EXHIBIT 6.17
STOCK PURCHASE AND SHARE EXCHANGE AGREEMENT
by and among
DIPPY FOODS, INC.
a Nevada Corporation,
AMERICAS FAVORITE FOOD CORP.
a California Corporation
and
AFFC SHAREHOLDERS
Dated as of May 25, 2001
This STOCK PURCHASE AND SHARE EXCHANGE AGREEMENT (this "Agreement")
is made and entered into as of May 25, 2001, by and among Dippy Foods, Inc., a
Nevada corporation ("Dippy"), Americas Favorite Food Corp., a California
corporation ("AFFC"), and each of the AFFC Shareholders listed on Schedule I
hereto (the "AFFC Shareholders"), with reference to the following:
RECITALS
A. This Agreement provides for the acquisition by Dippy of all of the
issued and outstanding shares of capital stock of AFFC, such that AFFC shall
become a wholly owned subsidiary of Dippy, and the issuance in exchange
therefore of 8,000,000 shares of restricted common stock of Dippy to the AFFC
Shareholders, subject to the provisions of a Pledge Agreement among the AFFC
Shareholders and Dippy to be entered into simultaneously herewith.
B. The board of directors and shareholders of AFFC and the board of
directors of Dippy have determined, subject to the terms and conditions set
forth in this Agreement, that the transactions contemplated hereby are desirable
and in the best interests of the parties hereto.
C. The parties to this Agreement desire that the transaction
contemplated by the provisions of this Agreement satisfy the requirements of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated pursuant thereto.
AGREEMENT
NOW, THEREFORE, 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 AND WARRANTIES OF DIPPY
As an inducement to and to obtain the reliance of AFFC, Dippy
represents and warrants as follows:
SECTION 1.1 ORGANIZATION. Dippy is a corporation duly organized,
validly existing, and in good standing under the laws of Nevada and has the
corporate power and is duly authorized and qualified 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 any jurisdiction in which the character and location of the
assets owned by it or the nature of the business transacted by it requires
qualification.
SECTION 1.2 CAPITALIZATION. The authorized capitalization of Dippy
consists of 200,000,000 Common Capital Shares, $0.001 par value per share
("Dippy Common Shares"). Dippy has no preferred shares issued or authorized. As
of the date hereof, Dippy has 21,669,247 Common Capital Shares issued and
outstanding. All issued and outstanding Common Capital Shares of Dippy are
legally issued, fully paid and nonassessable and are not issued in violation of
the preemptive or other rights of any person.
SECTION 1.3 OPTIONS AND WARRANTS. there are no outstanding options,
warrants, calls, convertible securities, or rights of any kind to acquire any
securities of Dippy.
SECTION 1.4 SUBSIDIARIES. Except for all of the issued and outstanding
shares of Dippy Foods, Inc., a California corporation, Dippy does not own
directly or indirectly, any capital stock or have any interest in any other
corporation, partnership or other form of business organization.
Section 1.5 Absence of Certain Changes or Events. Since January 31,
2001:
(a) Dippy has not: (i) amended its Articles of Incorporation
or Bylaws or (ii) waived any rights of value which in the aggregate
are extraordinary or material considering the business of Dippy;
(b) Dippy has not: (i) granted or agreed to grant any options,
warrants or other rights for its certificates, bonds or other
corporate securities calling for the issuance thereof, which
option, warrant or other right has not been canceled as of the
Closing Date; (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
SECTION 1.6 TITLE AND RELATED MATTERS. Dippy 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 which are
reflected in its most recent balance sheet or were acquired after the date
thereof (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.
SECTION 1.7 LITIGATION AND PROCEEDINGS. Except as disclosed in Schedule
1.7, to Dippy's knowledge, there are no actions, suits, proceedings or
investigations pending or threatened by or against Dippy, affecting Dippy 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 or
financial condition of Dippy.
SECTION 1.8 NO CONFLICT WITH OTHER INSTRUMENTS. To Dippy's knowledge,
the execution of this Agreement and the consummation of the transactions
contemplated hereby will not result in the breach of any term or provision of,
or constitute an event of default under, any material contract, agreement or
instrument to which Dippy is a party or to which any of its properties or
operations are subject.
