Exhibit 10.2
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ACQUISITION AGREEMENT
By and Between
T&G2, INC.
and
WHOLESALE BY US, LLC
Dated as of: August __ , 2004
Effective as of: July 1, 2004
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ACQUISITION AGREEMENT
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THIS
ACQUISITION
AGREEMENT is made and entered into this ____ day of
July, 2004 (the "Agreement") by and between T&G2,
Inc. a Nevada
corporation
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("Buyer"), and Wholesale By Us, LLC a Arizona limited liability company
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("Seller").
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WHEREAS, Seller
operates an internet
based marketing an distribution
company located in Arizona with a web address of www.WholeSaleByUs.com (the
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"Business"); and
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WHEREAS, the
purchase price for all of the assets and
liabilities
of
Seller by Buyer, including, without limitation, 100% (one hundred percent) of
the membership interest of Seller, is One Hundred Twelve Thousand Dollars
($112,000.00) and Twenty Million Shares of Buyer's
Restricted
Class A Common
Stock (the "Acquisition Shares"); and
WHEREAS, subject
to the foregoing, Seller desires to sell and Buyer
desires to purchase the Business in
accordance with the terms, conditions, and
agreements hereinafter contained.
NOW
THEREFORE, in
consideration of the mutual premises and the covenants
and promises hereinafter contained,
and other good and
valuable
consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound,
hereby agree as follows:
Section 1. Sale and Purchase of
Seller.
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1.1
Sale of
Purchased Assets.
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On
the terms and subject to the conditions set forth in this Agreement,
at the Closing, Seller will sell, convey, transfer and assign to Buyer, and
Buyer will purchase and accept from Seller
all right, title and
interest in and
to all assets of Seller (other than the
Excluded Assets, as hereinafter defined)
used in the operation of the Business,
(collectively,
the "Purchased
Assets"),
including, without limitation, the
following:
(a)
Personal Property.
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The tangible
and intangible personal property set forth on
Schedule 1.1(a) (the "Personal
Property").
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(b)
Leases.
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The rights of Seller under the real and personal property leases
and subleases set forth on Schedule
1.1(b).
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(c)
Contracts.
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The rights and benefits of Seller under all contracts,
agreements,
license agreements, vendor agreements, purchase orders, commitments, sales
orders and supply agreements set forth on
Schedule 1.1(c).
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(d)
Permits.
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The certificates,
permits, license rights, consents, grants,
ordinances, leaseholds, and all rights to construct,
maintain and operate
the
Business and every right of every
character whatever in connection
therewith,
and the obligations thereof, and all renewals, extensions, additions or
modifications of any of the foregoing;
as identified in
Schedule 1.1(d),
but
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only to the extent that Seller's rights to
the foregoing are transferable under
applicable federal, state, local, foreign or other laws, rules,
regulations,
orders, injunctions, building and other codes,
ordinances, permits,
licenses,
decrees of federal, state, local, foreign or other authorities
(collectively,
"Laws"), (collectively, the "Permits");
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(e)
Customer List.
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The customer list of
the Business and all books, files, papers,
supplier lists (identified in Schedule 1.1(e) and other databases, licensee
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lists, distributor lists, bid information
and customer
correspondence relating
exclusively to the Business.
(f)
Goodwill.
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The goodwill associated exclusively with the Business.
1.2
Excluded
Assets.
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Those Excluded Assets, if any, specifically identified in Schedule
1.2.
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1.3
Method of
Conveyance.
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(a) At the
Closing, Seller shall effectuate the sale, transfer,
conveyance, assignment and delivery by Seller of the Business to Buyer in
accordance with Section 1.1 hereof and shall
be deemed effective as
of July 1,
2004 and shall be evidenced by Seller's execution and delivery of one or more
bills of sale, assignments, and other
instruments of conveyance and transfer.
