Exhibit 1
PURCHASE AGREEMENT
BETWEEN
DEVILLE, INC.
AND
SHAREHOLDERS OF BGR CORPORATION
A NEVADA PUBLIC CORPORATION
AGREEMENT, made this 1st day of November 2003, by and between Deville, Inc.
("DVI") and BGR Corporation ("BGR").
RECITALS
WHEREAS, DVI has developed a system (System) for the operation of Lucky Lou's(R)
restaurants, offering to the public steaks, hamburgers, sandwiches, pasta,
beverages, including alcohol, fries and other limited-menu casual food
restaurant items. The system includes, among other things, specific trademarks
or service marks, including without limitation, the Lucky Lou's(R) trademark,
logo and related commercial symbols and slogans, and recipes, including future
recipes, developed by DVI.
WHEREAS, BGR desires to purchase from DVI all authorized, issued and
outstanding, common shares of DVI stock and the System including, without
limitation, the Marks and Recipes in exchange for 1,000,000 shares of BGR's
restricted common stock and a note for four hundred thousand dollars ($400,000).
WHEREAS, DVI desires to sell all authorized shares and System provided that One
Husker One Cane LLC (OHOC), DVI's controlling shareholder, is given a limited
master franchise agreement to use the Lucky Lou's System in five locations in
the State of Arizona free of franchise fees, royalties, and management fees and
OHOC receives twenty percent (20%) of all future franchise fees, royalties, and
management fees collected by BGR for the Lucky Lou's System.
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
representations contained herein,
THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE I
ISSUANCE OF SHARES
1.1 Issuance of Shares. Subject to all of the terms and conditions of this
Agreement, DVI agrees to issue and deliver 100% of its common stock to BGR in
exchange for 1,000,000 shares of the BGR's restricted common stock.
1.2 Exemption From Registration. The parties hereto intend that the common
stock to be issued by the BGR to DVI shall be exempt from the registration
requirements of the Securities Act of 1933, as amended ("the Act"), pursuant to
section 4(2) and or 3(b) of the Act and the rules and regulations promulgated
there under.
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1.3 Restricted Securities. BGR represents to DVI, and DVI is aware that the
shares are "Restricted Securities" as that term is defined in Rule 144 and the
general rules and regulations of the 1933 act. BGR further represents that DVI
is fully aware of the applicable limitations on the resale of restricted
securities and that these restrictions are set forth, for the most part, in Rule
144 of the act as promulgated by the Securities and Exchange Commission (SEC).
1.4 Restrictive Legend. BGR further represents that DVI understands that
any and all certificates representing the Shares shall bear the following
investment legend, which DVI understands:
"No sale, offer to sell, or transfer of the shares represented by this
certificate shall be made unless a registration statement under the Federal
Securities Act of 1933, as amended, with respect to such shares then in effect
or an exemption from the registration requirements of said act is then in fact
applicable to said shares."
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF DVI
DVI hereby represents and warrants to BGR that:
2.1 DVI will provide BGR with all authorized, issued and outstanding,
common shares of DVI stock and the System including, without limitation, the
Marks and Recipes in exchange for 1,000,000 shares of BGR's restricted common
stock, a note from DVI to OHOC for four hundred thousand dollars ($400,000), a
limited master franchise agreement for OHOC to use the Lucky Lou's System in
five locations in the State of Arizona free of franchise fees, royalties, and
management fees and OHOC receives twenty percent (20%) of all future franchise
fees, royalties, and management fees collected by BGR for the Lucky Lou's
System.
2.2 Non-Competition. DVI Affiliates, their affiliates and family will not,
either separately or together, as long as they are directly or indirectly
affiliates of Seller or related, directly or indirectly, to the Master Franchise
Agreement and for a period of three (3) years following the termination of any
such direct or indirect affiliation or relationship, directly or indirectly, in
any capacity, without Buyer's prior written consent, engage in a business, or
plan for or organize a business, or provide services to, or have any financial
interest in a business, which is competitive with or substantially similar to
the business of the Lucky Lou's(R) franchise or any Lucky Lou's(R) franchise
business by becoming an owner, operator, officer, director, shareholder,
partner, consultant, associate, employee, advisor, agent, lessor or lessee,
representative or franchisee or serve in any other capacity whatsoever in any
such competing or substantially similar business. The ownership of not more than
2% of the voting stock of a publicly held corporation shall not be considered a
violation of the foregoing provision.
