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| 8-K - YARRAMAN WINERY, INC. | v170774_8k.htm |
EXCHANGE
AGREEMENT
This
Agreement is made and entered into as of December 31, 2009 by and between GLOBAL
BEVERAGES, INC., a Nevada corporation (“Global”), and RIVIERA
GLOBAL HOLDINGS, LLC, a New York limited liability company (the “Shareholder”, and
together with Global, the “Parties”).
RECITALS
WHEREAS,
the Shareholder is the sole beneficial owner of all of the issued and
outstanding shares of capital stock of Riviera Beverages, Inc., a New York
corporation (the “Company”), consisting
of fifty shares of Common Stock, par value $.01 per share (the “Company Shares”);
and
WHEREAS,
Global and the Shareholder contemplate that the Shareholder will transfer to
Global all of the Company Shares in exchange for 19,605,000 shares of Global’s
Common Stock, par value $.001 per share (the “Global Common
Stock”), all upon and subject to the terms and conditions hereinafter set
forth.
NOW
THEREFORE, in consideration of the mutual representations, warranties, covenants
and agreements, and upon the terms and subject to the conditions hereinafter set
forth, the Parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
1.01 Definitions. For
purposes of this Agreement, the following terms have the meanings specified or
referred to in this Section 1.01:
“Accounts Receivable”
means: (i) all trade accounts receivable and other rights to payment from
customers of the Company or Riviera; (ii) all other accounts or notes receivable
of the Company or Riviera; and (iii) any claim, remedy or other right related to
any of the foregoing.
“Action” - any legal,
administrative, arbitral, mediation or other alternative dispute resolution
procedure or other action, proceeding, claim, inquiry or investigation before
any court, arbitrator or other Governmental Entity.
“Affiliate” - has the
meaning set forth in Rule 12b-2 of the regulations promulgated under the
Securities Exchange Act.
“Agreement” - this
Agreement, as the same may be amended, modified or supplemented from time to
time in accordance with its terms.
“Articles of
Amendment” – the Articles of Amendment of Global’s Articles of
Incorporation increasing the authorized number of shares of Global Common Stock
to 400,000,000.
“Audited Financial
Statements” – as defined in Section 9.18.
“Bankruptcy Exception”
– as defined in Section 4.02.
“Benefit Plan” - every
plan, fund, Contract and program for the benefit of present or former employees,
including those intended to provide (i) medical, surgical, health care,
hospitalization, dental, vision, workers’ compensation, life insurance, death,
disability, legal services, severance, sickness or accident benefits;
(ii) pension, profit sharing, stock bonus, retirement, supplemental
retirement or deferred compensation benefits; or (iii) salary continuation,
unemployment, supplemental unemployment, severance, termination pay,
change-in-control, vacation or holiday benefits (w) that is maintained or
contributed to by the Relevant Party or any Subsidiary of the Relevant Party,
(x) that the Relevant Party or any Subsidiary of the Relevant Party has
committed to implement, establish, adopt or contribute to in the future, (y) for
which the Relevant Party or any Subsidiary of the Relevant Party is or may be
financially liable as a result of the direct sponsor’s affiliation with the
Relevant Party, any Subsidiary of the Relevant Party or the Relevant Party’s
shareholders or (z) for or with respect to which the Relevant Party or any
Subsidiary of the Relevant Party is or may become liable under any common law
successor doctrine, express successor liability provisions of Law, provisions of
a collective bargaining Contract, labor or employment Law or Contract with a
predecessor employer.
“Books and Records” -
the books of account and other financial and corporate records and files
(including records and files stored on computer disks or tapes or any other
storage medium) of the Relevant Party and each Subsidiary of the Relevant Party,
including all statutory registers and share certificate books, minute books,
stock record books, books of account, business registration and other
certificates, corporate seals, rubber chops, written Contracts, title deeds and
other documents, instruments and papers.
“Breaching Party” - as
defined in Section 11.02(a).
“Business Day” – any
day other than a Saturday, Sunday or other day on which commercial banks located
in New York are authorized or required to be closed.
“CERCLA” – as defined
in Section 3.09(v).
“CERCLIS” – as defined
in Section 3.09(vi).
“Claim” – a written
notice, asserting a breach of representation or warranty, covenant, Contract or
other obligation contained in this Agreement or in any Transaction
Document.
“Closing” – as defined
in Section 2.03.
“Closing Date” – as
defined in Section 2.03.
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“Code” – the Internal
Revenue Code of 1986, as the same shall be amended from time to time, including
any successor statute, and the temporary and final regulations promulgated
thereunder.
“Commitments” – legal
undertakings or obligations, whether pursuant to Contract or otherwise,
(i) under which a Person has acquired or may acquire any rights, (ii) under
which a Person has or may become subject to any Liability, or (iii) by which a
Person, or any of the assets owned or used by such Person, is or may become
bound.
“Company” – as defined
in the first Recital to this Agreement.
“Company Financial
Statements” – as defined in Section 3.05(a).
“Company Intellectual
Property” – Intellectual Property as to which the Company or Riviera is
the Relevant Party.
“Company-Licensed
Intellectual Property” – Intellectual Property that is rightfully used by
the Company or Riviera pursuant to a valid License Agreement with a third
party.
“Company-Owned Intellectual
Property” – Intellectual Property that is owned by the Company or
Riviera.
“Company Real Property
Tenancies” – as defined in Section 3.13(b).
“Company Shares” – as
defined in the first Recital to this Agreement.
“Confidential
Information” – information that either Party or any of its Affiliates, or
any Representative of any of them, has provided or shall hereafter provide to
the other Party or any of its Affiliates, or any Representative of any of them,
in written form, together with all notes, analyses, or studies prepared by or
for the receiving Party, any of its Affiliates and any of their respective
Representatives incorporating such information, and all information the
receiving Party, any of its Affiliates and any of their respective
Representatives shall have obtained by visiting the facilities of the disclosing
Party or any of its Affiliates, reviewing product samples, equipment or other
assets or conducting discussions with the disclosing Party or any of its
Affiliates; provided, however, Confidential
Information shall not include any information in the possession of a receiving
Party, any of its Affiliates and/or any of their respective Representatives
that: (i) is at the time it is provided, or thereafter becomes, a part of the
public domain other than through the breach of any obligation of the receiving
Party, any of its Affiliates or any of their respective Representatives to the
disclosing Party; (ii) is lawfully in the possession of the receiving Party or
any of its Affiliates prior to its being provided by the disclosing Party, any
of its Affiliates or any of their respective Representatives; (iii) is lawfully
disclosed to the receiving Party, any of its Affiliates or any of their
respective Representatives by a Person that is not known by the receiving Party,
any of its Affiliates or any of the respective Representatives to have an
obligation to the disclosing Party or any of its Affiliates with respect to the
confidentiality thereof; (iv) is independently developed by the receiving Party
or any of its Affiliates; or (v) is provided by the disclosing Party, any of its
Affiliates or any of their respective Representatives to a third
party without any obligation of confidentiality.
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“Consents” – all
consents, waivers, approvals, allowances, authorizations, declarations, filings,
recordings, registrations, validations or exemptions and
notifications.
“Contract” – any
agreement, understanding, contract, obligation, promise or understanding
(whether written or oral and whether express or implied) and including, in each
case, all amendments, modifications and supplements thereto and Consents
thereunder.
“Damages” – all
losses, Liabilities, claims, damages, deficiencies, obligations, fines, payments
(including incidental and consequential damages), expenses (including costs of
investigation and defense and reasonable attorneys’ fees and expenses), actions,
causes of action, assessments, judgments, amounts paid in settlement or
diminution in value, whether or not involving a Third Party Claim.
“Direct Claim” – as
defined in Section 12.03(b).
“Employment Agreement”
– as defined in Section 9.12.
“Encumbrance” – any
charge, claim, community property interest, covenant, condition, equitable
interest, easement, encumbrance, option, lien, pledge, hypothecation,
assignment, deposit arrangement, security interest, mortgage, deed of trust,
retention of title Contract, right of first refusal, right of first offer,
preemptive right, encroachment or other restriction or granting of any rights of
any kind.
“Environmental Laws” -
any and all applicable Laws and Permits issued, promulgated or entered into by
any Governmental Entity relating to the environment, the protection or
preservation of human health or safety, including the health and safety of
employees, the preservation or reclamation of natural resources, or the
management, release or threatened release of Hazardous Materials.
“Escrow Agent” – as
defined in Section 12.07(c)(ii).
“Escrow Agreement” –
as defined in Section 12.07(c)(ii).
“Exchange Shares” – as
defined in Section 2.01.
“Global Common Stock”
– as defined in the second paragraph of the recitals to this Agreement, being
voting common stock of Global, par value $.001 per share.
“Global Insurance
Policies” – as defined in Section 5.18(a).
“Global Intellectual
Property” – Intellectual Property as to which Global or any Subsidiary of
Global is the Relevant Party.
“Global-Licensed Intellectual
Property” – Intellectual Property that is rightfully used by Global or
any Subsidiary of Global pursuant to a valid License Agreement with a third
party.
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“Global-Owned Intellectual
Property” – Intellectual Property that is owned by Global or any
Subsidiary of Global.
“Global Real Property
Leases” – as defined in Section 5.15(b).
“Global”
–collectively, Global and, where the context requires, each Subsidiary of
Global.
“Governmental Entity”
- any: federal, state, local, municipal, foreign or international (i)
government; (ii) court, arbitral or other tribunal or governmental or
quasi-governmental authority of any nature; or (iii) body exercising, or
entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature pertaining to
government.
“GAAP” – generally
accepted accounting principles recognized in the United States as in effect from
time to time.
“Hazardous Materials”
- those materials, substances or wastes that are regulated by, or form the basis
of Liability under, any Environmental Law.
“Indemnitees” - as
defined in Section 12.02.
“Indemnitor” - as
defined in Section 12.02.
“Information
Statement” - as defined in Section 7.03.
“Insurance Policies” -
as defined in Section 3.16(a).
“Intellectual
Property” – any and all intellectual property that is or has been, or is
currently contemplated to be, used in or in relation to the business of the
Relevant Party, including any and all:
(i) inventions,
designs, algorithms and other industrial property, and all enhancements and
improvements thereto, whether patentable or unpatentable and whether or not
reduced to practice, and all patent rights in connection therewith, whether or
not any of the foregoing are registered;
(ii) trademarks,
trade names, design marks, and service marks, trade dress, logos, internet
domain names, websites, brand names and corporate names and other commercial
product or service designations, together with all translations, adaptations,
derivations and combinations thereof, and all goodwill and similar value
associated with any of the foregoing, and renewals in connection
therewith;
(iii) artwork,
photographs, advertising and promotional materials and computer software and all
copyrights and renewals in connection therewith;
(iv) trade
secrets, know-how and other confidential business information; and
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(v) other
rights to existing and future registrations and applications for any of the
foregoing and all other proprietary rights in, or relating to, any of the
foregoing.
“Inventory” means
consumable inventory, wherever located, including, without limitation, all
finished goods, work in process, raw materials, spare parts and all other
materials and supplies to be used or consumed by a Person.
“IRS” - the United
States Internal Revenue Service or any other successor agency, and, to the
extent relevant, the United States Department of the Treasury.
“Knowledge” – means,
with reference to any facts or circumstances concerning or pertaining to the
Relevant Party or any Subsidiary of the Relevant Party:
(i) where
the Relevant Party is Global, actual knowledge of such facts or circumstances by
any executive officer or director or manager or managing director of
Global or any of the Subsidiaries of Global as of the date hereof;
and
(ii) where
the Relevant Party is the Shareholder, actual knowledge of such facts or
circumstances by the Shareholder of any of the directors or managers of the
Company or Riviera as of the date hereof.
“Latest Company Balance
Sheet” – as defined in Section 3.05(a).
“Latest Company Balance Sheet
Date” – as defined in Section 3.05(c).
“Latest Global Balance
Sheet” – as defined in Section 5.07(b).
“Latest Global Balance Sheet
Date” – as defined in Section 5.07(b).
“Laws” - all
applicable laws, principles of common law, statutes, constitutions, treaties,
rules, regulations, ordinances, codes, rulings, Orders and determinations of any
Governmental Entity.
“Leases” - all leases,
subleases, right to occupy or use and other arrangements with respect to real
property, including, in each case, all amendments, modifications and supplements
thereto and waivers and consents thereunder.
“Liability” - means
any direct or indirect indebtedness, liability, assessment, expense, Claim,
loss, damage, deficiency, Commitment, obligation or responsibility, known or
unknown, disputed or undisputed, joint or several, vested or unvested, asserted
or unasserted, executory or not, fixed or unfixed, choate or inchoate,
liquidated or unliquidated, secured or unsecured, determinable or
undeterminable, accrued or unaccrued, absolute or not, actual or potential,
contingent or otherwise.
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“License Agreement” –
any Contract under which a license, sublicense, consent or other permission to
use Intellectual Property is granted by or to the Relevant Party or any
Subsidiary of the Relevant Party.
“Lock-Up Agreement” –
as defined in Section 9.14.
“Material Adverse
Effect” – any change, effect, event or condition that, individually or in
the aggregate, (i) has had, or, with the passage of time, will or could have, a
material adverse effect on the business, assets, properties, condition
(financial or otherwise), results of operations or customer, supplier or
employee relationships of a Relevant Party and any Subsidiaries of the Relevant
Party, taken as a whole, or (ii) limits the ability of a Relevant Party to
perform material services; or (iii) insofar as can reasonably be foreseen,
will prevent a Relevant Party from materially performing its obligations under
this Agreement or any Transaction Document.
“Material Company
Contracts” – as defined in Section 3.15(a).
“Material Global
Contracts” – as defined in Section 5.17(a).
“Order” – any award,
decision, stipulation, preliminary or permanent injunction, judgment, order,
ruling, subpoena, temporary restraining order, award, citation, consent decree
or writ, or verdict entered, issued, made or rendered by any Governmental
Entity.
“Ordinary Course of
Business” - the ordinary course of the business of the Relevant Party and
the Subsidiaries of the Relevant Party consistent with past custom and practice
(including with respect to quantity and frequency).
“Organizational
Documents” - (i) the articles or certificate of incorporation and the
bylaws of a corporation, (ii) the partnership agreement and any statement of
partnership of a general partnership, (iii) the limited partnership agreement
and the certificate of limited partnership of a limited partnership, (iv) the
limited liability company agreement and articles or certificate of formation of
a limited liability company, (v) any charter or similar document adopted or
filed in connection with the creation, formation or organization of a Person and
(vi) any amendment to any of the foregoing.
“Outstanding Global
Shares” – as defined in Section 5.05(a).
“Parties” – As defined
in the first paragraph of this Agreement.
“Pending Claim” – (i)
a Claim that has been asserted but has not been resolved by the six month
anniversary of the delivery by Global to the Shareholder and the Escrow Agent of
the audited consolidated financial statements of Global for the fiscal year
ending June 30, 2011, or (ii) a Claim for which the right the payment has been
established but for which Damages have not been paid by the six month
anniversary of the delivery by Global to the Shareholder and the Escrow Agent of
the audited consolidated financial statements of Global for the fiscal year
ending June 30, 2011.
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“Permit” - all
franchises, grants, establishment registrations, product listings, easements,
variances, exceptions, identification and registration numbers, approvals and
Orders, licenses, permits, certificates, Consents, or other authorizations,
issued, granted, given or otherwise made available by or under the authority of
any Governmental Entity.
“Permitted
Encumbrances” - Encumbrances for Taxes not yet due or payable; inchoate
mechanic and materialmen liens for construction in progress; inchoate workmen’s,
repairmen’s, warehousemen’s and carrier’s liens arising in the Ordinary Course
of Business; and minor imperfections of title which do not, individually or in
the aggregate, (i) have a Material Adverse Effect, (ii) materially
impair the current business operations conducted on the affected property or
(iii) materially reduce the value of, or have a material adverse effect on
the ability to transfer, the affected property.
“Person” - any
individual, sole proprietorship, firm, corporation (including any non-profit
corporation and public benefit corporation), general or limited partnership,
limited liability partnership, joint venture, limited liability company, estate,
trust, association, organization, labor union, institution, entity or
Governmental Entity.
“Registered Intellectual
Property” - rights in Intellectual Property that are the subject of a
pending application with a Governmental Entity or a patent, trademark,
copyright, design right or other similar registration formalizing exclusive
rights issued by a Governmental Entity.
“Registration Rights
Agreement” – as defined in Section 9.10.
“Relevant Auditors” –
the firm of independent certified or chartered public accounts for the time
being appointed by the Relevant Party to certify its audited financial
statements.
“Relevant Party” –
Global or the Shareholder, as the context requires.
“Representative” –
with respect to a particular Person, any director, officer, employee, agent,
consultant, advisor, or other representative of such Person, including legal
counsel, accountants, and financial advisors.
“R. Mack Assets” – as
defined in Section 6.04.
“Riviera” – as defined
in Section 3.03.
“SEC” – the United
States Securities and Exchange Commission.
“SEC Reports” – as
defined in Section 5.06.
“Securities Act” – the
Securities Act of 1933, as the same may be amended from time to time, including
any successor statute.
“Shareholder” – as
defined in the first paragraph of this Agreement.
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“Securities Exchange
Act” – the Securities Exchange Act of 1934, as the same may be amended
from time to time, including any successor statute.
“Subsidiary” – with
respect to any Person, any corporation, limited liability company, partnership,
association or other Person of which (i) if a corporation, a majority of
the total voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of such Person or a
combination thereof, or (ii) if a limited liability company, partnership,
association or other Person, a majority of the partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more Subsidiaries of such Person or a
combination thereof.
“Taxes” – any and all
(i) taxes, fees, levies, duties, tariffs, imposts and other charges of any kind,
imposed by any Governmental Entity or taxing authority, including taxes or other
charges on, measured by, or with respect to income, franchise, windfall or other
profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers’ compensation, unemployment compensation or
net worth; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value-added or gains duties or taxes; license,
registration and documentation fees; and customers’ duties, tariffs and similar
charges; (ii) any Liability for the payment of any amounts of the type
described in clause (i) above as a result of being a member of an
affiliated, combined, consolidated or unitary group for any Taxable period;
(iii) any Liability for the payment of amounts of the type described in
clauses (i) or (ii) above as a result of being a transferee of, or a
successor in interest to, any Person or as a result of an express or implied
obligation to indemnify any Person; and (iv) any and all interest,
penalties, additions to tax and additional amounts imposed in connection with or
with respect to any amounts described in clauses (i), (ii) or (iii)
above.
“Tax Return” – any
return, report, statement, form or other documentation filed or maintained, or
required to be filed or maintained, with respect to or in connection with the
calculation, determination, assessment or collection of any Taxes.
“Terminating Party” -
as defined in Section 11.02(a).
“Third Party Claim” –
as defined in Section 12.03(a)(i).
“Transaction” – as
defined in Section 2.03.
“Transaction
Documents” – this Agreement, together with any and all certificates,
schedules, Contracts and other documents required to be delivered pursuant to
any of the foregoing, including the Escrow Agreement, the Registration Rights
Agreement, the Lock-Up Agreement and the Voting Agreement.
“Transfer Documents” –
as defined in Section 12.07(c)(ii).
“$” – United States
Dollars, the lawful currency of the United States of America.
“Voting Agreement” –
as defined in Section 9.15.
