EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, made and entered into this
6th day of March 2000, by and between Mully Corp., a Nevada corporation
("Mully") with its principal place of business located at 00000 X. Xxxxxxxx
Xxxx, Tower I, Penthouse, Xxxxxxxxx, Xxxxxxxx 00000 and Baby's Best Infant
Formula, Inc., a Florida corporation ("BBI"), with its principal place of
business located at 00 Xxxxxxx Xxxxx, Xxxxx 000 Xxxxxxxxx Xxxxx, XX 00000
("BBI").
PREMISES
WHEREAS, this Agreement provides for the merger of BBI into Mully, and
in connection therewith, the conversion of the outstanding common stock of BBI
into shares of common voting stock of Mully, all for the purpose of effecting a
tax-free reorganization pursuant to sections 354 and 368(a) of the Internal
Revenue Code of 1986, as amended; and
WHEREAS, the boards of directors and shareholders of BBI and Mully have
determined, subject to the terms and conditions set forth in this Agreement and
the approval of each respective corporations' shareholders, that the merger
contemplated hereby is desirable and in the best interests of their respective
corporations. This Agreement is being entered into for the purpose of setting
forth the terms and conditions of the proposed merger.
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, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF BBI
As an inducement to and to obtain the reliance of Mully, BBI represents
and warrants as follows:
SECTION 1.1 ORGANIZATION. BBI is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Florida and has
the corporate power and is duly authorized, qualified, franchised and licensed
under all applicable laws, regulations, ordinances and orders of public
authorities to own all of its properties and assets and to carry on its business
in all material respects as it is now being conducted, including qualification
to do business as a foreign corporation in the jurisdiction in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification. Included in the BBI Schedules (as
hereinafter defined) are complete and correct copies of the articles of
incorporation, bylaws and amendments thereto of BBI as in effect on the date
hereof. The execution and delivery of this Agreement does not and the
consummation of the transactions contemplated by this Agreement in accordance
with the terms hereof will not violate any provision of BBI's articles of
incorporation or bylaws. BBI has full power, authority and legal right and has
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taken all action required by law, its articles of incorporation, its bylaws or
otherwise to authorize the execution and delivery of this Agreement.
SECTION 1.2 CAPITALIZATION. BBI's total authorized capital consists of
10,000,000 Common Shares, $0.001 par value per share. As of the date of Closing,
as defined hereinbelow, there will be 10,000,000 Common Shares issued and
outstanding. All issued and outstanding shares are legally issued, fully paid
and nonassessable and are not issued in violation of the preemptive or other
rights of any person. BBI has no other securities, warrants or options
authorized or issued.
SECTION 1.3 SUBSIDIARIES AND PREDECESSOR CORPORATIONS. Except as
otherwise set forth in the BBI Schedules, BBI does not have any subsidiaries and
does not own, beneficially or of record, any shares of any other corporation.
SECTION 1.4 FINANCIAL STATEMENTS. Included in the BBI Schedules is an
audited financial statement, including a balance sheet, statement of operations,
shareholder equity and cash flows and notes thereto, dated as of December 31,
1999. Relevant thereto:
(a) the BBI balance sheets present fairly as of their date the
financial condition of BBI. BBI does not have, as of the date
of such balance sheets, except as noted and to the extent
reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be reflected
in a balance sheet or the notes thereto and all assets
reflected therein are properly reported and present fairly the
value of the assets of BBI, in accordance with generally
accepted accounting principles;
(b) BBI has no liabilities with respect to the payment of any
federal, state, county, local or other taxes (including any
deficiencies, interest or penalties), except for taxes accrued
but not yet due and payable;
(c) BBI has filed all state, federal and local income tax
returns required to be filed by it from inception to the date
hereof, if any;
(d) The books and records, financial and others, of BBI are in
all material respects complete and correct and have been
maintained in accordance with good business accounting
practices; and
(e) except as and to the extent disclosed in the most recent
BBI balance sheet and the BBI Schedules, BBI has no material
contingent liabilities, direct or indirect, matured or
unmatured.
SECTION 1.5 INFORMATION. The information concerning BBI set forth in
this Agreement and in the BBI 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.
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SECTION 1.6 OPTIONS AND WARRANTS. There are no existing options,
warrants, calls or commitments of any character to which BBI is a party and by
which it is bound.
SECTION 1.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
in this Agreement, the BBI Schedules, or as otherwise disclosed to Mully, since
December 31, 1999:
(a) there has not been: (i) any material adverse change in the
business, operations, properties, assets or condition of BBI;
or (ii) any damage, destruction or loss to BBI (whether or not
covered by insurance) materially and adversely affecting the
business, operations, properties, assets or condition of BBI;
(b) BBI has not: (i) amended its articles of incorporation or
bylaws; (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
extraordinary or material considering the business of BBI;
(iv) made any material change in its method of management,
operation or accounting; (v) entered into any other material
transaction; (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 employees whose monthly compensation exceeds
$5,000; or (viii) made any increase in 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;
(c) BBI 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 liabilities incurred in the ordinary course
of business; (iii) paid any material obligation or liability
(absolute or contingent) other than current liabilities
reflected in or shown on the most recent BBI balance sheet and
current liabilities incurred since that date in the ordinary
course of business; (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
$10,000); (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 BBI; 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); and
(d) to the best knowledge of BBI, it 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 BBI.
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SECTION 1.8 TITLE AND RELATED MATTERS. BBI has good and marketable
title to and is the sole and exclusive owner of all of its properties,
inventory, interests in properties and assets, real and personal (collectively,
the "Assets") which are reflected in the most recent BBI audited balance sheet
and the BBI Schedules or acquired after that date (except properties, interests
in properties and assets sold or otherwise disposed of since such date in the
ordinary course of business), free and clear of all liens, pledges, charges or
encumbrances except: (a) statutory liens or claims not yet delinquent; (b) such
imperfections of title and easements as do not and will not, materially detract
from or interfere with the present or proposed use of the properties subject
thereto or affected thereby or otherwise materially impair present business
operations on such properties; and (c) as described in the BBI Schedules. Except
as set forth in the BBI Schedules, BBI owns free and clear of any liens, claims,
encumbrances, royalty interests or other restrictions or limitations of any
nature whatsoever and all procedures, techniques, marketing plans, business
plans, methods of management or other information utilized in connection with
BBI's business. Except as set forth in the BBI Schedules, no third party has any
right to, and BBI has not received any notice of infringement of or conflict
with asserted rights of others with respect to any product, technology, data,
trade secrets, know-how, proprietary techniques, trademarks, service marks,
trade names or copyrights which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would have a materially adverse
affect on the business, operations, financial conditions or income of BBI or any
material portion of its properties, assets or rights.