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2.2 Organization. DVI is a corporation duly organized, validly existing
and in good standing under the laws of Arizona, has all necessary corporate
powers to own its property and to carry on its business as now owned and
operated by it, and is duly qualified to do business and is in good standing in
each of the states where its business requires qualification.
2.2 Capital. Management of DVI own control of DVI and therefore have the
right to vote for the completion of this transaction. DVI represents that there
are no other issued and outstanding open subscriptions, options, rights,
warrants, debentures, instruments, convertible securities, or other agreements
or commitments obligating DVI to issue or to transfer from treasury any
additional shares of its capital stock.
2.3 Financial Statements. The most recent financial statements of DVI are
attached as Exhibit A. The financial statements have been prepared in accordance
with generally accepted accounting principles and practices consistently
followed by DVI throughout the period indicated, and fairly represent the
financial position of each as of the date of the balance sheet included in the
financial statements.
2.4 Investigation of Financial Condition. Without in any manner reducing or
otherwise mitigating the representations contained herein, BGR and/or its
attorneys shall have the opportunity to meet with the accountants and attorneys
to discuss the financial condition of DVI. DVI shall make available to BGR
and/or its attorney all books and records, once reasonable notice of such
request has been given.
2.5 Authority. The Board of Directors of DVI have authorized the execution
of this Agreement and the consummation of transactions contemplated herein, and
DVI has full power and authority to execute, deliver, and perform this Agreement
and this Agreement is a legal, valid and binding obligation of DVI, and is
enforceable in accordance with its terms and conditions.
2.6 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by DVI of its obligations hereunder in the time and in the manner
contemplated will not cause, constitute or conflict with or result in (a) any
breach or violation of any of the provisions or constitute a default under any
license, indenture, mortgage, charter, instrument, articles of incorporation,
bylaws, or other agreement or instrument to which either is a party, or by which
it may be bound, nor will any consents or authorizations of any party other than
those hereto be required, (b) an event that would permit any party to any
agreement or instrument to terminate it or to accelerate the maturity of any
indebtedness or other obligation of DVI, or (c) any event that would result in
the creation or imposition of any lien, charge, or encumbrance on any asset of
DVI.
2.7 Full Disclosure. None of the representations and warranties made by DVI
herein, or in any exhibit, certificate or memorandum furnished or to be
furnished by either, or on their behalf, contains or will contain any untrue
statement of material fact, or omit any material fact the omission of which
would be misleading.
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2.8 Good Title. Other than as described in Exhibit A, DVI has good and
marketable title to all of its property free and clear of any liens, claims and
encumbrances of any nature, form or description.
2.9 Indemnification. DVI agrees to defend and hold BGR harmless against and
in respect of any and all claims, demands, losses, costs, expenses, obligations,
liabilities, damages, recoveries, and deficiencies, including interest,
penalties, and reasonable attorney's fees, that it shall incur or suffer, which
arise out of, result from or relate to any breach of, or failure by DVI to
perform any of its representations, warranties, covenants and agreements in this
Agreement or in any exhibit or other instrument furnished or to be furnished by
DVI under this Agreement.
2.10 Settlements. DVI agrees to negotiate the settlement of all outstanding
obligations of DVI as represented on Exhibit A.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BGR
BGR hereby represents and warrants to DVI that:
3.1 BGR will provide OHOC 1,000,000 shares of BGR's restricted common
stock, a note from DVI to OHOC for four hundred thousand dollars ($400,000), a
limited master franchise agreement to use the Lucky Lou's System in five
locations in the State of Arizona free of franchise fees, royalties, and
management fees and twenty percent (20%) of all future franchise fees,
royalties, and management fees collected by BGR for the Lucky Lou's System in
exchange for all authorized, issued and outstanding, common shares of DVI stock
and the System including, without limitation, the Marks and Recipes.
