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EXHIBIT 2.05
ACQUISITION AGREEMENT
THIS AGREEMENT ("Agreement") is made and dated March 3, 1999, by and
between ▇▇▇▇▇▇▇ HILLS, LTD., a Utah corporation ("BHL") and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇▇"), individually and as the authorized agent for and on behalf of
FOCUSED MEDIA LTD ("Focused") and GLOBAL GOLF LTD ("Global") and all of their
respective shareholders. Unless the context clearly indicates otherwise, any
references in this Agreement to "▇▇▇▇▇▇▇▇▇" are intended to refer to ▇▇▇▇
▇▇▇▇▇▇▇▇▇ both in his individual capacity and as authorized agent for and on
behalf of Focused and Global and all of their respective shareholders, and any
and all representations, covenants and undertakings on the part of "▇▇▇▇▇▇▇▇▇"
shall be construed accordingly.
Attached hereto as Exhibit "A" and incorporated herein by reference are
(a) a 13-page business plan ("Plan") which was prepared by or pursuant to the
direction of ▇▇▇▇▇▇▇▇▇ for review by BHL in connection with BHL's consideration
of the transactions encompassed by this Agreement, and (b) financial statements
and notes thereto with respect to Global for its fiscal years ended May 31, 1997
and May 31, 1998 (the "Financial Statements"), which were likewise provided to
BHL for its review in connection with its consideration of the transactions
encompassed by this Agreement.
IN CONSIDERATION OF the mutual covenants contained herein and intending
to be legally bound hereby, the parties to this Agreement hereby agree as
follows:
1. REPRESENTATIONS BY ▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇▇ represents and warrants to BHL
as follows:
1.1 ▇▇▇▇▇▇▇▇▇ (individually) is the founder as well as the President
and chief executive officer of Focused and Global, and, as such, has personal
knowledge of all aspects of their business.
1.2 Focused is a Republic of Ireland Company having its principal
office ▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
Focused is authorized to issue 1,000,000 shares of common stock, of which 2
shares are presently issued and outstanding. ▇▇▇▇▇▇▇▇▇ (individually) is the
owner and holder of 1 share and ▇▇▇▇ ▇'▇▇▇▇▇▇▇▇ ("▇'▇▇▇▇▇▇▇▇") is the owner and
holder of one 1 share. There are no other classes or shares of stock, or other
securities of any kind or description, authorized, issued or outstanding with
respect to Focused.
1.3 Global is a Northern Ireland company having its principal place
of business at ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇ BT48OLD. Global is authorized to issue 1,000,000 shares of common stock,
of which 100,000 shares are presently issued and outstanding. Of the issued and
outstanding shares, ▇▇▇▇▇▇▇▇▇ (individually) owns or is lawfully entitled to
70%, ▇'▇▇▇▇▇▇▇▇ owns or is lawfully entitled to 10%, and various other
individuals own or are lawfully entitled to 20%. There are no other classes or
shares of stock, or other securities of any kind or description, authorized,
issued or outstanding with respect to Global.
1.4 The Plan sets forth a description of the present and projected
business of Global, and the information contained therein is complete and
accurate in all material respects.
1.5 The Financial Statements and any and all other financial
statements which have been provided to BHL for purposes of the transactions
contemplated by this Agreement (a) are correct and complete, (b) fairly present
the financial condition, assets and liabilities of the Company as at their
respective dates and the results of their operations for the periods covered
thereby and (c) have been prepared in accordance with generally accepted
accounting principles consistently maintained.
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1.6 Since the end of Global's last fiscal year, May 31, 1998,
Global's operations have resulted in additional losses not exceeding $150,000
U.S., but there have been no material adverse changes in Global's business or
its prospects.
1.7 ▇▇▇▇▇▇▇▇▇ been authorized by ▇'▇▇▇▇▇▇▇▇, as well as by Focused
and Global, to act as the agent of each of them in negotiating and entering into
this Agreement.