SECTION 1.9 LITIGATION AND PROCEEDINGS. To the best of BBI's knowledge
and belief, there are no actions, suits, proceedings or investigations pending
or threatened by or against BBI or affecting BBI 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 that would have a
material adverse affect on the business, operations, financial condition or
income of BBI. BBI does not have any 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
of any circumstances which, after reasonable investigation, would result in the
discovery of such a default.
SECTION 1.10 CONTRACTS.
(a) Except as included or described in the BBI Schedules,
there are no material contracts, agreements, franchises,
license agreements or other commitments to which BBI is a
party or by which it or any of its assets, products,
technology or properties are bound;
(b) Except as included or described in the BBI Schedules or
reflected in the most recent BBI balance sheet, BBI is not a
party to any oral or written: (i) contract for the employment
of any officer or employee which is not terminable on thirty
(30) days or less notice; (ii) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension benefit or
retirement plan, agreement or arrangement covered by Title IV
of the Employee Retirement Income Security Act, as amended;
(iii) agreement, contract or indenture relating to the
borrowing of money; (iv) guaranty of any obligation, other
than one on which BBI is a primary obligor, for collection and
other guaranties of obligations, which, in the aggregate do
not exceed more than one year or providing for payments in
excess of $10,000 in the aggregate; (v) consulting or other
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similar contracts with an unexpired term of more than one year
or providing for payments in excess of $10,000 in the
aggregate; (vi) collective bargaining agreements; (vii)
agreement with any present or former officer or director of
BBI; or (viii) contract, agreement or other commitment
involving payments by it of more than $10,000 in the
aggregate; and
(c) To BBI's knowledge, all contracts, agreements, franchises,
license agreements and other commitments to which BBI is a
party or by which its properties are bound and which are
material to the operations of BBI taken as a whole, are valid
and enforceable by BBI in all respects, except as limited by
bankruptcy and insolvency laws and by other laws affecting the
rights of creditors generally.
SECTION 1.11 MATERIAL CONTRACT DEFAULTS. To the best of BBI's knowledge
and belief, BBI is not in default in any material respect under the terms of any
outstanding contract, agreement, lease or other commitment which is material to
the business, operations, properties, assets or condition of BBI, and there is
no event of default in any material respect under any such contract, agreement,
lease or other commitment in respect of which BBI has not taken adequate steps
to prevent such a default from occurring.
SECTION 1.12 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, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which BBI is a
party or to which any of its properties or operations are subject.
SECTION 1.13 GOVERNMENTAL AUTHORIZATIONS. To the best of BBI's
knowledge, BBI has all licenses, franchises, permits or other governmental
authorizations legally required to enable BBI to conduct its business in all
material respects as conducted on the date hereof. Except for compliance with
federal and state securities and corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by BBI of this Agreement and the consummation by BBI
of the transactions contemplated hereby.
SECTION 1.14 COMPLIANCE WITH LAWS AND REGULATIONS. To the best of BBI's
knowledge, except as disclosed in the BBI Schedules, BBI 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 BBI or would not result in BBI's incurring any material liability.
SECTION 1.15 INSURANCE. All of the insurable properties of BBI are
insured for BBI's benefit in accordance with the insurance policies disclosed in
the BBI Schedules under valid and enforceable policies issued by insurers of
recognized responsibility. Such policy or policies containing substantially
equivalent coverage will be outstanding and in full force at the Closing Date.
SECTION 1.16 APPROVAL OF AGREEMENT. The board of directors of BBI has
authorized the execution and delivery of this Agreement by BBI, has approved the
transactions contemplated hereby and approved the submission of this Agreement
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and the transactions contemplated hereby to the stockholders of BBI for their
approval with the recommendation that the merger be accepted.
SECTION 1.17 MATERIAL TRANSACTIONS OR AFFILIATIONS. Except as disclosed
herein and in the BBI Schedules, there exists no material contract, agreement or
arrangement between BBI 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 BBI to own beneficially, ten percent (10%) or more of the
issued and outstanding BBI Common Shares and which is to be performed in whole
or in part after the date hereof. In all of such transactions, the amount paid
or received, whether in cash, in services or in kind, has been during the full
term thereof, and is required to be during the unexpired portion of the term
thereof, no less favorable to BBI than terms available from otherwise unrelated
parties in arms length transactions. There are no commitments by BBI, whether
written or oral, to lend any funds to, borrow any money from or enter into any
other material transactions with, any such affiliated person.
SECTION 1.18 LABOR RELATIONS. BBI has never had a work stoppage
resulting from labor problems. To the best knowledge of BBI, no union or other
collective bargaining organization is organizing or attempting to organize any
employee of BBI.
SECTION 1.19 PREVIOUS SALES OF SECURITIES. Since inception, BBI has
sold BBI Common Shares to investors in reliance upon applicable exemptions from
the registration requirements under the laws of the United States, the state of
Florida and such other states in the United States where such sales have
occurred. All such sales were made in accordance with the laws of the United
States and those states where such securities were sold.
