNO shall execute,
acknowledge, and deliver (or shall ensure to be executed, acknowledged, and delivered), any and all certificates,
opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required by this
Agreement to be so delivered at or prior to the Closing, together with such other items as may be reasonably
requested by the parties hereto and their respective legal counsel in order to effectuate or evidence the transactions
contemplated hereby.
Section 3.05
Termination. This Agreement may be terminated by each of the SNO
Shareholders or the Company only (a) in the event that the Company or SNO do not meet the conditions precedent
set forth in Articles V and VI or (b) if the Initial Closing has not occurred by August 31, 2015. If this Agreement is
terminated pursuant to this section, this Agreement shall be of no further force or effect as to any party hereto, and no
obligation, right or liability shall arise hereunder.
Notwithstanding the foregoing or anything herein to the contrary, if, after signing this
Agreement, SNO elects not to consummate the Exchange with the Company under the terms herein, and
preconditioned on the Company having performed its obligations through the date of SNO’s termination
of the Exchange, a payment of Two Hundred and Fifty Thousand Dollars (US$250,000) will become due
and payable from SNO to the Company. This breakup fee, or termination fee, is required to compensate
the Company of the time and resources that the Company used to facilitate the transactions hereunder
and is the exclusive remedy to the Company under this Agreement in the event of a breach by SNO.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01
Access to Properties and Records. The Company and SNO will each afford to the
officers and authorized representatives of the other full access to the properties, books and records of the Company
or SNO, as the case may be, in order that each may have a full opportunity to make such reasonable investigation as
it shall desire to make of the affairs of the other, and each will furnish the other with such additional financial and
operating data and other information as to the business and properties of the Company or SNO, as the case may be,
as the other shall from time to time reasonably request. Without limiting the foregoing, as soon as practicable after
the end of each fiscal quarter (and in any event through the last fiscal quarter prior to the Closing Date), each party
shall provide the other with quarterly internally prepared and unaudited financial statements.
Section 4.02
Delivery of Books and Records. At the Closing, SNO shall deliver to the
Company, the originals of the corporate minute books, books of account, contracts, records, and all other books or
documents of SNO now in the possession of SNO or its representatives.
Section 4.03
Third Party Consents and Certificates. The Company and SNO agree to
cooperate with each other in order to obtain any required third party consents to this Agreement and the transactions
herein contemplated.
Section 4.04
Actions Prior to Closing. From and after the date hereof until the Closing Date
and except as set forth in the Company Schedules or SNO Schedules or as permitted or contemplated by
this Agreement, the Company (subject to paragraph (d) below) and SNO respectively, will each:
(a)
carry on its business in substantially the same manner as it has heretofore and as disclosed
in the Company OTC Reports;
(b)
maintain and keep its properties in states of good repair and condition as at present,
except for depreciation due to ordinary wear and tear and damage due to casualty;
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(c)
maintain in full force and effect insurance comparable in amount and in scope of
coverage to that now maintained by it;
(d)
perform in all material respects all of its obligations under material contracts, leases, and
instruments relating to or affecting its assets, properties, and business;
(e)
use its best efforts to maintain and preserve its business organization intact, to retain its
key employees, and to maintain its relationship with its material suppliers and customers; and
(f)
fully comply with and perform in all material respects all obligations and duties imposed
on it by all federal and state laws (including without limitation, the federal securities laws) and all rules,
regulations, and orders imposed by federal or state governmental authorities.
(g)
from and after the date hereof until the Closing Date, except as required by this
agreement neither the Company nor SNO will:
(i)
make any changes in their Certificates of Incorporation, certificates or
certificates of incorporation or bylaws except as contemplated by this Agreement including a
name change;
(ii)
take any action described in Section 1.07 in the case of SNO or in Section 2.07, in
the case of the Company (all except as permitted therein or as disclosed in the applicable party’s
schedules);
(iii)
enter into or amend any contract, agreement, or other instrument of any of the
types described in such party’s schedules, except that a party may enter into or amend any
contract, agreement, or other instrument in the ordinary course of business involving the sale of
goods or services; or
(iv)
sell any assets or discontinue any operations, sell any shares of capital stock or
conduct any similar transactions other than in the ordinary course of business except as disclosed
in the Company OTC Reports.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
The obligations of the Company under this Agreement are subject to the satisfaction, at or before the
Closing Date, of the following conditions:
Section 5.01
Accuracy of Representations and Performance of Covenants.