1.8 No broker, finder, agent or similar intermediary ("Broker") has
acted on behalf of ▇▇▇▇▇▇▇▇▇, Focused or Global in connection with this
Agreement or the transactions contemplated hereby, and there are no brokerage
commissions, finder's fees or similar fees or commissions payable in connection
therewith.
2. SALE AND PURCHASE OF SHARES.
2.1 SALE AND PURCHASE OF SHARES. Upon the terms and subject to the
conditions of this Agreement and in reliance upon ▇▇▇▇▇▇▇▇▇'▇ representations,
warranties and agreements contained herein, BHL agrees to acquire all of the
issued and outstanding shares of Focused (the "Shares"), from ▇▇▇▇▇▇▇▇▇,
▇'▇▇▇▇▇▇▇▇ and/or any other individuals who may own or be entitled to any of
said shares at the time of Closing (hereinafter, the "Sellers").
2.2 OWNERSHIP OF GLOBAL. ▇▇▇▇▇▇▇▇▇ represents and warrants that, at
the time of Closing, Global shall be or become a wholly-owned subsidiary of
Focused, and that ▇▇▇▇▇▇▇▇▇, ▇'▇▇▇▇▇▇▇▇ and any other individuals who may
presently own or be entitled to any of Global's shares shall have relinquished
their interests and claims with respect thereto.
2.3 INDEMNIFICATION. ▇▇▇▇▇▇▇▇▇ (individually) hereby agrees to
indemnify BHL from any loss or damage sustained by BHL if, for any reason, (a)
▇'▇▇▇▇▇▇▇▇ and/or any other individuals who may own or be entitled to any shares
of Global shall fail or refuse to relinquish their interests and claims thereto
in favor of Focused, as represented by ▇▇▇▇▇▇▇▇▇ in Paragraph 2.2 above, or (b)
▇'▇▇▇▇▇▇▇▇ and/or any other individual who may own or be entitled to the Shares
shall fail or refuse to tender the same to BHL at the Closing.
2.4 CLOSING. The closing of the purchase and sale of the Shares (the
"Closing") will take place on March 31, 1999 or on such other date (whether
earlier or later) as the parties may mutually agree in writing (hereinafter, the
"Closing Date" or "time of Closing").
2.5 PURCHASE PRICE: Subject to the terms and conditions of this
Paragraph 2.5, BHL shall pay to the Sellers (pro rata, as their interests may
appear), either 150,000 or 250,000 shares of the restricted common stock, $1.00
par value, of BHL (the "Shares").
(a) At the time of or as soon as practicable following the
Closing, BHL shall cause 150,000 Shares to be issued or transferred into the
names of the Sellers. In so doing, BHL shall be entitled to rely upon the
written instructions provided by ▇▇▇▇▇▇▇▇▇ at the time of Closing as to the
person(s) entitled thereto and the number of said Shares to be issued or
transferred to each, and ▇▇▇▇▇▇▇▇▇ shall agree in writing to hold harmless and
indemnify BHL and its officers, directors, attorneys and agents of and from any
liability or expense incurred by BHL (including BHL's attorney's fees) in the
event of any claim by any person which is contrary to or inconsistent with the
instructions provided.
(b) At the time of or as soon as practicable following the
Closing, BHL shall also cause certificates representing an additional 100,000
Shares, endorsed in blank or accompanied by duly executed
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stock powers, with signature guaranteed, to be delivered to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Esq., an attorney at law of the State of New York, pursuant to an Escrow
Agreement, which Escrow Agreement shall be executed by ▇▇▇▇▇▇▇▇▇ individually
and as the Sellers' authorized agent, BHL and said escrow agent (the "Escrow
Agent") at the time of Closing. Said certificates and any associated stock
powers are referred to herein as the Escrowed Certificates. The Escrow Agreement
shall provide in substance as follows:
(i) That if Global realizes an Accumulated Net Operating
Income (as hereinafter defined) equal to or exceeding the sum of $200,000 U.S.
at any time during the period commencing on April 1, 1999 and ending on March
31, 2003 (the "Determination Period"), the Escrowed Certificates shall be
forwarded to BHL's transfer agent, for reissuance of said 100,000 Shares to the
Sellers, pro rata, according to their respective interests as instructed by
▇▇▇▇▇▇▇▇▇ at the time of Closing. Thereupon, the Escrow Agreement shall be
deemed terminated and neither BHL nor any of the Sellers shall have any further
rights or claims against the other, or against the Escrow Agent, arising out of
or in connection with this Agreement or the Escrow Agreement on account of or
relating to said Shares.