SECTION 1.20 BBI SCHEDULES. Upon execution hereof, BBI will deliver to
Mully the following schedules, which are collectively referred to as the "BBI
Schedules" and which consist of separate schedules dated as of the date of this
Agreement and instruments and data as of such date, all certified by the chief
executive officer of BBI as complete, true and correct in all material respects:
(a) copies of the articles of incorporation, bylaws and all
minutes of shareholders' and directors' meetings of BBI;
(b) the financial statements of BBI referenced hereinabove in
Section 1.4;
(c) a list indicating the name and address of the stockholders
of BBI, together with the number of shares owned by them;
(d) copies of all licenses, permits and other governmental
authorizations, requests or applications therefor, pursuant to
which BBI carries on or proposes to carry on its business
(except those which in the aggregate, are immaterial to the
present or proposed business of BBI);
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(e) a list of every debt, mortgage, security interest, pledge,
lien, encumbrance or claim of any nature whatsoever in excess
of $10,000 as may affect BBI, its properties or assets;
(f) a list of all executive employees of BBI, including
current compensation, with notation as to job description and
whether or not such employee is subject to a written contract;
(g) a description of all real and personal property owned by
BBI, together with a description of every mortgage, deed of
trust, pledge, lien, agreement, encumbrance, claim or equity
interest of any nature whatsoever in such real and personal
property;
(h) copies of all material contracts, leases, agreements or
other instruments to which BBI is a party or by which it or
its properties are bound;
(i) the name and location of each bank or other institution
with which BBI has an account or safety deposit box and the
names of all persons authorized to draw thereon or having
access thereto;
(j) a list of all patent applications, copyrights, trademarks,
service marks and trade names that are pertinent in any manner
whatsoever to the development, testing, registration,
assembly, manufacture, use or sale of any products or services
used in the business of BBI and in which either BBI or BBI's
stockholders has or previously had any direct or indirect,
equitable or legal right or interest;
(k) a copy of all material documentation relating to the sale
of BBI Common Shares by BBI to its present stockholders;
(l) a list of insurance policies referred to in Section 1.15;
(m) a description of any material adverse change in the
business operations, property, inventory, assets or condition
of BBI since the most recent BBI balance sheet required to be
provided pursuant to Section 1.7;
(n) any other information, together with any required copies
of documents required to be disclosed in the BBI Schedules by
Sections 1.1 through 1.19.
BBI shall cause the BBI Schedules and the instruments and data
delivered to Mully hereunder to be updated after the date hereof up to and
including the Closing Date, as hereinafter defined.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES OF MULLY
As an inducement to, and to obtain the reliance of BBI, Mully
represents and warrants as follows:
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SECTION 2.1 ORGANIZATION. Mully is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
has the corporate power and is duly authorized, qualified, franchised and
licensed under all applicable laws, regulations, ordinances and orders of public
authorities to own all of its properties and assets and to carry on its business
in all material respects as it are now being conducted, including qualification
to do business as a foreign corporation in the states in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the Mully Schedules (as hereinafter
defined) are complete and correct copies of the articles of incorporation and
bylaws of Mully as in effect on the date hereof. The execution and delivery of
this Agreement does not and the consummation of the transactions contemplated by
this Agreement in accordance with the terms hereof will not, violate any
provision of Mully's articles of incorporation or bylaws. Mully has taken all
action required by law, its articles of incorporation, its bylaws or otherwise
to authorize the execution and delivery of this Agreement. Mully 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
contemplate.
SECTION 2.2 CAPITALIZATION. Mully's total authorized capital stock
consists of 25,000,000 shares of Preferred Stock, par value $0.001 per share,
and 100,000,000 Common Shares, par value $.001 per share. As of the date hereof
there are 500,000 common shares of Mully issued and outstanding. There are no
preferred shares issued or outstanding. Prior to Closing, as defined
hereinbelow, the Board of Directors of Mully shall undertake a forward split of
the Mully issued and outstanding common stock, whereby 4 shares of common stock
shall be issued in exchange for each share of common stock issued and
outstanding, in order to establish the number of issued and outstanding common
shares of Mully at Closing to be 2,000,000 shares. As of the Closing Date, as
defined herein, there will be no more than 2,000,000 common shares issued and
outstanding and reserved for issuance (the "Mully Common Shares") held by the
then existing securities holders of Mully. All issued and outstanding Mully
Common Shares have been legally issued, fully paid and are nonassessable. There
are no preferred shares issued or outstanding. All issued and outstanding Mully
Common Shares have been legally issued, fully paid and are nonassessable.
SECTION 2.3 SUBSIDIARIES. Mully has no subsidiary companies.
SECTION 2.4 FINANCIAL STATEMENTS.
(a) Included in the Mully Schedules are the audited financial
statements of Mully for the years ended December 31, 1998 and
1997 and the unaudited financial statements of Mully for the
nine month period ended September 30, 1999 and the related
statements of operations, stockholders' equity and cash flows
for the periods then ended, which are included in the
schedules identified in Section 2.18(c).
(b) All such financial statements have been prepared in
accordance with generally accepted accounting principles
consistently applied throughout the periods involved. The
Mully balance sheets presents fairly as of their respective
dates the financial condition of Mully. Mully did not have as
of the date of any of such Mully balance sheets, any
liabilities or obligations (absolute or contingent) which
should be reflected in a balance sheet or the notes thereto
prepared in accordance with generally accepted accounting
principles, and all assets reflected therein are properly
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reported and present fairly the value of the assets of Mully,
in accordance with generally accepted accounting principles.
The statements of operations, stockholders' equity and changes
in financial position reflect fairly the information required
to be set forth therein by generally accepted accounting
principles.
(c) The books and records, financial and others, of Mully are
in all material respects complete and correct and have been
maintained in accordance with good business accounting
practices.
(d) Mully has no liabilities with respect to the payment of
any federal, state, county, local or other taxes (including
any deficiencies, interest or penalties).
(e) As of the Closing Date, as defined herein the Mully
balance sheet and the notes thereto, shall reflect that Mully
has: (i) no receivables; (ii) no accounts payable; and (iii)
no contingent liabilities, direct or indirect, matured or
unmatured.
SECTION 2.5 INFORMATION. The information concerning Mully as set forth
in this Agreement and in the Mully 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.
SECTION 2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as described
herein or in the Mully Schedules, since September 30, 1999:
(a) Mully has not: (i) amended its articles of incorporation
or bylaws; (ii) waived any rights of value which in the
aggregate are extraordinary or material considering the
business of Mully; (iii) made any material change in its
method of management, operation or accounting; or (iv) 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;
(b) Mully 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, which
option, warrant or other right has not been cancelled as of
the Closing Date; or (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; and
(c) to the best knowledge of Mully, it 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 Mully.
