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EXHIBIT 6.12
AGREEMENT
THIS AGREEMENT made this 21st day of April, 1998 by and between
MEGAWORLD, INC., a corporation organized and existing under the laws of the
STATE OF DELAWARE, having offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("MegaWorld"), and XXXXXXX XXXXXXXX, an individual residing at 000 Xxxxxxxxx
Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 ("Giamalvo").
WITNESSETH:
WHEREAS, MegaWorld is involved in the business, among others, of
developing properties for timeshare sales;
WHEREAS, Castello Xxxxx Enterprises Srl ("CRE") is a party to a certain
Tenancy Agreement, dated January 11, 1990 (the "Tenancy Agreement"), granting
CRE the right to use the Castello Torre Xxxxx, a castle resort located in
Borghetti, Borbera, Italy (the "Property"), for a remaining term of
approximately forty-two (42) years, as a hotel-restaurant;
WHEREAS, Giamalvo is the controlling stockholder of CRE;
WHEREAS, Giamalvo has agreed to sell, assign and transfer to MegaWorld
all of his right, title and interest in CRE, consisting of twenty thousand
(20,000) quote (shares) of CRE capital stock (the "CRE Stock"), which CRE Stock
constitutes all of the outstanding quote (shares) of CRE, in return for certain
consideration hereafter set forth;
WHEREAS, MegaWorld, in the furtherance of MegaWorld's business, desires
to acquire all right, title, and interest in and to all of the outstanding quote
(shares) of CRE;
WHEREAS, Giamalvo, on one hand, and MegaWorld, on the other hand, are
desirous of entering into this Agreement to effectuate the foregoing upon the
terms and conditions set forth hereinafter;
NOW, THEREFORE, in consideration of the foregoing premises and the
consideration and mutual covenants contained herein, the sufficiency of which is
hereby acknowledged, and intending to be legally bound hereby, Giamalvo, on one
hand, and MegaWorld, on the other hand, hereby mutually promise and agree as
follows:
1. Transfer of the CRE Stock. Subject to compliance with all of the terms and
conditions of this Agreement and in reliance on the representations and
warranties set forth in this Agreement, Giamalvo, hereby sells, assigns and
transfers all right, title and interest in and to the CRE Stock to MegaWorld,
free and clear of any and all liens, charges or encumbrances.
2. Representations.
(a) Giamalvo warrants and represents that (i) CRE is a corporation duly
incorporated, validly existing and in good standing under the laws of Italy and
has the requisite corporate power
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to own its property and to carry on its business as presently conducted, and
(ii) the outstanding capital stock of CRE consists of twenty thousand (20,000)
quote (shares) of capital stock, all of the same class, and Giamalvo owns all
of such capital stock.
(b) Giamalvo warrants and represents that this Agreement has been duly
and validly executed and delivered by him, and the Tenancy Agreement has been
duly and validly executed and delivered by CRE, and each constitutes the valid
and binding agreement of Giamalvo or CRE, as the case may be, enforceable
against him or CRE, as the case may be, in accordance with its terms, subject to
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium,
receivership or other similar laws relating to or affecting creditors' rights
generally.
(c) Giamalvo warrants and represents that neither the execution of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute a violation of, or be in conflict with, or constitute or create a
default under any agreement or arrangement binding upon CRE or Giamalvo,
including without limitation the Tenancy Agreement.
(d) Giamalvo warrants and represents that no statutory or regulatory
rule or order of a court or a governmental body applicable to Giamalvo or CRE,
and no agreement between Giamalvo or CRE, and any such governmental body is in
effect which restrains or prohibits the sale and assignment by Giamalvo, of the
CRE Stock as contemplated by this Agreement, nor the consummation of any of the
other actions contemplated hereby, nor is there pending or (to the best of
Giamalvo's knowledge, information and belief) threatened any action, suit,
proceeding or investigation by any person, entity or governmental body which
questions or might jeopardize the validity of this Agreement or challenges any
of the transactions contemplated hereby.