SECTION 1.9 COMPLIANCE WITH LAWS AND REGULATIONS. To Dippy's knowledge,
Dippy 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 financial condition of Dippy or would not
result in Dippy's incurring any material liability.
SECTION 1.10 ACQUISITION FOR INVESTMENT. Dippy is acquiring the AFFC
Shares for investment, and not with a view to or for sale in connection with
any distribution thereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF AFFC AND AFFC SHAREHOLDERS
As an inducement to, and to obtain the reliance of Dippy, AFFC and the
AFFC Shareholders represent and warrant, jointly and severally, as follows:
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SECTION 2.1 ORGANIZATION. AFFC is a corporation duly organized, validly
existing and in good standing under the laws of California and has the corporate
power and is duly authorized and qualified 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 any jurisdiction in which the character and location of the
assets owned by it or the nature of the business transacted by it requires
qualification. Schedule 2.1 sets forth complete and correct copies of the
Articles of Incorporation and Bylaws of AFFC as in effect on the date hereof.
The execution, delivery and performance of this Agreement do not and the
consummation of the transactions contemplated by this Agreement in accordance
with the terms hereof will not, violate any provision of AFFC 's Articles of
Incorporation or Bylaws. AFFC has full power, authority and legal right and has
taken all action required by law, its Articles of Incorporation and Bylaws or
otherwise to authorize the execution and delivery of this Agreement.
SECTION 2.2 CAPITALIZATION. The authorized capitalization of AFFC
consists of 1,000,000 shares of Common Stock, no par value, of which 8,000
shares (the "AFFC Shares") are presently, and will be immediately prior to the
Closing, issued and outstanding. AFFC has no preferred shares issued or
authorized. The AFFC Shareholders are the sole beneficial and record owners of
the AFFC Shares, and such AFFC Shareholders presently have and at the Closing
will have the unqualified right to transfer and dispose of such AFFC Shares. 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.
SECTION 2.3 OPTIONS AND WARRANTS. There are no outstanding options,
warrants, calls, convertible securities, or rights of any kind to acquire any
securities of AFFC.
SECTION 2.4 SUBSIDIARIES. AFFC does not own directly or indirectly, any
capital stock or have any interest in any corporation, partnership or other form
of business organization.
SECTION 2.5 CONTRACTS AND UNDERTAKINGS. Schedule 2.5 sets forth all of
the contracts, agreements, leases, arrangements, commitments or other
undertakings (collectively, the "AFFC Contracts") to which it is a party or to
which it or its property is subject. AFFC is not in default under any of the
AFFC Contracts and, to AFFC's best knowledge, after due inquiry, no other party
to any AFFC Contract is in default thereunder nor, to AFFC's best knowledge,
does there exist any condition or event which, after notice or lapse of time or
both, would constitute a default by any party to any such AFFC Contract.
SECTION 2.6 LIABILITIES. AFFC has no liabilities or obligations
(whether known or unknown, contingent or absolute, matured, unmatured or
otherwise), including, without limitation, any liabilities with respect to the
payment of any country, federal, state, county, local or other taxes (including
any deficiencies, interest or penalties).
SECTION 2.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since May 1, 2001:
(a) AFFC has not: (i) amended its Articles of Incorporation or
Bylaws; (ii) waived any rights of value which individually or in
the aggregate are material considering the business of AFFC; or
(iii) 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) AFFC has not: (i) granted or agreed to grant any options,
warrants or other rights for its certificates, bonds or other
corporate securities calling for the issuance thereof, which
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option, warrant or other right has not been canceled as of the
Closing Date; (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;
(c) AFFC 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 financial
condition of AFFC.
SECTION 2.8 TITLE AND RELATED MATTERS. AFFC 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, tangible and
intangible, free and clear of all liens, pledges, charges or encumbrances.
SECTION 2.9 LITIGATION AND PROCEEDINGS. There are no actions, suits,
proceedings or investigations pending or, to AFFC's best knowledge, threatened
by or against AFFC, affecting AFFC 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 or financial condition of AFFC.
SECTION 2.10 NO CONFLICT WITH OTHER INSTRUMENTS. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the breach of any term or
provision of, or constitute an event of default under, any contract, agreement
or instrument to which AFFC is a party or to which any of its properties or
operations are subject.