SECTION 2.7 TITLE AND RELATED MATTERS. As of the Closing Date, Mully
will own no real, personal or intangible property.
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SECTION 2.8 LITIGATION AND PROCEEDINGS. There are no actions, suits or
proceedings pending or, to the best of Mully's knowledge and belief, threatened
by or against or affecting Mully, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind that would have a material adverse effect on the
business, operations, financial condition, income or business prospects of
Mully. Mully does not have any 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.
SECTION 2.9 CONTRACTS. On the Closing Date:
(a) There are no material contracts, agreements, franchises,
license agreements, or other commitments to which Mully is a
party or by which it or any of its properties are bound;
(b) Mully is not a party to any contract, agreement,
commitment or instrument or subject to any charter or other
corporate restriction or any judgment, order, writ,
injunction, decree or award which materially and adversely
affects, or in the future may (as far as Mully can now
foresee) materially and adversely affect, the business,
operations, properties, assets or conditions of Mully; and
(c) Mully is not a party to any material 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, agreement
or arrangement covered by Title IV of the Employee Retirement
Income Security Act, as amended; (iii) agreement, contract or
indenture relating to the borrowing of money; (iv) guaranty of
any obligation for the borrowing of money or otherwise,
excluding endorsements made for collection and other
guaranties of obligations, which, in the aggregate exceeds
$1,000; (v) consulting or other similar contract with an
unexpired term of more than one year or providing for payments
in excess of $10,000 in the aggregate; (vi) collective
bargaining agreement; (vii) agreement with any present or
former officer or director of Mully; or (viii) contract,
agreement, or other commitment involving payments by it of
more than $10,000 in the aggregate.
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, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which Mully is a
party or to which any of its properties or operations are subject.
SECTION 2.11 MATERIAL CONTRACT DEFAULTS. To the best of Mully's
knowledge and belief, Mully is not in default in any material respect under the
terms of any outstanding contract, agreement, lease or other commitment which is
material to the business, operations, properties, assets or condition of Mully,
and there is no event of default in any material respect under any such
contract, agreement, lease or other commitment in respect of which Mully has not
taken adequate steps to prevent such a default from occurring.
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SECTION 2.12 GOVERNMENTAL AUTHORIZATIONS. To the best of Mully's
knowledge, Mully has all licenses, franchises, permits and other governmental
authorizations that are legally required to enable it to conduct its business
operations in all material respects as conducted on the date hereof. Except for
compliance with federal and state securities or corporation laws, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by Mully of the transactions contemplated hereby.
SECTION 2.13 COMPLIANCE WITH LAWS AND REGULATIONS. To the best of
Mully's knowledge and belief, Mully 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
Mully or would not result in Mully's incurring any material liability.
SECTION 2.14 INSURANCE. Mully has no insurable properties and no
insurance policies will be in effect at the Closing Date, as hereinafter
defined.
SECTION 2.15 APPROVAL OF AGREEMENT. The board of directors of Mully has
authorized the execution and delivery of this Agreement by Mully, has approved
the transactions contemplated hereby and approved the submission of this
Agreement and the transactions contemplated hereby to the stockholders of Mully
for their approval with the recommendation that the merger be accepted.
SECTION 2.16 MATERIAL TRANSACTIONS OR AFFILIATIONS. As of the Closing
Date there will exist no material contract, agreement or arrangement between
Mully 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 Mully
to own beneficially, ten percent (10%) or more of the issued and outstanding
common stock of Mully and which is to be performed in whole or in part after the
date hereof. Mully has no commitment, whether written or oral, to lend any funds
to, borrow any money from or enter into any other material transactions with,
any such affiliated person.
SECTION 2.17 LABOR RELATIONS. Mully has never had a work stoppage
resulting from labor problems. Mully has no employees other than its officers
and directors.
SECTION 2.18. 34 ACT FILINGS. As of the Closing Date, Mully shall be
current in, and in compliance with all requirements of, all filings required to
be tendered to the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended. Said filings contain all of the information
required pursuant to the Securities Exchange Act of 1934, as amended and, to the
best knowledge of Mully, do not fail to state any material facts which were
required to be so stated.
SECTION 2.19 MULLY SCHEDULES. Upon execution hereof, Mully shall
deliver to BBI the following schedules, which are collectively referred to as
the "Mully Schedules" which are dated the date of this Agreement, all certified
by an officer of Mully to be complete, true and accurate:
(a) complete and correct copies of the articles of
incorporation and bylaws of Mully as in effect as of the date
of this Agreement;
15
(b) copies of all financial statements of Mully identified in
Section 2.4(a);
(c) the description of any material adverse change in the
business, operations, property, assets, or condition of Mully
since September 30, 1999 required to be provided pursuant to
Section 2.6; and
(d) any other information, together with any required copies
of documents, required to be disclosed in the Mully Schedules
by Sections 2.1 through 2.17.
Mully shall cause the Mully Schedules and the instruments to
be delivered to BBI hereunder to be updated after the date hereof up to and
including the Closing Date.
ARTICLE III
MERGER
SECTION 3.1 DELIVERY OF BBI SECURITIES. On the Closing Date, the
holders of the BBI Common Shares shall deliver to Mully (i) certificates or
other documents evidencing all of the issued and outstanding BBI Common Shares,
duly endorsed in blank or with executed stock power attached thereto in
transferrable form, and (ii) investment letters, the form of which is attached
hereto as Exhibit "A".
SECTION 3.2 ISSUANCE OF MULLY COMMON SHARES. (a) In exchange for all of
the BBI Common Shares tendered pursuant to Section 3.1, Mully shall issue an
aggregate of 18,000,000 "restricted" Mully Common Shares to the BBI shareholders
on a pro rata basis, so that the BBI shareholders will own 90% of the surviving
company's issued and outstanding common stock.