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1.02 Interpretation. Unless
the context otherwise requires, the terms defined in Section 1.01 shall have the
meanings herein specified for all purposes of this Agreement, applicable to both
the singular and plural forms of any of the terms defined herein. All
accounting terms defined in Section 1.01, and those accounting terms used in
this Agreement not defined in Section 1.01, except as otherwise expressly
provided herein, shall have the meanings customarily given thereto in accordance
with GAAP. When a reference is made in this Agreement to any Article,
Section, Exhibit or Schedule, such reference shall be to the corresponding
article, section, exhibit or schedule of this Agreement unless otherwise
indicated. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words
“without limitation.”
ARTICLE
II
EXCHANGE OF GLOBAL SHARES;
CLOSING
2.01 Exchange of Company Shares
for Global Shares. On the basis of the representations, warranties,
covenants and agreements set forth in this Agreement and the Transaction
Documents, and subject to the satisfaction or waiver of the applicable
conditions set forth herein, at the Closing the Shareholder hereby agrees to
sell, assign and transfer to Global, and Global agrees to purchase, assume and
accept from the Shareholder, the Company Shares, in exchange for which Global
shall issue to Shareholder 19,605,000 Global Shares (the “Exchange
Shares”).
2.02 Delivery. Subject
to the satisfaction or waiver of the applicable conditions set forth herein, at
the Closing Global shall deliver or cause be delivered to the Shareholder one or
more certificates representing the Exchange Shares, duly issued in the name of
the Shareholder, simultaneously with the delivery by the Shareholder to Global
of certificates for the Company Shares accompanied by all necessary duly
executed stock powers endorsed in blank.
2.03 Closing. The
closing (the “Closing”) of the
transactions contemplated by this Agreement and the other Transaction Documents
(collectively, the “Transaction”) will
take place at the offices of Katten Muchin Rosenman LLP, 575 Madison Avenue, New
York, New York, at 10:00 a.m. local time, on the second Business Day following
the satisfaction or waiver of all other conditions set forth in Articles IX and
X, or such other date, place or time agreed to by the Shareholder and Global
(such date of the Closing being hereinafter referred to as the “Closing
Date”). The Parties hereby agree to deliver at the Closing
such documents, certificates of officers and other instruments as are set forth
in Articles IX and X and as may reasonably be required to effect the transfer by
the Shareholder of the Company Shares, and the delivery by Global to the
Shareholder of the Exchange Shares, pursuant to and as contemplated by this
Agreement.
2.05 Transfer
Taxes. Global shall be responsible for payment of all Taxes
assessed or payable in connection with the sale and transfer to Global of the
Company Shares pursuant to this Agreement other than Taxes imposed on the income
of the Shareholder, if any.
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ARTICLE
III
REPRESENTATIONS AND
WARRANTIES REGARDING THE COMPANY
The
Shareholder hereby represents and warrants to Global as follows:
3.01 Organization and Valid
Existence. The Company is a corporation duly incorporated and
validly existing under the Laws of the State of New York and has all requisite
corporate power and authority to conduct its business in the manner in which it
is presently being conducted, and to own, operate and lease its
property. The Company is duly qualified or licensed to do business
and is in good standing in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so
qualified or licensed would not reasonably be expected to have a Material
Adverse Effect. True and complete copies of the Organizational
Documents, as amended to date, of the Company have previously been delivered or
made available to Global. The Company is not in violation of any of
the provisions of its Organizational Documents.
3.02 Capitalization; Title to
Shares and Structure. The authorized capital stock of the
Company consists of one hundred (100) shares of common stock, par value $.01 per
share, of which fifty (50) are issued and outstanding and constitute the Company
Shares. Except as set forth in the immediately preceding sentence, no
shares or other securities of any kind are outstanding, have been issued by the
Company or are reserved for issuance. All of the Company Shares are
registered in the names of the Shareholder. All of the Company Shares
are duly authorized, validly issued, fully paid and, except as provided in
Section 630(a) of the New York Business Corporation Law, non-assessable, and
were not issued in violation of, and are not subject to, any preemptive
rights. None of the Company Shares were issued in violation of
relevant Laws of the State of New York or any other Laws. There are
no bonds, debentures, notes or other indebtedness of the Company having the
right to vote (or convertible into, or exchangeable for, shares or other
securities having the right to vote) on any matters on which any shareholders of
the Company may vote. There are no securities, options, warrants,
calls, rights or other Commitments obligating the Company to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares or other
securities or assets of the Company or obligating the Company to issue, grant,
extend or enter into any such security, option, warrant, call, right or
Commitment. There are no Commitments (i) under which the Company
is obligated to repurchase, redeem or otherwise acquire any shares of the
Company, or (ii) requiring the Company to vote or to dispose of any shares
of the Company.
3.03 Subsidiaries.
(a) The
sole Subsidiary of the Company is Riviera Imports LLC, a New York limited
liability company (“Riviera”). Rivera
has been duly organized and is validly existing and in good standing under the
Laws of the State of New York, and has all powers required to carry on its
business as now being conducted. Riviera is duly qualified to do
business and is in good standing as a foreign limited liability company in each
jurisdiction where such qualification is necessary, except where the failure to
be so qualified would not reasonably be expected to have a Material Adverse
Effect. Schedule 3.03 lists each jurisdiction in which the Riviera is
qualified to do business.
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(b) All
of the outstanding membership interests in Riviera are beneficially owned by the
Company, free and clear of any Encumbrance and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such issued membership interests or other voting securities or
ownership interests). None of the membership interests in Riviera
were issued in violation of relevant Laws of the State of New York or any other
Laws. There are no bonds, debentures, notes or other indebtedness of
Riviera having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which any members of
Riviera may vote. There are no securities, options, warrants, calls,
rights or other Commitments, obligating the Company to issue, deliver or sell,
or cause to be issued, delivered or sold, additional securities or assets of
Riviera or obligating Riviera to issue, grant, extend or enter into any such
security, option, warrant, call, right or Commitment. There are no
Commitments (i) of the Company to repurchase, redeem or otherwise acquire
any securities of Riviera, or (ii) requiring the Company to dispose of any
membership interests of Riviera. Neither the Company nor Riviera is
subject to any obligation or requirement to provide funds for or to make any
investment (in the form of a loan, capital contribution or otherwise) to or in
any Person. The Company has previously delivered or made available to
Global true and complete copies of the Organizational Documents of Riviera as in
effect on the date hereof.
3.04 No Violation;
Consents. Except as set forth in Schedule 3.04, neither the
execution, delivery or performance of this Agreement or the other Transaction
Documents by the Shareholder, nor the consummation by the Shareholder of the
Transaction, will directly or indirectly, with or without the giving of notice
or lapse of time or both: (i) violate, conflict with or result in any
breach of any provision of the Organizational Documents of the Company or
Riviera; (ii) require any Permit of any Governmental Entity or violate,
conflict with or constitute a default (with or without notice or lapse of time,
or both) under any of the terms or requirements of any Permit that is held by
the Company or Riviera; (iii) require any Consent of any Person or result
in any breach of or constitute a default (or an event which with the giving of
notice or lapse of time or both could reasonably be expected to become a
default) under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of an Encumbrance on
any property or asset of the Company or Riviera pursuant to, any Contract or
other Commitment; or (iv) violate, conflict with or result in any breach
of any Law applicable to the Company or Riviera.
3.05 Financial Statements;
Liabilities.
(a) The
Shareholder has delivered to Global true and correct copies of the unaudited
unconsolidated balance sheet (the “Latest Company Balance
Sheet”) and statements of income of Riviera as at and for the twelve
months ended on November 30, 2009 (with the Latest Company Balance
Sheet, the “Company
Financial Statements”). Schedule 3.05 contains the revenues of
the R. Mack Assets for the twelve months ended November 30, 2009.
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(b) The
Company Financial Statements have been prepared in conformity with GAAP applied
on a consistent basis throughout the periods covered thereby, fairly present the
financial position of Riviera, as of the dates thereof and the results of
operations for the periods covered thereby (except that the Interim Company
Financial Statements do not contain the notes normally required by GAAP and are
subject to normal year end adjustments), and are consistent with the books and
records of and Riviera (which books and records are materially correct and
complete).
(c) Except
as and to the extent reflected in the Latest Company Balance Sheet, neither the
Company nor Riviera had, as of November 30, 2009 (the “Latest Company Balance Sheet
Date”), any Liabilities, other than obligations of continued performance
under Contracts and other Commitments entered into in the Ordinary Course of
Business. Except as described in Schedule 3.05, neither the Company
nor Riviera has incurred any Liabilities since the Latest Company Balance Sheet
Date, except Liabilities that have arisen after the date of the Latest Company
Balance Sheet in the Ordinary Course of Business, none of which is a Liability
for breach of Contract, breach of warranty, tort, infringement, Litigation or
violation of any Governmental Order, Permit or Law.
3.06 Absence of Certain
Changes. Except as set forth in Schedule 3.06, since the
Latest Company Balance Sheet Date, each of the Company and Riviera has conducted
its activities and operations in all material respects only in the Ordinary
Course of Business and, since such date, there has not been:
(i)
any Material Adverse Effect with respect to the Company or
Riviera;
(ii)
any material change by the Company or Riviera in its accounting methods,
principles or practices;
(iii)
any declaration, setting aside or payment of any dividend or distribution in
respect of the Company Shares or the membership interests in Riviera or any
redemption, purchase or other acquisition of any shares or
other securities of the Company or Riviera;
(iv) except
for changes in the Ordinary Course of Business of the Company and Riviera that
affect only non-management employees of the Company or Riviera, any increase in
the compensation or benefits or establishment of any Benefit Plan, or any other
increase in the compensation payable or to become payable to any employees,
officers, consultants or directors of the Company or Riviera;
(v)
other than in the Ordinary Course of Business of the Company and Riviera, any
(A) purchase, sale, assignment or transfer of any assets of the Company or
Riviera, or (B) waiver of any rights of value or cancellation or any debts or
claims by the Company or Riviera;
(vi) any
incurrence by the Company or Riviera of any Liability, except for current
Liabilities incurred in the Ordinary Course of Business of the Company or
Riviera;
(vii) any
incurrence by the Company or Riviera of any Damage, destruction or similar loss,
whether or not covered by insurance, affecting the business or properties of the
Company or Riviera;
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(viii) any
entry by the Company or Riviera into any transaction other than in the Ordinary
Course of Business of the Company or Riviera, except for the
Transaction;
(ix)
any purchase by the Company or Riviera of Inventory other than in the Ordinary
Course of Business of the Company and Riviera or any material change in the
nature, level and condition of Inventory;
(x)
any write-downs or write-ups (or
failures to write down or write up in accordance with GAAP) of the value of any
Inventory other than in the Ordinary Course of Business and in accordance with
GAAP;
(xi)
any failure to maintain the assets of the Company or Riviera in accordance with
good business practice and in good operating condition and repair, reasonable
wear and tear excepted;
(xii) any
significant personnel changes or employee turnover;
(xiii) any
adverse change in the relations between the Company or Riviera and any of their
respective customers, clients and suppliers that is, or could reasonably be
expected to become, a Material Adverse Effect;
(xiv) any
discharge or satisfaction of any Encumbrance, or payment of any Liabilities,
other than in the Ordinary Course of Business, or any failure to pay or
discharge when due any Liabilities, the failure to pay or discharge which has
caused or will cause any actual damage or risk of loss to the Company or Riviera
that, in the case of any matter set forth in this clause (xiv), has or would
reasonably be expected to have a Material Adverse Effect; or
(xv) the
entry by the Company or Riviera in any Contract under which it is or will be
obligated to do any of the foregoing.
3.07 Litigation. There
is no Action or Claim pending or, to the Knowledge of the Shareholder,
threatened against the Company or Riviera that could reasonably be expected to
result, individually or in the aggregate, in a Material Adverse Effect or
materially interfere with the Company’s ability to consummate the Transaction
and, to the Knowledge of the Shareholder, there are no existing facts or
circumstances that could reasonably be expected to result in such an Action or
Claim. To the Knowledge of the Shareholder, there are no facts or
circumstances which could reasonably be expected to result in the denial of
insurance coverage under policies issued to the Company or Riviera in respect of
any Action, except in any case as could not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect. There
is no Action or Claim pending or, to the Knowledge of the Shareholder,
threatened alleging any right of indemnification of the part of any director,
officer member or manager of the Company or Riviera, or any Affiliate of any
such Person, as against the Company or Riviera. Neither the Company nor Riviera
is subject to any outstanding Order which could reasonably be expected to
result, individually or in the aggregate, in a Material Adverse Effect or
materially interfere with the Shareholder’ ability to consummate the
Transaction.
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3.08 Compliance with
Laws. Schedule 3.08
contains a complete and accurate list of all Permits that are held by the
Company or Riviera or that otherwise relate to the business or to any of the
assets owned or used by the Company or Riviera. The Permits listed in
Schedule 3.08 constitute all of the Permits necessary to permit the Company or
Riviera lawfully to conduct and operate their business in the manner in which
they currently conduct and operate the business and to permit the Company or
Riviera to own and use their assets in the manner in which they currently own
and use such assets. Except as set forth in Schedule 3.08, each of
the Company and Riviera is in compliance in all material respects with all of
the terms and requirements of each Permit identified or required to be
identified in Schedule 3.08. Except as set forth in
Schedule 3.08, each of the Company and Riviera is, and has been, in
compliance in all material respects with all Laws applicable to it or to the
conduct or operation of the business or the ownership or use of any of their
respective assets. No investigation or review by any Governmental
Entity with respect to the Company or Riviera is pending or, to the Knowledge of
the Shareholder, threatened, nor has any Governmental Entity indicated an
intention to conduct any such investigation or review. Except as set forth in
Schedule 3.08, neither the Company nor Riviera is in conflict in any material
respect with or in default or violation of any Order or Law, in either case
affecting or relating to the Company or Riviera.
3.09 Environmental
Matters. There are no environmental reports relating to the
Company or Riviera or their respective properties or assets. Except
as set forth in Schedule 3.09 and except to the extent any of the following does
not have and would not reasonably be expected to have a Material Adverse
Effect:
(i)
Each of the Company and Riviera is in compliance with
all applicable Environmental Laws and all environmental Permits;
(ii)
there has been no past noncompliance of Company or
Riviera with Environmental Laws or environmental Permits;
(iii)
neither the Company nor Riviera has released a
Hazardous Material at, or transported a Hazardous Material to or from, any real
property currently or formerly owned, leased or occupied by the Company or
Riviera in amounts that violate, or would require remediation under, any
applicable Environmental Law;
(iv)
to the Knowledge of the
Shareholder, no Person has released Hazardous Material at, or transported a
Hazardous Material to or from, any real property currently or formerly owned,
leased or occupied by the Company or Riviera in amounts that violate, or would
require remediation under, any Environmental Law;
(v)
neither the Shareholder nor the Company or
Riviera has received any notice, demand, suit or information request pursuant to
any Environmental Law, including but not limited to the Comprehensive
Environmental Response, Compensation and Liability Act (“CERCLA”);
(vi)
to the Knowledge of the Shareholder none of
the properties, former properties or any property to which the Company or
Riviera has sent waste is listed on any regulatory list of contaminated
properties, including but not limited to the National Priorities List
promulgated pursuant to CERCLA, the Comprehensive Environmental Response,
Compensation and Liability Information System (“CERCLIS”), or any
other United States or foreign national, state, provincial or local counterpart;
and
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(vii) no
environmental approvals, clearances or consents are required under applicable
Law from any Governmental Entity in order for the Parties to consummate the
transactions contemplated herein or for the Company or Riviera to continue the
business after the Closing Date.
3.10 Taxes.
(a) Except
as set forth in Schedule 3.10 hereto, all Tax Returns required to be filed by or
on behalf of the Company or Riviera or any predecessor Person of either them, or
any consolidated, combined, affiliated or unitary group of which the Company or
Riviera is or has ever been a member have been timely filed with the appropriate
tax authorities or requests for extensions have been timely filed and any such
extensions have been granted and have not expired. Each such Tax
Return was complete and correct. All Taxes with respect to taxable
periods or portions thereof covered by such Tax Returns of the Company and
Riviera have been paid in full or, to the extent that payment of any such Taxes
is not yet due, proper and adequate reserves reflecting such Taxes have been
established on the Latest Company Balance Sheet in accordance with
GAAP.
(b) All
material Taxes due with respect to any completed and settled audit,
investigation or enquiry with or by any taxing authority for which the Company
or Riviera is or might otherwise be liable have been paid in
full. There is no audit, investigation or enquiry pending with
respect to any Taxes for which the Company or Riviera is or might otherwise be
liable and no taxing authority has given written notice of the commencement of
any audit, investigation or enquiry with respect to any such
Taxes. To the Knowledge of the Shareholder, no claim has ever been
made by a Governmental Entity in a jurisdiction where neither the Company nor
Riviera files Tax Returns that the Company or Riviera is or may be subject to
taxation. No issue has arisen in any examination of the Company or
Riviera by any taxing authority that, if raised with respect to the same or
substantially similar facts arising in any other Tax period not so examined,
would result in a deficiency for such other period, if upheld. Full
provision has been made in the Company Financial Statements with respect to
Taxes for which the Company or Riviera may be held liable upon conclusion of any
such audit, investigation or enquiry.
(c) No
Person has released, forgiven, waived or otherwise extinguished, in whole or in
part, any debt due from the Company or Riviera in circumstances whereby the
Company or Riviera may be liable to pay Taxes in respect of the amount so
released, forgiven, waived or otherwise extinguished.
(d) No
Encumbrances for Taxes exist with respect to any of the assets or properties of
the Company or Riviera except Encumbrances for Taxes not yet due and
payable.
(e) There
is no Tax sharing Contract or any other Contract that will require any Tax or
Tax indemnification payment by the Company or Riviera. Neither the
Company nor Riviera is or could be held liable for Taxes owed by any other
Person.
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(f) The
Company and Riviera have timely withheld proper and accurate amounts from its
employees, customers, shareholders and others from whom it is or was required to
withhold Taxes in compliance in all material respects with all applicable Laws
and has timely paid all such withheld amounts to the appropriate taxing
authorities.
(g) There
are no outstanding commitments or waivers extending the statutory period of
limitations applicable to any claim for, or the period for the collection or
assessment of, Taxes of the Company or Riviera due for any taxable
period.
(h) All
documents in the possession or under the control of and used or relied upon by
the Company or Riviera and which attract stamp duties or other similar Taxes
have been properly adjudicated and all necessary Taxes paid
thereon.
3.11 Employee Benefit
Matters.
(a) Schedule
3.11 lists each Benefit Plan maintained, sponsored or contributed to or required
to be contributed to by the Company or Riviera for the benefit of their
respective employees. With respect to each Benefit Plan, the
Shareholder has delivered or made available to Global a true, complete and
correct copy of (i) such Benefit Plan (or, if not written, a written summary of
its material terms) and the most recent summary plan description, if any,
related to such Benefit Plan, (ii) each trust Contract or other funding
arrangement, if any, relating to such Benefit Plan, and (iii) the most recent
actuarial report or financial statement, if any, relating to such Benefit
Plan Neither the Company nor Riviera nor, to the Knowledge of the
Shareholder, any other Person, has any express or implied commitment, whether
legally enforceable or not, to modify, change or terminate any Benefit Plan of
the Company, other than with respect to a modification, change or termination
required by any Law.