SECTION 2.11 AUTHORIZATIONS; PERMITS; LICENSES. AFFC has all licenses,
franchises, permits or other governmental authorizations legally required to
enable AFFC to conduct its business 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, delivery and performance by AFFC
of this Agreement and the consummation of AFFC of the transactions contemplated
hereby.
SECTION 2.12 COMPLIANCE WITH LAWS AND REGULATIONS. AFFC 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 financial condition of AFFC or would not result in AFFC's incurring
any material liability.
SECTION 2.13 AUTHORITY. AFFC and each of the AFFC Shareholders has full
power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized and approved by all of the AFFC Shareholders and the board of
directors of AFFC and no other corporate or other proceedings on the part of
AFFC or the AFFC Shareholders are necessary to authorize this Agreement and the
transactions contemplated hereby.
SECTION 2.14 INFORMATION. The information concerning AFFC as set forth
in this Agreement 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 2.15 SECURITIES LAWS. The AFFC Shareholders acknowledge that
the Dippy Common Shares to be delivered pursuant to this Agreement are not being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
on the ground that the offer and sale of the Dippy Common Shares are exempt from
the registration provisions of Section 5 of the Securities Act pursuant to
Section 4(2) thereof, as transactions by an issuer not involving any public
offering, and/or may be deemed not to involve an offer or sale within the
meaning of Section 5 of the Securities Act pursuant to Regulation D promulgated
thereunder, and that the Dippy Common Shares being delivered pursuant hereto may
not be resold in any transaction subject to Section 5 of the Securities Act
unless registered or an exemption from registration is available for such sale,
and that the certificates representing such Dippy Common Shares will bear
substantially the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR REGISTERED OR QUALIFIED UNDER THE
SECURITIES LAWS OF ANY STATE OR TERRITORY OF THE UNITED STATES, IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION OR QUALIFICATION AFFORDED
BY SUCH SECURITIES LAWS, AND HAVE BEEN ACQUIRED BY THE HOLDER FOR
INVESTMENT PURPOSES ONLY. THESE SECURITIES MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED, OR OFFERED FOR SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION, WITHIN THE UNITED STATES OR ANY OF ITS
TERRITORIES OR TO A UNITED STATES PERSON, UNLESS (i) THE SECURITIES ARE
REGISTERED UNDER SECTION 5 OF THE SECURITIES ACT, OR (ii) THE PROPOSED
TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE SECURITIES ACT. THE TRANSFER AGENT (OR THE COMPANY
IF THEN ACTING AS ITS TRANSFER AGENT) WILL REFUSE TO TRANSFER THESE
SECURITIES UNLESS PRESENTED WITH A WRITTEN OPINION SATISFACTORY TO
COUNSEL FOR THE COMPANY (OR A NO-ACTION OR INTERPRETIVE LETTER FROM THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION) TO THE EFFECT THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE CIRCUMSTANCES OF SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
LOCK-UP PROVISIONS CONTAINED IN A STOCK PURCHASE AND SHARE EXCHANGE
AGREEMENT WITH THE ISSUER THAT RESTRICT THE TRANSFER OF THE SECURITIES
REPRESENTED HEREBY, A COPY OF WHICH AGREEMENT CAN BE OBTAINED FROM THE
ISSUER AT ITS EXECUTIVE OFFICES."
SECTION 2.16 ACQUISITION FOR INVESTMENT. The Dippy Common Shares to be
delivered pursuant to this Agreement are being acquired by the AFFC Shareholders
for investment and not with a view to or for sale in connection with any
distribution thereof.
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ARTICLE III
EXCHANGE PROCEDURE; CLOSING
SECTION 3.1 SHARE EXCHANGE/DELIVERY OF AFFC SHARES. At the Closing, the
holders of AFFC Shares (or any other outstanding security of AFFC, including,
but not limited to, options, warrants, conversion rights or other equity
interests) shall deliver to Dippy (i) certificates or other documents evidencing
all of the issued and outstanding AFFC Shares (and any other outstanding
security of AFFC, including, but not limited to, options warrants, conversion
rights or other equity interests), duly endorsed in blank or with executed
powers attached thereto in transferable form, such that AFFC shall become a
wholly owned subsidiary of Dippy as of the Closing.