(b) No fractional Mully Common Shares shall be issued pursuant to this
Section 3.2. In lieu of such fractional shares, all shares to be issued shall be
rounded up or down to the nearest whole share.
SECTION 3.3 EVENTS PRIOR TO CLOSING. Upon execution hereof or as soon
thereafter as practical, management of Mully and BBI shall execute, acknowledge
and deliver (or shall cause 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, 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, subject only to the conditions to
Closing referenced hereinbelow.
SECTION 3.4 CLOSING. The closing ("Closing" or the "Closing Date") of
the transaction contemplated by this Agreement shall be as of the date in which
all of the conditions included in Sections 3.1 and 3.2 hereinabove and those
additional conditions contained in Article V hereinbelow have been satisfied by
the respective party and all documentation referenced herein is delivered to the
respective party herein, unless a different date is mutually agreed to in
writing by the parties hereto.
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SECTION 3.5 TERMINATION.
(a) This Agreement may be terminated by the board of directors
of either Mully or BBI at any time prior to the Closing Date if there
shall be any action or proceeding before any court or any governmental
body which shall seek to restrain, prohibit or invalidate the
transactions contemplated by this Agreement and which, in the judgment
of such board of directors, made in good faith and based on the advice
of its legal counsel, makes it inadvisable to proceed with the merger
contemplated by this Agreement. In the event of termination pursuant to
this paragraph (a) of this Section 3.5, no obligation, right, or
liability shall arise hereunder.
(b) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of Mully if BBI shall
fail to comply in any material respect with any of its covenants or
agreements contained in this Agreement or if any of the representations
or warranties of BBI contained herein shall be inaccurate in any
material respect, which noncompliance or inaccuracy is not cured after
20 days' written notice thereof is given to BBI. If this Agreement is
terminated pursuant to this paragraph (b) of this Section 3.5, this
Agreement shall be of no further force or effect and no obligation,
right or liability shall arise hereunder.
(c) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of BBI if Mully shall
fail to comply in any material respect with any of its covenants or
agreements contained in this Agreement or if any of the representations
or warranties of Mully contained herein shall be inaccurate in any
material respect, which noncompliance or inaccuracy is not cured after
20 days written notice thereof is given to Mully. If this Agreement is
terminated pursuant to this paragraph (c) of Section 3.5, this
Agreement shall be of no further force or effect and no obligation,
right or liability shall arise hereunder.
SECTION 3.6 DIRECTORS OF MULLY. Upon the Closing, the present members
of Mully's Board of Directors shall tender their resignations seriatim so that
the following persons are appointed directors of Mully in accordance with
procedures set forth in the Mully bylaws: Xxxxxxxx Xxxxxx, Xxxxxx Free and
Xxxxxx X. Xxxxxxx. Each director shall hold office until his successor shall
have been duly elected and shall have qualified or until his earlier death,
resignation or removal.
SECTION 3.7 OFFICERS OF MULLY. Upon the Closing, the present officers
of Mully shall tender their resignations and simultaneous therewith, the
following person shall be elected as officer of Mully in accordance with
procedures set forth in the Mully bylaws:
NAME POSITION
Xxxxxxxx Xxxxxx President, Director
Xxxxxx Free Chief Financial Officer,
Treasurer, Director
Xxxxxx X. Xxxxxxx Chief Operating Officer,
Director
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ARTICLE IV
SPECIAL COVENANTS
SECTION 4.1 ACCESS TO PROPERTIES AND RECORDS. Mully and BBI will each
afford to the officers and authorized representatives of the other full access
to the properties, books and records of Mully and BBI, as the case may be, in
order that each may have 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 Mully and BBI, as the case may be, as the
other shall from time to time reasonably request.
SECTION 4.2 AVAILABILITY OF RULE 144. Each of the parties acknowledge
that the stock of Mully to be issued pursuant to this Agreement will be
"restricted securities," as that term is defined in Rule 144 promulgated
pursuant to the Securities Act. Mully is under no obligation to register such
shares under the Securities Act, or otherwise. Notwithstanding the foregoing,
however, following the Closing Date, Mully will use its best efforts to: (a)
make publicly available on a regular basis not less than semi-annually, business
and financial information regarding Mully so as to make available to the
shareholders of Mully the provisions of Rule 144 pursuant to subparagraph (c)(2)
thereof; and (b) within ten (10) days of any written request of any stockholder
of Mully, Mully will provide to such stockholder written confirmation of
compliance with such of the foregoing subparagraph as may then be applicable.
The stockholders of Mully holding restricted securities of Mully as of the date
of this Agreement and their respective heirs, administrators, personal
representatives, successors and assigns, are intended third party beneficiaries
of the provisions set forth herein. The covenants set forth in this Section 4.2
shall survive the Closing and the consummation of the transactions herein
contemplated.
SECTION 4.3 INFORMATION FOR MULLY PUBLIC REPORTS. BBI will furnish
Mully with all information concerning BBI and the BBI Stockholders, including
all financial statements, required for inclusion in any registration statement
or public report intended to be filed by Mully pursuant to the Securities Act,
the Exchange Act, or any other applicable federal or state law. BBI covenants
that all information so furnished for either such registration statement or
other public release by Mully, including the financial statements described in
Section 1.4, shall be true and correct in all material respects without omission
of any material fact required to make the information stated therein not
misleading.
SECTION 4.4 SPECIAL COVENANTS AND REPRESENTATIONS REGARDING THE MULLY
COMMON SHARES TO BE ISSUED IN THE MERGER. The consummation of this Agreement,
including the issuance of the Mully Common Shares to the stockholders of BBI as
contemplated hereby, constitutes the offer and sale of securities under the
Securities Act, and applicable state statutes. Such transaction shall be
consummated in reliance on exemptions from the registration and prospectus
delivery requirements of such statutes which depend, INTER ALIA, upon the
circumstances under which the BBI stockholders acquire such securities. In
connection with reliance upon exemptions from the registration and prospectus
delivery requirements for such transactions, at the Closing, BBI shall cause to
be delivered, and the BBI stockholders shall deliver to Mully, the investment
letter referenced in Section 3.1.