(e) Giamalvo warrants and represents that except as set forth in this
Agreement, no consent, approval, or authorization of or registration,
designation, declaration or filing with any governmental authority on the part
of Giamalvo or CRE is required in connection with the sale, assignment and
transfer of the CRE Stock pursuant to this Agreement or the consummation of any
other transaction contemplated hereby, including, without limitation, the
ability of the controlling stockholder of CRE to cause CRE to sell timeshare
interests in the Property to third parties and to operate the Property as a
hotel-restaurant.
(f) Giamalvo warrants and represents that no finder's fee or brokerage
fee is payable to any person by Giamalvo or CRE as a result of any action by
Giamalvo in connection with the transactions contemplated by this Agreement.
(g) Giamalvo warrants and represents that Giamalvo has the full right
to convey the entire right, title, and interest in the CRE Stock herein sold,
assigned and transferred, has not encumbered any right, title, and interest in
and to the CRE Stock, has not executed, and will not execute, any agreements in
conflict herewith nor do (or omit to be done) any act, matter, or thing whereby
any of the CRE Stock or any of Giamalvo's rights thereto may be invalidated, and
that the CRE Stock, when conveyed and sold hereunder to MegaWorld, will be free
from any lien, charge or other encumbrance whatsoever.
(h) Giamalvo warrants and represents that he has received from
MegaWorld all information with respect to the operations, business affairs and
financial condition of MegaWorld (the "Information") which Giamalvo considers
necessary to inform him of the investment value of
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the shares of Common Stock, $.0001 par value, of MegaWorld to be issued to
Giamalvo pursuant to this Agreement (the "MegaWorld Shares").
(i) Giamalvo warrants and represents that he has received no
representations, warranties or written communications with respect to the
offering of the MegaWorld Shares other than those contained in the Information
and this Agreement, and Giamalvo is not relying upon any information other than
that (i) contained in the Information or this Agreement, or (ii) resulting from
Giamalvo's own investigation of MegaWorld.
(j) Giamalvo warrants and represents that he is not relying on
MegaWorld for investment advice. Giamalvo warrants and represents that he has
carefully considered and has, to the extent Giamalvo believes such discussion
necessary, discussed with his professional legal, tax, accounting and financial
advisers the suitability of an investment in the MegaWorld Shares for his
particular tax and financial situation.
(k) Giamalvo warrants and represents that he has had an opportunity to
request and obtain any additional information he deemed necessary to verify the
information contained in the Information.
(l) Giamalvo warrants and represents that he is acquiring the MegaWorld
Shares for the investment and not with a view to the distribution or sale
thereof
(m) Giamalvo warrants and represents that he understands that the
MegaWorld Shares have not been registered under the Securities Act of 1933, as
amended (the "Act"), nor under the securities laws of any state or other
jurisdiction. Giamalvo warrants and represents that he understands that: (i) the
offering and sale of the MegaWorld Shares is intended to be exempt from
registration under the Act and applicable state securities laws, and (ii) the
MegaWorld Shares have not been approved or disapproved by the United States
Securities and Exchange Commission (the "Commission") or by any other federal or
state agency, and no such agency has passed on the accuracy or adequacy of the
Information, nor made any finding or determination as to the fairness or
suitability of an investment in the MegaWorld Shares.
(n) Giamalvo warrants and represents that he understands that there
are restrictions on the transferability of the MegaWorld Shares as stated in
this Agreement which restrict Giamalvo's ability to liquidate his investment in
any of the MegaWorld Shares. Giamalvo warrants and represents that all
subsequent offers and sales of the MegaWorld Shares shall be made pursuant to
registration of the MegaWorld Shares under the Act or pursuant to an available
exemption from the registration requirements of the Act and that MegaWorld has
not obligated itself to register the MegaWorld Shares under the Act.