(b) Each
Benefit Plan of the Company and Riviera has been administered in all material
respects in accordance with its terms and all applicable Laws, and all
contributions required to be made under the terms of any of the Benefit Plans of
the Company and Riviera as of the Latest Company Balance Sheet Date have been
timely made or, if not yet due, have been properly reflected on the Latest
Company Balance Sheet. With respect to the Benefit Plans of the
Company and Riviera, no event has occurred and, to the Knowledge of the
Shareholder, there exists no condition or set of circumstances in connection
with which the Company or Riviera could be subject to any Liability (other than
for routine benefit liabilities) under the terms of, or with respect to, such
Benefit Plans or any applicable Law.
(c) Each
Benefit Plan of the Company not required by Law to be maintained can be amended,
terminated or otherwise discontinued after the Closing Date in accordance with
its terms, without material Liability. No Action has been brought or,
to the Knowledge of the Shareholder, is threatened, against or with respect to
any such Benefit Plan, including any audit or inquiry by any Governmental
Entity.
(d) No
Benefit Plan of the Company or Riviera provides any of the following retiree or
post-employment benefits to any Person: medical, disability or life insurance
benefits.
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3.12 Labor and Employment
Matters.
(a) Schedule
3.12(a) contains a true and correct list of all directors, full-time employees
(listed by job classification), contractors and consultants of the Company and
Riviera as of the date hereof and a description of the rate and nature of all
compensation payable by the Company or Riviera to each such
Person. Schedule 3.12(a) also contains a list of any Contracts
(whether oral or written) with any such Person and a description of all existing
severance, accrued vacation obligations or retiree benefits of any current or
former director, officer, employee or consultant of the Company or
Riviera. Except as set forth in Schedule 3.12(a), the employment or
consulting arrangement of all such Persons is terminable at will.
(b) Except
as set forth in Schedule 3.12(b):
(i)
neither the Company nor Riviera is a party
to any Contract with any trade union, labor organization or other representative
of its employees;
(ii)
there is no unfair labor practice charge or
complaint pending or, to the Knowledge of the Shareholder, threatened against
the Company or Riviera;
(iii) neither
the Company nor Riviera has experienced any labor strike, slowdown, work
stoppage or similar labor controversy within the past three (3)
years;
(iv) no
labor union representation question has been raised respecting the employees of
the Company or Riviera working within the past three (3) years, nor are there
any campaigns being conducted to solicit authorization from employees of the
Company or Riviera to be represented by any labor organization;
(v)
no claim before any Governmental Authority brought by or
on behalf of any employee, prospective employee, former employee, retiree, labor
organization or other representative of the employees of the Company or Riviera,
is pending or, to the Knowledge of the Shareholder, threatened against the
Company or Riviera;
(vi) neither
the Company nor Riviera is a party to, or otherwise bound by, any Order relating
to its employees or employment practices; and
(vii) each
of the Company and Riviera has paid in full to all of its employees all wages,
salaries, commissions, bonuses, benefits and other compensation due and payable
to such employees.
(c) Except
as set forth in Schedule 3.12(c), none of the Shareholder, the Company nor
Riviera has made any written or, to the Knowledge of the Shareholder, oral
Contract with or promise to any employee, officer or consultant regarding
continued employment by Global, the Company or Riviera after the Closing
Date.
3.13 Real Property Owned or
Leased; Title to Assets.
(a) Neither
the Company nor Riviera owns or has the right to acquire ownership of any real
property.
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(b) The
lease Contracts listed on Schedule 3.13(b) are all of the lease Contracts under
which the Company or Riviera is a tenant (or subtenant) of any real
property or interest therein (collectively, the “Company Real Property
Tenancies”). To the knowledge of the Shareholder, no
proceeding is pending or, threatened for the taking or condemnation of all or
any portion of the property leased under the Company Real Property
Tenancies. There is no brokerage commission or finder’s fee due from
the Company or Riviera or the Shareholder and unpaid with regard to any of the
Company Real Property Tenancies or which will become due any time in the future
with regard to any Company Real Property Tenancy.
(c) Except
as set forth on Schedule 3.13(c), the Company or Riviera has good and marketable
title to all tangible personal property shown as owned by the Company or Riviera
on their respective Books and Records, including all the properties and assets
reflected on the Latest Company Balance Sheet and all properties and assets
purchased by and delivered to it since the Latest Company Balance Sheet Date
(except for properties and assets sold or disposed of since the Latest Company
Balance Sheet Date in the Ordinary Course of Business of the Company and
Riviera) free and clear of any Encumbrances of any kind, other than purchase
money Encumbrances incurred in the Ordinary Course of Business.
3.14 Sufficiency and Condition of
Assets.
(a) The
properties, assets, buildings, plants, structures, equipment and rights owned,
licensed or leased by the Company and Riviera constitute all properties (whether
real or personal or tangible or intangible), assets and rights necessary for the
Company or Riviera, as the case may be, to conduct its business after the
Closing as it is presently being conducted and as it will be conducted and as it
is planned to be conducted on the Closing Date.
(b) Except
as set forth in Schedule 3.14(b), the Company or Riviera has good and marketable
title to, or a valid leasehold interest in, all of its personal property, free
and clear of all Encumbrances, other than Permitted Encumbrances, and no
Affiliate of the Shareholder has any interest in any of such properties, assets,
buildings, plants, structures, equipment or rights. The facilities
and equipment owned or leased by the Company or Riviera are in good operating
condition and repair and, to the Knowledge of the Shareholder, are free from any
material defects, reasonable wear and tear excepted, are not unsafe or dangerous
and are suitable for the uses for which they are being used and are performing
the functions for which they were intended.
3.15 Material Company
Contracts.
(a) Schedule 3.15(a)
lists each of the following Contracts, whether or not in written form, to which
the Company or Riviera is a party or subject or by which either is bound (the
“Material Company
Contracts”):
(i)
any Contract with any of the customers and
suppliers of the Company or Riviera that contains payment terms that differ
materially from the normal payment terms between the Company or Riviera and its
customers or suppliers;
(ii)
any continuing Contract for management
or consulting services, services of independent contractors, the purchase of
materials, supplies, equipment or services involving in the case of any such
Contract more than $10,000 over the life of the Contract;
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(iii) any
distributor, reseller, dealer, manufacturer’s representative, sales agency,
advertising agency, finder’s, manufacturing or assembly Contract involving in
the case of any such Contract more than $10,000 over the life of the
Contract;
(iv) any
Contract that expires more than one year after the date of this Agreement or any
Contract that may be renewed at the option of any Person other than the Company
or Riviera so as to expire more than one year after the date of this
Agreement;
(v) any
mortgage, promissory note, loan Contract or other Contract for the borrowing of
money, any currency exchange, commodities or other hedging arrangement or any
leasing transaction of the type required to be capitalized in accordance with
GAAP, in each case in excess of $25,000;
(vi) any
Contract for capital expenditures in excess of $25,000 individually or, taken
together with other such Contracts, in the aggregate;
(vii) any
Contract for the sale of any capital asset;
(viii) except
for restrictions as to territory set forth in importing or distribution
Contracts, any Contract containing exclusivity, noncompetition or
nonsolicitation provisions or that would prohibit or restrict the Company or
Riviera or any employee, officer or director thereof from freely engaging in
business anywhere in the world or prohibiting the solicitation of the employees
or contractors of any other Person, or any Contract that may be terminable by
the other party thereto as a result of the status of Global or any Subsidiary of
Global as a competitor of any party to such Contract;
(ix) any
Contract pursuant to which the Company or Riviera is a lessor of any machinery,
equipment, motor vehicles, office furniture, fixtures or other personal
property, pursuant to which payments in excess of $25,000 remain
outstanding;
(x)
any Contract with an Affiliate of the Shareholder other than the Company or
Riviera;
(xi) any
Contract of guarantee, support, indemnification, assumption or endorsement of,
or any similar Commitment with respect to, the Liabilities (whether accrued,
absolute, contingent or otherwise) of any other Person, other than customary
customer Contracts made in the Ordinary Course of Business;
(xii) any
employment Contract, arrangement or policy (including any collective bargaining
Contract or trade union Contract) which may not be immediately terminated
without financial notifications or penalty;
(xiii) any
Contract providing for or concerning a strategic alliance, joint venture or
partnership with any other Person; or
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(xiv) any
Contract that is otherwise material and is not described in any of the
categories specified in this Section 3.15(a).
(b) Except
as set forth in Schedule 3.15(b): (i) all Contracts to which the
Company or Riviera is a party were entered into in the Ordinary Course of
Business, (ii) each Contract is in full force and effect and is legal,
valid, binding and enforceable against the Company or Riviera in accordance with
its terms; (iii) the Company and Riviera has performed in all material
respects the obligations required to be performed by it to date and is not (with
or without the giving of notice or the lapse of time or both) in breach or
default or, to the Knowledge of the Shareholder, alleged to be in breach or
default under any Material Company Contract and, to the Knowledge of the
Shareholder, the other parties thereto have complied in all material respects
thereunder and are not in breach or default thereof; and (iv) no event has
occurred or circumstance exists that (with or without the giving of notice or
lapse of time or both) may contravene, conflict with or result in a violation or
breach of or give any Person other than the Company or Riviera or, to the
Knowledge of the Shareholder, give to the Company or Riviera, the right to
declare a default or exercise any remedy under or to accelerate the maturity of
or to cancel, terminate or modify, any Material Company Contract.
(c) The
Shareholder has previously delivered or made available to Global true and
complete copies of all Material Company Contracts that have been reduced to
writing and has described to Global summaries of any Material Company Contracts
that have not been reduced to writing.
3.16 Insurance.
(a) Schedule
3.16(a) contains a true and complete list of all insurance policies to which the
Company or Riviera is or was a party or which provides or provided coverage to
or for the benefit of or with respect to the Company or Riviera or any director,
officer or employee of the Company or Riviera (the “Insurance Policies”),
indicating in each case the type of coverage, name of the insured, the insurer,
the premium, the expiration date of each policy and the amount of
coverage. The Company or Riviera has delivered to Global true and
complete copies of such Insurance Policies.
(b) Except
as set forth in Schedule 3.16(b), the Insurance
Policies: (i) are in full force and effect and will not lapse or
terminate by reason of the execution, delivery or performance of this Agreement
or consummation of the Transaction; (ii) insure the Company and Riviera in
reasonably sufficient amounts against all risks usually insured against by
Persons operating similar businesses or properties in the localities where such
businesses or properties are located; and (iii) are sufficient for
compliance with all requirements of Laws, Permits, and Material Company
Contracts. The Company or Riviera is current in all premiums or other
payments due thereunder and have otherwise performed all of their respective
obligations under each Insurance Policy. The Company or Riviera has
given timely notice to the insurer of all claims that may be insured
thereby. No Insurance Policy provides for any retrospective premium
adjustment or other experience-based Liability on the part of the Company or
Riviera.
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(c) Except
as set forth in Schedule 3.16(c), neither the Company nor Riviera has received
(i) any refusal of coverage or any notice that a defense will be afforded
with reservation of rights or (ii) any notice of cancellation or any other
indication that any Insurance Policy is no longer in full force or effect or
will not be renewed or that the issuer of any policy is not willing or able to
perform its obligations thereunder.
3.17 Intellectual
Property.
(a) Schedule
3.17(a) contains a true and complete list of (i) all Registered Intellectual
Property comprising a part of the Company Intellectual Property and
(ii) all other material Company Intellectual Property, in each case broken
down by Company-Owned Intellectual Property and Company-Licensed Intellectual
Property, and, with respect to all Company-Owned Intellectual Property includes
details of all due dates for further filings, maintenance and other payments or
other actions falling due in respect of the Company Owned Intellectual Property
and the current status of the corresponding registrations, filings, applications
and payments. All of the registrations and applications arising from
or relating to the Company Registered Intellectual Property are and remain valid
and subsisting, in good standing, and have not been assigned. None of
the registrations and applications relating to the Company Registered
Intellectual Property are, to the Knowledge of the Shareholder, invalid or
unenforceable. The Shareholder has delivered to Global correct and
complete copies of all of the registrations and applications relating to the
Company Intellectual Property and has made available for review correct and
complete copies of all other written documentation evidencing ownership and
prosecution (if applicable) of each of the foregoing.
(b) The
Company Intellectual Property consists solely of items and rights which are: (i)
Company-Owned Intellectual Property; (ii) Company-Licensed Intellectual Property
or (ii) in the public domain. The parties and date of each License
Agreement relating to the Company-Licensed Intellectual Property, other than
commercially available intellectual property licensed pursuant to mass-market
licenses, are set forth in Schedule 3.17(b). The Company or Riviera
has rights in the Company Intellectual Property necessary and sufficient to
carry out the current activities of and currently proposed activities of the
Company and Riviera (and had rights necessary to carry out its former activities
at the time such activities were being conducted), including and to the extent
required to carry out such activities, rights to make, use, reproduce, modify,
adapt, create derivative works based on, translate, distribute (directly and
indirectly), transmit, display and perform publicly, license, rent and lease
and, as applicable, assign and sell, the Company Intellectual
Property. The Shareholder has delivered correct and complete copies
of all material License Agreements relating to the Company–Licensed Intellectual
Property to Global, and, as applicable, has made available for review correct
and complete copies of all other written documentation evidencing Company
Intellectual Property.
(c) The
continued operation of the business of the Company and Riviera, as presently
conducted, to the Knowledge of the Shareholder, does not infringe upon or
misappropriate any Intellectual Property of any Person anywhere in the
world. No Claim (i) challenging the validity, effectiveness or
ownership by the Company or Riviera of any of the Company Intellectual Property,
or (ii) to the effect that the use, distribution, licensing, sublicensing, sale
or any other exercise of rights in any product, service, work, technology or
process as now used or offered or proposed for use, licensing, sublicensing,
sale or other manner of commercial exploitation by the Company or Riviera
infringes or will infringe any intellectual property rights of any Person has
been received in writing by the Company or Riviera nor, to the Knowledge of the
Shareholder, has any such Claim been threatened in writing by any Person or is
there any valid basis for the existence of any such Claim. To the
Knowledge of the Shareholder, there is not, and has not been, any unauthorized
use, infringement or misappropriation of any of the Company Intellectual
Property by any Person.
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(d) Subject
to receipt of any required consent of the licensor of any Licensed Company
Intellectual Property, neither the Company nor Riviera is, nor, as a result of
the execution or delivery of this Agreement or performance of the Shareholder’s
obligations hereunder, will the Company or Riviera be, in violation of any
License Agreement relating to Company Intellectual Property to which the Company
or Riviera is a party or by which any of them is otherwise bound, nor will
execution or delivery of this Agreement, or performance of the obligations of
the Shareholder hereunder, cause the diminution, termination or forfeiture of
any Company Intellectual Property or any rights therein or
thereto. Except to the extent non-compliance would not reasonably be
expected to result in a Material Adverse Effect, the Company and Riviera have
complied with all privacy Laws with respect to the Company Intellectual
Property, as well as with other Laws, applicable to the Company Intellectual
Property and its use in the course of the business of the Company or Riviera,
including those governing intellectual property rights. Except to the
extent non-compliance would not reasonably be expected to result in a Material
Adverse Effect, neither the Company nor Riviera has included or caused to be
included in the Company Intellectual Property any material that it was wrongful
or unlawful to include therein nor, to the Knowledge of the Shareholder, has any
other Person done so.
(e) The
Company Intellectual Property is free and clear of any and all Encumbrances of
any kind and, to the Knowledge of the Shareholder, there are no facts or
circumstances that are likely to interfere with the quiet use and enjoyment by
the Company and Riviera Intellectual Property following consummation of the
Transaction.
(f) Except
as set forth in Schedule 3.17(f), neither the Company nor Riviera owes
royalties or other payments to third parties in respect of Company Intellectual
Property. Neither the Company nor Riviera will owe any such payments
or any additional payments as a result of the consummation of the transactions
contemplated hereby.
3.18 Customers and
Suppliers.
(a) The
Shareholder has made available to Global information concerning the most
significant customers of the Company and Riviera, all of which is accurate and
complete. To the Knowledge of the Shareholder, none of such customers
of the Company or of Riviera has ceased, or has informed the Company or Riviera
that it intends to cease, to purchase products from the Company or Riviera, or
has substantially reduced or has informed the Company or Riviera that it will
substantially reduce, the purchase of products from the Company or Riviera at
any time.
(b) The
Shareholder has made available to Global information concerning the most
significant suppliers of supplies, merchandise or other goods for the Company
and Riviera, all of which is accurate and complete. To the Knowledge
of the Shareholder, none of such suppliers has ceased, or has informed the
Company or Riviera that it intends to cease, to sell supplies, merchandise and
other goods to the Company or Riviera on substantially the same terms and
conditions as those used in its current sales to the Company or Riviera, subject
only to general and customary price increases.
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3.19 Bank Accounts; Powers of
Attorney. Schedule 3.19 sets forth a true and complete
list of: (i) the names and locations of all banks, trust companies, savings
and loan associations and other financial institutions at which the Company and
Riviera maintains accounts of any nature and the location of all lockboxes and
safe deposit boxes of the Company and Riviera, (ii) the names of all
Persons authorized to draw thereon or make withdrawals therefrom or have access
thereto and (iii) the names of all Persons holding general or special
powers of attorney from the Company or Riviera.
3.20 Transactions with
Affiliates.
(a) Except
as set forth in Schedule 3.20(a), during the past two (2) years
no Affiliate of the Company has (i) had any interest in any property
(whether real, personal, or mixed and whether tangible or intangible), used in
or pertaining to the business of the Company or Riviera, or (ii) owned of
record or beneficially an equity interest, or any other financial or profit
interest, in a Person that has (x) had business dealings or a material
financial interest in any transaction with the Company or Riviera or
(y) engaged in competition with the Company or Riviera.
(b) Except
as set forth in Schedule 3.20(b), no Affiliate of the Company is a party to
any Contract with, or has any Claim or right against, the Company or
Riviera.
(c) All
property (whether real, personal, or mixed and whether tangible or intangible)
sold, transferred or otherwise disposed of at any time by or to the Company or
Riviera, the transferor or transferee being the Shareholder or an Affiliate of
the Shareholder, was sold, transferred or otherwise disposed of at such value as
was equivalent to the fair market value of such property at the time of the
sale, transfer or disposal, such fair market value having been recorded in the
Books and Records of the Company or Riviera.
3.21 Brokers or
Finders. None of the Shareholder, the Company or Riviera, nor
any of their respective Representatives, has incurred any Liability for
brokerage or finders’ fees or agents’ commissions or other similar payments in
connection with the negotiation, preparation, delivery or execution of this
Agreement or the consummation of the Transaction, nor is there any basis, to the
Knowledge of the Shareholder, for any such fee, commission or similar payment to
be claimed by any Person.
3.22 Books and
Records. The books and records of account, minute books,
statutory registers, stock record books, and other records of the Company and
Riviera, all of which have been made available to Global, are complete and
correct in all material respects. The minute books of the Company and
Riviera contain accurate and complete records of all meetings held of, and
corporate action taken by, the shareholders and directors of the Company or
Riviera, and no meeting of any of such shareholders or directors has been held
for which minutes have not been prepared and are not contained in such minute
books. At the Closing, all of those books, registers and records will
be in the possession of the Company or Riviera.
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3.23 Accounts
Receivable. Except to the extent of the amount of the reserve
for doubtful accounts reflected in the Latest Company Balance Sheet or as set
forth in Schedule 3.23, all Accounts Receivable of the Company and Riviera
reflected therein and all Accounts Receivable that have arisen since the Latest
Company Balance Sheet Date (except Accounts Receivable that have been collected
since such date) constitute bona fide Accounts Receivable resulting from the
sale of goods and services in the Ordinary Course of Business. To the
Knowledge of the Shareholder, the Accounts Receivable are subject to no valid
defense, offsets, returns, allowances or credits of any kind. Except
for the Accounts Receivable or as set forth on Schedule 3.23, neither the
Company nor Riviera has made any loan or advance to any Person.