(b) At the
Closing, Seller shall sell, transfer, convey, assign
and deliver to Buyer title to: (i) the
Personal Property
specifically set forth
on Schedule 1.1(a) hereto by a separate Bill
of Sale and Assignment in the form
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attached hereto as Exhibit 5.5(a), free and
clear of any and all liens, security
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interests and rights of Seller (collectively, "Liens"), except for Liens,
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encumbrances and other encroachments
specifically
identified in Schedule 1.3(b)
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(collectively, the "Permitted Liens") and Liens, if any, created
by Buyer, and
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subject to the Assumed Obligations
(c) At the
Closing, except as
expressly set forth in Section
1.3(b) with respect to the Personal
Property, Seller shall
remise, release
and
quitclaim to Buyer all Seller's right, title and interest in and to all of
Seller's assets, without warranties or covenants of title
or otherwise,
and
subject to the Assumed Obligations.
The form of such
quitclaim conveyance shall
be in a form reasonably acceptable to
counsel for Seller and Buyer giving effect
to the terms of this Agreement.
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1.4
Assumed
Obligations.
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At
the Closing,
Buyer shall assume and shall agree to satisfy and
discharge, as the same shall become due, (a) all of the liabilities,
obligations, contracts and commitments from the operation of the Business,
including, without limitation, those set forth on Schedule 1.1(b)
and Schedule
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1.1(c); and (b) all liabilities, obligations and commitments set forth on
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Schedule 1.4(b) (collectively, the "Assumed
Obligations").
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1.5
Excluded
Obligations.
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Buyer is not assuming, and Seller shall remain fully responsible
for, all
indebtedness, liabilities, obligations,
contracts and commitments of Seller that
are not Assumed Obligations (the "Excluded
Obligations").
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1.6
Closing
Date.
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The
closing of the
transactions
contemplated by this
Agreement shall
occur on or before the tenth (10th) day following the completion of Buyer's
audit (the "Closing" or "Closing Date") or
at such other date, time and place as
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may be agreed upon by the parties. The
foregoing notwithstanding, the sale shall
be deemed to have taken place on July 1,
2004 (the "Acquisition Date").
Section 2. Purchase Price.
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2.1
Purchase
Price.
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At
the Closing, Seller
shall convey, transfer, assign and deliver to
Buyer all of the assests and liabilities of Seller in exchange for (a)
Buyer's
assumption of the Assumed Obligations; (b) payment of One Hundred Twelve
Thousand Dollars ($112,000.00); and (c) issuance of the
Acquisition
Shares,
fully paid, non assessable and duly issued
(collectively, the "Purchase Price").
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2.2
Payment
Terms.
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(a)
Payment.
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The Purchase Price shall be payable to Seller as follows:
(i) A good
faith deposit in the amount of $50,000.00 has
been paid on account of the Purchase Price.
If for any reason the
transactions
contemplated herein are not consummated,
Seller shall
immediately
return the
good faith deposit of $50,000.00 without any rights of offset or claims
whatsoever.
(ii) On the
Closing Date, Buyer shall cause the delivery,
as appropriate, of the balance of the Purchase Price, including, without
limitation, $62,000.00 in immediately available funds, to Seller by hand
delivery or internationally recognized overnight delivery service, or as
otherwise agreed to by the parties.
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2.3
Restrictive Legend
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Seller and
Buyer agree that the Acquisition Shares will bear the
restrictive legend as set forth on Schedule
2.3.
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2.4
Repurchase
of the Acquisition Shares.
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The
Buyer reserves the
right to repurchase
certain of the
Acquisition
Shares in the event the Seller fails to
attain certain
average monthly gross
revenue levels (which were represented by Seller and are a fundamental
inducement in the Buyer consummating this
transaction). In the
event, not later
than December 31, 2006, the Business does not generate the specified gross
average monthly gross revenue levels as
follows the Buyer may repurchase, at par
value, the following shares:
(a) In the
event the Business does not generate average monthly
gross revenue of $100,000 for six consecutive months, the
Buyer may repurchase, at par value, fifteen million
(15,000,000) of the Acquisition Shares.
