STOCK PURCHASE AGREEMENT
THIS AGREEMENT, (the "Agreement") is dated as of the ____
day of October, 1997, and is between DEVELOPMENT
BANCORP LTD., ("DVBC") a Washington corporation, and INTERNATION-
AL MARKETING & ADVERTISING, INC. ("IMA).
R E C I T A L S
WHEREAS, DVBC desires to acquire 51% of the issued and authorized shares of IMA,
which would make IMA a partially owned subsidiary of DVBC; and
WHEREAS, IMA would like to sell 51% of all of its issued and outstanding shares
in consideration for an investment of $500,000
AGREEMENT
In consideration of the mutual covenants and agreements contained in
this agreement and in reliance upon the representations and warranties set forth
below, the parties agree as follows:
PURCHASE OF SHARES AND CONSIDERATION
Share purchase. IMA has 10,000 shares authorized, of which 3,137.60 are
outstanding. Under this agreement, IMA is selling DVBC 3,266 shares of IMA
stock, which represents 51% of the issued and outstanding shares of IMA.
Consideration. In consideration for the purchase of 3,266 shares of IMA stock,
DVBC agrees to pay to IMA $500,000.00 in two separate payments. The initial
payment of $350,000.00 and the final payment of $150,000.00. Stock option. IMA
hereby grants DVBC a right of first refusal to purchase additional shares of
IMA, and a right of first refusal to provide additional financing. IMA is not
obligated to sell additional shares or borrow additional capital.
Share Conversion. After two consecutive quarters that IMA has produced a profit
before taxes of $100,000.00 or more, the holders of shares of IMA will be able
to exchange their shares with DVBC shares on the basis of mutually agreed terms.
Change of Status. IMA agrees not to merge, reorganize, or
otherwise alter the current status of IMA without a shareholders
meeting.
Exchange of Shares of Debt. The following shareholders agree to cancel their
shareholder loans as listed below in exchange for the following number of DVBC
two year restricted shares.
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Name of shareholder Loan amount
Number of DVBC shares
Xxxxxxx Xxxxxxx $20,459
6,819
Xxxxx Xxxxxxx $19,000
6,333
Xxxxxx Ciba $20,000
6,666
Board of Directors. The Company will appoint Xxxxxxx Xxxxxxx
chairman of the board of DVBC. IMA will appoint Xxxxxxx Xxxx,
Xxxxxxxx Xxxxxxx, Xxxx Xxxxxx and Xxxxxxx X. Xxxxx.
Company Name. DVBC will change its name to IMATEL Holdings. IMA
will change its name to IMATEL Inc.
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Closing
The closing of this transaction will be in two parts. In part one, which will be
closed on October 20, 1997, DVBC will pay $350,000 and receive 2,881 shares,
which represent 45% of the issued and outstanding shares of IMA, plus two seats
on the IMA board of directors which represent a majority. Immediately following
the closing IMA will take all necessary steps to enable the FCC to approve DVBC
as a control party of IMA. Part two of the closing, is to take place within 5
days of the FCC approval of DVBC, DVBC will fund the remaining $150,000 and have
one directors resign for the IMA board, leaving DVBC with a single seat on the
IMA board. DVBC will receive 385 shares, which will result in DVBC owning 51% of
the issued and outstanding shares of IMA.
Stock Option Plan. DVBC shall immediately establish a stock option program under
which IMA management shall be entitled to options to purchase a total of 600,000
shares, which options shall vest at the following rates:
Options Price Event
100,000 4.00 First $1,000,000 of IMA earnings
200,000 5.00 Second $1,000,000 of IMA earnings
300,000 6.00 Third $1,000,000 of IMA earnings
The above earnings targets shall be cumulative; and all options
will expire on three years from closing.
REPRESENTATIONS AND WARRANTIES OF IMA
Organization.: IMA is a corporation duly organized and in good standing under
the laws of Florida, and is in good standing. The officers and directors of IMA
are: Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, and Xxxxxx Ciba all of whom make the
following representations.
Capitalization. IMA has 10,000 authorized shares of common stock
of which 3,137.60 are issued and outstanding. There is no other
class of stock. There are on options, rights or agreement
relative to any of the IMA shares.
Financial Statements. The financial statements provided DVBC by IMA contained in
the business plan dated September, 1997 are true and correct and properly
present the financial condition of IMA.
No Undisclosed Liabilities. IMA is not subject to any undis-
closed material liability or obligation.
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Litigation. There is no litigation, proceeding or investigation
pending or threatened against IMA or any of its officers or
directors.
Title of Assets. IMA has good and marketable title to all of its assets and
properties carried on its balance sheet, free and clear of all liens or
encumbrances, except those reflected on its financial statements.
Defaults. IMA is not in material default, or alleged to be in
material default, under any contract or obligation.
Transactions with Affiliates, Directors and Shareholders. There are no contracts
or agreements between the officers and directors of IMA that have an adverse
material effect on IMA.
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IMA Audit. IMA, out of the proceeds of the DVBC investment, agrees to engage
Xxxxxxxxx, Silver & Hardy to conduct a certified audit of IMA and to complete
said audit within 60 days of the first closing.
Authority. IMA has the full power and authority to enter into
this Agreement.
Closing. The closing will have two parts.
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
All representations, warranties and covenants of the officers and directors of
IMA shall survive the closing of this transaction and remain in full force and
effect.
CERTAIN AGREEMENTS AND UNDERSTANDINGS
MISCELLANEOUS
Entire Agreement; Amendments. This Agreement contains the entire
understanding of the parties. There are no representations,
agreements, or undertaking other than those set forth herein or
therein.
Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
parties hereto as the date first above written.
International Marketing & Advertising, Inc.
By:
Xxxxxxx Xxxxxxx Title
By:
Xxxxx Xxxxxxx Title
By:
Xxxxxx Ciba Title
Development Bancorp, Ltd.
, Director
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