3.24 Inventory. Except
as set forth on Schedule 3.24, the Company and Riviera have good and marketable
title to their respective Inventory free and clear of all Encumbrances. None of
the Inventory reflected on the Latest Company Balance Sheet includes items that
are required to be reserved against in accordance with GAAP. All such
Inventory is in good and merchantable condition, is suitable and usable for the
purposes for which it is intended and is in a condition such that it can be sold
in the Ordinary Course of Business. The Inventory of the Company and
of Riviera is valued on the Books and Records of the Company or of the relevant
Subsidiary of the Company at the lower of cost or net realizable
value.
3.25 Business Activity
Restriction. Except as set forth in Schedule 3.25 and except
for restrictions as to territory set forth in importing or distribution
Contracts: (i) there is no non-competition or other similar Contract, Commitment
or Order to which the Company or Riviera or any of their respective Affiliates
is a party or subject that has or could reasonably be expected to have the
effect of prohibiting or impairing the conduct of the business of the Company or
Riviera; (ii) neither the Company nor Riviera has entered into any Contract
under which the Company or Riviera is restricted from selling, licensing or
otherwise distributing any of its products to customers or potential customers
or any class of customers, in any geographic area, during any period of time or
in any segment of the market or line of business; and (iii) no Affiliate of the
Company is a party to any Contract, which, by virtue of such Person’s
relationship with the Company or Riviera, restricts the Company or Riviera from,
directly or indirectly, engaging in the business in which it is currently
engaged.
3.26 No Significant Items
Excluded. The Company and Riviera possesses all assets,
properties, Contracts, Permits or other items that are of material importance to
the ongoing operation of the business by the Company and Riviera in
substantially the same manner in which the business has been conducted prior to
the date of this Agreement.
3.27 Certain Business
Practices. Neither the Company nor Riviera, or, to the
Knowledge of the Shareholder, any Representative (in their capacities as such)
of either of them has: (i) made or provided any unlawful contributions,
gifts, entertainment or other unlawful benefits relating to political activity;
(ii) made any unlawful payment to any foreign or domestic government
official or employee or to any foreign or domestic political party or campaign
or violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or (iii) made any other payment in violation of applicable
Laws.
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3.28 Export Control and Related Matters.
(a) The
Company and Riviera is in compliance in all material respects with all
applicable Laws regulating the importation and exportation of goods, services,
technology and information.
(b) Neither
the Company nor Riviera has participated directly or indirectly in any boycotts
or other similar practices in violation of the Anti-Boycott Regulations of the
United States Department of Commerce or Section 999 of the Code.
(c) Neither
the Company nor Riviera has applied for or received any grant or other financial
assistance from any Governmental Entity.
3.29 Disclosure. No
representation or warranty by the Shareholder in this Agreement and no statement
contained in any document or other writing furnished or to be furnished to
Global or its Representatives pursuant to the provisions hereof contains or will
contain any untrue statement of fact or omits or will omit to state any fact
necessary in order to make the statements made herein or therein not
misleading. All copies of Contracts and all other documents delivered
to Global or its Representatives pursuant hereto are true, complete and
accurate. There has been no event or transaction (other than the
Transaction and the matters related thereto) which has occurred, nor are there
facts and circumstances (other than events, facts and circumstances relating to
economic conditions of general public knowledge) which could reasonably be
expected to result in a Material Adverse Effect with respect to the Company or
Riviera or which could reasonably be expected to prevent or impair the ability
of the Company or Riviera, after the Closing, to carry on the business in the
same manner as it is presently being conducted.
ARTICLE
IV
REPRESENTATIONS AND
WARRANTIES REGARDING THE SHAREHOLDER
The
Shareholder represents and warrants to Global as follows:
4.01 Organization and
Authority. The Shareholder is a limited liability company duly
organized, validly existing and in good standing under the Laws of the State of
New York and has all requisite power and authority to conduct its business in
the manner in which it is presently being conducted and to own, operate and
lease its property. The Shareholder is duly qualified or licensed to
do business and, if and as applicable, is in good standing, in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing necessary, except
where the failure to be so qualified and licensed or to have such power and
authority would not prevent the consummation of the Transaction by the
Shareholder.
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4.02 Due Authorization;
Enforceability. The execution, delivery and performance of
this Agreement and the Transaction Documents and the consummation of the
Transaction by the Shareholder have been duly authorized by all necessary or
appropriate action and no other corporate proceedings on the part of the
Shareholder are necessary to authorize the execution, delivery and performance
of this Agreement or the Transaction Documents or the consummation of the
Transaction. This Agreement and the other Transaction Documents have
been or will be duly executed and delivered by the Shareholder and, assuming the
due authorization, execution and delivery of all Transaction Documents by the
other parties hereto or thereto, each of this Agreement and the other
Transaction Documents executed or delivered on or prior to the date of this
Agreement constitute, and the remaining Transaction Documents required to be
executed prior to or at Closing when executed will constitute, the valid and
legally binding obligation of the Shareholder, enforceable against the
Shareholder in accordance with its terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization or other similar
Law affecting the enforceability of creditors’ rights generally and to the
effect of general principles of equity which may limit the availability of
remedies, whether in a proceeding at law or in equity (the “Bankruptcy
Exception”).
4.03 No Violation; No
Consents. Except as set forth on Schedule 4.03, neither the
execution, delivery or performance of this Agreement or the other Transaction
Documents by the Shareholder, nor the consummation by the Shareholder of the
Transaction, will, directly or indirectly, with or without the giving of notice
or lapse of time or both: (i) violate, conflict with or result in any
breach of any provision of the Organizational Documents of the Shareholder;
(ii) require any Permit of any Governmental Entity or violate, conflict
with or constitute a default (with or without notice or lapse of time, or both)
under any of the terms or requirements of any Permit that is held by the
Shareholder; (iii) result in any breach of or constitute a default (or an
event which with the giving of notice or lapse of time or both could reasonably
be expected to become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of an Encumbrance on any property or asset of the Shareholder pursuant
to, any Contract; or (iv) violate, conflict with or result in any breach of
any Law applicable to the Shareholder. Except as set forth in
Schedule 4.03, the execution, delivery or performance of this Agreement and the
other Transaction Documents by the Shareholder do not, and the consummation of
the Transaction will not, require any notice, report or other filing with any
Governmental Entity, domestic or foreign, or require any waiver, consent,
approval or authorization of any Person or any Governmental Entity, domestic or
foreign.
4.04 Litigation. There
is no Action pending or, to the Knowledge of the Shareholder, threatened in
writing against the Shareholder or any of its Affiliates that could reasonably
be expected to result, individually or in the aggregate, in a Material Adverse
Effect with respect to the Company or materially interfere with the
Shareholder’s ability to consummate the Transaction and, to the Knowledge of the
Shareholder, there are no existing facts or circumstances that could reasonably
be expected to result in such an Action. Neither the Shareholder nor
any of its Affiliates is subject to any outstanding Order that could reasonably
be expected to interfere with the Shareholder’s ability to consummate the
Transaction.
4.05 Share
Ownership. The Shareholder is the record and beneficial owner
of all of the Company Shares free and clear of any Encumbrance. None
of the Company Shares is the subject of any voting trust Contract or other
Contract relating to the voting thereof or restricting in any way the sale or
transfer thereof except for this Agreement, including any option relating
thereto. The Shareholder has full right and authority to transfer or
cause to be transferred the Company Shares pursuant to the terms of this
Agreement. The exchange, transfer and delivery of the Company Shares
to Global pursuant to Article II hereof will vest in Global all right,
title and interest in and to the Company Shares, free and clear of all
Encumbrances (other than any Encumbrances created or suffered by
Global).
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4.06 Securities Law
Matters. The Shareholder understand that the Exchange Shares
have not been, and may not be, registered under the Securities Act by reason of
a specific exemption from the registration provisions of the Securities Act, the
availability of which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Shareholder’s representations as
expressed herein or otherwise made pursuant hereto. The Shareholder
is acquiring the Exchange Shares for investment for its own account, not as a
nominee or agent, and not with the view to, or for resale in connection with,
any distribution thereof. The Shareholder is capable of evaluating
the merits and risks of its investment in Global and has the capacity to protect
its own interests. The Shareholder is an “accredited investor” within
the meaning of Regulation D, Rule 501(a), promulgated by the SEC under the
Securities Act. The Shareholder acknowledges that the Exchange Shares must be
held indefinitely unless subsequently registered under the Securities Act or
unless an exemption from such registration is available.
ARTICLE
V
REPRESENTATIONS AND
WARRANTIES REGARDING GLOBAL
Global
hereby represents and warrants to the Shareholder as follows:
5.01 Organization and Good
Standing. Global is a corporation duly incorporated, validly
existing and, as applicable, in good standing under the laws of the State of
Nevada and has all requisite corporate power and authority to conduct its
business in the manner in which it is presently being conducted, and to own,
operate and lease its property. Global is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary except where the failure to be
so qualified or licensed would not reasonably be expected to have a Material
Adverse Effect. True and complete copies of the Organizational Documents, as
amended to date, of Global have previously been delivered or made available to
the Shareholder. Global is not in violation of any of the provisions
of its Organizational Documents.
5.02 Due Authorization;
Enforceability. Global has all requisite corporate power and
authority to execute, deliver and perform this Agreement and the Transaction
Documents and to consummate the Transaction. The execution delivery
and performance of this Agreement and the Transaction Documents and the
consummation by Global of the Transaction have been duly authorized by its Board
of Directors and, except for the approval and filing of the Articles of
Amendment, no other corporate proceedings on the part of Global are necessary to
authorize the execution, delivery and performance of this Agreement, or the
Transaction Documents, or the consummation of the Transaction. This
Agreement and the other Transaction Documents have been or will be duly executed
and delivered by Global and, assuming the due authorization, execution and
delivery of all Transaction Documents by the other parties hereto or thereto,
each of this Agreement and the other Transaction Documents executed or delivered
on or prior to the date of this Agreement constitute, and the remaining
Transaction Documents required to be executed prior to or at Closing when
executed will constitute, the valid and legally binding obligations of Global,
enforceable against Global in accordance with their terms except as such
enforceability may be limited by the Bankruptcy Exception.
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5.03 Subsidiaries.
(a) Each
Subsidiary of Global is a corporation duly incorporated or organized, validly
existing, and, as applicable, in good standing under the Laws of its
jurisdiction of organization and has all requisite corporate powers and
authority to conduct its business in the manner in which it is presently being
conducted, and to own, operate and lease its property. Each such
Subsidiary of Global is duly qualified or licensed to do business and, as
applicable, is in good standing as a foreign corporation in each jurisdiction in
which the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary except where the
failure to be so qualified would not reasonably be expected to have a Material
Adverse Effect. Each Subsidiary of Global is identified on Schedule
5.03(a). Except as disclosed on Schedule 5.03(a), each Subsidiary of
Global is wholly-owned.
(b) Except
as set forth on Schedule 5.03(b), all of the outstanding issued shares in the
capital of, or other voting securities or ownership interests in, each
Subsidiary of Global, are beneficially owned by Global, directly or indirectly,
free and clear of any Encumbrance and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such issued shares or other voting securities or ownership
interests). None of the shares of any Subsidiary of Global were
issued in violation of relevant Laws. There are no bonds, debentures,
notes or other indebtedness of any Subsidiary of Global having the right to vote
(or convertible into, or exchangeable for, shares or other securities having the
right to vote) on any matters on which any shareholders of any Subsidiary of
Global may vote. There are no securities, options, warrants, calls,
rights or other Commitments, including stock appreciation rights, “phantom”
stock or similar plans or rights, obligating Global or any Subsidiary of Global
to issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares or other securities or assets of any Subsidiary of Global or obligating
Global or any Subsidiary of Global to issue, grant, extend or enter into any
such security, option, warrant, call, right or Commitment, including any
securities pursuant to which rights to acquire shares become exercisable only
after a change of control of any Subsidiary of Global upon the acquisition of a
specified amount of the share capital or voting power of
Global. There are no Commitments (i) of Global or any Subsidiary
of Global to repurchase, redeem or otherwise acquire any shares of any
Subsidiary of Global, or (ii) requiring Global or any Subsidiary of Global
to vote or to dispose of any shares of any Subsidiary of
Global. Neither Global nor any Subsidiary of Global is subject to any
obligation or requirement to provide funds for or to make any investment (in the
form of a loan, capital contribution or otherwise) to or in any
Person.
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5.04 No Violation;
Consents. Subject to the filing of the Articles of Amendment,
neither the execution, delivery or performance of this Agreement or the other
Transaction Documents by Global, nor the consummation by Global of the
Transaction, will directly or indirectly, with or without the giving of notice
or lapse of time or both: (i) violate, conflict with or result in any
breach of any provision of the Organizational Documents of Global or any
Subsidiary of Global; (ii) require any Permit of any Governmental Entity or
violate, conflict with or constitute a default (with or without notice or lapse
of time, or both) under any of the terms or requirements of any Permit that is
held by Global or any Subsidiary of Global; (iii) require any Consent of
any Person or result in any breach of or constitute a default (or an event which
with the giving of notice or lapse of time or both could reasonably be expected
to become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of an
Encumbrance on any property or asset of Global or any Subsidiary of Global
pursuant to, any Contract or other Commitment; or (iv) violate, conflict
with or result in any breach of any Law applicable to Global or any Subsidiary
of Global. Except for the filing of Articles of Amendment, the execution,
delivery or performance of this Agreement and the other Transaction Documents by
Global do not, and the consummation of the Transaction will not, require any
notice, report or other filing with any Governmental Entity, domestic or
foreign, or require any waiver, consent, approval or authorization of any Person
or any Governmental Entity, domestic or foreign.
5.05 Capitalization; Title to
Shares and Structure.
(a) The
authorized capital stock of Global consists of 90,000,000 shares of common
stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par
value $0.001 per share, of which 88,747,213 shares of Global Common Stock are
issued and outstanding, 381,600 shares of preferred stock have been designated
Series A Preferred Stock, of which 381,600 shares of Series A Preferred Stock
are issued outstanding, and 55,000 shares of preferred stock have been
designated Series B Shares, of which 55,000 shares of Series B Preferred Stock
are issued and outstanding (the outstanding Common Stock, Series A Preferred
Stock and Series B Preferred are referred to as the “Outstanding Global
Shares”). After the filing of the Articles of Amendment and
immediately prior to the issuance of the Exchange Shares, Global shall have
152,680,584 shares of Common Stock outstanding or reserved for issuance and no
shares of preferred stock outstanding. No shares of Global Common
Stock or preferred stock are held in treasury. Except for the
Outstanding Global Shares and as set forth on Schedule 5.05(a), no shares or
other securities of any kind are outstanding, have been issued by Global or are
reserved for issuance. All of the Outstanding Global Shares have been
duly authorized and validly issued and are fully paid and nonassessable, free of
preemptive rights and, except as stated in Section 5.05(b), any other third
party rights, are in certificated form and have been offered, sold and issued by
Global in compliance with all applicable Laws, Contracts applicable to Global
and Global’s Organizational Documents and in compliance with any rights of first
refusal or similar rights. The rights and privileges of the Global
Common Stock, Series A Stock and Series B Stock are set forth in Global’s
Organizational Documents.
(b) As
of the date of this Agreement, options with respect to 656,689 shares granted to
Evolution Securities are outstanding.
(c) As
of the date of this Agreement, no warrants are outstanding.
(d) All
outstanding options and warrants have been offered, sold and delivered in
compliance with applicable Laws, Contracts applicable to Global and Global’s
Organizational Documents. All shares of Global Common Stock issuable
upon exercise of the options and warrants will, if and when issued, be duly
authorized, validly issued, fully paid and, except as may be provided by
applicable Law, nonassessable.
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(e) Except
for the options listed in Section 5.05(b), the conversion of the Series A
Preferred Stock and Series B Preferred Stock into Common Stock in accordance
with Global’s Organizational Documents, as set forth in the Global SEC reports
and as set forth on Schedule 5.05(e), there are no securities, options,
warrants, calls, rights (including preemptive right) or other Commitments or
Contracts obligating Global to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares or other securities or assets of Global
or obligating Global to issue, grant, extend or enter into any such
security, option, warrant, call, right or Commitment. There are no
Commitments (i) under which Global is obligated to repurchase, redeem or
otherwise acquire any shares of Global, or (ii) requiring Global to vote or
to dispose of any shares of Global. There are no outstanding or
authorized stock appreciation, phantom stock or similar rights with respect to
Global. Except as set forth on Schedule 5.05(e) or as contemplated by
the Transaction, there are no registration rights Contracts, no voting trust,
proxy or other Contract and no restrictions on transfer with respect to any
capital stock of Global imposed by or binding upon Global or, to the Knowledge
of Global, imposed by or binding upon any other Person. There are no bonds,
debentures, notes or other indebtedness of Global having the right to vote (or
convertible into, or exchangeable for, shares or other securities having the
right to vote) on any matters on which any shareholders of Global may
vote.
(f) All
of the Exchange Shares have been duly authorized, and upon the filing of the
Articles of Amendment as of the Closing Date will be validly issued, fully paid
and non-assessable, will not have been issued in violation of any applicable Law
or any preemptive rights and will be free from Encumbrances, other than
Encumbrances imposed by the Shareholder.
5.06 Securities Law Filings,
Etc. Global has previously furnished to the Shareholder copies
of (i) Global’s Annual Report on Form 10-K for the fiscal year ended June 30,
2008, (ii) Global’s Quarterly Reports on Form 10-Q for the fiscal quarters ended
September 30, 2008, December 31, 2008 and March 31, 2009, and (iii) Global’s
Current Reports on Form 8-K or Form 8-K/A filed with the SEC on December 2,
2008, December 22, 2008, January 20, 2009, March 27, 2009, June 30, 2009 and
September 16, 2009, in each case as amended until date of this Agreement
(collectively, the “SEC
Reports”). The SEC Reports comply in all material respects
with the provisions of the Securities Exchange Act, and in each case the rules
and regulations promulgated thereunder and were true, complete and correct in
all material respects. Without limiting the foregoing, none of the
SEC Reports contains any untrue statement of fact or omits to state any fact
necessary in order to make the statements made herein or therein not
misleading.
5.07 Financial Statements;
Liabilities.
(a) The
draft unaudited consolidated financial statements of Global and its Subsidiaries
for the year ending June 30, 2009 heretofore delivered to the Shareholder
(including the notes thereto), and the audited consolidated financial statements
and unaudited consolidated interim financial statements of Global and its
Subsidiaries (including the notes thereto) included in the SEC Reports, have
been prepared in conformity with GAAP applied on a consistent basis throughout
the periods covered thereby (except, in the case of quarterly financial
statements, as permitted by Form 10-QSB or Form 10-Q under the Securities
Exchange Act), fairly present the financial position of Global and its
Subsidiaries at the dates thereof and the results of operations of Global and
its Subsidiaries for the periods covered thereby (except that the interim
financial statements do not contain the notes normally required by GAAP and
subject, in the case of any interim financial statements, to normal year end
adjustments), and are consistent with the books and records of Global and its
Subsidiaries (which books and records are materially correct and
complete).