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SECTION 4.5 THIRD PARTY CONSENTS. Mully and BBI agree to cooperate with
each other in order to obtain any required third party consents to this
Agreement and the transactions herein contemplated.
SECTION 4.6 ACTIONS PRIOR TO CLOSING.
(a) From and after the date of this Agreement until the
Closing Date and except as set forth in the Mully or BBI
Schedules or as permitted or contemplated by this Agreement,
Mully and BBI will each use its best efforts to:
(i) carry on its business in substantially the same manner as
it has heretofore;
(ii) 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;
(iii) maintain in full force and effect insurance comparable
in amount and in scope of coverage to that now maintained by
it;
(iv) perform in all material respects all of its
obligations under material contracts, leases and
instruments relating to or affecting its assets,
properties and business;
(v) maintain and preserve its business organization
intact, to retain its key employees and to maintain
its relationship with its material suppliers and
customers; and
(vi) fully comply with and perform in all material
respects all obligations and duties imposed on it by
all federal and state laws and all rules, regulations
and orders imposed by federal or state governmental
authorities.
(b) From and after the date of this Agreement until the
Closing Date, neither Mully nor BBI will, without the prior
consent of the other party:
(i) except as otherwise specifically set forth herein, make
any change in their respective certificates or articles of
incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding shares of
capital stock, except as may otherwise be required by law, or
effect any stock split or otherwise change its capitalization,
except as provided herein;
(iii) enter into or amend any employment, severance or similar
agreements or arrangements with any directors or officers;
(iv) grant, confer or award any options, warrants, conversion
rights or other rights not existing on the date hereof to
acquire any shares of its capital stock; or
18
(v) purchase or redeem any shares of its capital stock, except
as disclosed herein.
SECTION 4.7 INDEMNIFICATION.
(a) BBI hereby agrees to indemnify Mully and each of
the officers, agents and directors of Mully as of the date of
execution of this Agreement against any loss, liability,
claim, damage or expense (including, but not limited to, any
and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation,
commenced or threatened or any claim whatsoever), to which it
or they may become subject arising out of or based on any
inaccuracy appearing in or misrepresentation made in this
Agreement. The indemnification provided for in this paragraph
shall survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement for a
period of 24 months.
(b) Mully and its officers and directors hereby
agrees to indemnify BBI and each of the officers, agents,
directors and current shareholders of BBI as of the Closing
Date against any loss, liability, claim, damage or expense
(including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened or any claim
whatsoever), to which it or they may become subject arising
out of or based on any inaccuracy appearing in or
misrepresentation made in this Agreement and particularly the
representation regarding no liabilities referred to in Section
2.4(b). The indemnification provided for in this Section shall
survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement for a
period of 24 months.
SECTION 4.8 UNDERTAKINGS OF BBI. Management of BBI, who will assume the
management of Mully upon Closing, hereby undertakes to Mully and its
shareholders as follow:
(a) to exercise good faith in their efforts to file all
reports required to be filed by the surviving company herein
with the Securities and Exchange Commission or any other
governmental agency, in a timely manner; and
(b) to exercise all due diligence in causing the surviving
company to list its common stock for trading on any national
stock exchange for which the surviving company may then
qualify for such listing.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF MULLY
The obligations of Mully under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
SECTION 5.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by BBI 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
20
and warranties were made at the Closing Date (except for changes therein
permitted by this Agreement), and BBI shall have performed or complied with all
covenants and conditions required by this Agreement to be performed or complied
with by BBI prior to or at the Closing. Mully shall be furnished with a
certificate, signed by a duly authorized officer of BBI and dated the Closing
Date, to the foregoing effect.
SECTION 5.2 STOCKHOLDER APPROVAL. The stockholders of BBI shall have
approved this Agreement and the transactions contemplated thereby in accordance
with the laws of the State of Florida.
SECTION 5.3 OFFICER'S CERTIFICATE. Mully shall have been furnished with
a certificate dated the Closing Date and signed by a duly authorized officer of
BBI to the effect that no litigation, proceeding, investigation or inquiry is
pending or, to the best knowledge of BBI, 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 BBI Schedules, by or
against BBI which might result in any material adverse change in any of the
assets, properties, business or operations of BBI.
SECTION 5.4 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of BBI.
SECTION 5.5 OPINION OF COUNSEL TO BBI. Mully shall receive an opinion
dated the Closing Date of Broad & Xxxxxx, counsel to BBI, in substantially the
following form:
(a) BBI is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Florida and
has the corporate power and is duly authorized, qualified,
franchised and licensed under all material applicable laws,
regulations, ordinances and orders of public authorities to
own all of its properties and assets and to conduct its
business as now conducted, including qualification to do
business as a foreign corporation in the states in which the
character and location of the assets owned by it or the nature
of the business transacted by it requires qualification.
(b) To the best knowledge of such legal counsel, the execution
and delivery by BBI of this Agreement and the consummation of
the transactions contemplated by this Agreement in accordance
with the terms hereof will not conflict with or result in the
breach of any term or provision of BBI's articles of
incorporation or bylaws or violate any court order, writ,
injunction or decree applicable to BBI, or its properties or
assets.
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(c) The authorized capitalization of BBI consists of
10,000,000 Common Shares, $0.001 par value per share. As of
the date of Closing, as defined hereinbelow, there will be
10,000,000 Common Shares issued and outstanding. All issued
and outstanding shares are legally issued, fully paid and
nonassessable and not issued in violation of the preemptive
rights of any person. To the best knowledge of such legal
counsel, there are no outstanding subscriptions, options,
rights, warrants, convertible securities or other agreements
or commitments obligating BBI to issue any additional shares
of any class of its capital stock prior to closing of the
transactions contemplated herein.
(d) This Agreement has been duly and validly authorized,
executed and delivered by BBI.
(e) To the best knowledge of such legal counsel, except as set
forth in the BBI Schedules, there are no actions, suits or
proceedings pending or threatened by or against or affecting
BBI 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.
(f) BBI has taken all actions required by the applicable laws
of the State of Florida to permit the transfer of the BBI
Common Shares to Mully.