The
representations and warranties made by SNO and the SNO Shareholders in this Agreement were true when made
and shall be true at the Closing Date with the same force and effect as if such representations and warranties were
made at and as of the Closing Date (except for changes therein permitted by this Agreement). SNO shall have
performed or complied with all covenants and conditions required by this Agreement to be performed or complied
with by SNO prior to or at the Closing. The Company shall be furnished with a certificate, signed by a duly
authorized executive officer of SNO and dated the Closing Date, to the foregoing effect.
Section 5.02
Officer’s Certificate. The Company shall have been furnished with a certificate
dated the Closing Date and signed by a duly authorized officer of SNO to the effect that no litigation, proceeding,
investigation, or inquiry is pending, or to the best knowledge of SNO threatened, which might result in an action to
enjoin or prevent the consummation of the transactions contemplated by this Agreement, or, to the extent not
disclosed in the SNO Schedules, by or against SNO, which might result in any material adverse change in any of the
assets, properties, business, or operations of SNO.
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Section 5.03
Good Standing. The Company shall have received a certificate of good standing
from the Secretary of State of Florida or other appropriate office, dated as of a date within ten days prior to the
Closing Date certifying that SNO is in good standing as a corporation in the State of Delaware.
Section 5.04
Minimum SNO Shareholders. This Agreement shall have been signed by the
holders of not less than 100% of the SNO common stock, including voting power, of SNO, unless a lesser number is
agreed to by the Company.
Section 5.05
No Governmental Prohibition. No order, statute, rule, regulation, executive order,
injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by
any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the
transactions contemplated hereby.
Section 5.06
Consents. All consents, approvals, waivers or amendments pursuant to all
contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated
herein, or for the continued operation of SNO after the Closing Date on the basis as presently operated shall have
been obtained.
Section 5.07
Other Items.
(a)
The Company shall have received a list containing the name, address, and number of
shares held by the SNO Shareholders as of the date of Closing, certified by an executive officer of SNO as being
true, complete and accurate; and
(b)
The Company shall have received such further opinions, documents, certificates or
instruments relating to the transactions contemplated hereby as the Company may reasonably request.
(c)
The Company shall have received the SNO Financial Statements as provided for in
Sections 1.04(a) and (b).
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF SNO
AND THE SNO SHAREHOLDERS
The obligations of SNO and each of the SNO Shareholders under this Agreement are subject to the
satisfaction of the Company, or each SNO Shareholder, as the case may be, at or before the Closing Date, of the
following conditions:
Section 6.01
Accuracy of Representations and Performance of Covenants.
The
representations and warranties made by the Company in this Agreement were true when made and shall be true as of
the Closing Date (except for changes therein permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date. Additionally, the Company shall have
performed and complied with all covenants and conditions required by this Agreement to be performed or complied
with by the Company.
Section 6.02
Officer’s Certificate. SNO shall have been furnished with certificates dated the
Closing Date and signed by duly authorized executive officers of the Company, to the effect that no litigation,
proceeding, investigation or inquiry is pending, or to the best knowledge of the Company threatened, which might
result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement or, to
the extent not disclosed in the Company Schedules, by or against the Company, which might result in any material
adverse change in any of the assets, properties or operations of the Company.
Section 6.03
Good Standing. SNO shall have received a certificate of good standing from the
Secretary of State of Delaware or other appropriate office, dated as of a date within ten days prior to the Closing Date
- 14 -
certifying that the Company is in good standing as a corporation in the State of Nevada and has filed all tax returns
required to have been filed by it to date and has paid all taxes reported as due thereon.