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(b) Except
as and to the extent reflected in the balance sheet contained in its audited
financial statements of Global and its Subsidiaries for the year ending June 30,
2009 (the “Latest
Global Balance Sheet”), neither Global nor Riviera had, as of June 30,
2009 (the “Latest
Global Balance Sheet Date”), any Liabilities, other than obligations of
continued performance under Contracts and other Commitments entered into in the
Ordinary Course of Business. Neither Global nor any Subsidiary of
Global has incurred any Liabilities since the Latest Global Balance Sheet Date
except Liabilities that have arisen after the date of the Latest Global Balance
Sheet in the Ordinary Course of Business, none of which is a Liability for
breach of Contract, breach of warranty, tort, infringement, Litigation or
violation of any Governmental Order, Permit or Law.
5.08 Absence of Certain
Changes. Except as set forth in Schedule 5.08, since the
Latest Global Balance Sheet Date, each of Global and each Subsidiary of Global
has conducted its activities and operations in all material respects only in the
Ordinary Course of Business and, since such date, there has not
been:
(i) any
Material Adverse Effect with respect to Global or any Subsidiary of
Global;
(ii) any
event that could reasonably be expected to prevent or materially delay the
performance of Global’s obligations pursuant to this Agreement;
(iii) any
material change by Global or any Subsidiary of Global in its accounting methods,
principles or practices other than changes required to convert the financial
statements of non-US Subsidiaries of Global to be in accordance with
GAAP;
(iv) any
declaration, setting aside or payment of any dividend or distribution in respect
of Global Stock or the shares of any Subsidiary of Global or any redemption,
purchase or other acquisition of any shares or other securities of
Global or any Subsidiary of Global;
(v) except
for changes in the Ordinary Course of Business of Global and the Subsidiaries of
Global that affect only non-management employees of Global or any Subsidiary of
Global, any increase in the compensation or benefits or establishment of any
Benefit Plan, or any other increase in the compensation payable or to become
payable to any employees, officers, consultants or directors of Global or any
Subsidiary of Global;
(vi) other
than in the Ordinary Course of Business of Global and any Subsidiary of Global,
any (A) purchase, sale, assignment or transfer of any assets of Global or any
Subsidiary of Global, or (B) waiver of any rights of value or cancellation or
any debts or claims by Global or any Subsidiary of Global;
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(vii) any
incurrence by Global or any Subsidiary of Global of any Liability, except for
current Liabilities incurred in the Ordinary Course of Business of Global and
its Subsidiaries;
(viii) any
incurrence by Global or any Subsidiary of Global of any Damage, destruction or
similar loss, whether or not covered by insurance, affecting the business or
properties of Global or any Subsidiary of Global;
(ix) any
entry by Global or any Subsidiary of Global into any transaction other than in
the Ordinary Course of Business of Global and its Subsidiaries except for the
Transaction;
(x) any
purchase by Global or any Subsidiary of Global of Inventory other than in the
Ordinary Course of Business of Global and its Subsidiary of Global or any
material change in the nature, level and condition of the
Inventory;
(xi) any
write-downs or write-ups (or failures to write down or write up in accordance
with GAAP) of the value of any Inventory other than in the Ordinary Course of
Business and in accordance with GAAP;
(xii) any
failure to maintain the assets of Global or any Subsidiary of Global in
accordance with good business practice and in good operating condition and
repair, reasonable wear and tear excepted;
(xiii) any
significant personnel changes or employee turnover;
(xiv) any
adverse change in the relations between Global or any Subsidiary of Global and
any of their respective customers, clients and suppliers that is, or could
reasonably be expected to become, a Material Adverse Effect;
(xv) any
discharge or satisfaction of any Encumbrance, or payment of any material
Liabilities, other than in the Ordinary Course of Business, or any failure to
pay or discharge when due any Liabilities, the failure to pay or discharge which
has caused or will cause any actual damage or risk of loss to Global or any
Subsidiary of Global that, in the case of any matter set forth in this clause
(xv) has or would reasonably be expected to have a Material Adverse Effect;
or
(xvi) the
entry by Global or any Subsidiary of Global in any Contract under which it is or
will be obligated to do any of the foregoing.
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5.09 Litigation. Except
as set forth in Schedule 5.09 or in the SEC Reports, there is no Action or Claim
pending or, to the Knowledge of Global, threatened against Global or any
Subsidiary of Global that could reasonably be expected to result, individually
or in the aggregate, in a Material Adverse Effect or materially interfere with
Global’s ability to consummate the Transactions and, to the Knowledge of Global,
there are no existing facts or circumstances that could reasonably be expected
to result in such an Action or Claim. To the Knowledge of Global,
there are no facts or circumstances which could reasonably be expected to result
in the denial of insurance coverage under policies issued to the Global or any
Subsidiary of Global in respect of any Action, except in any case as could not
reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect. There is no Action or Claim pending or, to
the Knowledge of Global, threatened alleging any right of indemnification of the
part of any director, officer member or manager of Global or any Subsidiary of
Global , or any Affiliate of any such Person, as against Global or any
Subsidiary of Global. Neither Global nor any Subsidiary of Global is subject to
any outstanding Order that could reasonably be expected to result, individually
or in the aggregate, in a Material Adverse Effect or materially interfere with
Global’s ability to consummate the Transaction.
5.10 Compliance with
Laws. Global
holds all of the Permits necessary to permit Global or any Subsidiary of Global
lawfully to conduct and operate its business in the manner in which it currently
conducts and operates its business and to permit Global or any Subsidiary of
Global to own and use its assets in the manner in which it currently owns and
uses such assets. Global and each Subsidiary of Global is in
compliance in all material respects with all of the terms and requirements of
each Permit held by it. Each of Global and each Subsidiary of Global
is, and has been, in compliance in all material respects with all Laws
applicable to it or to the conduct or operation of the business or the ownership
or use of any of its respective assets. No investigation or review by
any Governmental Entity with respect to Global or any Subsidiary of Global is
pending or, to the Knowledge of Global, threatened, nor has any Governmental
Entity indicated an intention to conduct any such investigation or
review. Neither Global nor any Subsidiary of Global is in conflict in
any material respect with or in default or violation of any Order or Law, in
either case affecting or relating to Global or any Subsidiary of
Global.
5.11 Environmental
Matters. No environmental reports relating to Global or any
Subsidiary of Global or their respective properties or assets have been prepared
by Global. Except to the extent any of the following does not have
and would not reasonably be expected to have a Material Adverse
Effect,
(i) Global
and each Subsidiary of Global is in compliance with all applicable Environmental
Laws and all environmental Permits;
(ii) there
has been no past noncompliance of Global or any Subsidiary of Global with
Environmental Laws or environmental Permits;
(iii) neither
Global nor any Subsidiary or Global has released a Hazardous Material at, or
transported a Hazardous Material to or from, any real property currently or
formerly owned, leased or occupied by Global in amounts that violate, or would
require remediation under, any Environmental Law;
(iv) to
the Knowledge of Global, no Person has released Hazardous Material at, or
transported a Hazardous Material to or from, any real property currently or
formerly owned, leased or occupied by Global or any Subsidiary of Global in
amounts that, to the Knowledge of Global, violate, or would require remediation
under, any Environmental Law;
(v) neither
Global nor any Subsidiary of Global has received any notice, demand, suit or
information request pursuant to any Environmental Law;
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(vi) none
of the properties, former properties or any property to which Global or any
Subsidiary of Global has sent waste is listed on any regulatory list of
contaminated properties; and
(vii) no
environmental approvals, clearances or consents are required under applicable
Law from any Governmental Entity in order for the parties to consummate the
transactions contemplated herein or for Global or any Subsidiary of Global to
continue the business after the Closing Date.
5.12 Tax
Matters.
Except as set forth in Schedule 5.12
hereto:
(a) Global
and each of its Subsidiaries has (i) timely filed (or has had timely filed on
its behalf), or timely filed extensions for all Tax Returns required to be filed
or sent by it in respect of any Taxes or required to be filed or sent by it by
any Governmental Entity, all which were correct and complete; (ii) timely and
properly paid (or has had paid on its behalf) all Taxes shown to be due and
payable on such Returns; (iii) established on the Latest Global Balance Sheet,
in accordance with GAAP and consistent with past practices, reserves that are
adequate for the payment of any Taxes not yet due and payable; and (iv) complied
with all Laws relating to the withholding of Taxes and the payment thereof and
timely and properly withheld from individual employee wages and paid over to the
proper Governmental Entity all amounts required to be so withheld and paid over
under applicable Law.
(b) All
Taxes of Global and any Subsidiaries of Global that will be due and payable for
any period ending on, and including or ending prior to the Closing Date, will
have been paid by or on behalf of Global or will be reflected, in a manner
consistent with past practice, on Global’s books as an accrued Tax Liability,
either current or deferred.
(c) There
are no Encumbrances for Taxes upon any assets of Global or any Subsidiaries of
Global, except Encumbrances for Taxes not yet due and payable.
(d) No
deficiency for any Taxes has been proposed, asserted or assessed against Global
that has not been resolved and paid in full, except where any failure to do so
would not have a Material Adverse Effect. No waiver, extension or
comparable consent given by Global or any Subsidiary of Global regarding the
application of the statute of limitations with respect to any material Taxes is
outstanding, nor is any request for any such waiver or consent
pending. There has been no Tax audit or other administrative
proceeding or court proceeding with regard to any Taxes or Returns for any Tax
year nor, to the Knowledge of Global, is any such Tax audit or other proceeding
pending, nor has there been any written notice to Global or any Subsidiary of
Global by any Governmental Entity of an intention to commence any such Tax audit
or other proceeding. To the Knowledge of Global, no claim has ever
been made by a Governmental Entity in a jurisdiction where neither Global nor
any Subsidiary of Global files any Tax Return that Global or any Subsidiary of
Global is or may be subject to taxation.
(e) Neither
Global nor any Subsidiary of Global has requested an extension of time within
which to file any Return, which Return has not since been filed.
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(f) Neither
Global nor any Subsidiary of Global is a party to any Tax allocation or Tax
sharing Contract that will require any payments to be made by them on or after
the Closing Date.
(g) Continuity
of Business Enterprise. Global will continue at least one significant “historic
business line” of the Company, or will use at least a significant portion of the
Company’s “historic business line” in a business, in each case within the
meaning of Reg. § 1.368-1(d).
5.13 Employee Benefit
Matters.
(a) Global
has not maintained, sponsored or contributed to or is required to contributed to
any Benefit Plan other than those required to be maintained by Applicable Law,
all of which are set forth and described in the SEC Reports.
(b) Each
Benefit Plan of Global or any Subsidiary of Global has been administered in all
material respects in accordance with its terms and all applicable Laws, and all
contributions required to be made under the terms of any of the Benefit Plans as
of the Latest Global Balance Sheet Date have been timely made or, if not yet
due, have been properly reflected on the Latest Global Balance
Sheet. With respect to the Benefit Plans of Global or any Subsidiary
of Global, no event has occurred and, to the Knowledge of Global, there exists
no condition or set of circumstances in connection with which Global or any
Subsidiary of Global could be subject to any Liability (other than for routine
benefit liabilities) under the terms of, or with respect to, such Benefit Plans
or any applicable Law.
(c) No
Action has been brought, or to the Knowledge of Global is threatened, against or
with respect to any such Benefit Plan, including any audit or inquiry by any
Governmental Entity.
5.14 Labor and Employment
Matters.
(a) Schedule
5.14 contains a true and correct list of all directors, officers, key management
employees, contractors and consultants of Global and each Subsidiary of Global
as of the date hereof. The SEC Reports and Schedule 5.14 collectively
contain, a list of any Contracts (whether oral or written) with any such Person
and a description of all existing severance, accrued vacation obligations or
retiree benefits of any current or former director, officer, key management
employee or consultant of Global or any Subsidiary of Global. Except
as set forth in Schedule 5.14(a), the employment or consulting arrangement of
all such Persons is terminable at will.
(b) Except
as set forth in the SEC Reports:
(i) neither
Global nor any Subsidiary of Global is a party to any Contract with any trade
union, labor organization or other representative of its employees;
(ii) there
is no unfair labor practice charge or complaint pending or, to the Knowledge of
Global, threatened against Global or any Subsidiary of Global;
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(iii) neither
Global nor any Subsidiary of Global has experienced any labor strike, slowdown,
work stoppage or similar labor controversy within the past three (3)
years;
(iv) no
labor union representation question has been raised respecting the employees of
Global or any Subsidiary of Global working within the past three (3) years, nor
are there any campaigns being conducted to solicit authorization from employees
of Global or any Subsidiary of Global to be represented by any labor
organization;
(v) no
claim before any Governmental Authority brought by or on behalf of any employee,
prospective employee, former employee, retiree, labor organization or other
representative of the employees of Global or any Subsidiary of Global, is
pending or, to the Knowledge of Global, threatened against Global or any
Subsidiary of Global;
(vi) neither
Global nor any Subsidiary of Global is a party to, or otherwise bound by, any
Order relating to its employees or employment practices; and
(vii) Global
and each Subsidiary of Global has paid in full to all of its employees all
wages, salaries, commissions, bonuses, benefits and other compensation due and
payable to such employees.
(c) Neither
Global nor any Subsidiary of Global has made any written or, to the Knowledge of
Global, oral Contract with or promise to any employee, officer or consultant
regarding continued employment by Global or any Subsidiary of Global after the
Closing Date.
5.15 Real Property Owned or
Leased; Title to Assets.
(a) Except
as set forth in the SEC Reports, neither Global nor any Subsidiary of Global
owns or has the right to acquire ownership of any real property.
(b) The
lease Contracts listed on Schedule 5.15(b) or in the SEC Reports are all of the
material real property lease Contracts under which Global or a Subsidiary of
Global is a tenant (or subtenant) of any material real property or
interest therein (collectively, the “Global Real Property
Leases”). To the knowledge of Global, no proceeding is pending
or, threatened for the taking or condemnation of all or any portion of the
property leased under the Global Real Property Leases. There is no
brokerage commission or finder’s fee due from Global or any Subsidiary of Global
and unpaid with regard to any of the Global Real Property Leases or which will
become due any time in the future with regard to any Global Real Property
Leases.
(c) Except
as set forth on Schedule 5.15(c) or in the SEC Reports, Global or a Subsidiary
of Global has good and marketable title to all tangible personal property shown
as owned by Global or a Subsidiary of Global on their respective Books and
Records, including all the properties and assets reflected on the Latest Global
Balance Sheet and all properties and assets purchased by and delivered to it
since the Latest Global Balance Sheet Date (except for properties and assets
sold or disposed of since the Latest Global Balance Sheet Date in the Ordinary
Course of Business of Global and the Subsidiaries of Global) free and clear of
any Encumbrances of any kind (including, to the Knowledge of Global, any Claim
that the acquisition of such property by Global or any Subsidiary of Global
constitutes a fraudulent conveyance) other than purchase money Encumbrances
arising in the Ordinary Course of Business.
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5.16 Sufficiency and Condition of
Assets.
(a) The
properties, assets, buildings, plants, structures, equipment and rights owned,
licensed or leased by Global and each Subsidiary of Global constitute all
properties (whether real or personal or tangible or intangible), assets and
rights necessary for Global or such Subsidiary of Global, as the case may be, to
conduct its business after the Closing as it is presently being conducted and as
it will be conducted immediately before the Closing Date.
(b) Except
as set forth in Schedule 5.16(b) or in the SEC Reports, Global and each
Subsidiary of Global has good and marketable title to, or a valid leasehold
interest in, all of its personal property, free and clear of all Encumbrances,
other than Permitted Encumbrances, and no Affiliate of Global or any Subsidiary
of Global has any interest in any of such properties, assets, buildings, plants,
structures, equipment or rights. The facilities and equipment owned
or leased by Global and each Subsidiary of Global are in good operating
condition and repair and, to the Knowledge of Global, are free from any material
defects, reasonable wear and tear excepted, are not unsafe or dangerous and are
suitable for the uses for which they are being used and are performing the
functions for which they were intended.
5.17 Material Global
Contracts.
(a) The
SEC Reports and Schedule 5.17 collectively list each of the following Contracts,
whether or not in written form, to which Global or any Subsidiary of Global is a
party or subject or by which it is bound (the “Material Global
Contracts”):
(i) any
Contract with any other customer or supplier of Global or any Subsidiary of
Global that contains payment terms that differ materially from the normal
payment terms between Global or any Subsidiary of Global and its customers or
suppliers;
(ii) any
continuing Contract for management or consulting services, services of
independent contractors, the purchase of materials, supplies, equipment or
services involving in the case of any such Contract more than $50,000 over the
life of the Contract;
(iii) any
distributor reseller, dealer, manufacturer’s representative, sales agency,
advertising agency, finder’s, manufacturing or assembly Contract involving in
the case of any such Contract more than $50,000 over the life of the
Contract;
(iv) any
mortgage, promissory note, loan Contract or other Contract for the borrowing of
money, any currency exchange, commodities or other hedging arrangement or any
leasing transaction of the type required to be capitalized in accordance with
GAAP, in each case in excess of $50,000;
(v) any
Contract for capital expenditures in excess of $50,000 individually or, taken
together with other such Contracts, in the aggregate;
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(vi) except
for restrictions as to territory set forth in importing or distribution
Contracts, any Contract containing exclusivity, noncompetition or
nonsolicitation provisions or that would prohibit or restrict Global or any
Subsidiary from freely engaging in business anywhere in the world or prohibiting
the solicitation of the employees or contractors of any other Person, or any
Contract that may be terminable by the other party thereto as a result of the
status of Global or any Subsidiary of Global as a competitor of any party to
such Contract;
(vii) any
Contract pursuant to which Global or a Subsidiary of Global is a lessor of any
machinery, equipment, motor vehicles, office furniture, fixtures or other
personal property, pursuant to which payments in excess of $50,000 remain
outstanding;
(viii) any
Contract with an Affiliate of Global or a Subsidiary of Global;
(ix) any
Contract of guarantee, support, indemnification, assumption or endorsement of,
or any similar Commitment with respect to, the Liabilities (whether accrued,
absolute, contingent or otherwise) of any other Person, other than customary
customer Contracts made in the Ordinary Course of Business;
(x) any
Contract providing for or concerning a strategic alliance, joint venture or
partnership with any other Person;
(xi) any
Contract under which a license, sublicense, consent or permission of any kind
has been granted by or to any other Person for the use of Company Intellectual
Property;
(xii) any
Contract providing for the development of any products or the delivery of any
services by, for or with any other Person; or
(xiii) any
Contract which is otherwise material and is not described in any of the
categories specified in this Section 5.17(a).
(b) Except
as set forth in Schedule 5.17(b): (i) all Contracts to which Global or
any Subsidiary of Global is a party were entered into in the Ordinary Course of
Business; (ii) each Contract is in full force and effect and is legal,
valid, binding and enforceable against Global or a Subsidiary of Global in
accordance with its terms; (iii) Global and each Subsidiary of Global has
performed in all material respects the obligations required to be performed by
it to date and is not (with or without the giving of notice or the lapse of time
or both) in breach or default or, to the knowledge of Global, alleged to be in
breach or default under any Material Global Contract and, to the Knowledge of
Global, the other parties thereto have complied in all material respects
therewith and are not in breach or default thereof; and (iv) no event has
occurred or circumstance exists that (with or without the giving of notice or
lapse of time or both) may contravene, conflict with or result in a violation or
breach of or give any to any Person other than Global or any Subsidiary of
Global, or, to the Knowledge of Global, give to Global, or any Subsidiary of
Global, the right to declare a default or exercise any remedy under or to
accelerate the maturity of, or to cancel, terminate or modify, any Material
Global Contract.