(ii) That in the absence of their actual receipt of any
information or documentation to the contrary, BHL and the Escrow Agent shall be
entitled to rely upon the written instructions provided by ▇▇▇▇▇▇▇▇▇ at the time
of Closing as to the person(s) who will be entitled to said 100,000 Shares upon
their release from escrow pursuant to (i) above, and that ▇▇▇▇▇▇▇▇▇ shall hold
harmless and indemnify BHL and its officers, directors, attorneys and agents, as
well as the Escrow Agent and his heirs, executors, administrators, personal
representatives and successors, of and from any liability or expense incurred by
them (including their attorney's fees) in the event of any claim by any person
which is contrary to or inconsistent with the instructions provided.
(iii) That the duties of the Escrow Agent are merely
ministerial, and that the Escrow Agent shall in no wise be liable or accountable
to any person for the release and delivery of any of the Escrowed Certificates
or the Shares evidenced thereby, or for any failure to release and deliver the
same, except for willful acts of bad faith. The Escrow Agreement shall also
contain such other provisions for the protection of the Escrow Agent as are
normal and customary in such agreements.
(iv) That if Global shall fail to realize an Accumulated
Net Operating Income (as hereinafter defined) equal to or exceeding the sum of
$200,000 U.S. at any time during the Determination Period then, upon the
expiration of the Determination Period, the Escrowed Certificates shall be
returned to BHL (or forwarded to BHL's transfer agent for reissuance to BHL, as
appropriate). Thereupon, the Escrow Agreement shall be deemed terminated and
neither BHL nor any of the Sellers shall have any further rights or claims
against the other, or against the Escrow Agent, arising out of or in connection
with this Agreement or the Escrow Agreement on account of or relating to said
Shares.
(v) That the duties of the Escrow Agent are merely
ministerial, and that the Escrow Agent shall in no wise be liable or accountable
to any person for the release and delivery, or for any failure to release and
deliver, any of the Escrowed Certificates or the Shares evidenced thereby,
except for willful acts of bad faith.
(c) For purposes of this Agreement, Accumulated Net Operating
Income shall be as determined by Global's regularly engaged accountants, in
accordance with generally accepted accounting principles consistently applied.
Global's Net Operating Income shall be determined on a cash basis for each
successive calendar quarter during the Determination Period (commencing with the
calendar quarter ending June 30, 1999). Global's Accumulated Net Operating
Income, as of any date, shall be the total of the Net Operating Income amounts
(positive amounts being offset by any negative amounts) as so determined for all
such calendar quarters preceding such date.
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2.6 RESTRICTED NATURE OF SHARES. It is acknowledged that the BHL
Shares to be issued to the Sellers pursuant to this Agreement have not been
registered, will be restricted, and may not be sold or otherwise transferred
except in accordance with Rule 144 of the Securities Exchange Act of 1933, as
amended.
2.7 FINANCING COMMITMENT BY BHL. As a material part of the
consideration for the acquisition pursuant to this Agreement, BHL agrees to
provide up to $300,000 U.S. in cash capital to Global, for use in its operations
and in expanding its business, in such installments and at such time or times as
may be needed.
2.8 PAYMENT TO ▇▇▇▇ ▇▇▇▇▇▇▇▇▇. At the time of Closing, BHL shall
make a separate cash payment to ▇▇▇▇▇▇▇▇▇ in the amount of $100,000. It is
understood that said funds are needed and will be utilized in order to arrange
for the relinquishment of certain minority interests in and/or claims against
Global.