Section 6.04
No Governmental Prohibition. No order, statute, rule, regulation, executive order,
injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by
any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the
transactions contemplated hereby.
Section 6.05
Approval by the Company Board of Directors and its Shareholders. The
Company’s board of directors shall have approved the Exchange and Other Issuance (the “Corporate Actions”).
Section 6.06
Consents. All consents, approvals, waivers or amendments pursuant to all
contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated
herein, or for the continued operation of the Company after the Closing Date on the basis as presently operated shall
have been obtained including approval of the Corporate Actions by FINRA.
Section 6.07
Shareholder Report
The SNO Shareholders shall receive a shareholder’s report reflective of all the Company
shareholder’s which does not exceed 387,000 shares of the Company common stock issued and outstanding as of the
day prior to the Closing Date and no shares of preferred stock outstanding (except for the 1,000,000 shares of Series
E Preferred Stock, par value $0.01 per share, of the Company currently owned by Xxxxx Xxxxxxxxx, which will be
purchased by Xxxxxxx Xxxxxxx for an aggregate purchase price of $100 as provided in Section 3.03 above).
Section 6.08
Other Items.
(a)
The SNO Shareholders shall have received further opinions, documents, certificates, or
instruments relating to the transactions contemplated hereby as the SNO Shareholders may reasonably request.
(b)
This Agreement shall have been executed by the holders of at least 100% of the shares of
SNO common stock.
(c)
Resignation of Current Directors and Officers. The current directors and officers of
the Company shall have resigned from their positions as directors and officers of the Company.
(d)
Appointment of New Directors and Officers. The Company shall have appointed Xxx
Xxxxx, Xxxxxxx Xxxxxxx and Xxxx Xxxxxxxx as directors of the Company and such directors shall appoint two
additional directors thereafter, for a total of five directors on the board. In addition, the Company shall have
appointed the following individuals as new officers of the Company: Xxx Xxxxx as Chief Executive Officer,
Xxxxxxx Xxxxxxx as President and Secretary, and Xxxx Xxxxxxxx as Executive Vice President.
ARTICLE VII
MISCELLANEOUS
Section 7.01
Brokers. The Company and SNO agree that there were no finders or brokers
involved in bringing the parties together or who were instrumental in the negotiation, execution or consummation of
this Agreement. The Company and SNO each agree to indemnify the other against any claim by any third person
other than those described above for any commission, brokerage, or finder’s fee arising from the transactions
contemplated hereby based on any alleged agreement or understanding between the indemnifying party and such
third person, whether express or implied from the actions of the indemnifying party.
Section 7.02
Governing Law. This Agreement shall be governed by, enforced, and construed
under and in accordance with the laws of the State of Florida, without giving effect to the principles of conflicts of
law thereunder. Each of the parties (a) irrevocably consents and agrees that any legal or equitable action or
- 15 -
proceedings arising under or in connection with this Agreement shall be brought exclusively in the state or federal
courts of the United States with jurisdiction in Palm Beach County, Florida. By execution and delivery of this
Agreement, each party hereto irrevocably submits to and accepts, with respect to any such action or proceeding,
generally and unconditionally, the jurisdiction of the aforesaid courts, and irrevocably waives any and all rights such
party may now or hereafter have to object to such jurisdiction.
Section 7.03
Notices. Any notice or other communications required or permitted hereunder
shall be in writing and shall be sufficiently given if personally delivered to it or sent by telecopy, overnight courier or
registered mail or certified mail, postage prepaid, addressed as follows:
If to SNO, to:
If to the Company, to:
SnöBar Holdings, Inc.
Attn: Xxxxxxx Xxxxxxx, Senior Vice President
Attn: Xxxxx Xxxxxxxxx, Chief Executive Officer
000 Xxxx 0xx Xxxxxx, Xxxxx 000
000 Xxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Xxxx Xxxxx, Xxxxxxx 00000
or such other addresses as shall be furnished in writing by any party in the manner for giving notices hereunder, and
any such notice or communication shall be deemed to have been given (i) upon receipt, if personally delivered, (ii)
on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by telecopy and receipt is
confirmed by telephone and (iv) three (3) days after mailing, if sent by registered or certified mail.