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(c) Global
has previously delivered or made available to the Shareholder true and complete
copies of all Material Global Contracts that have been reduced to writing and
true and correct summaries of any Material Global Contracts that have not been
reduced to writing. Neither Global nor any Subsidiary of Global has,
to the Knowledge of Global, waived any right under any Material Global Contract,
amended or extended any Material Global Contract or failed to renew, or received
notice of termination or failure to renew with respect to, any Material Global
Contract.
5.18 Insurance.
(a) Global
has delivered to the Shareholder true and complete copies of all Global
Insurance Policies that provide insurance coverage for directors and officers of
Global or any Subsidiary of Global acting in such capacities. All
insurance policies to which Global or any Subsidiary of Global is or was a party
or which provides or provided coverage to or for the benefit of or with respect
to Global or any Subsidiary of Global or any director, officer or employee of
Global or any Subsidiary of Global (the “Global Insurance
Policies”), (i) are in full force and effect and will not lapse or
terminate by reason of the execution, delivery or performance of this Agreement
or consummation of the Transaction; (ii) insure Global and each Subsidiary
of Global in reasonably sufficient amounts against all risks usually insured
against by Persons operating similar businesses or properties in the localities
where such businesses or properties are located; and (iii) are sufficient
for compliance with all requirements of Laws, Permits, and Material Global
Contracts. Global and each Subsidiary of Global are current in all
premiums or other payments due, and have otherwise performed in all material
respects all of their respective obligations, under each Global Insurance
Policy.
5.19 Intellectual
Property.
(a) Schedule
5.19(a) contains a true and complete list of (i) all Registered Intellectual
Property comprising a part of the Global Intellectual Property and (ii) all
other material Global Intellectual Property, in each case broken down by
Global-Owned Intellectual Property and Global-Licensed Intellectual
Property. All of the registrations and applications arising from or
relating to such Global Registered Intellectual Property are and remain valid
and subsisting, in good standing, and have not been assigned. None of the
registrations and applications relating to Global Registered Intellectual
Property are, to the Knowledge of Global, invalid or unenforceable.
(b) The
Global Intellectual Property consists solely of items and rights which are: (i)
Global-Owned Intellectual Property; (ii) Global-Licensed Intellectual Property
or (ii) in the public domain. Global or a Subsidiary of Global has
rights in Global Intellectual Property necessary and sufficient to carry out the
current activities of and currently proposed activities of Global or such
Subsidiary of Global (and had rights necessary to carry out its former
activities of the time such activities were being conducted). Global
has made available to the Shareholder correct and complete copies of all
material License Agreements to which Global or any Subsidiary of Global is a
party.
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(c) The
continued operation of the business of Global and each Subsidiary of Global, as
presently conducted, to the Knowledge of Global, does not infringe upon or
misappropriate any Intellectual Property of any Person anywhere in the
world. No Claim (i) challenging the validity, effectiveness or
ownership by Global or a Subsidiary of Global of any of Global Intellectual
Property, or (ii) to the effect that the use, distribution, licensing,
sublicensing, sale or any other exercise of rights in any product, service,
work, technology or process as now used or offered or proposed for use,
licensing, sublicensing, sale or other manner of commercial exploitation by
Global or such Subsidiary of Global infringes or will infringe any intellectual
property rights of any Person has been received by Global or any Subsidiary of
Global nor, to the Knowledge of Global, has any such claim been threatened by
any Person or is there any valid basis for the existence of any such
Claim. To the Knowledge of Global, there is not, and has not been,
any unauthorized use, infringement or misappropriation of any Global
Intellectual Property by any Person.
(d) Except
to the extent non-compliance would not reasonably be expected to result in a
Material Adverse Effect, Global and each Subsidiary of Global has complied with
all privacy Laws with respect to the Global Intellectual Property, as well as
with other Laws, applicable to the Global Intellectual Property and its use in
the course of the business of Global, including those governing intellectual
property rights. Except to the extent non-compliance would not
reasonably be expected to result in a Material Adverse Effect, Global or any
Subsidiary of Global has not included or caused to be included in the Global
Intellectual Property any material that it was wrongful or unlawful to include
therein nor, to the Knowledge of Global, has any other Person done
so.
(e) Except
as set forth in Schedule 5.19(e), neither Global nor any Subsidiary of
Global owes royalties or other payments to third parties in respect of Company
Intellectual Property.
5.20 Customers and
Suppliers.
(a) Global
has made available to the Shareholder information concerning its most
significant customers of Global and the Subsidiaries of Global, all of which is
accurate and complete. To the Knowledge of Global, none of such
customers of Global or of any Subsidiary of Global has ceased, or has informed
Global or a Subsidiary of Global that it intends to cease, to purchase or use
the products, equipment, goods or services of Global or any Subsidiary of
Global, or has substantially reduced or has informed Global or a Subsidiary of
Global that it will substantially reduce, the purchase or use of such products,
equipment, goods or services at any time.
(b) Global
has made available to the Shareholder information concerning the most
significant suppliers of raw materials, supplies, merchandise or other goods for
Global and the Subsidiaries of Global, all of which is accurate and
complete. To the Knowledge of Global, none of such suppliers has
ceased, or has informed Global or any Subsidiary of Global that it intends to
cease, to sell raw materials, supplies, merchandise and other goods to Global or
any Subsidiary of Global on substantially the same terms and conditions as those
used in its current sales to Global or any Subsidiary of Global, subject only to
general and customary price increases.
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5.21 Transactions with
Affiliates.
(a) Except
as set forth in Schedule 5.21(a) or in the SEC Reports, during the past two
(2) years no Affiliate of Global, has (i) had any interest in any property
(whether real, personal, or mixed and whether tangible or intangible), used in
or pertaining to the business of Global or any Subsidiary of Global, or
(ii) owned of record or beneficially an equity interest, or any other
financial or profit interest, in a Person that has (x) had business
dealings or a material financial interest in any transaction with Global or
Riviera of Global or (y) engaged in competition with Global or any
Subsidiary of Global.
(b) Except
as set forth in Schedule 5.21(b) or in the SEC Reports, no Affiliate of
Global, other than Global and the Subsidiaries of Global, is a party to any
Contract with, or has any Claim or right against, Global or a Subsidiary of
Global.
(c) All
property (whether real, personal, or mixed and whether tangible or intangible)
sold, transferred or otherwise disposed of at any time by or to Global or any
Subsidiary of Global, the transferor or transferee being a shareholder or an
Affiliate of a shareholder, was sold, transferred or otherwise disposed of at
such value as was equivalent to the fair market value of such property at the
time of the sale, transfer or disposal, such fair market value having been
recorded in the Books and Records of Global.
5.22 Securities Law
Matters. Global understand that the Company Shares have not
been, and may not be, registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act, the
availability of which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of Global’s representations as expressed
herein or otherwise made pursuant hereto. Global is acquiring the
Company Shares for investment for its own account, not as a nominee or agent,
and not with the view to, or for resale in connection with, any distribution
thereof. Global is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own
interests. Global is an “accredited investor” within the meaning of
Regulation D, Rule 501(a), promulgated by the SEC under the Securities Act.
Global acknowledges that the Company Shares must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption from
such registration is available.
5.23 Brokers or
Finders. Neither Global or any Subsidiary of
Global, nor any of the respective Representatives, has incurred any Liability
for brokerage or finders’ fees or agents’ commissions or other similar payments
in connection with the negotiation, preparation, delivery or execution of this
Agreement or the consummation of the Transaction, nor is there any basis, to the
Knowledge of Global, for any such fee, commission or similar payment to be
claimed by any Person.
5.24 Books and
Records. The books and records of account, minute books,
statutory registers, stock record books, and other records of Global and each
Subsidiary of Global, are complete and correct in all material respects and have
been maintained in accordance with sound business practices and applicable Law,
including the maintenance of an adequate system of internal controls that
complies with the Sarbanes-Oxley Act of 2002.
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5.25 Accounts
Receivable. Except to the extent of the amount of the reserve
for doubtful accounts reflected in the Latest Global Balance Sheet, all Accounts
Receivable of Global and each Subsidiary of Global reflected therein and all
such Accounts Receivable that have arisen since the Latest Global Balance Sheet
Date (except Accounts Receivable that have been collected since such date)
constitute bona fide Accounts Receivable resulting from the sale of goods and
services in the Ordinary Course of Business. To the Knowledge of
Global, the Accounts Receivable are subject to no valid defense, offsets,
returns, allowances or credits of any kind. Except for the Accounts
Receivable, neither Global nor any Subsidiary of Global has made any loan or
advance to any Person.
5.26 Inventory. Except
as set forth on Schedule 5.26 or in the SEC Reports, Global and the Subsidiaries
of Global have good and marketable title to their respective Inventory set forth
on the Latest Global Balance Sheet free and clear of all
Encumbrances. None of the Inventory reflected on the Latest Global
Balance Sheet includes items that are required to be reserved against in
accordance with GAAP. All such Inventory is in good and merchantable
condition, is suitable and usable for the purposes for which it is intended and
is in a condition such that it can be sold in the Ordinary Course of
Business. The Inventory reflected on the Latest Global Balance Sheet
is valued on the Books and Records of Global or of the relevant Subsidiary of
Global at the lower of cost or net realizable value.
5.27 Business Activity
Restriction. Except as set forth in Schedule 5.27: (i) there
is no non-competition or other similar Contract, Commitment or Order to which
Global or any Subsidiary of Global or any of their respective Affiliates is a
party or subject that has or could reasonably be expected to have the effect of
prohibiting or impairing the conduct of the business of Global or any Subsidiary
of Global; (ii) neither Global nor any Subsidiary of Global has entered into any
Contract under which Global or any Subsidiary of Global is restricted from
selling, licensing or otherwise distributing any of its products to customers or
potential customers or any class of customers, in any geographic area, during
any period of time or in any segment of the market or line of business; and
(iii) no Affiliate of Global is a party to any Contract, which, by virtue of
such Person’s relationship with Global or any Subsidiary of Global, restricts
Global or any Subsidiary of Global from, directly or indirectly, engaging in the
business in which it is currently engaged.
5.28 No Significant Items
Excluded. Global and each Subsidiary of Global possesses all
assets, properties, Contracts, Permits or other items that are of material
importance to the ongoing operation of the business by Global and each
Subsidiary of Global in substantially the same manner in which the business has
been conducted prior to the date of this Agreement.
5.29 Certain Business
Practices. Neither Global nor any Subsidiary of Global, to the
Knowledge of Global, any Representative of any of them (in their capacities as
such), has: (i) made or provided any unlawful contributions, gifts,
entertainment or other unlawful benefits relating to political activity;
(ii) made any unlawful payment to any foreign or domestic government
official or employee or to any foreign or domestic political party or campaign
or violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or (iii) made any other payment in violation of applicable
Laws.
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5.30 Export Control and Related Matters. Global
and each Subsidiary of Global is in compliance in all material respects with all
applicable Laws regulating the importation and exportation of goods, services,
technology and information.
5.31 Disclosure. No
representation or warranty by Global in this Agreement and no statement
contained in any document or other writing furnished or to be furnished to the
Shareholder or its Representatives pursuant to the provisions hereof contains or
will contain any untrue statement of fact or omits or will omit to state any
fact necessary in order to make the statements made herein or therein not
misleading. All copies of Contracts and all other documents delivered
to the Shareholder or its Representatives pursuant hereto are true, complete and
accurate. There has been no event or transaction (other than the
Transaction and the matters related thereto) which has occurred, nor are the
facts and circumstances (other than events, facts and circumstances relating to
economic conditions of general public knowledge) which could reasonably be
expected to result in a Material Adverse Effect or which could reasonably be
expected to prevent or impair the ability of Global and the Subsidiaries of
Global, after the Closing, to carry on their business in the same manner as it
is presently being conducted.
ARTICLE
VI
COVENANTS OF THE
SHAREHOLDERS
6.01 Books and
Records. On the Closing Date, the Shareholder will cause all
Books and Records belonging or relating to the Company or Riviera to be in the
possession of the Company or Riviera, as may be appropriate.
6.02 Confidentiality.
(a) Subject
to Section 6.02(b), the Shareholder will, and will cause its Affiliates and any
of their respective Representatives to, hold in strict confidence all
Confidential Information pertaining to the business, operations, assets,
financial condition and prospects of Global, the Company, Riviera and the
Subsidiaries of Global and to refrain from using such Confidential Information
to compete with (including, planning, marketing, product development or
pricing), or in any other manner that is, directly or indirectly, detrimental to
the interests of, Global, the Company or any Subsidiary of either Global or the
Company.
(b) In
the event that the Shareholder or any of its Affiliates should be required by
Law to disclose any of such Confidential Information, the Shareholder will use
its commercially reasonable efforts promptly to notify Global in writing so that
Global may seek a protective Order to prevent the production or disclosure of
such Confidential Information. If such Order or Action has been
denied or dismissed, then the Shareholder or its Affiliates, as the case may be,
may disclose only that portion of the Confidential Information: (i) which
based on the advice of the Shareholder’s outside legal counsel is required by
Law to be disclosed or with respect to which the Shareholder would be incurring
a substantial risk of Liability if it failed to make such disclosure, provided, however, that the
Shareholder will in such case use commercially reasonable efforts to preserve
the confidentiality of the remainder of the Confidential Information; or
(ii) which Global consents, in writing, to having
disclosed. Neither the Shareholder nor any of its Affiliates will,
nor will they not permit any of their Representatives to, oppose any motion for
a protective Order brought by Global or the Company. The Shareholder
will continue to be bound by its obligations pursuant to this Section as to any
Confidential Information the disclosure of which is not permitted under this
Section or which is covered by a protective Order.
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6.03 Injunctive
Relief. Without intending to limit the remedies available to
Global, the Shareholders agree that violation of any provision of
Section 6.02 by the Shareholder or any of its Affiliates would result in
irreparable injury to Global, that damages at law would be an inadequate remedy
to Global, and that Global will be entitled to injunctive relief or other
equitable remedies to enforce any of such provisions. If any of such
provisions are held to be unenforceable because of the scope, term or areas of
their applicability, then it is the intent and desire of the Parties that the
court, arbitrator or other tribunal making such determination modify such scope,
term or area or any of them to the extent necessary to render such Section
enforceable under applicable Law and enforce such provisions in such modified
form.
6.04 R. Mack
Estates . The Shareholder shall use commercially
reasonable efforts to obtain all required consents to transfer the assets listed
on Schedule 6.04 owned by R. Mack Estates, LLC to Riviera as soon as practicable
(the “R. Mack
Assets”). Upon receipt of such consents, the Shareholder shall
cause R. Mack Estates, LLC to transfer the R. Mack Assets to Riviera without
additional consideration.
ARTICLE
VII
COVENANTS OF
GLOBAL
7.01 Confidentiality.
(a) Subject
to Section 7.01(b), Global will, and will cause the Affiliates of Global and any
of their respective Representatives to, hold in strict confidence all
Confidential Information pertaining to the business, operations, assets,
financial condition and prospects of the Shareholder and its Affiliates and to
refrain from using such Confidential Information in any manner that is, directly
or indirectly, detrimental to the interests of, the Shareholder and its
Affiliates.
(b) In
the event that Global or any of its Affiliates should be required by Law to
disclose any of such Confidential Information, Global will use its commercially
reasonable efforts promptly to notify the Shareholder in writing so that the
Shareholder may seek a protective Order to prevent the production or disclosure
of such Confidential Information. If such Order or Action has been
denied or dismissed, then Global or its Affiliate, as the case may be, may
disclose only that portion of the Confidential Information (i) which based
on the advice of Global’s outside legal counsel is required by Law to be
disclosed or with respect to which Global or such Affiliate would be incurring a
substantial risk of Liability if it failed to make such disclosure, provided, however, that Global
will in such case use all commercially reasonable efforts to preserve the
confidentiality of the remainder of the Confidential Information; or
(ii) which the Shareholder consents, in writing, to having
disclosed. Neither Global nor any of its Affiliates will, nor will
they not permit any of their Representatives to, oppose any motion for a
protective Order brought by the Shareholder or any of its
Affiliates. Global will continue to be bound by its obligations
pursuant to this Section as to any Confidential Information the disclosure of
which is not permitted under this Section or which is covered by a protective
Order.
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7.02 Injunctive
Relief. Without intending to limit the remedies available to
the Shareholder, Global agrees that violation of any provision of Section 7.01
by Global or any of its Affiliates would result in irreparable injury to the
Shareholder, that damages at law would be an inadequate remedy to the
Shareholder, and that the Shareholder will be entitled to injunctive relief or
other equitable remedies to enforce any of such provisions. If any of
such provisions are held to be unenforceable because of the scope, term or areas
of their applicability, then it is the intent and desire of the Parties that the
court, arbitrator or other tribunal making such determination modify such scope,
term or area or any of them to the extent necessary to render such Section
enforceable under applicable Law and enforce such provisions in such modified
form.
7.03 Global Information
Statement. Global shall, as promptly as practicable after the
execution of this Agreement, prepare and file with the SEC a preliminary
information statement on Schedule 14C with respect to the Articles of Amendment,
use commercially reasonable efforts to promptly file any amendment to the
preliminary information statement required as a result of any SEC comments and
to file with the SEC a definitive information statement on Schedule 14C in
accordance with the Exchange Act (together with the preliminary information
statement and any amendments thereto, the “Information
Statement”). Upon the filing of the definitive Information Statement,
Global shall promptly mail the Information Statement to its shareholders as
required by applicable Law and its Organizational Documents so that the Articles
of Amendment are filed as promptly as is practicable and in any event on or
before February 28, 2010.
ARTICLE
VIII
MUTUAL
COVENANTS
8.01 Access. Each of the Parties
agrees that, from the date of this Agreement until the Closing Date, it will
(i) provide, or cause to be provided, to the other Party and its
Representatives reasonable access during regular business hours to the offices,
properties, Books and Records and Representatives of the Company and each
Subsidiary of the Company, on the one hand, and Global and its Subsidiaries, on
the other hand, provided that such access does not unreasonably interfere with
the business of the Person granting such access, (ii) furnish to the other
Party and its Representatives, such financial and operating data as such Persons
may reasonably request, including to the extent it may do so without violating
any Law or Contract, auditors’ workpapers and (iii) instruct such Person’s
Representatives to cooperate with the other Party in its investigation
of any matter concerning the Company and each Subsidiary of the
Company, on the one hand, and Global and each Subsidiary of Global, on the other
hand, and of their respective financial and legal conditions; provided, however, that no
investigation pursuant to this Section 8.01 will affect, or limit Liability for,
any representation or warranty of a Party contained in this Agreement or in any
Transaction Document and each Party will be deemed to have relied solely upon
the representations and warranties contained in this Agreement or any
Transaction Documents notwithstanding any contrary information that may have
been provided or made available by the Shareholder, the Company, Global or any
Subsidiary of either the Company or Global, as the case may be, or by any of
their respective Representatives, or that either Party or its Representatives
shall have discovered or could or should have discovered in the course of its
investigation either prior or subsequent to the date of this
Agreement.
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8.02 Conduct of
Business.