SECTION 5.6 OTHER ITEMS. Mully shall have received such further
documents, certificates or instruments relating to the transactions contemplated
hereby as Mully may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF BBI
The obligations of BBI under this Agreement are subject to the
satisfaction, at or before the Closing Date (unless otherwise indicated herein),
of the following conditions:
SECTION 6.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Mully 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, and Mully shall have performed and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by Mully prior to or at the Closing. BBI shall have been furnished
with a certificate, signed by a duly authorized executive officer of Mully and
dated the Closing Date, to the foregoing effect.
SECTION 6.2 OFFICER'S CERTIFICATE. BBI shall be furnished with a
certificate dated the Closing Date and signed by a duly authorized officer of
Mully to the effect that no litigation, proceeding, investigation or inquiry is
pending or, to the best knowledge of Mully, 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 Mully Schedules, by or
22
against Mully which might result in any material adverse change in any of the
assets, properties, business or operations of Mully.
SECTION 6.3 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of Mully.
SECTION 6.4 OPINION OF COUNSEL TO MULLY. BBI shall receive an opinion
dated the Closing Date of Xxxxxx X. Xxxxxx, P.C., counsel to Mully, in
substantially the following form:
(a) Mully is a corporation duly organized, validly existing,
and in good standing under the laws of the state of Nevada and has the
corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances and orders
of public authorities to own all of its properties and assets and to
carry on its business in all material respects as it is now being
conducted, including qualification to do business as a foreign
corporation in the states in which the character and location of the
assets owned by it or the nature of the business transacted by it
requires qualification.
(b) To the best knowledge of such legal counsel, the execution
and delivery by Mully of this Agreement and the consummation of the
transactions contemplated by this Agreement in accordance with the
terms hereof will not conflict with or result in the breach of any term
or provision of Mully's articles of incorporation or bylaws or
constitute a default or give rise to a right of termination,
cancellation or acceleration under any material mortgage, indenture,
deed of trust, license agreement or other obligation or violate any
court order, writ, injunction or decree applicable to Mully or its
properties or assets.
(c) The authorized capitalization of Mully consists of
25,000,000 shares of Preferred Stock, par value $0.001 per share, and
100,000,000 Common Shares, par value $.001 per share. As of the date
hereof there are 500,000 common shares of Mully issued and outstanding.
There are no preferred shares issued or outstanding. As of the Closing
of the transaction proposed herein, there will be 2,000,000 common
shares of Mully issued and outstanding (post forward split). There are
no preferred shares issued or outstanding. All issued and outstanding
shares are legally issued, fully paid and nonassessable and not issued
in violation of the preemptive rights of any person.
(d) The Mully Common Shares to be issued to the BBI
stockholders pursuant to the terms of this Agreement will be, when
issued in accordance with the terms hereof, legally issued, fully paid
and non-assessable.
(e) This Agreement has been duly and validly authorized,
executed, and delivered and constitutes the legal and binding
obligation of Mully, except as limited by bankruptcy and insolvency
laws and by other laws affecting the rights of creditors generally.
(f) To the best knowledge of such counsel, there are no
actions, suits or proceedings pending or threatened by or against Mully
or affecting Mully's properties, at law or in equity, before any court
23
or other governmental agency or instrumentality, domestic or foreign or
before any arbitrator of any kind.
(g) Mully has taken all actions required by the applicable
laws of the state of Nevada to permit the issuance of the Mully Common
Shares to the BBI stockholders.
SECTION 6.5 COMPLIANCE WITH REPORTING REQUIREMENTS. As of the Closing
Date, Mully shall be current in, and in compliance with all requirements of, all
filings required to be tendered to the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended. Said filings
contain all of the information required pursuant to the Securities Exchange Act
of 1934, as amended and, to the best knowledge of Mully, do not fail to state
any material facts which were required to be so stated.
SECTION 6.6 OTHER ITEMS. BBI shall have received such further
documents, certificates, or instruments relating to the transactions
contemplated hereby as BBI may reasonably request.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 BROKERS AND FINDERS. Except as set forth in Schedule 7.1,
each party hereto hereby represents and warrants that it is under no obligation,
express or implied, to pay certain finders in connection with the bringing of
the parties together in the negotiation, execution, or consummation of this
Agreement. The parties each agree to indemnify the other against any claim by
any third person not listed in Schedule 7.1 for any commission, brokerage or
finder's fee or other payment with respect to this Agreement or 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 7.2 LAW; FORUM AND JURISDICTION. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Nevada,
except as US federal law may be applicable.
SECTION 7.3 NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to Mully: Xx. Xxxxxx X. Xxxxxx
00000 X. Xxxxxxxx Xx.
Xxxxx X, Xxxxxxxxx
Xxxxxxxxx, XX 00000
If to BBI: BBI, Inc.
00 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx Xxxxx, XX 00000
Attention: Xx. Xxxxxxxx Xxxxxx, President
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With a copy to: Xxxxxxx Xxxxxx, Esq.
Broad & Xxxxxx
0000 Xxxxxx Xxxx
Xxxxx 000
Xxxx Xxxxx, XX 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 as of the date so delivered, mailed, or
telegraphed.
SECTION 7.4 ATTORNEYS' FEES. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
SECTION 7.5 CONFIDENTIALITY. Each party hereto agrees with the other
parties that, unless and until the reorganization contemplated by this Agreement
has been consummated, they and their 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 is a matter of public knowledge or is
required by law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement.
SECTION 7.6 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 7.7 THIRD PARTY BENEFICIARIES. This contract is solely among
Mully and BBI and, except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this Agreement.
SECTION 7.8 ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understandings, agreements, representations or warranties, written or oral,
except as set forth herein. This Agreement may not be amended or modified,
except by a written agreement signed by all parties hereto.
SECTION 7.9 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 18 months.
SECTION 7.10 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. Further, facsimile signatures shall
25
be deemed valid, so long as the original signature page, duly executed, are
delivered to the other party within seven (7) business days following execution
thereof.
SECTION 7.11 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 be 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 hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
SECTION 7.12 INCORPORATION OF RECITALS. All of the recitals hereof are
incorporated by this reference and are made a part hereof as though set forth at
length herein.