(o) Giamalvo warrants and represents that he understands and
acknowledges that MegaWorld is relying upon the representations and warranties
contained in this Agreement in determining whether the offering is eligible for
exemption from the registration requirements contained in the Act and applicable
state securities law.
(p) Giamalvo warrants and represents that he agrees that the
representations, warranties, acknowledgments and agreements made by him in this
Agreement shall survive the Closing (hereafter defined).
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(q) Giamalvo warrants and represents that
(i) the Tenancy Agreement has a remaining term of approximately
forty two (42) years;
(ii) the Tenancy Agreement permits CRE to sell, assign and transfer
all of its rights under the Tenancy Agreement without requiring the
consent of the other party thereto;
(iii) the Tenancy Agreement is current, all payments required
thereunder have been made, and no default exists and no condition
exists which, with the passage of time or the giving of notice,
would be a default under the Tenancy Agreement; and
(iv) the Tenancy Agreement permits CRE or its assigns to undertake
structural repairs or modifications to the Property, although the
Property is presently in good condition and repair.
(r) MegaWorld warrants and represents that
(i) MegaWorld is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, and
has the corporate power to own its property and to carry on its
business as presently conducted;
(ii) the execution, delivery and performance of this Agreement by
MegaWorld, including the issuance to Giamalvo of the MegaWorld
Shares, has been duly and validly authorized by the Board of
Directors of MegaWorld, and this Agreement has been duly and
validly executed and delivered by MegaWorld and constitutes the
valid and binding agreement of MegaWorld, enforceable in accordance
with its terms, subject to bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium, receivership or other similar
laws relating to or affecting creditors' rights generally;
(iii) MegaWorld has all requisite corporate power and authority to
execute, deliver and perform. this Agreement and to carry out the
transactions contemplated hereby;
(iv) neither the execution of this Agreement by MegaWorld nor the
consummation by MegaWorld of the transactions contemplated hereby
will constitute a violation of, or be in conflict with or
constitute or create a default under any agreement or arrangement
binding upon MegaWorld, or result in the creation of any mortgage,
lien, pledge, charge, security interest or any encumbrance of any
nature whatsoever on any asset of MegaWorld, or conflict with or
violate any provision of the Certificate of Incorporation or
By-laws of MegaWorld;
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(v) no statutory or regulatory rule or order of a court or a
governmental body applicable to MegaWorld, and no agreement between
MegaWorld and any such governmental body is in effect which
restrains or prohibits the acquisition by MegaWorld of the CRE
Stock as reflected in this Agreement nor the consummation of any of
the other transactions contemplated hereby nor is there pending or
(to the best of MegaWorld's knowledge, information and belief)
threatened any action, suit, proceeding or investigation by any
person, entity or governmental body which questions or might
jeopardize the validity of this Agreement or challenges any of the
transactions contemplated hereby;
(vi) except as set forth in this Agreement, no consent, approval,
or authorization of or registration, designation, declaration or
filing with any governmental authority on the part of MegaWorld is
required in connection with the acquisition of the CRE Stock
pursuant to this Agreement or the consummation of any other
transaction contemplated hereby;
(vii) no finder's fee or brokerage fee is payable to any person by
MegaWorld as a result of any action by MegaWorld in connection with
the transactions contemplated by this Agreement;
(viii) the MegaWorld Shares, when issued in accordance with the
terms of this Agreement, will have been duly and validly authorized
and issued, will be fully paid and non assessable and will not have
been issued in violation of the preemptive rights of any person;
and
(ix) it is MegaWorld's intention to become a reporting company
pursuant to the Securities Exchange Act of 1934, as amended, within
a reasonable time after the Closing (hereafter defined).
(s) MegaWorld warrants and represents that the representations,
warranties, acknowledgments and agreements made by MegaWorld in this Agreement
shall survive the Closing.