(b) In the
event the Business
does generate
average monthly
gross revenue of $100,000 for six consecutive months, but
does not generate average monthly gross revenue of $150,000
for three additional consecutive months, the Buyer may
repurchase, at par
value, ten million
(10,000,000) of the
Acquisition Shares.
(c) In the
event the Business
does generate
average monthly
gross
revenue of $100,000
for six consecutive
months and
average monthly
gross revenue of $150,000 for three
additional
consecutive months,
but does not generate
average monthly
gross revenue of $250,000 for three
additional consecutive months, the Buyer may repurchase, at
par value, seven
million five hundred
(7,500,000) of the
Acquisition Shares.
(d) In the
event the Business
does generate
average monthly
gross revenue of
$100,000 for six
consecutive months
and
average monthly
gross revenue of $150,000 for three
additional consecutive
months and average
monthly gross
revenue of
$250,000 for three additional consecutive
months, but does not generate average monthly gross revenue
of $500,000 for six
additional
consecutive
months, the
Buyer may repurchase, at par value, five million
(5,000,000) of the Acquisition Shares.
Section 3. Representations and
Warranties.
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3.1
Seller.
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Seller hereby
represents
and warrants to Buyer, all of which
representations and warranties are true,
complete, and correct in all material
respects as of the date hereof and as of
the Closing Date, as follows:
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(a)
Brokers.
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Seller has not dealt with any broker, salesman, finder or similar person
in connection with any part of the
transactions
contemplated by this Agreement,
and, to Seller's actual knowledge,
without inquiry, no
broker, salesman, finder
or similar person is entitled to any commission or fee with respect to such
transactions as a result of Seller's
actions.
(b) Title
to Purchased Assets.
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As
of the Closing
Date, to the extent of Seller's interest therein,
Seller shall have good and valid title to
the Personal Property specifically set
forth on Schedule 1.1(a) hereto, free and clear of any Liens except
Permitted
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Liens, and except for Liens, if any, created by Buyer, and subject to the
Assumed Obligations.
(c)
Restrictions on Transfer.
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Seller acknowledges
that the Acquisition Shares will bear a
restrictive legend as required by Law.
Seller represents that it will take
no
action contrary to the restrictions on transfer and will take all
reasonable
efforts to ensure compliance with same.
3.2
Buyer.
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Buyer hereby
represents
and warrants to Seller, all of which
representations and warranties are true,
complete, and correct in all material
respects as of the date hereof and as of
the Closing Date, as follows:
(a)
Brokers.
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Buyer has not dealt with any broker, salesman, finder or similar
person in connection with any part of the transactions contemplated by this
Agreement, and, to Buyer's actual knowledge without inquiry, no broker,
salesman, finder or similar person is entitled to any
commission
or fee with
respect to such transactions as a result of
Buyer's actions.
(b)
Restrictions on Transfer.
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Buyer acknowledges
that the Acquisition Shares will bear a
restrictive legend as required by Law.
Buyer represents that it will take no
action contrary to the restrictions on transfer and will take all
reasonable
efforts to ensure compliance with same.
Section 4. Covenants Prior to
Closing.
4.1
Seller's
Covenants.
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Seller covenants
that, except as otherwise consented to in writing by
Buyer, from and after the date hereof until the Closing or the earlier
termination of this Agreement, the Business will be conducted only in the
ordinary course and in substantially the same manner as heretofore
conducted
except as required by this Agreement; and Seller will use reasonable efforts
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<PAGE>
consistent with past practice to preserve the
organization of the
Business and
continuing business relationships with
suppliers, customers,
clients and others
having business relations with Seller with
respect to the Business.
4.2
Access.