SECTION 3.2 ISSUANCE OF DIPPY COMMON SHARES. In exchange for all of the
AFFC Shares delivered to Dippy pursuant to Section 3.1 above, Dippy shall issue
an aggregate of 8,000,000 "restricted" Dippy Common Shares to the AFFC
Shareholders, with each such AFFC Shareholder to receive that number of Dippy
Common Shares set forth opposite such AFFC Shareholder's name on Schedule I
hereto. Such shares shall be "restricted" in accordance with Rule 144 of the
Securities Act of 1933.
SECTION 3.3 CLOSING. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at 4:00 pm Pacific Time at the
offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ be on the date of this Agreement, or on such other date as may be
mutually agreed upon by the parties (the "Closing Date").
SECTION 3.4 ARTICLES OF EXCHANGE. Immediately following the Closing,
Dippy shall file Articles of Exchange, in the form of Exhibit A hereto, with the
Secretary of State of the State of Nevada pursuant to NRS 92A.200. The
transactions contemplated by this Agreement shall become effective at such time
as the Articles of Exchange are duly filed in Nevada.
ARTICLE IV
SPECIAL COVENANTS
SECTION 4.1 ACCESS TO PROPERTIES AND RECORDS. Prior to the Closing,
AFFC will afford to the officers and authorized representatives of Dippy the
full access to the properties, books and records of AFFC, in order that Dippy
may have full opportunity to make such reasonable investigation as it shall
desire to make of the affairs of AFFC, and will furnish Dippy with such
additional financial and operating data and other information as to the business
and properties of AFFC as Dippy shall from time to time reasonably request.
SECTION 4.2 THIRD PARTY CONSENTS. AFFC and Dippy agree to cooperate
with each other in order to obtain any required third party consents to this
Agreement and the transactions herein contemplated.
SECTION 4.3 INDEMNIFICATION.
(a) AFFC and the AFFC Shareholders, jointly and severally, hereby agree
to indemnify Dippy and each of the officers, agents and directors of Dippy as of
the date of execution of this Agreement and as of the Closing against any loss,
liability, claim, damage or expense (including, but not limited to, any and all
expenses 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; and
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(b) Dippy hereby agrees to indemnify AFFC and each of the officers,
agents, directors and AFFC Shareholders as of the date of the execution of this
Agreement and as of the Closing against any loss, liability, claim, damage or
expense (including, but not limited to, any and all expenses 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 Section shall survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement.
SECTION 4.4 ADVISORY BOARD. At the Closing, the board of directors of
Dippy shall have duly formed an Advisory Board (the "Advisory Board") comprised
entirely of all of the AFFC Shareholders, except ▇▇▇ ▇. ▇▇▇▇▇▇▇ ("Hermann") who
shall be elected to the board of directors of Dippy pursuant to Section 6.3. The
Advisory Board shall advise Dippy's board of directors with respect to, among
other things, (i) development of new business, (ii) cultivation of domestic and
international business opportunities, (iii) development of strategic plans,
including, without limitation, expanding Dippy's manufacturing capability, and
(iv) general management of Dippy. In addition, the Advisory Members shall use
their business contacts, whenever appropriate and as the opportunity arises, to
assist Dippy in forming strategic alliances and procuring sales and other
business opportunities for Dippy. The members of the Advisory Board (each, an
"Advisory Member", collectively, the "Advisory Members") shall not possess any
voting power in respect of the board of directors of Dippy. The board of
directors of Dippy may, in its sole discretion, accept or reject any
recommendations made by the Advisory Board. The Advisory Board shall not possess
the power to act on behalf of or otherwise bind the corporation in any way.
SECTION 4.5 ADVISORY OBLIGATION. Each Advisory Member, each of whom is
an AFFC Shareholder signatory hereto, shall serve on the Advisory Board, without
compensation, and in good faith perform the duties and uphold the
responsibilities of such Advisory Board, until the second anniversary of the
date of this Agreement, or until such Advisory Member becomes an officer or
director of Dippy, whichever first occurs. In the event an Advisory Member
becomes an officer or director of Dippy prior to the second anniversary of the
date hereof, such individual shall remain an officer or director of Dippy until
such second anniversary date; provided, however, if such individual is
subsequently removed from office or the board of directors of Dippy prior to
such second anniversary date, such individual shall be automatically reappointed
to the Advisory Board as an Advisory Member and shall serve in such capacity
until such second anniversary date.. Dippy's exclusive remedies for the failure
of any Advisory Member to satisfy the advisory obligation provided in this
Section are those remedies provided in the Pledge Agreement (as defined in
Section 5.4).