3. Payments; Closings.
(a) Subject to compliance with all of the terms and conditions of this
Agreement and in reliance on the representations and warranties set forth in
this Agreement, in partial consideration for the sale, assignment and transfer
to MegaWorld of the CRE Stock, MegaWorld shall issue to Giamalvo, not later than
thirty (30) days after the Initial Closing referred to below, One Million
(1,000,000) MegaWorld Shares.
(b) In partial consideration for the sale, assignment and transfer to
MegaWorld of the CRE Stock, MegaWorld shall pay to Giamalvo Six Hundred
Twenty-Two Thousand Five Hundred Dollars (US$622,500) as follows: (i) on or
before the ninth (9) business day after the execution of this Agreement by
MegaWorld (the "Initial Closing"), MegaWorld shall transfer to Giamalvo Fifty
Thousand Dollars (US$50,000) in immediately available funds, and (ii) on or
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before August 1, 1998, MegaWorld shall transfer to Giamalvo the balance of such
payment in immediately available funds. It is the intent of MegaWorld to raise
the balance of the funds of Five Hundred Seventy-Two Thousand Five Hundred
Dollars (US$572,500) through the sale of MegaWorld Shares to investors pursuant
to an exemption from the registration requirements of the Act. Exhibit A to this
Agreement sets forth wire transfer information for payments required by this
Section 3(b). The initial payment and the deposit of the CRE Stock in escrow
pursuant to Section 3(d) shall occur simultaneously, with the obligation to make
the payment being conditioned on the deposit in escrow of the CRE Stock and the
deposit of the CRE Stock being conditioned on the making of the initial payment.
(c) The closing of the sale, assignment and transfer by Giamalvo to
MegaWorld of the CRE Stock shall take place on the date (the "Closing") of
delivery of the final US$5723,500 payment by MegaWorld to Giamalvo, I provided,
Giamalvo shall have previously received the MegaWorld Shares. The Closing shall
take place at the offices of Xxxxxxx, Xxxxxx and Xxxxx LLP, in New York, New
York or at such place as the parties hereto shall agree. At the Closing, the CRE
Stock shall be delivered to MegaWorld by Giamalvo and the US$572,5.00 final
payment shall be delivered to Giamalvo by MegaWorld.
(d) The parties agree that the CRE Stock will be transferred presently
to MegaWorld and registered in its name with, however, the necessary paperwork
to transfer the CRE Stock back to Giamalvo as hereinafter provided. The CRE
Stock will be placed by Giamalvo in escrow, not later than the ninth (9)
business day after the execution of this Agreement by MegaWorld, pursuant to the
Escrow Agreement attached as Exhibit B to this Agreement. The Escrow Agreement
shall authorize the Escrow Agent named therein to release the CRE Stock to
MegaWorld upon payment by MegaWorld to Giamalvo of all amounts due him under
this Agreement, including the issuance to him of the MegaWorld Shares.
(e) Should MegaWorld default in making any payment due to Giamalvo
under this Agreement, or fail to issue to him the MegaWorld Shares as provided
herein, then Giamalvo shall be entitled to retain any payments previously
received by him and/or MegaWorld Shares issued to him, as the case may -be, as
liquidated damages, shall be under no obligation to deliver. the CRE Stock to
MegaWorld as a result of any such default, and shall be entitled to a return
from the escrow of the CRE Stock which shall be transferred back to him by
MegaWorld.
(f) In addition, MegaWorld and Giamalvo shall enter into an Employment
Agreement substantially in the form of the Employment Agreement attached as
Exhibit C to this Agreement.
4. Governing Law; Arbitration and Venue.
(a) This Agreement shall be governed by, interpreted, construed and
enforced in accordance with the laws of the State of New York.
(b) Any controversy or claim arising out of or relating to this
Agreement shall be settled by decision of a panel of three (3) neutral
arbitrators to be selected pursuant to the Commercial Arbitration Rules of the,
American Arbitration Association. The venue of any such arbitration shall be in
New York, New York, U.S.A., and the arbitration shall in conducted pursuant to
the rules of said Association.