3.2 Financial Ability. BGR is a corporation duly organized, validly
existing and in good standing, and has the necessary wherewithall to complete
this agreement through it's legal counsel.
3.3 Authority. BGR has authorized the execution of this Agreement and the
consummation of transactions contemplated herein through its legal counsel.
BGR's legal counsel has full power and authority to execute, deliver, and
perform this Agreement and this Agreement is a legal, valid and binding
obligation of BGR, and is enforceable in accordance with its terms and
conditions.
3.4 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by BGR and the performance by BGR of its obligations hereunder in the
time and in the manner contemplated will not cause, constitute or conflict with
or result in (a) any breach or violation of any of the provisions or constitute
a default under any license, indenture, mortgage, charter, instrument, articles
of incorporation, bylaws, or other agreement or instrument to which BGR is a
party, or by which it may be bound, nor will any consents or authorizations of
any party other than those hereto be required except approvals required by law,
if any, (b) an event that would permit any party to any agreement or instrument
to terminate it or to accelerate the maturity of any indebtedness or other
obligation of BGR, or (c) any event that would result in the creation or
imposition of any lien, charge, or encumbrance on any asset of BGR.
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3.5 Full Disclosure. None of the representations and warranties made by
BGR herein, or in any exhibit, certificate or memorandum furnished or to be
furnished by BGR, or on its behalf, contains or will contain any untrue
statement of material fact, or omit any material fact the omission of which
would be misleading.
3.6 Indemnification. BGR agrees to defend and hold DVI harmless against
and in respect to any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries, and deficiencies, including
interest, penalties, and reasonable attorney's fees, that it shall incur or
suffer, which arise out of, result from or relate to any breach of, or failure
by BGR to perform any of its respective representations, warranties, covenants
and agreements in this Agreement or in any exhibit or other instrument furnished
or to be furnished by BGR under this Agreement.
ARTICLE IV
COVENANTS
4.1 Investigative Rights. From the date of this Agreement until the Closing
date, DVI shall provide the other full access during normal business hours to
all properties, books, contracts, commitments, and records for the purpose of
examining same.
4.2 Conduct of Business. Prior to the Closing, DVI shall conduct its
business in the normal course and shall not sell, pledge or assign any assets
without the prior written consent of BGR. Neither BGR nor DVI shall amend its
articles of incorporation or Bylaws, declare dividends, redeem or sell stock or
other securities, incur additional or newly-funded liabilities, acquire or
dispose of fixed assets or settle or discharge any balance sheet receivable
other than in the normal course of business.
4.3 Required Corporate Action by BGR. BGR and its officers and directors
shall cause a meeting to be held as soon as practicable for the purpose of
voting on the approval of this Agreement.
4.4 Officers and Directors. Effective on the Date of Closing, the officers
and directors of DVI shall appoint additional officers and/or directors as
recommended by BGR.
ARTICLE V
CONDITIONS PRECEDENT TO BGR'S PERFORMANCE
5.1 Conditions. BGR's obligations hereunder shall be subject to the
satisfaction, at or before the Closing, of all the conditions set forth in this
Article V. BGR may waive any of these conditions in whole or in part without
prior notice; provided however, that no such waiver of a condition shall
constitute a waiver by BGR of any other condition of or any of BGR's other
rights or remedies, at law or in equity, if DVI shall be in default of any of
their representations, warranties, or covenants under this Agreement.
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5.2 DVI Performance. DVI shall have performed, satisfied and complied with
all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it, on or before the Closing Date.
5.3 Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties by DVI in this Agreement or in any
written statement that shall be delivered to BGR by DVI under this Agreement
shall be true and accurate on and as of the Closing Date as though made at that
time.
5.4 Acceptance by BGR. The holders of an aggregate of not less than 51% of
the issued and outstanding shares of common stock of DVI shall have executed
this agreement below thereby acknowledging their agreement to exchange issuance
of control to BGR of common stock as described in paragraph 1.1. above.