(a) Except
as otherwise agreed to by the Parties in writing, or as otherwise expressly
permitted by this Agreement, from the date of this Agreement until the Closing,
the Shareholder will cause the Company and each Subsidiary of the Company to,
and Global will, and will cause each Subsidiary of Global to, conduct its
respective operations and activities only in the Ordinary Course of Business and
(i) use commercially reasonable efforts to (A) preserve intact its
current business organizations, (B) keep available the services of its
current officers, employees, and agents, (C) preserve its relationships
with customers, suppliers, licensors, licensees, advertisers, distributors and
others having business dealings with it and (D) preserve goodwill;
(ii) to the extent permitted by applicable Law, confer with the other Party
and its Representatives on a regular basis concerning material operational
matters; and (iii) report to the other(s) as and when reasonably requested,
concerning the status of the business, operations and finances of the Company
and each Subsidiary of the Company, on the one hand, and Global and each
Subsidiary of Global, on the other hand.
(b) Without
limiting the generality of the foregoing, and except as (x) otherwise expressly
provided in this Agreement, or (y) required by Law, neither Global nor the
Shareholder, as the case may be, will cause or permit Global, the Company or any
Subsidiary of either the Company or Global, as the case may be, to take any of
the actions set forth in Sections 3.06 or 5.08, as the case may be.
8.03 Notice of Certain
Events. From the date of this Agreement until the Closing
Date, each of the Parties will promptly notify the other in writing of
(i) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the execution,
delivery or performance of this Agreement or the consummation of the
Transaction; (ii) any notice or other communication from any Government
Entity in connection with the Transaction; (iii) any Actions or
investigations commenced or, to the Knowledge of either Party, threatened
against, relating to or involving or otherwise affecting the Company or any
Subsidiary of the Company, on the one hand, or Global or any Subsidiary of
Global, on the other hand; (iv) any Order or notification relating to any
material violation or claimed material violation of Law involving or otherwise
affecting the Company or any Subsidiary of the Company or Global or any
Subsidiary of Global, as the case may be; (v) the existence or
non-existence or occurrence or non-occurrence of any event, condition or
circumstance the occurrence or non-occurrence of which does or would cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Closing Date;
(vi) any failure of the Company or any Subsidiary of the Company or Global
or any Subsidiary of Global, as the case may be, to comply with or satisfy any
covenant, agreement or obligation to be complied with or satisfied by it
hereunder; and (vii) any misrepresentation or breach of the representations or
warranties of such Party set forth in this Agreement.
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8.04 Commercially Reasonable
Efforts. Each
Party shall use its commercially reasonable efforts to cause all conditions
precedent to the obligations of the other Party set forth in Articles IX and X,
as applicable, to be satisfied as promptly as practicable.
8.05 Representation and
Warranties. Neither
Party will knowingly take or omit to take any action, the effect of which could
reasonably be expected to cause any of the representations and warranties made
herein to be inaccurate on the Closing Date.
8.06 Insurance. Until
the Closing Date, each of the Shareholder and Global, as the case may be, will
maintain or cause the Company and each Subsidiary of the Company and Global and
each Subsidiary of Global, as the case may be, to maintain in full force and
effect all presently existing insurance coverage with respect to the Company and
each Subsidiary of the Company and Global and each Subsidiary of Global, and
will take no action which will cause a retroactive cancellation, or a lapse or
reduction of the benefits, thereof.
8.07 Further
Assurances. At
any time, or from time to time after the Closing, each of the Parties will, and
Global will cause the Company and Riviera, at the other’s reasonable request and
at the requesting Party’s expense, to execute and deliver such instruments of
transfer, conveyance, assignment and assumption in addition to those delivered
at the Closing, and to take such other action as either of them may reasonably
request, in order to evidence the consummation of the Transaction in accordance
with the terms of the Transaction Documents.
8.08 Public
Announcements. No
press release or announcement concerning the Transaction will be issued by
either Party or its Affiliates without the prior written consent of the other
Party, except as such release or announcement may be required by
Law.
8.09 Schedules to
Agreement. The Stockholder and Global shall deliver to the
other Party, as soon as possible but in no event later than January 15, 2010,
the Schedules referenced in Articles III, IV and V. After the initial
delivery of the Schedules, each of the Stockholder and Global shall from time to
time deliver to the other Party, as soon as possible after such Party becomes
aware thereof, supplemental information updating the information set forth in
the Schedules, so that such Schedules supplemented by such information will be
true and correct at the Closing as if then made; provided that the foregoing
shall not be deemed to permit any transaction not otherwise permitted by this
Agreement or to constitute a waiver by either Party of any misrepresentation or
breach by the other Party of any agreement, covenant, obligation or warranty
made herein.
ARTICLE
IX
CONDITIONS TO THE
OBLIGATIONS OF THE SHAREHOLDER
The
obligations of the Shareholder to consummate the Transaction are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which, to the extent permitted by applicable Law, may be waived by the
Shareholder, in writing, in whole or in part):
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9.01
Representations, Warranties
and Covenants.
(a) Each
of the representations and warranties of Global contained in this Agreement, any
Transaction Document to which it is a party and in any certificate or other
writing delivered by Global pursuant hereto shall be true, complete and correct
in all material respects (other than representations and warranties subject to
“materiality” qualifiers, which shall be true, complete and correct as stated)
both when made and on and as of the Closing as if made at and as of the Closing
(other than representations and warranties which address matters only as of a
certain date which shall have been true, complete and correct as of such certain
date).
(b) Global
will have performed each of its covenants, agreements and obligations required
to be performed by it pursuant to this Agreement and the Transaction Documents
on or prior to the Closing.
(c) The
Shareholder will have received a certificate, executed by an officer of Global,
dated as of the Closing Date, certifying that the conditions set forth in
Sections 9.01 through Section 9.05 have been fulfilled.
9.02 Governmental
Permits. No
notice from any Governmental Entity shall have been received which challenges or
seeks to prohibit or limit the ownership or operation of all or any portion of
the business or assets of Global or any Subsidiary of Global, or otherwise seeks
to compel Global or any Subsidiary of Global to dispose or hold separate all or
any portion of its business or assets or impose any material limitation on the
ability of Global or any Subsidiary of Global to conduct its business, in each
case, following the Closing.
9.03 No
Litigation. No
Action will have been threatened, instituted or pending which
(i) challenges or seeks to restrain or prohibit, or would reasonably be
expected to have the effect of preventing, delaying, making illegal or otherwise
interfering with the consummation of the Transaction or the performance by any
Person of its covenants, agreements or obligations under this Agreement or the
Transaction Documents or seeks Damages in connection therewith,
(ii) challenges or seeks to prohibit or limit the ownership or operation of
all or any portion of the business or assets of Global or any Subsidiary of
Global or compels or seeks to compel Global or its Affiliates to dispose of or
hold separate all or any portion of the business or assets of Global or any
Subsidiary of Global or seeks to impose any material limitation on the ability
of Global or any Subsidiary of Global to conduct its business or own such
assets, (iii) could reasonably be expected to result in any material
diminution in the benefits expected to be derived by the Shareholder as a result
of the Transaction or (iv) has or has had a Material Adverse Effect on
Global or any Subsidiary of Global, taken as a whole.
9.04 No
Prohibition. On
or after the date of this Agreement, there will not exist or have been enacted,
entered, enforced, promulgated or deemed applicable to the Transaction, any Law
or any other action taken by any court or other Governmental Entity that has
resulted, or could reasonably be expected to result, directly or indirectly, in
any of the consequences referred to in Section 9.03.
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9.05 No Material Adverse
Effect. Since
the date hereof, there will not have occurred (or reasonably be expected to
occur) any event, change or development which has had or could reasonably be
expected to have a Material Adverse Effect on Global or any Subsidiary of Global
taken as a whole, and the Shareholder shall have received a certificate from
Global with respect thereto.
9.06 Legal
Opinion. The
Shareholder will have received the opinion of Katten Muchin Rosenman LLP,
special counsel to Global, and the opinion of special Nevada counsel reasonably
acceptable to the Shareholder and in form and substance
reasonably acceptable to the Shareholder.
9.07 Articles of
Amendment. The
Articles of Amendment shall have been filed with the Secretary of State of the
State of Nevada and have become effective.
9.08 Secretary’s
Certificate. The
Shareholder shall have received a certificates of the corporate secretary of
Global and the company secretary of Global certifying as to (i) the resolutions
adopted by the board of directors and shareholders of Global authorizing the
execution, delivery and performance of this Agreement, (ii) if the concept of
good standing exists in the jurisdiction of incorporation of Global and its
Subsidiaries, the good standing of Global and its Subsidiaries, (iii) the
Organizational Documents of Global which are then in effect and (iv) the
incumbency of the signatories to this Agreement and the other Transaction
Documents.
9.09 Consents.
Global shall have obtained all Permits and Consents described in Schedule 5.04.
9.10 Registration Rights
Agreement. Global and the Shareholder shall have entered into
a Registration Rights Agreement containing terms reasonably acceptable to the
Shareholder, including demand and piggyback registration rights and obligations
for Global to comply with SEC reporting requirements (the “Registration Rights
Agreement”).
9.11 Board
Appointment. Edward Caan shall have been appointed as a
director of Global.
9.12 Employment
Agreement. Edward Caan and Global shall have entered into an
Employment Agreement reasonably acceptable to Edward Caan (the “Employment
Agreement”).
9.13 Exchange of Stock
Certificates. The Shareholder shall have received certificates evidencing
the Exchange Shares.
9.14 Lock-Up Agreement.
The Shareholder, Gary Blom, Ian Long, Timothy Yeo and certain other management
personnel of Global shall have entered into an agreement pursuant to
which such persons shall not sell any shares of Global Common Stock until the
six month anniversary of the delivery of Global’s audited consolidated financial
statements for the year ended June 30, 2011 (the “Lock-Up
Agreement”).
9.15 Voting Agreement. The
Shareholder and the Persons identified on Schedule 9.15 shall have entered into
an agreement pursuant to which the parties to such agreement shall agree to vote
their shares to elect Edward Caan or another individual designated by the
Shareholder as a director of Global until the expiration of the Lock-Up
Agreement, provided that such Persons shall hold a sufficient number of shares
of Global Common Stock to elect Edward Caan or such other individual as a
director of Global (the “Voting
Agreement”).
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9.16 Schedules. Global
shall have delivered the Schedules and the Audited Financial Statements pursuant
to Section 8.09 and the information contained on such Schedules shall be
acceptable to the Shareholder in its sole discretion.
9.17 Escrow
Agreement. Global, the Shareholder and the Escrow Agent shall
have entered into the Escrow Agreement on terms, in addition to those set forth
in Article XII, reasonably acceptable to the Shareholder.
9.18 Financial
Statements. Global shall have delivered to the Shareholder
audited consolidated financial statements of Global and its Subsidiaries for the
year ending June 30, 2009 (including the notes thereto) (the “Audited Financial
Statements”) on or before February 16, 2010 and the Audited Financial
Statements shall not be materially different from those set forth in the draft
financial statements previously delivered by Global.
ARTICLE
X
CONDITIONS TO THE
OBLIGATIONS OF GLOBAL
The
obligations of Global to consummate the Transaction and the Transaction
Documents are subject to the satisfaction, at or prior to the Closing, of each
of the following conditions (any of which, to the extent permitted by applicable
Law, may be waived by Global, in writing, in whole or in part):
10.01 Representations, Warranties
and Covenants.
(a) Each
of the representations and warranties of the Shareholder contained in this
Agreement, any Transaction Document to which it is a party and in any
certificate or other writing delivered by the Shareholder pursuant hereto shall
be true, complete and correct in all material respects (other than
representations and warranties subject to “materiality” qualifiers, which shall
be true, complete and correct as stated) both when made and on and as of the
Closing as if made at and as of the Closing (other than representations and
warranties which address matters only as of a certain date which shall have been
true, complete and correct as of such certain date).
(b) The
Shareholder will have performed each of the covenants, obligations and
agreements required to be performed by it pursuant to this Agreement and the
Transaction Documents on or prior to the Closing.
(c) Global
will have received a certificate executed by an officer of the Shareholder,
dated as of the Closing Date, certifying that the conditions set forth in
Sections 10.01 through
10.05 have been fulfilled.
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10.02 Governmental
Permits. No
notice from any Governmental Entity shall have been received which challenges or
seeks to prohibit or limit the ownership or operation of all or any portion of
the business or assets of the Company or any Subsidiary of the Company, or
otherwise seeks to compel the Company or any Subsidiary of the Company to
dispose or hold separate all or any portion of its business or assets or impose
any material limitation on the ability of Global, the Company or any Subsidiary
of either Global or the Company to conduct its business following the
Closing.
10.03 No
Litigation. No
Action will have been threatened, instituted or pending which
(i) challenges or seeks to restrain or prohibit, or could reasonably be
expected to have the effect of preventing, delaying, making illegal or otherwise
interfering with the consummation of the Transaction or the performance by any
Person of its covenants, agreements and obligations under this Agreement or the
Transaction Documents or seeks Damages in connection therewith,
(ii) challenges or seeks to prohibit or limit the ownership or operation by
the Company or any Subsidiary of the Company of all or any portion of
its business or assets or ownership by Global of the Company Shares
or compels or seeks to compel the Company or any Subsidiary of the Company to
dispose of or hold separate all or any portion of its business or assets or
seeks to impose any material limitation on the ability of the Company or any
Subsidiary of the Company to conduct its business or own its assets or the
ability of Global to own the Company Shares, (iii) could
reasonably be expected to result in any material diminution in the benefits
expected to be derived by Global as a result of the Transaction or (iv) has
or has had a Material Adverse Effect on the Company or any Subsidiary of the
Company, taken as a whole.
10.04 No
Prohibition. On or
after the date of this Agreement, there will not exist or have been enacted,
entered, enforced, promulgated or deemed applicable to the Transaction, any Law
or any other action taken by any court or other Governmental Entity that has
resulted, or could reasonably be expected to result, directly or indirectly, in
any of the consequences referred to in Section 10.03.
10.05 No Material Adverse
Effect. Since
the date hereof, there will not have occurred (or reasonably be expected to
occur) any event, change or development which has had or could reasonably be
expected to have a Material Adverse Effect on the Company or any Subsidiary of
the Company taken as a whole, and Global shall have received a certificate of
the Shareholder with respect thereto.
10.06 Legal
Opinion. Global
will have received the opinion of Kelley Drye & Warren LLP, special counsel
to the Shareholder, in a form and substance reasonably acceptable to
Global.
10.07 Shareholder’s
Certificates. Global shall have
received a certificate of a Manager of the Shareholder certifying as to (i) the
resolutions adopted by the Shareholder authorizing the execution, delivery and
performance of this Agreement, (ii) the good standing of the Shareholder, the
Company and Riviera, (iii) the Organizational Documents of the Shareholder, the
Company and Riviera and (iv) the incumbency of the signatories to this Agreement
and the other Transaction Documents.
10.08 Books and
Records. The
Shareholder will have delivered and made available to Global the Books and
Records of the Company and each Subsidiary of the Company in accordance with
Section 6.01 of
this Agreement.
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10.09 Consents. The
Shareholder shall have obtained all Permits and Consents set forth on Schedules
3.04 and 4.03.
10.10 Registration Rights
Agreement. Global and the Shareholder shall have entered into
the Registration Rights Agreement.
10.11 Board
Appointment. One or more persons designated by Global shall
have been appointed to the Board of Directors of the Company and as managers of
Riviera.
10.12 Employment
Agreement. Edward Caan and Global shall have entered the
Employment Agreement on terms reasonable acceptable to Global.
10.13 Exchange of Stock
Certificates. Global shall have received the stock certificates
representing the Company Shares with stock powers endorsed in
blank.
10.14 Articles of
Amendment. The
Articles of Amendment shall have been filed with the Secretary of State of the
State of Nevada.
10.15 Lock-Up
Agreement. The Shareholder shall have entered into the Lock-Up
Agreement on terms reasonably acceptable to the Global.
10.16 R. Mack Estates
Agreement. In the event that the Shareholder shall not have
obtained the consent to the assignment of the R. Mack Assets listed on Schedule
6.04, Global or its designee and R. Mack Estates, LLC shall have entered into an
agreement reasonably acceptable to Global under which R. Mack Estates, LLC shall
operate the R. Mack Assets for the sole and exclusive benefit of
Riviera.
10.17 Schedules. The
Shareholder shall have delivered the Schedules pursuant to Section 8.09 and the
information contained on such Schedules shall be acceptable to Global in its
sole discretion.
10.18 Escrow
Agreement. Global, the Shareholder and the Escrow Agent shall
have entered into the Escrow Agreement on terms, in addition to those set forth
in Article XII, reasonably acceptable to Global.
ARTICLE
XI
TERMINATION
11.01 Termination
Events. This
Agreement may, by notice given prior to or at the Closing, be
terminated:
(a) by
mutual written consent of Global and the Shareholder;
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(b) (i)
by Global if satisfaction of any of the conditions contained in Article X of
this Agreement becomes impossible, other than through the failure of Global to
comply with its covenants, agreements or obligations under this Agreement or the
breach of any of Global representations and warranties set forth in Article V of
this Agreement, and Global has not waived such condition on or before the
Closing Date; or (ii) by the Shareholder if satisfaction of any of the
covenants, agreements or obligations contained in Article IX of this
Agreement becomes impossible, other than through the failure of the Shareholder
to comply with its covenants, agreements or obligations under this Agreement or
the breach of any of the Shareholders representations and warranties set forth
in Articles III or IV of this Agreement, and the Shareholder has not waived such
condition on or before the Closing Date; or (iii) by either Global or the
Shareholder if the Closing has not occurred, other than through the failure of
the Party seeking to terminate this Agreement fully to comply with its
covenants, agreements or obligations under this Agreement or the breach of any
of such Party’s representations or warranties on or before February 28, 2010, or
such later date as the Parties may agree upon in writing; or
(c) by
either Global or the Shareholder if the other Party has committed a material
breach of this Agreement and such breach has not been waived.
11.02 Effect of
Termination.
(a) Termination
of this Agreement pursuant to Section 11.01 will terminate all obligations of
the Parties hereunder except for those covenants, agreements and obligations
contained in Sections 8.08, 13.01 and this Section 11.02; provided, however, that
termination by either Party (the “Terminating Party”)
pursuant to clause (b) or (c) of Section 11.01 will not relieve a
Party in material breach of its covenants, agreements or obligations hereunder
(the “Breaching
Party”) for any Liability to the Terminating Party with respect to such
breach.
(b) In
the event of termination of this Agreement for any reason other than those
described in the proviso of subsections (a) of this Section 11.02, each Party
will bear all expenses incurred by it in connection with this Agreement and the
Transaction Documents.
ARTICLE
XII
SURVIVAL AND
INDEMNIFICATION
12.01 Survival.
Notwithstanding any right of either Party to fully investigate the affairs of
the other Party and its Subsidiaries and any knowledge of facts determined or
determinable by such Party pursuant to such investigation or right of
investigation, the representations, warranties, covenants and agreements of the
other Party contained in this Agreement, or listed or disclosed on any Schedule
hereto or in any other Transaction Document shall survive the Closing as
follows: All covenants, agreements and Closing certifications made by
the Parties shall survive the execution and delivery of this Agreement and the
Closing hereunder; and all of the representations and warranties made by the
Parties shall survive the execution and delivery of this Agreement and the
Closing hereunder until the six month anniversary of the delivery by Global to
the Shareholder of the audited consolidated financial statements of Global for
the fiscal year ending June 30, 2011; provided, however, that there
shall be no termination of any such representation or warranty as to which a
Claim has been asserted prior to the termination of such survival period, provided further, that the
representations and warranties made (a) by the Shareholder in Section 3.10 and
Global in Section 5.12 shall survive for the applicable Tax law statute of
limitations period plus 10 days and (b) the representations and warranties made
in Sections 3.01, 3.02, 4.01, 4.02, 4.05, 5.01, 5.02 and 5.05 shall survive
indefinitely.