SECTION 7.13 HEADINGS; CONTEXT. The headings of the sections and
paragraphs contained in this Agreement are for convenience of reference only and
do not form a part hereof and in no way modify, interpret or construe the
meaning of this Agreement.
SECTION 7.14 BENEFIT. This Agreement shall be binding upon and shall
inure only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
SECTION 7.15 PUBLIC ANNOUNCEMENTS. Except as may be required by law,
neither party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto.
SECTION 7.16 SEVERABILITY. In the event that any particular provision
or provisions of this Agreement or the other agreements contained herein shall
for any reason hereafter be determined to be unenforceable, or in violation of
any law, governmental order or regulation, such unenforceability or violation
shall not affect the remaining provisions of such agreements, which shall
continue in full force and effect and be binding upon the respective parties
hereto.
SECTION 7.17 FAILURE OF CONDITIONS; TERMINATION. In the event any of
the conditions specified in this Agreement shall not be fulfilled on or before
the Closing Date, either of the parties have the right either to proceed or,
upon prompt written notice to the other, to terminate and rescind this Agreement
without liability to any other party. The election to proceed shall not affect
the right of such electing party reasonably to require the other party to
continue to use its efforts to fulfill the unmet conditions.
SECTION 7.18 NO STRICT CONSTRUCTION. The language of this Agreement
shall be construed as a whole, according to its fair meaning and intendment, and
not strictly for or against either party hereto, regardless of who drafted or
was principally responsible for drafting the Agreement or terms or conditions
hereof.
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SECTION 7.19 EXECUTION KNOWING AND VOLUNTARY. In executing this
Agreement, the parties severally acknowledge and represent that each: (a) has
fully and carefully read and considered this Agreement; (b) has been or has had
the opportunity to be fully apprised of its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; and (c) is
executing this Agreement voluntarily, free from any influence, coercion or
duress of any kind.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
and entered into as of the date first above written.
MULLY CORP. BABY'S BEST INFANT FORMULA, INC.
By: /s/ XXXXXX X. XXXXXX By: /s/ XXXXXXXX XXXXXX
--------------------------- -------------------------------------
Xxxxxx X. Xxxxxx, President Xxxxxxxx Xxxxxx, President
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INVESTMENT LETTER
March 6, 2000
MULLY CORP.
00000 X. Xxxxxxxx Xx.
Tower I, Penthouse
Xxxxxxxxx, XX 00000
Gentlemen:
The undersigned herewith deposits certificate(s) for shares of common stock of
Baby's Best Infant Formula, Inc., a Florida corporation, ("BBI"), as described
below (endorsed, or having executed stock powers attached) in acceptance of and
subject to the terms and conditions of that certain Agreement and Plan of
Reorganization (the "Agreement"), between Mully Corporation (the "Company") and
BBI, dated March 6, 2000, receipt of which is hereby acknowledged, in exchange
for shares of Common Stock of BBI (the "Exchange Shares"). If any condition
precedent to the Agreement is not satisfied within the relevant time parameters
established in the Agreement (or any extension thereof), the certificate(s) are
to be returned to the undersigned.
The undersigned hereby represents, warrants, covenants and agrees with you that,
in connection with the undersigned's acceptance of the Exchange Shares and as of
the date of this letter:
1. The undersigned is aware that his acceptance of the Exchange Shares
is irrevocable, absent an extension of the Expiration Date of any material
change to any of the terms and conditions of the Agreement.
2. The undersigned warrants full authority to deposit all shares
referred to above and the Company will acquire good and unencumbered title
thereto.
3. The undersigned has full power and authority to enter into this
Agreement and that this Agreement constitutes a valid and legally binding
obligation of the undersigned.
4. By execution hereof, the undersigned hereby confirms that the
Company's common stock to be received in exchange for BBI common stock (the
"Securities"), will be acquired for investment for the undersigned's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the undersigned has no present
intention of selling, granting any participation in, or otherwise distributing
the same. By execution hereof, the undersigned further represents the
undersigned does not have any contract, undertaking, agreement or arrangement
with any third party, with respect to any of the Securities.
5. The undersigned understands that the Securities are being issued
pursuant to available exemption thereto and have not been registered under the
Securities Act of 1933, as amended (the "1933 Act"), or under any state
securities laws. I understand that no registration statement has been filed with
the United States Securities and Exchange Commission nor with any other
regulatory authority and that, as a result, any benefit which might normally
28
accrue to a holder such as me by an impartial review of such a registration
statement by the Securities and Exchange Commission or other regulatory
authority will not be forthcoming. I understand that I cannot sell the
Securities unless such sale is registered under the 1933 Act and applicable
state securities laws or exemptions from such registration become available. In
this connection I understand that the Company has advised the Transfer Agent for
the Common Shares that the Securities are "restricted securities" under the 1933
Act and that they may not be transferred by me to any person without the prior
consent of the Company, which consent of the Company will require an opinion of
my counsel to the effect that, in the event the Securities are not registered
under the 1933 Act, any transfer as may be proposed by me must be entitled to an
exemption from the registration provisions of the 1933 Act. To this end, I
acknowledge that a legend to the following effect will be placed upon the
certificate representing the Securities and that the Transfer Agent has been
advised of such facts:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED
PURSUANT TO THE PROVISIONS OF THE ACT OR IF AN EXEMPTION FROM
REGISTRATION THEREUNDER IS AVAILABLE, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
I understand that the foregoing legend on my certificate for the Common
Shares limits their value, including their value as collateral.
6. The undersigned represents that he is experienced in evaluation and
investing in securities of companies in the development stage and acknowledges
that it is able to fend for himself, can bear the economic risk of this
investment and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the investment
in the Securities.
IN WITNESS WHEREOF, the undersigned has duly executed this Investment
Letter as of the date indicated hereon.
Dated: March __, 2000
Very truly yours,
----------------------------
(signature)
----------------------------
(print name in full)
----------------------------
(street address)
----------------------------
(city, state, zip)
----------------------------
(social security number or
employer identification no.)
29