ARTICLE VI
CONDITIONS PRECEDENT TO DVI PERFORMANCE
6.1 Conditions. DVI obligations hereunder shall be subject to the
satisfaction, at or before the Closing, of all the conditions set forth in this
Article VI. DVI may waive any of these conditions in whole or in part without
prior notice; provided however, that no such waiver of a condition shall
constitute a waiver by DVI of any other condition of or any of DVI other rights
or remedies, at law or in equity, if BGR shall be in default of any of their
representations, warranties, or covenants under this Agreement.
6.2 BGR Performance. BGR shall have performed, satisfied and complied with
all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it, on or before the Closing Date.
6.3 Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties by BGR in this Agreement or in any
written statement that shall be delivered to DVI by BGR under this Agreement
shall be true and accurate on and as of the Closing Date as though made at that
time.
ARTICLE VII
CLOSING
7.1 Closing. The Closing of this transaction shall be held at a place and
on a date mutually acceptable to the parties.
At the Closing the parties shall deliver the following in form acceptable
to counsel to the parties or as set forth herein:
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By BGR:
A. 1,000,000 shares of BGR's restricted common stock issued to Xxxxx
Xxxxxxxx in the amount of five hundred thousand (500,000) shares and
Xxxxx Xxxxxx in the amount of five hundred thousand (500,000) shares,
a note from DVI to OHOC for four hundred thousand dollars ($400,000),
and a limited master franchise agreement for OHOC to use the Lucky
Lou's System in five locations in the State of Arizona free of
franchise fees.
By DVI:
A. All authorized, issued and outstanding, common shares of DVI stock and
the System including, without limitation, the Marks and Recipes.
ARTICLE VIII
REMEDIES
8.1 Legal Action and Costs. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorney's fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled.
8.2 Termination. In addition to the other remedies, any of the parties
hereto may terminate this Agreement, without liability:
(i) upon the failure of any condition not otherwise waived by the
parties; or
(ii) upon mutual consent of the respective boards of directors of BGR
and DVI.
ARTICLE IX
MISCELLANEOUS
9.1 Captions and Headings. The Article and paragraph headings throughout
this Agreement are for convenience and reference only, and shall in no way be
deemed to define, limit, or add to the meaning of any provision of this
Agreement.
9.2 No Oral Change. This Agreement and any provisions hereof, may not be
waived, changed, modified or discharged orally, but it can be changed by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or, discharge is sought.
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9.3 Non-Waiver. Except as other wise expressly provided herein, no waiver
of any covenant, condition, or provision of this Agreement shall be deemed to
have been made unless expressly in writing and signed by the party against whom
such waiver is charged.
9.4 Time of Essence. Time is of the essence of this Agreement and each and
every part hereof.
9.5 Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings and merges any all such prior discussions and/or agreements
herein.
9.6 Choice of Law. This Agreement and its application shall be governed by
the laws of the State of Arizona.
9.7 Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument.
9.8 Notices. All notices, requests, demands, and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally on the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid, and
properly addressed as follows:
BGR Representative:
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DVI Representative:
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9.9 Binding Effect. This Agreement shall inure to and be binding upon the
heirs, executors, personal representatives successors and assigns of each of the
parties to this Agreement.
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9.10 Effect of Closing. All representations, warranties, covenants, and
agreements of the parties contained in this Agreement, or in any instrument,
certificate, opinion, or other writing provided for in it, shall survive the
Closing of this Agreement.
9.11 Brokers. The parties hereto represent that no finder's fee has been
paid or is payable by any party.
9.12 Expenses. Each party will pay its own legal, accounting and any other
out-of-pocket expenses reasonably incurred in connection with this transaction,
whether or not the transaction contemplated hereby is consummated.
9.13 Facsimile Signatures as Originals. Original signatures transmitted by
facsimile communication shall constitute originals for the purpose of validly
executing this Agreement.
AGREED TO AND ACCEPTED as of the date first above written.
Deville, Inc.
By
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Dr. Xxxxx Xxxxxxxx, President & C.E.O.
BGR Corporation
By
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Xxxxx Xxxxx, President
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