2.9 INCLUDED ASSETS. Focused and (its wholly-owned subsidiary)
Global shall be sold to and acquired by BHL with all of their property and
assets of any kind, real or personal, tangible or intangible, including but not
limited to any and all of their inventory, pending orders, accounts receivable,
equipment, fixtures, leases, leasehold improvements, Cash on hand, deposits,
Contracts and contract rights, customer lists, contacts, advantageous business
relationships with vendors and other parties, computer software, Internet web
sites, trade names, trademarks, service marks and other Intellectual Property
rights, business records, and good will. Any and all domain names now or
heretofore utilized in connection with the business of Global, whether
registered to Global, Focused, ▇▇▇▇▇▇▇▇▇ or any affiliated entity or person,
shall likewise be included in the sale.
2.10 NON-COMPETITION AGREEMENT. At the Closing, ▇▇▇▇▇▇▇▇▇ and
▇'▇▇▇▇▇▇▇▇ shall each enter in agreements in form and content to the reasonable
satisfaction of BHL and its attorneys, prohibiting ▇▇▇▇▇▇▇▇▇ and ▇'▇▇▇▇▇▇▇▇ from
competing with Global in any manner, or from assisting any entity or person in
so doing, for a period of five (5) years from the date of Closing.
3. DUE DILIGENCE.
3.1 Commencing upon the execution of this Agreement, and continuing
until the Closing, ▇▇▇▇▇▇▇▇▇ and any other Sellers, Focused and Global shall
provide to BHL and its attorneys and accountants, any and all such information
and documents as they may request, together with any and all such other
documents (whether or not specifically requested) as may be necessary or
appropriate, in order to provide to BHL full disclosure of all material aspects
of the business, operations and finances of Focused and Global. Any information
and documents specifically requested shall be provided on a prompt basis, as
soon as practicable following receipt of such request.
3.2 If ▇▇▇▇▇▇▇▇▇, any other Sellers, Focused and Global shall fail
to comply fully with their obligations pursuant to Paragraph 3.1 above, or any
of the representations and warranties contained in this Agreement (including the
Exhibits hereto) shall prove (whether by virtue of the information and documents
provided pursuant to Paragraph 3.1 above or otherwise) to be false in any
material respect; or if BHL, as the result of the information and documents
provided during the due diligence process, shall find the condition of Focused
and Global to be unsatisfactory in any other material respect; then BHL shall
not be obligated to conclude the transactions contemplated by this Agreement,
and shall be entitled to a full refund and reimbursement of any and all sums
paid by BHL hereunder.
4. ADDITIONAL REPRESENTATIONS; NATURE AND SURVIVAL OF REPRESENTATIONS AND
WARRANTIES.
(a) The representations, warranties, covenants and agreements
contained in this Agreement, and all statements contained in this Agreement or
any Exhibit or Schedule hereto or any certificate, financial
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statement or report or other document delivered pursuant to this Agreement or in
connection with the transactions contemplated hereby, will be deemed to
constitute the representations, warranties, covenants and agreements of the
respective party delivering the same.
(b) All information and documents provided to BHL during the due
diligence process shall be deemed to constitute additional representations and
warranties on the part of ▇▇▇▇▇▇▇▇▇, the other Sellers, Focused and Global that
the information and the contents of the documents provided are true and correct
in all material respects.
(c) No representation or warranty made in this Agreement, and no
Exhibit, document, statement, certificate or Schedule which has been furnished
or is hereafter to be furnished to Buyer pursuant hereto, or in connection with
the transactions contemplated hereby, contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
(d) Any representations and warranties which are made to BHL in
connection with this transaction will not be affected or mitigated by any
investigation conducted by BHL or its representatives prior to the Closing or by
any knowledge of BHL, except to the extent that BHL or its officers, employees
and legal representatives shall be shown to have been provided with affirmative
written disclosure at or prior to the Closing.