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5. Captions and Exhibits. Captions in this Agreement are solely for purposes of
identification and shall not in any manner alter or vary the interpretation or
construction of this Agreement. All Exhibits which are, or may be, attached to
this Agreement are to be considered to be incorporated herein by reference as if
set forth at length.
6. Integration. It is the desire and intent of the parties to provide certainty
as to their future rights and undertakings herein. The parties to this Agreement
have incorporated all representations, warranties, covenants, commitments and
understandings on which they have relied in entering into this Agreement, and
neither party makes any covenant or other commitment to the other concerning its
future action. Accordingly, this Agreement (i) constitutes the entire Agreement
and understanding between the parties and there are no promises,
representations, conditions, provisions or terms related thereto other than
those set forth in this Agreement, and (ii) supersedes all previous
undertakings, agreements and representations between the parties, written or
oral, with respect to the subject matter hereof. No modification of, addition
to, or waiver of any provisions of this Agreement shall be binding upon either
party hereto unless the same shall be in writing duly executed by a duly
authorized representative of the parties hereto.
7. Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
8. Waiver. No express or implied waiver by any party of any right or remedy with
respect to a default by any other party under any provision of this Agreement
shall be deernedl interpreted or construed as a waiver of any right or remedy
with respect to any other default under the same or any other provision hereof.
9. Successors and Assigns. All the terms and provisions of this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
heirs, personal representatives, transferees, successors and assigns.
10. Resale Restrictions: Registration Rights-
(a) Giamalvo acknowledges and agrees that: (i) the MegaWorld Shares may
not be sold, assigned or otherwise transferred by him unless a registration
statement is in effect with respect to such resale or an exemption for such
resale under applicable securities law registration requirements exists with
respect to such sale (as evidenced by an opinion of counsel delivered and
addressed to MegaWorld, which opinion must be reasonably acceptable to
MegaWorld); (ii) MegaWorld is under no obligation to prepare or file a
registration statement for the MegaWorld Shares at any time; (iii) the
certificates evidencing the MegaWorld Shares will bear the following legend in
substantially the following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), or under any
state securities laws, and thus may not be sold, assigned or otherwise
transferred unless so registered or unless an exemption from
registration is available, which exemption shall be established by an
opinion of
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counsel, reasonably satisfactory in form and substance to the issuer
and delivered and addressed to the issuer by counsel for the registered
owner of the shares evidenced hereby."
; and (iv) MegaWorld will issue instructions to its transfer agent to the effect
that subsequent transfer of the MegaWorld Shares may not be effected unless the
transfer agent has received evidence satisfactory to it that such transfer may
be made without violating applicable series laws.
(b) MegaWorld agrees that Giamalvo shall be entitled to one (1) demand
registration of the MegaWorld Shares, such demand registration to be exercisable
at any time after the first anniversary of the Closing by written notice from
Giamalvo to MegaWorld specifying the number of MegaWorld Shares to be registered
for resale by Giamalvo.
11. Counterparts. This Agreement may be executed in separate counterparts, each
of which is deemed to be an original and all of which taken together constitute
one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement under seal as if done so on the date first above written.
SIGNED IN AGREEMENT:
(CORPORATE SEAL)
/s/ XXXXX XXXX /s/ XXXXXXX XXXXXXXX
--------------------------- --------------------------
XXXXX X. XXXX XXXXXXX XXXXXXXX
DIRECTOR
MEGAWORLD, INC.
/s/ XXXXX ROLL
-----------------------------
XXXXX X. ROLL
PRESIDENT & TREASURER
MEGAWORLD, INC.
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EXHIBIT A
TO
AGREEMENT
WIRE TRANSFER INSTRUCTIONS:
BANK ACCOUNT: CITIBANK N.A.
000 0XX XXXXXX
XXX XXXX, XX 00000
ACCOUNT NAME: XXXXXXX XXXXXXXX
ACCOUNT NUMBER: 00000000
ROUTING NUMBER: 000000000
