EXHIBIT 2.1
STOCK TRANSFER AND EXCHANGE AGREEMENT
This STOCK TRANSFER AND EXCHANGE AGREEMENT ("Agreement") dated as of
September 8, 2003, by and among those certain shareholders of Spartan Tours
Inc., a Canadian corporation ("STI"), identified in Exhibit A attached hereto
and made a part hereof by this reference (individually, a "Transferor", and
collectively, the "Transferors"), and Royal Holiday Mobile Estates, Inc., a
Nevada corporation ("RHME").
RECITALS
WHEREAS, the Transferors own 600. shares of Class A Common Stock and
45,000 shares of Class D Preferred Stock constituting 100% of the issued and
outstanding capital stock of STI (the "STI Stock"); and
WHEREAS, the Transferors desire to transfer to RHME, and RHME desires
to acquire from the Transferors (the "Acquisition"), all of the Transferors' STI
Common Stock in exchange for 2,205,206. shares of common stock of RHME (the
"RHME Stock") subject to share adjustment as set forth herein and stock options;
and
WHEREAS, the Parties hereto intend that the issuance of the RHME Stock
in exchange for the STI Stock, as set forth in this Agreement, shall qualify as
a "tax free" exchange as contemplated by the provisions of Sections 351 and
368(a)(1)(B) of the Internal Revenue Code of 1986; and
WHEREAS, this Agreement supersedes all previous oral or written
agreements; and
WHEREAS, all the parties hereto deem the Acquisition to be in the best
interests of the Transferors, STI and RHME;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereby agree as follows:
ARTICLE I
ISSUANCE AND TRANSFER OF SHARES AND OPTIONS
1. ISSUANCE AND TRANSFER. Upon the terms and subject to the conditions
set forth in this Agreement, at the "Closing" (as hereinafter defined), the
Transferors shall sell, assign, convey, transfer, and deliver to RHME, and RHME
shall purchase and receive from the Transferors, 600 shares of STI Class A
Common Stock and 45,000 Class D Preferred Stock, constituting all of the issued
and outstanding STI Stock owned by the Transferor and set forth opposite the
Transferor's name on Exhibit A. In consideration for the transfer of such shares
of STI Stock to RHME, RHME shall issue to the Transferor in exchange for all of
the shares of STI Stock, 2,205,206. shares of its authorized and newly issued
Common Stock of RHME. RHME and Transferor agree that, consistent with federal
Securities law and regulations, they will cooperate in the removal of
restrictions on RHME shares provided the Transferor and any restricted shares
owned by the current shareholders.
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ARTICLE II
CLOSING; TERMINATION
1. CLOSING. Subject to the fulfillment or waiver of the conditions
precedent set forth in Articles VII and VIII hereof, the Closing shall take
place on the Closing Date at the offices of the attorney for RHME at 00000 Xxxx
Xxxxxxx Xxxx., Xxxxx000 Xxx Xxxxxxx, Xxxxxxxxxx 00000 at 10:00 A.M., local time,
or at such other time on the Closing Date as the Transferors and RHME may
mutually agree in writing.
2. CLOSING DATE. The Closing Date shall be September 12, 2003 or such
later date upon which the Transferors and RHME may mutually agree in writing. If
the Closing shall not have taken place on or prior to December 31, 2003, this
Agreement shall terminate upon written notice of such termination given by
either party not then in material default. Upon such termination, the parties
shall be released from all obligations or liabilities arising hereunder except
for (a) liabilities arising out of pre-termination breaches hereof and (b)
obligations arising under Section VII.4 hereof.
3. FILINGS; COOPERATION.
(a) Prior and subsequent to the Closing the parties shall
proceed with due diligence and in good faith to make such filings and take such
other actions as may be necessary to satisfy the conditions precedent set forth
in Articles VI and VII below.
(b) On and after the Closing Date, RHME and the Transferors
shall, on request and without further consideration, cooperate with one another
by furnishing or using their best efforts to cause others to furnish any
additional information and/or executing and delivering or using their best
efforts to cause others to execute and deliver any additional documents and/or
instruments, and doing or using their best efforts to cause others to do any and
all such other things as may be reasonably required by the parties or their
counsel to consummate or otherwise implement the transactions contemplated by
this Agreement.