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12.02 Indemnification. Subject
to Section 12.01, each Party (the “Indemnitor”) agrees,
promptly upon the determination of Damages, to indemnify and hold harmless the
other Party, its Affiliates and their respective Representatives (the “Indemnitees”), from
and against all Damages resulting, directly or indirectly, from or in connection
with:
(i) any
misrepresentation or breach of any representation or warranty made by the
Indemnitor in this Agreement, any Transaction Document or any agreement or
instrument delivered in connection with the Transaction; and
(ii) any
breach of any covenant, agreement or other obligation of the Indemnitor
contained in this Agreement, any Transaction Document or any agreement or
instrument delivered in connection with the Transaction.
12.03 Procedure for
Indemnification.
(a) Third Party
Claims.
(i) Promptly
after receipt by an Indemnitee of notice of the commencement of any Action by a
third party (a “Third
Party Claim”) with respect to any matter for which indemnification is or
may be owing pursuant to Section 12.02, the Indemnitee will give notice
thereof to the Indemnitor; provided, however, that the
failure of the Indemnitee to notify the Indemnitor will not relieve the
Indemnitor of any of its obligations hereunder, except to the extent that the
Indemnitor demonstrates that the defense of such Third Party Claim has been
actually prejudiced by the Indemnitee’s failure to give such
notice.
(ii) If
any Action referred to in Section 12.02(a)(i) or 12.02(b) is brought
against an Indemnitee and it gives notice to the Indemnitor of the commencement
of such Action, the Indemnitor will be entitled to participate in such Action,
and (unless (x) the Indemnitor is also a party to such Action and joint
representation would be inappropriate based upon the advice of outside counsel
that a conflict of interest exists between the Indemnitee and the Indemnitor
with respect to such Action, or the representation of the Indemnitee by legal
counsel selected by the Indemnitor would be inappropriate due to legal defenses
available to Indemnitee that are different from or additional to those available
to Indemnitor or any other Indemnitee represented by such legal counsel, or
(y) the Indemnitor fails to provide reasonable assurance to the Indemnitee
of its financial capacity to defend such Action and provide indemnification with
respect to such Action) may assume the defense of such Action with counsel
reasonably satisfactory to the Indemnitee and, after notice from the Indemnitor
to the Indemnitee of its election to assume the defense of such Action, the
Indemnitor will not, as long as it diligently conducts such defense with counsel
reasonably satisfactory to the Indemnitee, be liable to the Indemnitee under
this Article XII for any fees of other counsel with respect to the defense of
such Action, in each case subsequently incurred by the Indemnitee in connection
with the defense of such Action.
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(iii) If
the Indemnitor assumes the defense of an Action, (x) no compromise or
settlement of the Third Party Claim or Action may be effected by the Indemnitor
without the Indemnitee’s prior written consent unless (A) there is no
finding or admission of any fault, any violation of Law or any violation of the
rights of any Person and the compromise or settlement will have no effect on, or
provide, grounds for the basis of, any other Third Party Claims that may be made
against the Indemnitee, (B) the sole relief provided is monetary damages
that are paid in full by the Indemnitor; and (C) the Indemnitee receives a
general release from any Liability and (y) the Indemnitee will have no
Liability with respect to any compromise or settlement of such Claims or Action
effected without Indemnitee’s prior written consent. Notwithstanding
the assumption by the Indemnitor of the defense of any Claim or Action as
provided in this Section 12.02(a)(i) or 12.02(b), the Indemnitee will be
permitted to join in such defense and to employ counsel at its own
expense. If notice pursuant to Section 12.02(a)(i) or 12.02(b) is
given to an Indemnitee of the commencement of any Action and the Indemnitor does
not, within ten (10) days after such Indemnitee’s notice is given, give notice
to the Indemnitee of its election to assume the defense of such Action, the
Indemnitor will be bound by any determination made in such Action or any
compromise or settlement effected by the Indemnitee.
(iv) Notwithstanding
the foregoing, if the Indemnitee determines in good faith that there is a
reasonable probability that an Action may adversely affect it or its Affiliates
other than as a result of monetary Damages for which it would be entitled to
indemnification under this Agreement, the Indemnitee may, by notice to the
Indemnitor, assume the exclusive right to defend, compromise or settle such
Action, but the Indemnitor will not be bound by any determination of an Action
so defended or any compromise or settlement effected without its prior written
consent, which may not be unreasonably withheld, conditioned or
delayed.
(v) Indemnitor
and Indemnitee agree to provide each other with reasonable access during regular
business hours to the properties, Books and Records and Representatives of the
other, as reasonably necessary in connection with the preparation for an
existing or anticipated Action involving a Third Party Claim and its obligations
with respect thereto pursuant to this Article XII.
(b)
Direct
Claims. Any claim by an Indemnitee for indemnification not
involving a Third Party Claim (a “Direct Claim”) may be
asserted by giving the Indemnitor notice thereof. If the Indemnitor
does not notify the Indemnitee within thirty (30) calendar days following its
receipt of such notice that the Indemnitor disputes its Liability to the
Indemnitee under Section 12.02, the Direct Claim specified by the
Indemnitee in such notice will be conclusively deemed a Liability of the
Indemnitor under Section 12.02 and the Indemnitor will pay the amount of
such Liability to the Indemnitee on demand or, in the case of any notice in
which the amount of the Direct Claim (or any portion thereof) is estimated, on
such later date as the amount of such Direct Claim (or such portion thereof)
becomes finally determined.
12.04 Payment. With
respect to any Third Party Claim for which indemnification is payable hereunder,
Indemnitor will pay Indemnitee promptly, but in any event within ten days after
(i) the entry of judgment against the Indemnitee and the expiration of any
applicable appeal period; (ii) the entry of a non-appealable judgment or
final appellate decision against the Indemnitee; or (iii) the execution of
any settlement agreement with respect to such Third Party Claim.
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12.05 Right to Indemnification Not
Affected by Knowledge or Waiver.
(a) The
right to indemnification, payment of Damages or other remedy based upon breach
of representations, warranties, covenants, agreements or obligations will not be
affected by any investigation conducted with respect to, or knowledge acquired
(or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, with respect to
the accuracy or inaccuracy of or compliance with any such representation,
warranty, covenant, agreement or obligation.
(b) The
waiver of any condition based on the accuracy of any representation or warranty,
or on the performance of or compliance with any covenant, agreement or
obligation, will not affect the right to indemnification, payment of Damages or
other remedy based on such representations, warranties, covenants, agreements
and obligations.
12.06
Sole
and Exclusive Remedy. Except
as otherwise expressly provided herein, in the absence of fraud or intentional
misrepresentation or intentional breach of a representation, warranty
covenant, agreement or obligation, indemnification pursuant to this Article XII
will be the exclusive remedy of each Party against the others for the matters
subject to indemnification set forth in this Article XII and will be in lieu of
other remedies with respect thereto.
12.07 Limitations on
Liability.
(a) No
Person seeking to be indemnified hereunder will be entitled to any recovery from
the proposed Indemnitor unless a claim for indemnification, specifying the
factual basis of that claim in reasonable detail to the extent then known, is
made on or before the expiration of time period for survival set forth in
Section 12.01.
(b) Subject
to the next sentence, neither Party shall be liable to indemnify the other Party
for Damages in excess of $7,450,000.00 or the equivalent thereof in other
currencies with respect to a Direct Claim based upon the circumstances described
in clause (i) of Section 12.02. The foregoing limitation shall not
apply to any claim for indemnification pursuant to either of clause (ii) of
Section 12.02, with respect to any Third Party Claim or with respect to any
Liability resulting from a breach of Sections 3.01, 3.02, 3.10, 4.01, 4.02,
4.05, 5.01, 5.02, 5.05 or 5.12.
(c) (i)
Notwithstanding anything in this Agreement to the contrary, if the Shareholder
is entitled to indemnification relating to one or more Claims under this Article
X and Global fails to pay the amount of Damages within 90 days after the right
to payment is established, then the Shareholder shall have the option,
exercisable by written notice to Global, to avail itself of the remedy set forth
in this Section 12.07(c) in lieu of receiving payment from Global.
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(ii) At
the Closing, (A) Global and the Shareholder shall enter into an Escrow Agreement
in form and substance reasonably acceptable to Global and the Shareholder (the
“Escrow
Agreement”) with Mellon Investor Services LLC, The Bank of New York
Mellon or another escrow agent reasonably acceptable to Global and the
Shareholder (the “Escrow Agent”) and
(B) Global shall execute and deliver, or cause to be executed and
delivered, to the Escrow Agent such agreements, documents and instruments that
are necessary or appropriate to transfer, assign and convey all right, title and
interest in and to the Company Intellectual Property to the Shareholder or its
designee, free and clear of any Encumbrance (the “Transfer
Documents”). The Escrow Agreement shall provide that the
Escrow Agent shall release and deliver the Transfer Documents as
follows:
(X) Upon
receipt of a notice from the Shareholder stating that Global has failed to pay
Damages as provided in this Article X within the time period set forth in this
Section 12.07(c) and that the Shareholder has given a copy of such notice to
Global on the same Business Day as it is giving the notice to the Escrow Agent,
the Escrow Agent shall on the third Business Day after receiving such notice
release and deliver the Transfer Documents to the Shareholder;
(Y) The
Escrow Agent shall promptly release and deliver the Transfer Documents pursuant
to joint written instructions executed by Global and the Shareholder;
or
(Z) If
the Transfer Documents have not been released and delivered by the Escrow Agent
pursuant to the foregoing clauses (X) or (Y) by the six month anniversary of the
delivery by Global to the Shareholder and the Escrow Agent of the audited
consolidated financial statements of Global for the fiscal year ending June 30,
2011, then the Escrow Agent shall promptly after such six month anniversary
release and deliver the Transfer Documents to Global, provided, however, that if
the Escrow Agent receives a written notice from the Shareholder on or prior to
such six month anniversary to the effect that it has asserted the possible
existence of a Pending Claim, then the Escrow Agent shall continue to hold the
Transfer Documents until it receives (I) joint written instructions executed by
Global and the Shareholder as to the release and delivery of the Transfer
Documents, in which case it shall promptly comply with such instructions, or
(II) a notice from the Shareholder stating that such Pending Claim has been
resolved and that the Shareholder has given a copy of such notice to Global on
the same Business Day as it is giving the notice to the Escrow Agent, in which
case the Escrow Agent shall on the third Business Day after receiving such
notice release and deliver the Transfer Documents as instructed by the
Shareholder.
(iii) For
the period beginning on the Closing Date and ending on the date the Transfer
Documents are released and delivered by the Escrow Agent, Global will not and
will not permit any of its Subsidiaries or Affiliates to, (A) transfer, assign
or convey any right, title or interest in or to any of the Company Intellectual
Property, (B) permit any Encumbrance to exist that affects the Company
Intellectual Property or (C) take or omit to take any action, or permit any
fact, event or circumstances to occur, that would diminish the value of, or any
right, title or interest in or to, any of the Company Intellectual
Property.
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(iv) For
the avoidance of doubt, if the Transfer Documents are released and delivered to
the Shareholder by the Escrow Agent in accordance with the Escrow Agreement,
then (A) the Shareholder shall not be entitled to seek Damages from Global with
respect to the Claim(s) which served as the basis for such release and delivery
of the Transfer Documents and (B) the Shareholder shall be free to transfer,
assign and convey any right, title or interest in or to the Company Intellectual
Property to itself or any other Person.
(v) Global
and the Shareholder will each pay one-half of the fees and expenses of the
Escrow Agent, provided, however, that if the Escrow Agent seeks indemnification
under the Escrow Agreement, the Party whose action or omission has given rise to
such indemnification shall be responsible for satisfying such
indemnification.
12.08
Indemnification
Threshold. In
the absence of fraud or intentional misrepresentation or intentional breach of
warranty, the Liability of an Indemnitor with respect to any claim for
indemnification under Section 12.02 shall not be payable unless and until the
aggregate amount of Damages suffered or incurred by Indemnitee shall exceed
$60,000 or the equivalent thereof in other currencies; provided, however, that
at such time as such amount is exceeded, the Indemnitor shall be liable for the
entire amount of the Damages incurred.
ARTICLE
XIII
MISCELLANEOUS
PROVISIONS
13.01 Expenses.
(a) Subject
to the provisions of Article XII and Section 13.01(b), each of the Parties will
pay all costs and expenses incurred by it or on its behalf in connection with
the Agreement, the Transaction Documents and the Transaction, including fees and
expenses of its own Representatives.
(b) If
an Action is brought by a party to this Agreement for the enforcement of this
Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party will be entitled to recover legal fees and
costs incurred in that Action in addition to any other relief to which it may be
entitled.
13.02 Notices. All
notices, consents, waivers and other communications under this Agreement must be
in writing and will be deemed to have been duly given when (a) delivered by
hand (with written or electronic confirmation of receipt), (b) sent by
facsimile (with written confirmation of receipt), provided, that a copy
is mailed by certified or registered mail, U.S. first class postage prepaid,
return receipt requested, or (c) when received by the addressee, if sent by
a nationally recognized overnight delivery service (receipt requested), in each
case to the appropriate addresses and facsimile numbers set forth below (or to
such other addresses and facsimile numbers as a Party may designate by notice to
the other Party):
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(a) If
to the Shareholder:
Riviera
Global Holdings, LLC
37-80
Review Avenue
Long
Island City, NY 11101
Attention: Greg
Brayman
Facsimile
No.: +1-718-729-2826
with a
copy to:
Kelley
Drye & Warren LLP
101 Park
Avenue
New York,
NY 10178
Attention: Merrill
B. Stone, Esq.
Facsimile
No.: +1-212-808-7897
(b) If
to Global or Global prior to Closing:
Global
Beverages, Inc.
700
Global Road
Wybong,
New South Wales, Australia
Attention: Mr. Ian
Long, President
Facsimile
No.: +61-2-6547- 8039
with a
copy to:
Katten
Muchin Rosenman LLP
575
Madison Avenue
New York,
New York 10022
Attention: Paul
J. Pollock, Esq.
Facsimile
No.: +1-212-894-5511
13.03 Submission to Jurisdiction;
Waiver of Venue; Waiver of Jury Trial.
(a) The
Parties hereby irrevocably and unconditionally submit to the jurisdiction of the
United States District Court for the Southern District of New York and of the
New York State Supreme Court, New York County, and any appellate court thereof
for purposes of any Action arising out of or relating to this Agreement, any
other Transaction Document and the Transaction, and each of the Parties hereto
hereby irrevocably agrees that all claims in respect of such suit, action or
proceeding may be heard and determined in such courts.
(b) The
Parties hereby irrevocably waive, to the fullest extent they may effectively do
so under applicable Law, any objection they may now or hereafter have to the
laying of venue of any such Action in any such court and the defense of an
inconvenient forum to the maintenance of any such Action and any right of
jurisdiction in such Action on account of the place of residence or domicile of
such Person.
(c) The
Parties agree that a final judgment in any Action of the nature referred to in
Section 13.03(a) brought in any such court shall be conclusive and binding upon
the Party and may be enforced in other jurisdictions by suit on the judgment or
in any manner provided by law.
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13.04 Governing
Law. This
Agreement will be interpreted and construed in accordance with and governed by
the internal law of the State of New York, which shall be the proper law of this
Agreement notwithstanding any rule or principle of conflict of laws under which
any other body of law would be made applicable.
13.05 Waiver. Except
as otherwise provided herein, the rights and remedies of the Parties to this
Agreement are cumulative and not alternative. Neither the failure nor
any delay by any Party in exercising any right, power, remedy or privilege under
this Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, remedy or privilege, and no single or partial
exercise of any such right, power, remedy or privilege will preclude any other
or further exercise of such right, power, remedy or privilege or the exercise of
any other right, power, remedy or privilege.
13.06 Entire Agreement and
Modification. This
Agreement and the other Transaction Documents constitute a complete and
exclusive statement of the terms of the agreement between the Parties with
respect to the subject matter contained herein and therein and supersede all
prior discussions, negotiations, proposals, offers, understandings and
agreements between the Parties, including the Heads of Agreement dated October
29, 2009 between the Parties and certain other parties thereto.
13.07 No Oral
Modification. This
Agreement may not be amended except by a written Contract executed by the Party
sought to be charged with the amendment. Any attempted amendment in
violation of this Section 13.07 will be void ab initio.
13.08 Assignments, Successors, and
No Third-Party Beneficiaries. Neither
Party may assign any of its rights or obligations under this Agreement or any
Transaction Document without the prior written consent of the other
Party. Any purported assignment without such consent shall be void
ab
initio. Subject to the preceding sentence, this Agreement and
the Transaction Documents will apply to, be binding in all respects upon, and
inure to the benefit of the successors and permitted assigns of the
Parties. This Agreement and the Transaction Documents and all of its
provisions and conditions are for the sole and exclusive benefit of the Parties
and their successors and permitted assigns.
13.09 Severability. If
any provision of this Agreement is held invalid or unenforceable by any court or
arbitration tribunal of competent jurisdiction, the other provisions of this
Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or
unenforceable.
13.10 Captions. The
article, section and paragraph captions herein and the table of contents hereto
are for convenience of reference only, do not constitute part of this Agreement
and will not be deemed to limit or otherwise affect any of the provisions
hereof.
13.11 Exhibits and
Schedules. All
s and schedules are hereby incorporated in and made a part of this Agreement as
if set forth in full herein. Capitalized terms used in the
Transaction Documents but not otherwise defined therein will have the respective
meanings assigned to such terms in this Agreement.
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13.12 Interpretation; Contra
Preferendum Principle Excluded. For
the purposes of this Agreement, (i) words in the singular will be held to
include the plural and vice versa and words of one gender shall be held to
include the other gender as the context requires, (ii) the terms “hereof”,
“herein”, and “herewith” and words of similar import will, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement, (iii) the word “or” will not be
exclusive, (iv) the phrase “made available” will mean that the information
referred to has been made available if requested by the party to whom such
information is to be made available, (v) a “breach” of a representation,
warranty, covenant, agreement, obligation or other provision of this Agreement
or any Transaction Document will be deemed to have occurred if there is or has
been (x) any inaccuracy in or breach of or any failure to perform or comply
with, such representation, warranty, covenant, agreement, obligation, or other
provision, or (y) any claim by any Person or other occurrence or
circumstance that is or was inconsistent with such representation, warranty,
covenant, agreement, obligation or other provision; and the term “breach” means
any such inaccuracy, failure, Claim, occurrence or circumstance. The
Parties have participated jointly in the negotiation and drafting of this
Agreement, and this Agreement will not be construed for or against either Party
by reason of the authorship or alleged authorship of any provision hereof or by
reason of the status of the respective Parties.
13.13 Counterparts;
Facsimile. This
Agreement may be executed simultaneously in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which
together will be deemed to constitute one and the same Contract and may be
executed by facsimile.
[Signature
page follows]
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IN WITNESS WHEREOF, this Agreement has
been duly executed and delivered by the Parties or their duly authorized
officers as of the date first written above.
|
GLOBAL
BEVERAGES, INC.
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By:
|
/s/ Ian Long
|
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Ian
Long
|
||
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President
|
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RIVIERA
GLOBAL HOLDINGS LLC
|
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By:
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/s/ Gregory Brayman
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Gregory
Brayman
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Manager
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