Exhibit 10.1
AGREEMENT OF PURCHASE AND
SALE OF ASSETS
This Agreement is made as of the____ day of December 1997,
between NetRom , Inc., ("NetR"), a California Corporation and Tri-National
Development Corp. ("TND"), a Wyoming Corporation.
WHEREAS, "NetR" desires to purchase from "TND" and "TND" desires to sell to
"NetR", upon the terms and subject to the conditions of this Agreement, the
properties of "TND" described in Paragraph 1.01 in exchange for cash, stock
and construction and management agreements from "NetR" described in
Paragraph 1.02. In consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties
agree as follows;
ARTICLE I - Purchase and Sale of Assets
1.1 Sale of Assets
The assets to be conveyed, transferred, signed, and delivered, as
provided by this Agreement, shall, without limitation, include 50
acres of the property, (see Exhibit A-Legal Description) known as
Hills of Bajamar owned by Planificacion y Desarrollo Regional
Jatay, S.A. de C.V., ("PDRJ") a Mexican Corporation, a wholly-
owned subsidiary of "TND", but does not include any other assets
of "TND" or ("PDRJ"). The 50 acres will transferred to "NetR" at
a price of $60,000 per acre, for a total purchase price of
$3,000,000. The price and terms for the property is based on arms
length negotiations between the parties and is subject to the
both Board of Directors approval.
1.02 Considerations
As full payment for the transfer of the assets by "TND" to
"NetR", "NetR" shall deliver at the closing, the following:
(i) Stock: "NetR" shall deliver to "TND", at closing,
1,000,000 shares of its Preferred Stock at a value of
$3.00 per share for a total value of $3,000,000. This
$3,000,000 of Preferred Stock will be accumulate
interest at 15% per annum and the principal and
interest will be convertible into "NetR" common stock
at $3.00 per share or market price for the 10 day
average prior to the day of conversion, which ever
price is less, but in no event less than $1.50 per
share. The conversion date is at "TND"s option,
however, no sooner than twelve months (12) from the
date hereof and in no case later than 15 days after the
common stock trades at or above a market price of $4.00
per share or more for a period of 30 consecutive days.
Additionally, "NetR' will provide "TND" with warrants
to purchase 1,000,000 shares of "NetR" at a price of
$1.25 per share presuming that "NetR" achieves its
stated projection of $.31 per share in earnings for the
year ending December 31, 1998. In the event that "NetR"
falls below the $.31 per share, but no lower than $.21
in earnings for that period , then the warrant price
will fall to $1.00 per share. Further if the earnings
fall to between $.11 and $.21per share then the option
price will be reduced to $.75 per share and in the
event that the earnings fall below $.11 per share then
the option price will be $.50 per share.
(ii) Construction and Management Agreements. It is
understood that "NetR"' intends to proceed with the
development of a Multi Media Production Studio. "NetR"
shall execute construction and management agreements,
dated as of the closing date, which will provide "TND"
with a management fee to be agreed for the construction
of facilities to be located on the 50 acres, as well as
a annual management fee to be agreed. This provision
and all other aspects of this agreement and any
amendments hereto or modifications hereof shall be
binding upon the parties hereto and their respective
heirs, successors and assigns. The agreement will also
contain language that allows "TND" to review and pre-
approve any usage for the property other than as a Studio.
(iii) It is further agreed that "TND" will provide "NetR"
annually with three consecutive weeks of useage of the
intended Automotive Racing Facility if and when
completed, which will adjoin "NetR" acreage, for the
setup and participation of "X Games". This will be
for the sole and exclusive benefit of "NetR",
including but not limited to filming and syndication
purposes.
(iii) Closing: The closing is to take place on or before
December 31, 1997.
1.03 Taxes
"NetR" shall pay all taxes and fees, excluding "TND"s income taxes,
arising out of the transfer of the assets.
ARTICLE 2 - Representations and Warranties of "TND"
2.01 Warranties-"TND" represents and warrants that:
(i) Organization. "TND" is a corporation duly organized,
validly existing, and in good standing under the laws
of Wyoming, has all necessary corporate powers to own
and sell its properties and carry on its business as
now owned and operated by it and is in good standing in
the State of Wyoming.
(ii) Title. "TND" through its wholly owned subsidiary is the
owner, beneficially and of record, of all the assets
identified or referred to in paragraph 1.01 which as of
closing shall be free and clear of all liens,
encumbrances, security agreements and any other
restrictions.
2.02 Absence of Changes. Since April 30, 1997, there has not been and
will not at closing be any changes in the financial condition or
operations of "TND", except changes in the ordinary course of
business, which changes have not in the aggregate been
materially adverse to "NetR"'s interests.
2.03 Compliance With Laws
"TND" represents that, to the best of its knowledge, it has
complied with, and is not in violation of, any applicable
federal, state or local statutes, laws or regulations, affecting
the assets or operation of the business of "TND", both in Mexico
and in the United States.
