Acquisition Agreement - Internet Advisory Corp. and Go West Entertainment Inc.
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (the "Agreement") is made and entered into this
11th day of March, 2002 by and among The Internet Advisory Corporation, a Utah
corporation with its principal place of business at 150 East 58th Street, New
York, NY 10022 ("TIAC"); Go West Entertainment, Inc, a New York corporation with
its principal place of business at 150 East 58th Street, New York, NY 10022 ("Go
West"); and the Go West shareholders listed on Exhibit A attached hereto and
made a part hereof (singly and collectively referred to herein as the
"Shareholders").
PREAMBLE
WHEREAS, Go West has authorized capital stock consisting of 25,000,000
shares of common stock, $.001 par value per share (the "Common Stock") and
5,000,000 shares of preferred stock, $.001 par value per share (the "Preferred
Stock") of which 7,500,00 shares of Common Stock are issued and outstanding and
owned by the Shareholders; and
WHEREAS, TIAC desires to acquire all of the Common Stock owned by the
Shareholders, making Go West a wholly owned subsidiary of TIAC, in exchange for
ten million (10,000,000) shares of TIAC's common stock, $.001 par value per
share, and the Shareholders similarly desire to make such exchange; and
WHEREAS, the parties desire that the exchange qualify as a tax free
exchange meeting the requirements of Article 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the premises, and of the promises,
covenants and conditions contained herein, the parties intending to be legally
bound, hereby agree as follows:
WITNESSETH:
ARTICLE 1
EXCHANGE OF SHARES
Subject to the hereinafter described conditions, TIAC hereby agrees to
transfer and deliver ten million (10,000,000) shares of its common stock, $.001
par value (the "TIAC Shares"), to the Shareholders in exchange for all of the
capital stock of Go West, consisting of seven million five hundred (7,500,000)
shares of Common Stock owned by the Shareholders (the "Go West Shares").
ARTICLE 2
CLOSING
The exchange of the TIAC Shares for the Go West Shares (the "Share
Exchange") shall take place at the offices of Kaplan Gottbetter & Levenson, LLP,
630 Third Avenue, New York, New York 10017, or such other place as the parties
may mutually agree (the "Closing"). The Closing shall take place as soon as
practicable after the execution of this Agreement, but in all events not later
than five (5) business days from the date hereof, unless mutually extended by
the parties. The date on which the Closing occurs is referred to herein at the
Closing Date. At the Closing:
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(a) The Shareholders shall tender to TIAC certificates representing all of
Go West's authorized, issued and outstanding capital stock, duly executed and in
proper form for transfer to TIAC, together with such executed consents, powers
of attorney, stock powers and other items as shall be required to convey such
stock to TIAC, in compliance with all applicable laws; and
(b) TIAC shall tender to the Shareholders, certificates representing an
aggregate of ten million (10,000,000) TIAC Shares and such other items as shall
be required to convey such stock to the Shareholders in compliance with all
applicable laws.
ARTICLE 3
EXEMPTION FROM REGISTRATION
(a) The Shareholders hereby represent, warrant, covenant and acknowledge
that:
(1) The TIAC Shares are being issued to them without registration
under the provisions of Article 5 of the Securities Act of 1933, as
amended (the "Act"), pursuant to exemptions provided pursuant to Article
4(2) thereof;
(2) All of the certificates for the TIAC Shares will bear legends
restricting their transfer, sale, conveyance or hypothecation, unless such
TIAC Shares are either registered under the provisions of Article 5 of the
Act and under applicable state securities laws, or an opinion of legal
counsel, in form and substance satisfactory to legal counsel to TIAC, is
provided certifying that such registration is not required as a result of
applicable exemptions therefrom;
(3) TIAC's transfer agent shall be instructed not to transfer any of
the TIAC Shares unless TIAC advises it that such transfer is in compliance
with all applicable laws;
(4) The Shareholders are acquiring the TIAC Shares for investment
purposes only, and not with a view to further sale or distribution; and
(5) Go West, the Shareholders and their advisors have been given and
had access to all reports filed by TIAC with the Securities and Exchange
Commission and have examined all of TIAC's books, records and financial
statements and fully and completely questioned TIAC's officers and
directors to their satisfaction as to all matters they deemed pertinent.