SECTION 4.6 HERMANN. Hermann shall serve on Dippy's board of directors
and/or as Dippy's Executive Vice President and/or Chief Operating Officeruntil
the second anniversary of the date of this Agreement. Dippy's exclusive remedies
for Hermann's failure to serve in such capacity or capacities until such second
anniversary date are those remedies provided in the Pledge Agreement.
SECTION 4.7 NAME CHANGE. Upon the execution of this Agreement, the
board of directors of Dippy shall have resolved to obtain from the shareholders
owning at least a majority of the outstanding shares of capital stock of Dippy
their written consent to the amendment of the Articles of Incorporation of Dippy
to change the name of Dippy to "America's Favorite Food Corporation, a Nevada
corporation".
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ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF DIPPY
The obligations of Dippy under this Agreement are subject to the
satisfaction, at or before the Closing, of the following conditions:
SECTION 5.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by AFFC in this Agreement were true when made and shall be true
at the Closing with the same force and effect as if such representations and
warranties were made at the Closing (except for changes therein permitted by
this Agreement), and AFFC shall have performed or complied with all covenants
and conditions required by this Agreement to be performed or complied with by
AFFC prior to or at the Closing.
SECTION 5.2 SHAREHOLDER AND DIRECTOR APPROVAL. All of the directors and
all of the holders of the issued and outstanding shares of Common Stock of AFFC
shall have approved this Agreement and the transactions contemplated hereby.
SECTION 5.3 BUSINESS DEVELOPMENT AGREEMENT. AFFC and US Foods
International, LLC ("USFI") shall have entered into a Business Development
Agreement in the form of Exhibit B hereto.
SECTION 5.4 PLEDGE AGREEMENT. Dippy and the AFFC Shareholders shall
have entered into a Pledge Agreement in the form of Exhibit C hereto (the
"Pledge Agreement").
SECTION 5.5 ADVISORY ACCEPTANCE. Each AFFC Shareholder shall have
accepted in writing his appointment to the Advisory Board.
SECTION 5.6 HERMANN. Hermann shall have accepted in writing his
election to Dippy's board of directors.
SECTION 5.7 DIRECTORS OF AFFC. ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇
▇▇▇▇▇▇▇ shall be duly elected to the board of directors of AFFC and shall
constitute all of the members thereof.
SECTION 5.8 OFFICERS OF AFFC. The following individuals shall be duly
appointed to the offices of AFFC indicated opposite their names below, and the
individuals occupying such offices, if any, immediately prior to the Closing
shall have tendered their resignations to Dippy, with such resignations becoming
effective at the Closing:
▇▇▇ ▇▇▇▇▇▇▇▇▇ Chief Executive Officer, President
▇▇▇▇▇▇ ▇▇▇▇▇ Chief Financial Officer, Secretary
▇▇▇ ▇▇▇▇▇▇▇ Chief Operating Officer
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF AFFC
The obligations of AFFC under this Agreement are subject to the
satisfaction, at or before the Closing (unless otherwise indicated herein), of
the following conditions:
Section 6.1 Accuracy of Representations. The representations and
warranties made by Dippy in this Agreement were true when made and shall be true
as of the Closing (except for changes
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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, and Dippy
shall have performed and complied with all covenants and conditions required by
this Agreement to be performed or complied with by Dippy prior to or at the
Closing.
SECTION 6.2 DIRECTOR APPROVAL. The board of directors of Dippy shall
have approved this Agreement and the transactions contemplated hereby.
SECTION 6.3 DIRECTORS OF DIPPY. At the Closing, the total number of
directors comprising the entire board of directors of Dippy shall have been duly
increased from 2 to 3, and ▇▇▇ ▇▇▇▇▇▇▇ shall have been duly elected as an
additional director of Dippy to fill the vacancy created by such increase.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 BROKERS AND FINDERS. Each party hereto hereby represents
and warrants that it is under no obligation, express or implied, to pay any
commission, brokerage or finder's fees 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 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 GOVERNING LAW. This Agreement shall be construed and
interpreted in accordance with the laws of the State of California.