Section 7.04
Attorney’s Fees. In the event that either party institutes any action or suit to
enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing party shall be
reimbursed by the losing party for all costs, including reasonable attorney’s fees, incurred in connection therewith
and in enforcing or collecting any judgment rendered therein.
Section 7.05
Confidentiality. Each party hereto agrees with the other that, unless and until the
transactions contemplated by this Agreement have been consummated, it and its representatives will hold in strict
confidence all data and information obtained with respect to another party or any subsidiary thereof from any
representative, officer, director or employee, or from any books or records or from personal inspection, of such other
party, and shall not use such data or information or disclose the same to others, except (i) to the extent such data or
information is published, is a matter of public knowledge, or is required by law to be published; or (ii) to the extent
that such data or information must be used or disclosed in order to consummate the transactions contemplated by this
Agreement. In the event of the termination of this Agreement, each party shall return to the other party all
documents and other materials obtained by it or on its behalf and shall destroy all copies, digests, work papers,
abstracts or other materials relating thereto, and each party will continue to comply with the confidentiality
provisions set forth herein.
Section 7.06
Public Announcements and Filings. Unless required by applicable law or
regulatory authority, none of the parties will issue any report, statement or press release to the general public, to the
trade, to the general trade or trade press, or to any third party (other than its advisors and representatives in
connection with the transactions contemplated hereby) or file any document, relating to this Agreement and the
transactions contemplated hereby, except as may be mutually agreed by the parties. Copies of any such filings,
public announcements or disclosures, including any announcements or disclosures mandated by law or regulatory
authorities, shall be delivered to each party at least one (1) business day prior to the release thereof.
Section 7.07
Schedules; Knowledge. Each party is presumed to have full knowledge of all
information set forth in the other party’s schedules delivered pursuant to this Agreement.
Section 7.08
Third Party Beneficiaries. This contract is strictly between the Company, the
SNO Shareholders and SNO, and, except as specifically provided, no director, officer, stockholder (other than the
SNO Shareholders), employee, agent, independent contractor or any other person or entity shall be deemed to be a
third party beneficiary of this Agreement.
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Section 7.09
Expenses. Subject to Section 7.04 above, whether or not the Exchange is
consummated, each of the Company and SNO will bear their own respective expenses, including legal, accounting
and professional fees, incurred in connection with the Exchange or any of the other transactions contemplated
hereby.
Section 7.10
Entire Agreement. This Agreement represents the entire agreement between the
parties relating to the subject matter thereof and supersedes all prior agreements, understandings and negotiations,
written or oral, with respect to such subject matter.
Section 7.11
Survival; Termination. The representations, warranties, and covenants of the
respective parties shall survive the Closing Date and the consummation of the transactions herein contemplated for a
period of two years.
Section 7.12
Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which taken together shall be but a single instrument. The execution and
delivery of a facsimile or other electronic transmission of a signature to this agreement shall constitute delivery of an
executed original and shall be binding upon the person whose signature appears on the transmitted copy.
Section 7.13
Amendment or Waiver. Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced
concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any
time prior to the Closing Date, this Agreement may by amended by a writing signed by all parties hereto, with
respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time
for performance may be extended by a writing signed by the party or parties for whose benefit the provision is
intended.
Section 7.14
Best Efforts. Subject to the terms and conditions herein provided, each party of
SNO and the Company shall use its best efforts to perform or fulfill all conditions and obligations to be performed or
fulfilled by it under this Agreement so that the transactions contemplated hereby shall be consummated as soon as
practicable. Each party of SNO and the Company also agrees that it shall use its best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective this Agreement and the transactions contemplated herein.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to be executed by
their respective officers, hereunto duly authorized, as of the date first-above written.
SNÖBAR HOLDINGS, INC.
A Delaware corporation
By: /s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx, Senior Vice President
A Delaware corporation
By: /s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx, Chief Executive Officer
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