(b) TIAC hereby represents, warrants, covenants and acknowledges that:
(1) The Go West Shares are being transferred without registration
under the provisions of Article 5 of the Act pursuant to exemptions
provided pursuant to Article 4(2) thereof;
(2) The certificates for the Go West Shares will bear legends
restricting their transfer, sale, conveyance or hypothecation, unless such
Go West Shares are either registered under the provisions of Article 5 of
the Act and under applicable state securities laws, or such registration
is not required as a result of applicable exemptions therefrom;
(3) TIAC shall not transfer any of the Go West Shares except in
compliance with all applicable laws;
(4) TIAC is acquiring the Go West Shares for investment purposes
only and not with a view to further sale or distribution; and
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(5) TIAC has been given and had access to all books, records and
financial statements of Go West and has fully and completely questioned Go
West's officers and directors to its satisfaction as to all matters it
deemed pertinent.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF GO WEST AND THE SHAREHOLDERS
Go West and the Shareholders hereby represent and warrant to TIAC as
follows:
(a) Go West is a corporation duly organized, validly existing, and in good
standing under the laws of the State of New York, and has the legal capacity and
all necessary corporate authority to enter into and perform this Agreement and
to consummate the transactions contemplated hereby;
(b) At the Closing, Go West shall have good and marketable title to all of
its assets free and clear of all liens, claims, charges, and any other
encumbrances. These assets will include (i) a license agreement with Heir
Holding Co. Inc granting Go West the right to use the "Scores" name in New York
City for up to three adult entertainment clubs; and (ii) a lease for a facility
at 533-535 West 27th Street, New York, NY from which Go West intends to operate
an adult entertainment club utilizing the "Scores" name.
(c) At the Closing, Go West shall have no liabilities other than those
liabilities listed in Exhibit B hereof.
(d) The Go West Shares represent all of Go West's issued and outstanding
capital stock. At the Closing, Go West shall have no outstanding subscriptions,
options, warrants, or other convertible securities that could result in an
obligation to issue additional capital stock of Go West;
(e) This Agreement has been duly authorized, executed and delivered by Go
West and the Shareholders and constitutes a legal, valid and binding obligation
of Go West and the Shareholders, enforceable against Go West and the
Shareholders in accordance with its terms;
(f) The execution and delivery of this Agreement and the performance of
the obligations imposed hereunder will not conflict with, or result in a breach
by Go West of, any of the terms or provisions of, or constitute a default under
the certificate of incorporation or bylaws of Go West, or any material agreement
or instrument to which Go West is a party, or by which it or any of its
properties or assets are bound, or result in a violation of any order, decree,
or judgment of any court or governmental agency having jurisdiction over Go West
or Go West's properties, will not conflict with, constitute a default under, or
result in the breach of, any contract, agreement, or other instrument to which
Go West is a party or is otherwise bound and no consent, authorization or order
of, or filing or registration with, any court, governmental, or regulatory
authority is required in connection with the execution and delivery of this
Agreement and any related agreements or the performance by Go West of its
obligations hereunder;
(g) There is no litigation or proceeding pending or, to the best knowledge
of Go West and the Shareholders, threatened, against Go West, the property of Go
West, or any of the Shareholders which would have any effect on the validity or
performance of this Agreement;
(h) Go West and the Shareholders are aware that the TIAC Shares have not
been registered under the Act and may not be transferred or otherwise disposed
of unless they are subsequently registered under the Act or an exemption from
such registration is available. Additionally, each of the Shareholders has such
knowledge and experience in financial and business matters that such Shareholder
is capable of evaluating the merits and risks of the purchase of the TIAC Shares
and making an informed investment
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decision with respect thereto, has evaluated the merits and risks of the
purchase of the TIAC Shares, and is able to bear the economic risk of purchasing
the TIAC Shares;
(i) Each of the Shareholders is purchasing the TIAC Shares for its own
account for investment purposes and not with a view to "distribute" the TIAC
Shares as that term is defined in the Act;
(j) Go West and each of the Shareholders have been provided with any and
all written information and materials concerning TIAC, and its business which it
has requested and has had the opportunity to conduct and has conducted its own
due diligence in connection with the purchase set forth herein;
(k) Neither TIAC, nor any person acting on behalf of TIAC, has offered,
offered to sell, offered for sale or sold the TIAC Shares to the Shareholders by
means of any form of general public solicitation or advertising;
(l) Go West has filed with the appropriate governmental agencies all tax
returns and tax reports required to be filed; all Federal, state and local
income, franchise, sales, use, occupation or other taxes due have been fully
paid or adequately reserved for; and Go West is not a party to any action or
proceeding by any governmental authority for assessment or collection of taxes,
nor has any claim for assessments been asserted against Go West;
(m) There are presently no contingent liabilities, factual circumstances,
threatened or pending litigation, contractually assumed obligations or
unasserted possible claims which are known to Go West, which might result in a
material adverse change in the future financial condition or operations of Go
West;
(n) No transactions have been entered into either by or on behalf of Go
West, other than in the ordinary course of business nor have any acts been
performed (including within the definition of the term performed the failure to
perform any required acts) which would adversely affect the good will of Go
West, nor will any such transactions be entered into prior to the Closing;
(o) Go West does not have any subsidiaries;
(p) The Shareholders own the Go West Shares free and clear of all liens,
claims, charges, preemptive rights, and any other encumbrances and shall deliver
the Go West Shares to TIAC at Closing free and clear of all liens, claims,
charges, preemptive rights, and any other encumbrances;
(q) Go West shall comply, at Go West's expense, with all Federal, state
and local stock transfer tax requirements; and
(r) Go West has acquired the right to use the "Scores" name in New York
City for up to three adult entertainment clubs pursuant to a license agreement
between Go West and Heir Holding Co., Inc., the owner of the Scores trademark.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF TIAC
TIAC hereby represents and warrants to Go West and the Shareholders as
follows:
(a) TIAC is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Utah and has the legal capacity and all
necessary corporate authority to carry on its business,
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to own its properties and assets, and to enter into and perform this Agreement
and to consummate the transactions contemplated hereby;
(b) This Agreement has been duly authorized, executed and delivered by
TIAC and constitutes a legal, valid and binding obligation of TIAC, enforceable
against TIAC in accordance with its terms;
(c) The execution and delivery of this Agreement and the performance of
the obligations imposed hereunder will not conflict with, or result in a breach
by TIAC of, any of the terms or provisions of, or constitute a default under the
certificate of incorporation or bylaws of TIAC, or any material agreement or
instrument to which TIAC is a party, or by which it or any of its properties or
assets are bound, or result in a violation of any order, decree, or judgment of
any court or governmental agency having jurisdiction over TIAC or TIAC's
properties, will not conflict with, constitute a default under, or result in the
breach of, any contract, agreement, or other instrument to which TIAC is a party
or is otherwise bound and no consent, authorization or order of, or filing or
registration with, any court, governmental, or regulatory authority is required
in connection with the execution and delivery of this Agreement and any related
agreements or the performance by TIAC of its obligations hereunder;
(d) There is no litigation or proceeding pending or, to the best knowledge
of TIAC, threatened, against TIAC which would have any material effect on the
validity or performance of this Agreement; and
(e) The TIAC Shares will, when issued, be duly authorized, validly issued,
fully paid, and non-assessable.