SECTION 7.3 NOTICES. Any notices or other communications required or
permitted hereunder shall be deemed 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 Dippy: ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to AFFC: ▇▇. ▇▇▇▇ Place
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
10
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 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 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,
understanding, 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 7.6 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 two (2) years from the
Closing Date.
SECTION 7.7 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
SECTION 7.8 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. 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. If at any time before the second
anniversary of the date of this Agreement the AFFC Shareholders, or any subset
thereof, are elected to a controlling number of directorships on Dippy's board
of directors, thenno amendment or waiver shall be effective unless the board of
directors and at least a majority of the shareholders of Dippy have approved
such amendment or waiver.
SECTION 7.9 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 7.10 EXPENSES. Each party hereto shall bear all of their
respective costs and expenses incurred in connection with the negotiation of
this Agreement and in the consummation of the transactions contemplated hereby
and the preparation hereof.
SECTION 7.11 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.
11
SECTION 7.12 ASSIGNMENT. This Agreement shall not be assigned by any
party without the prior written consent of the other parties.
SECTION 7.13 PUBLIC ANNOUNCEMENTS. Prior to the Closing, except as may
be required by law, neither party shall make any public announcement with
respect to the transactions provided for herein without the prior written
consent of the other party hereto.
SECTION 7.14 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 7.15 CONSTRUCTION. The language of this Agreement shall not be
construed for or against any party hereto, regardless of who drafted or was
principally responsible for drafting the Agreement or terms or conditions
hereof.
SECTION 7.16 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 apprized by legal counsel of the 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.
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives as of the date first
above written.
DIPPY FOODS, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇, President
AMERICAS FAVORITE FOOD CORP.
By: /s/ ▇▇▇▇ ▇. Place
-------------------------------------
▇▇▇▇ ▇. Place, President
AFFC SHAREHOLDERS:
/s/ ▇▇▇▇ ▇. Place
----------------------------------
▇▇▇▇ ▇. Place
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇
----------------------------------
▇▇▇▇ ▇. ▇▇▇
/s/ Min ▇. ▇▇▇▇
----------------------------------
Min ▇. ▇▇▇▇
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
13
SCHEDULE I
# AFFC SHARES OWNED # DIPPY COMMON SHARES
AFFC SHAREHOLDER AS OF CLOSING DATE RECEIVABLE IN EXCHANGE
------------------------------------------------------------------
▇▇▇▇ Place 1,000 1,000,000
▇▇▇▇▇ ▇▇▇▇ 1,000 1,000,000
▇▇▇▇▇ ▇▇▇ 1,000 1,000,000
▇▇▇▇ ▇▇▇ 1,000 1,000,000
Min Shim 1,000 1,000,000
▇▇▇ ▇▇▇▇▇▇▇ 1,000 1,000,000
▇▇▇▇▇ ▇▇▇ 1,000 1,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,000 1,000,000
TOTAL 8,000 8,000,000
14
SCHEDULE 1.7
LITIGATION
----------
SoloPac Co. vs. Dippy Foods, Inc.
On April 19, 2001, SoloPac Co. filed a lawsuit against the Company for the
alleged nonpayment of multiple invoices totaling $12,518.08. The Company
believes the correct amount is $11,885.16 owing on one unpaid invoice. This
figure represents the balance remaining on an invoice of $23,771.18 for the
purchase of film to be used with a new horizontal form fill and seal tray
machine. In a letter dated November 14, 2000, SoloPac stated that it would
invoice the Company for one-half of the total $23,771.18 invoice amount,
$11,885.59, which amount the Company paid on November 17, 2000. In connection
with this reduced invoice, the Company advised SoloPac that it would pay the
balance when the Company took possession and the form, fill and seal tray
machine was installed and operated.
Dippy Foods, Inc. vs. Bakemark (Westco Co.)
The Company filed suit against Bakemark for bad product in the amount of
$60,000. Bakemark delivered fruit that was contaminated. Bakemark has not filed
a counter-claim.
15
SCHEDULE 2.1
AFFC ARTICLES, BYLAWS
---------------------
16
SCHEDULE 2.5
AFFC CONTRACTS
--------------
Business Development Agreement, of even date herewith, between AFFC and US Foods
International, LLC, attached hereto as Exhibit B.
17