4. ELECTION OF TERMINATE.
(a) RHME shall have the option to terminate this Agreement
should the shares of STI not be transferred on demand.
(b) Should RHME elect to terminate this Agreement, the
Transferor shall immediately tender back to RHME the RHME shares issued to the
Transferor. Should STI elect to terminate this Agreement for any reason, RHME
shall immediately tender back to STI the STI shares received from the
Transferor.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF STI AND TRANSFERORS
STI AND TRANSFERORS REPRESENT AND WARRANT TO RHME AS FOLLOWS:
1. ORGANIZATION AND GOOD STANDING. STI is a corporation duly organized,
validly existing and in good standing under the laws of Canada and has full
corporate power and authority to own or lease its properties, and to operate and
carry on its business as now being conducted and as proposed to be conducted.
STI is not qualified to conduct business as a foreign corporation in Nevada. The
Certificate of Incorporation of STI and all amendments thereto as presently in
effect, certified by the federal government of Canada, and the Bylaws of STI as
presently in effect, certified by the President and Secretary of STI, have been
delivered to RHME and are complete and correct and since the date of such
delivery, there has been no amendment, modification or other change thereto.
2. AUTHORITY.
(a) STI has full corporate power to enter into this Agreement,
to execute all attendant documents and instruments necessary to consummate the
transactions contemplated hereunder and to carry out all of STI's obligations
hereunder. The execution and delivery of this Agreement and all other
agreements, documents and instruments to be executed by STI in connection
herewith, and the consummation of the transactions contemplated hereby, have
been duly authorized by all necessary corporate action required on the part of
STI. This Agreement constitutes the valid and legally binding obligation of STI
and is enforceable against STI in accordance with its terms subject to
applicable bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors' rights generally and the application of equitable
principles.
(b) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby nor compliance by STI
with any of the provisions hereof will:
(i) violate or conflict with, or result in a breach
of any provisions of, or constitute a default (or an
event which, with notice or lapse of time or both,
would constitute a default) under, any of the terms,
conditions or provisions of the Articles of
Incorporation or Bylaws of STI or any note, bond,
mortgage, indenture, deed of trust, license,
agreement or other instrument to which STI is a
party, or by which STI or its properties or assets
may be bound or affected; or
(ii) violate any order, writ, injunction or decree,
or any statute, rule, Permit, or regulation
applicable to STI or any of its properties or assets.
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3. CAPITALIZATION. STI's authorized capital stock consists of 600
shares of Class A Common Stock, of which 600 shares are issued and outstanding
and 45,000 shares of Class D Preferred Stock, of which 45,000 shares are issued
and outstanding. No other equity securities or debt obligations of STI are
authorized, issued or outstanding and as of the Closing, there will be no
outstanding options, warrants, agreements, contracts, calls, commitments or
demands of any character, preemptive or otherwise, other than this Agreement,
relating to any of the STI Stock, and there will be no outstanding security of
any kind convertible into common stock of STI. All of shares of stock of STI
have been duly authorized, are validly issued, fully paid and nonassessable. All
shares of stock of STI are free and clear of all liens, charges, claims,
pledges, restrictions and encumbrances whatsoever of any kind or nature.