2.04 No Breach or Violation
The consummation of the transaction contemplated by this
Agreement shall not result in or constitute any of the following;
(i) A breach of any term or provision of this agreement;
(ii) A default or event that, upon notice or lapse of time or
both, would be a default, breach or violation of the
Articles of Incorporation or Bylaws of "TND", or any lease,
license, promissory note, contract, commitment or other
agreement, instrument or arrangement to which "TND" is a
party;
(iii)An event that would permit any party to terminate any
agreement.
2.06 Authority
"TND" has the right, power, legal capacity and authority to enter
into and perform its respective obligations under this Agreement,
subject only to Board of Director approval, which should be
secured prior to closing.
2.07 Full Disclosure
None of the representations and warranties made by "TND",
hereunder, or on its behalf, contains or shall contain any untrue
statement of material fact, or omits or shall omit any material
fact the, omission of which would be misleading.
ARTICLE 3 - "NetR"'s Representations and Warranties
"NetR" represents and warrants that:
(i) Organization. "NetR" is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of California, has all necessary corporate powers to
own and sell its properties and carry on its business as now
owned and operated by it and is in good standing in
California.
(ii) Pre-existing Relationship. "NetR" has sufficient knowledge
of "TND" and of a nature and duration that has enabled it
to evaluate the business and financial circumstances of
"TND" and the risks and merits of this acquisition.
ARTICLE 4 - Obligations Before Closing
4.01 "TND"'s Covenants
"TND" covenants that from the date of this Agreement until the
closing:
(i) Access to Information. "NetR" and its representatives shall
have, full access during all business hours to all properties, books,
accounts, records, contracts, and documents of, or relating to the assets
and property of "TND" being sold hereunder.
(ii) Conduct of Business. "TND" shall carry on its business and
activities diligently and in substantially the same manner as it previously
has been carried on, and shall not institute or use any unusual or novel
methods of manufacture, purchase, sale, lease, management, accounting or
operation that shall vary materially from those methods used by "TND" as
of the of this Agreement.
4.02 Warranties at Closing
All representations and warranties of "NetR" and "TND" set forth
in this Agreement, shall also be true and correct as of the closing date as
if made on that date.
ARTICLE 5 - Conditions Precedent to "NetR"'s Performance
5.01 Conditions
The obligations of "NetR" to purchase the assets under this agreement
are subject to the satisfaction, at or before the closing, of all the
conditions set out below in this Article 5. "NetR" may waive any or
all of these conditions in whole or in part without prior notice.
5.2 Accuracy of Representations
Except as otherwise set forth in this Agreement, all representations
and warranties by "TND" in this Agreement shall be true on and as of
the closing date as though made at that time.
5.03 Performance of "TND"
"TND" shall have performed, satisfied and complied with all covenants,
agreements and conditions required by this Agreement to be performed
or complied with by it on or before the closing date. During the
period from execution of this Agreement by both parties to the closing
date, there shall not have been any material adverse change in the
financial condition or the results of operations of "TND" and "TND"
shall not have sustained any material loss or damage to its assets,
whether or not insured, that materially affects its ability to conduct
a material part of its business.
5.04 Absence of Litigation
No action, suit or proceeding before any court or any governmental
body or authority, pertaining to the transaction contemplated by this
Agreement, shall have been instituted or threatened on or before the
closing date,
5.05 Consents
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All necessary agreements and consents to the consummation of the
transaction contemplated by this Agreement, if any, shall have been
obtained by "TND" and delivered to "NetR" at or before closing.
Further this agreement shall be subject to approval of "TND"'s outside
legal and tax counsel prior to closing.
ARTICLE 6 - Conditions Precedent to "TND"'s Performance
6.01 Conditions.
The obligations of "TND" to sell and transfer the assets under this
Agreement are subject to the satisfaction, at or before the closing,
of all the following conditions in this Article 6.
6.02 Accuracy of Representations.
Except as otherwise set forth in this Agreement, all representations
and warranties by "NetR" in this Agreement shall be true on and as of
the closing date as though made at that time.
6.3 "NetR"'s Warranties.
All representations and warranties by "NetR" contained in this
Agreement shall be true on and as of the closing date as though such
representations and warranties were made on and as of that date.
6.4 Absence of Litigation.
No action, suit or proceeding before or any governmental body or
authority, pertaining to the transaction contemplated by this
Agreement, shall have been instituted or threatened on or before the
closing date.
6.05 "NetR"'s Performance
"NetR" shall have performed and complied with all covenants and
agreements, satisfied all conditions required by this Agreement to
perform, comply with, or satisfy, before or after closing.
6.06 Consents
All necessary agreements and consents to the consummation of the
transaction contemplated by this Agreement, if any, shall have been
obtained by "TND" and delivered to "NetR" at or before closing.