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From
and after the date hereof and until the Closing or the termination
of this Agreement, Seller shall, upon
reasonable prior notice, give to Buyer and
to Buyer's counsel, accountants, consultants and other representatives and
designees, reasonable access during normal
business hours as Seller may approve,
to the properties, agreements, and records
with respect to the Business and will
furnish to Buyer, at Buyer's expense, copies, at a cost of no more than
$0.10
per page, of all documents and all such
information
concerning
the properties
and affairs of the Business as Buyer may
reasonably request.
4.3
Cooperation.
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Buyer and Seller agree
(a) to cooperate with
each other in
determining
whether any filings are required to be made
or consents required
to be obtained
in any jurisdiction in connection with the
consummation
of the transactions
contemplated hereby and in making or causing to be made any such filings
promptly and in seeking to obtain in a
timely manner any such consents; and (b)
to use all reasonable efforts to obtain promptly the satisfaction of the
conditions to the Closing of the
transactions
contemplated
herein. Buyer and
Seller shall furnish to each other and to each other's counsel all such
information as may be reasonably required
in order to effectuate the foregoing.
Section 5. Closing.
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5.1
Conditions
to Buyer's Obligations.
---------------------------------
The
obligations
of Buyer under this Agreement, including, without
limitation, the obligation to consummate and effect the purchase of the
Purchased Assets, shall be subject to
satisfaction of the following conditions,
unless waived by Buyer:
(a) Buyer
shall have a period of thirty (30) days from the
execution of this Agreement in which to complete its
due diligence
including,
but not limited to, verification of income and
expenses and a complete audit of
same. In the event Buyer is not completely
satisfied,
Buyer may terminate
this
Agreement.
(b) Seller
shall have performed
in all material
respects all
agreements, and satisfied in all material
respects all conditions on its part to
be performed or satisfied hereunder at or
prior to the Closing Date.
(c) All
representations
and warranties of
Seller herein shall
have been true and correct in all material respects when made, shall have
continued to have been true and correct in
all material
respects at all
times
subsequent thereto, and shall be true and correct in
all material respects
on
and as of the Closing Date as though made on, as of and
with reference to
such
date.
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<PAGE>
(d) Seller
shall have executed and delivered to Buyer all
documents contemplated by Section 5.5 of
this Agreement.
(e) Prior
to the Closing
Date, Buyer and Seller shall have
obtained all necessary authorizations,
consents, approvals
and permits required
by Law for the consummation of the
transactions
contemplated by this
Agreement
(collectively, "Regulatory Approvals").
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5.2
Conditions
to Seller's Obligations.
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The
obligations
of Seller under this Agreement, including, without
limitation, the obligation to consummate
and effect the sale shall be subject to
satisfaction of the following conditions,
unless waived by Seller:
(a) Buyer
shall have performed
in all material respects all
agreements, and satisfied in all material
respects all conditions on its part to
be performed or satisfied hereunder at or
prior to the Closing Date.
(b) All of
the representations
and warranties of
Buyer herein
shall have been true and correct in all
material respects when
made, shall have
continued to have been true and correct in
all material
respects at all
times
subsequent thereto, and shall be true and correct in
all material respects
on
and as of the Closing Date as though made
on, as of, and with
reference to such
date.
(c) Buyer
shall have executed and delivered to Seller all
documents contemplated by Section 5.4 of
this Agreement.
(d) Prior
to the Closing
Date, Buyer and Seller shall have
obtained all necessary Regulatory
Approvals.
5.3
Conditions
to Seller's and Buyer's Obligations.
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The
obligations
of Seller and Buyer to
consummate
and effect the
sale
pursuant to this Agreement shall be subject to the following additional
condition, unless waived by Seller and
Buyer:
(a) No
injunction
or temporary
restraining
order shall have
been granted restraining or prohibiting the
consummation
of the transactions
contemplated by this Agreement, and no action, suit or other proceeding
instituted by any federal, state, or local governmental
authority seeking
such
an injunction or order shall be pending or
threatened.
5.4
Buyer's
Closing Documents.
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At
the Closing,
Buyer will
deliver to
Seller, in form and substance
consistent with this Agreement:
(a)
The