(e) All representations, warranties, covenants and agreements
contained in this Agreement shall survive the execution and delivery of this
Agreement and the Closing hereunder for a period of five (5) years (the
"Survival Period") from the Closing, provided, however, that, any
representation, warranty, covenant or agreement which is the subject of a claim
or dispute asserted prior to the expiration of the Survival Period shall survive
with respect to such claim or dispute until final resolution thereof.
5. INDEMNIFICATION.
5.1 OBLIGATION OF SELLER TO INDEMNIFY. At the Closing, the Sellers
shall agree in writing to indemnify, defend and hold harmless BHL (and BHL's
directors, officers, employees, affiliates, successors and assigns) from and
against all Claims, losses, liabilities, damages, deficiencies, judgments,
assessments, fines, settlements, costs or expenses (including interest,
penalties and fees, expenses and disbursements of attorneys, experts and
consultants) ("Losses") incurred by the indemnified party in any action or
proceeding between the indemnifying party and the indemnified party, or between
the indemnified party and any third party, or otherwise based upon, arising out
of or otherwise in respect of any inaccuracy in or any breach of any
representation, warranty or covenant contained in this Agreement or in any
Documents delivered by ▇▇▇▇▇▇▇▇▇, the Sellers, Focused or Global pursuant to
this Agreement.
5.2 BHL'S RIGHT OF OFFSET. Without limiting any other rights and
notwithstanding anything to the contrary set forth herein, any amounts due to
BHL pursuant to Paragraph 5.1 above may be offset by BHL against any unpaid
balance of the purchase price (whether cash or stock) due to Sellers pursuant to
this Agreement.
6. MISCELLANEOUS.
6.1 RESOLUTION OF DISPUTES. Any and all disputes arising out
of or in connection with this Agreement or any of its provisions (including the
attached Exhibits and Schedules), or any Documents and
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agreements delivered pursuant hereto or in connection herewith, shall be
resolved exclusively by arbitration proceedings in Atlanta, Georgia or at such
other location as the parties may mutually agree, in accordance with the
applicable rules of the American Arbitration Association. Judgment on the award
rendered may be entered in any Court of competent jurisdiction. In connection
with any such proceedings, the prevailing party, as determined by the arbitrator
or arbitrators assigned, shall be entitled to its attorney's fees and costs in
addition to any other relief granted.
6.2 ENTIRE AGREEMENT. This Agreement and the Schedules and
Exhibits hereto, each of which is hereby incorporated herein, set forth all of
the promises, covenants, agreements, conditions and undertakings between the
parties hereby with respect to the subject matter hereof, and supersede all
prior and contemporaneous agreements and understandings, inducements or
conditions, express or implied, oral or written.
6.3. MODIFICATIONS. This Agreement shall not be modified or
modifiable except in a writing signed by the party or parties to be charged
therewith.
6.4. SUCCESSORS AND ASSIGNS. This Agreement, and all rights
and powers granted hereby, will bind and inure to the benefit of the parties
hereto and their respective successors and assigns.
6.5 FURTHER ASSURANCES. Each party will cooperate and take
such action as may be reasonably requested by another party in order to carry
out the provisions and purposes of this Agreement and the transactions
contemplated hereby.
6.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.
6.7 COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all, of
the parties hereto.
6.8 SEVERABILITY OF PROVISIONS.
(a) If any provision or any portion of any provision of this
Agreement shall be held invalid or unenforceable, the remaining portion of such
provision and the remaining provisions of this Agreement shall not be affected
thereby.
(b) If the application of any provision or any portion of any
provision of this Agreement to any person or circumstance shall be held invalid
or unenforceable, the application of such provision or portion of such provision
to persons or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first above written.
ATTEST:
▇▇▇▇▇▇▇ HILLS, LTD.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ Hanlons
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
WITNESS:
/s/ illegible /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Individually and as the
Authorized Agent for and
on behalf of Focused Media
Ltd., Global Golf Ltd. and
all of their respective
Shareholders
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