Further, this agreement shall be subject to the approval of "NetR"s
outside legal and tax counsel prior to closing.
ARTICLE 7 - The Closing
7.01 Closing
The closing of the purchase and sale described herein shall take place
on or before December 31, 1997 at 10:00 A.M. Pacific Time, at the
offices of "TND" 000 Xxxxxx xxx Xxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx or at
another time and place agreeable to the parties.
7.02 "TND"'s Obligations
At the, closing, "TND" shall deliver or cause to be delivered to
"NetR":
i) Instruments of placement of all assets or other property of "TND"
being acquired hereunder by "NetR"into an escrow, with title being
available subject only to receipt by "TND" of full payment pursuant to
this agreement.
7.03 "NetR"'s Obligations
"NetR" shall execute and deliver to "TND":
(i) Preferred Stock as described in paragraph 1.02 (i) in a form
acceptable to "TND".
(ii) Construction and Management agreements as identified in Paragraph
1.02 (ii).
Article 8 - Costs
8.01 Broker
Each of the parties represents and warrants that they have dealt with
no outside broker as a broker or finder in connection with the
transactions contemplated by this Agreement, and, insofar as it knows,
no broker or other person is entitled to any commission or finder's
fee in connection with any of these transactions. Each party agrees
that it will be responsible for it's own commission arrangements.
8.02 Expenses
Each of the parties shall pay all costs and expenses incurred or to be
incurred by it in negotiation and preparation of this Agreement and in
closing and carrying out the transactions contemplated by this
Agreement.
ARTICLE 9 - Form of Agreement
9.01 Headings
The subject Headings of the paragraphs and subparagraphs of this
Agreement are included for purposes of convenience only, and shall not
affect the construction or interpretation of any of its provisions.
9.02 Modification and Waiver
This Agreement constitutes the agreement between the parties
pertaining to the subject matter contained in it and supersedes all
prior and contemporaneous agreements, representations, and
understandings of the parties. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in
writing by all the parties. No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a Waiver of any
other provisions, whether or not similar, nor shall any Waiver
constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
9.03 This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
ARTICLE 10 - Parties
10.01 Rights of Parties
Nothing in this Agreement, whether express or implied, is intended to
confer any rights or remedies under or by reason of this Agreement on
any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third persons
to any party to this agreement, nor shall any provision give any third
persons any right of subrogation or action over or against any party
to this Agreement.
10.02 Assignment
This Agreement shall be binding on, and shall inure to the benefit of
the parties to it and their respective heirs, legal representatives,
successors, and assigns; provided, however, "NetR" may not assign any
of its rights under it, except to a wholly owned subsidiary
corporation of the "NetR". No such assignment by "NetR" to its wholly
owned subsidiary shall relieve "NetR" of any of its obligations or
duties under this Agreement.
ARTICLE 11 - Remedies
11.01 Arbitration
Any controversy or claim arising out of or relating to this Agreement,
or the making, performance, or interpretation thereof, shall be
settled by arbitration in San Diego, California in accordance with the
Rules of the American Arbitration Association then existing, and
judgment on the arbitration award may be entered in any court having
jurisdiction over the subject matter of the controversy.
11-02 Time is of the Essence
Time is of the essence as to this agreement.
ARTICLE 12 - Nature and Survival of Representations and Obligations
12.01 Effect of Closing
All representations, warranties, covenants, and agreements of the
parties contained in this Agreement, or in any instrument,
certificate, opinion or other writing provided for in it, shall.
survive the closing.
ARTICLE 13 - Notices
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom
notice is to be given, or on the third day after mailing if mailed to
the party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid, and properly addressed as
follows:
To "NetR" at: Att: Mr. Xxxxxx Xxxxxx, President
NetRom, Inc.
0000 Xxxxxxx Xxx.
Xxx Xxxxx, Xxxxxxxxxx
To "TND" at: Att: Xx. Xxxxxxx Xxxxxxxx
000 Xxxxxx xxx Xxx Xxxxx #000
Xxx Xxxxx, Xxxxxxxxxx 00000
Any party may change its address for purposes of this paragraph by
giving the other party written notice of the new address in the manner
set forth above.
ARTICLE 14 - Governing Law
This Agreement shall be construed in accordance with, and governed by,
the laws of the State of California.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed
it on the day and year first above written.
THIS AGREEMENT IS SUBJECT TO THE BOARD OF DIRECTORS APPROVAL OF BOTH
COMPANIES, AS WELL AS THE APPROVAL OF "NETR" PREFERRED STOCK AS
REQUIRED BY THIS AGREEMENT, PRIOR TO DECEMBER 31, 1997.
"NetR":
NetRom, Inc.
by________________________
Xxxxxx Xxxxxx, President
"TND":
Tri-National Development Corp.
by_________________________
Xxxxxxx X. Xxxxxxxx, President & CEO