ARTICLE 6
NOTICE
All notices, demands or other communications given hereunder shall be in
writing and shall be deemed to have been duly given when received if sent by fax
or overnight courier, and if mailed shall be deemed to have been given on the
first business day after mailing by United States registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
To TIAC: The Internet Advisory Corporation
150 East 58th Street
New York, NY 10022
Telephone: (212) 421-8480
Facsimile: (212) 421-8357
With a copy to: Kaplan Gottbetter & Levenson, LLP
630 Third Avenue
New York, NY 10017
Telephone: (212) 983-6900
Facsimile: (212) 983-9210
To Go West: Go West Entertainment, Inc.
150 East 58th Street
New York, NY 10022
Telephone: (212) 421-8480
Facsimile: (212) 421-8357
To the Shareholders: At the address provided for Go West above.
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ARTICLE 7
MISCELLANEOUS
(a) Each of TIAC, Go West and the Shareholders agrees to take such actions
as are reasonably necessary to carry out the intentions of the parties under
this Agreement, including but not limited to the prompt execution and delivery
of any documents reasonably necessary to carry out and perform the terms or
intention of this Agreement.
(b) All costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
costs or expenses, unless otherwise agreed.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to conflicts of laws of
principles and each party hereby agrees that all performances due and
transactions undertaken pursuant to this Agreement shall be deemed to be due or
have occurred in New York, and the exclusive venue and place of jurisdiction for
any litigation arising from or related to this Agreement shall be the state or
federal courts located in the State and County of New York.
(d) The headings used in this Agreement are for convenience only, do not
form a part of this Agreement, and shall not affect in any way the meaning or
interpretation of this Agreement.
(e) This Agreement may be executed in one or more counterparts which when
taken together shall constitute one agreement.
(f) This Agreement is intended for the benefit of the parties hereto and
is not for the benefit of, nor may any provisions hereof be enforced by any
other person, firm or entity.
(g) This Agreement may be amended, modified and supplemented in writing
only by the mutual consent of the parties hereto.
(h) This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, and any attempts
to do so without the consent of the other parties shall be void and of no
effect.
(i) In the event any party breaches the terms of this Agreement, the
non-breaching parties shall be entitled to the recovery of their attorney's fees
and other professional costs and fees incurred in enforcing their rights
hereunder.
(j) This writing constitutes the entire agreement and understanding
between the parties hereto with respect to the subject matter contained herein.
Neither party is relying on any representation or statement not contained in
this writing. This Agreement supercedes and cancels any prior agreements
relating to the subject matter contained herein.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.
THE INTERNET ADVISORY CORPORATION
By: /s/ John Neilson
--------------------------------
Name: John Neilson
Title: Vice President and Secretary
By: /s/ Joseph Erickson
--------------------------------
Name: Joseph Erickson
Title: Treasurer
GO WEST ENTERTAINMENT, INC.
By: /s/ Richard Goldring
--------------------------------
Name: Richard Goldring
Title: President
THE SHAREHOLDERS:
/s/ Richard Goldring
-----------------------------------
Name: Richard Goldring
/s/ Elliot Osher
-----------------------------------
Name: Elliot Osher
/s/ William Osher
-----------------------------------
Name: William Osher
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EXHIBIT A
LIST OF SHAREHOLDERS
NUMBER OF
GO WEST SHARES
NAME OWNED
Richard Goldring 2,500,000
Elliot Osher 2,500,000
William Osher 2,500,000
EXHIBIT B
LIST OF GO WEST LIABILITIES AT CLOSING
Accounts Payable - $1,270,327
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