4. SUBSIDIARIES, JOINT VENTURES, JOINT PRODUCTION ARRANGEMENTS. STI
has no subsidiaries and no investments, directly or indirectly, or other
financial interest in any other corporation or business organization. Except as
set forth in Schedule III.4, there are no joint ventures, partnerships, revenue
sharing or other similar arrangements with any other entity. (No Schedule
Required)
5. MATERIAL CONTRACTS. Set forth in Schedule III.5 is a list of all
contracts, "deal memos", letters of intent and other commitments to which STI is
a party (collectively "Commitments"). Except as set forth on said Schedule each
Commitment is valid and subsisting;
(No Schedule Required)
6. FINANCIAL STATEMENTS.(No Statements Included or Schedules Required)
7. ABSENCE OF CERTAIN CHANGES. Since the date of the STI Financial
Statements, (a) STI has not entered into any material transaction; (b) there has
been no change in the condition (financial or otherwise), business, property,
prospects, assets or liabilities of STI as shown on the STI Financial
Statements, other than changes that both individually and in the aggregate do
not have a consequence that is materially adverse to such condition, business,
property, prospects, assets and liabilities; (c) there has been no damage to,
destruction or loss of any of the properties or assets or erosion of any of the
values thereto of STI (whether or not covered by insurance) materially and
adversely affecting the condition (financial or otherwise), business, property,
prospects, assets or liabilities of STI; (d) STI has not declared, or paid any
dividend or made any distribution on its capital stock, redeemed, purchased or
otherwise acquired any of its capital stock, granted any options to purchase
shares of its stock, or issued any shares of its capital stock; (e) there has
been no material change, except in the ordinary course of business, and the
contingent obligations of STI by way of guarantee, endorsement, indemnity,
warranty or otherwise; (f) there have been no loans made by STI to its
employees, officers or directors; (g) there has been no waiver or compromise by
STI of any valuable right or of a material debt owed to it; (h) there has been
no compensation paid to any of STI's employees, officers or directors and there
has been no accrued compensation of any such employee, officer or director; (i)
there has been no agreement or commitment by STI to do or perform any of the
acts described in this section III.7; and (j) there has been no other event or
condition of any character which might reasonably be expected either to result
in a material and adverse change in the condition (financial or otherwise),
business, property, prospects, assets or liabilities of STI or to impair
materially the ability of STI to conduct the business now being conducted by it
or proposed to be conducted by it.
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8. ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in STI
Financial Statements, STI did not have as of the date of those financial
statements and STI shall not have as of the Closing Date, any liabilities
(secured or unsecured and whether accrued, absolute, direct, indirect, or
otherwise) of a kind required by generally accepted accounting principles and
consistent with past practice to be set forth on a financial statement or the
notes thereto that were as of the date of the STI Financial Statements or will
be as of the Closing Date, individually or in the aggregate, material to the
results of operations or financial condition of STI (which for purposes of this
Section III shall be any amount individually or in the aggregate in excess of
$5,000).
9. LITIGATION. Except as disclosed in SCHEDULE IV.9, there are no
outstanding orders, judgments, injunctions, awards or decrees of any court,
governmental or regulatory body or arbitration tribunal against STI. Except as
disclosed in SCHEDULE IV.9, there are no actions, suits or proceedings pending,
or, to the knowledge of the Transferors, threatened, against or affecting STI,
or any of its or their properties, at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, in connection with the
business, operations or affairs of STI which might result in any material
adverse change in the operations or financial condition of STI, or which might
prevent or materially impede the consummation of the transactions contemplated
under this Agreement.
10. COMPLIANCE WITH LAWS. The operations and affairs of STI do not
violate any law, ordinance, rule or regulation currently in effect, or any order
writ, injunction or decree of any court or governmental agency, the violation of
which would substantially and adversely affect the business, financial
conditions or operations of STI.
11. DISCLOSURE. Neither this Agreement, nor any certificate, exhibit,
schedule or other written document or statement, furnished to RHME by the
Transferors in connection with the transactions contemplated by this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to be stated in order to make the
statements contained herein or therein not misleading.
12. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. Set forth in this
Section III.12 are representations and warranties made by the Transferor, with
respect to the transactions covered by this Agreement and their respective
shares of STI Stock.
(a) TRANSACTIONAL REPRESENTATIONS.
(iii) Transferor has full right, power, capacity and
authority to enter into and to deliver this Agreement
and to carry out its obligations hereunder. This
Agreement constitutes the valid and legally binding
obligation of the Transferor and is or will be, as
the case may be, enforceable against the Transferor
in accordance with its terms subject to applicable
bankruptcy, insolvency, moratorium or other similar
laws affecting creditors' rights generally and the
application of equitable principles.
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(iv) Neither the execution and delivery of this
Agreement nor the consummation of the transactions
contemplated hereby or thereby, nor compliance by the
Transferor with any of the provisions hereof or
thereof will:
A. violate or conflict with, or result in a
breach of any provisions of, or constitute a default
(or an event which, with notice or lapse of time or
both, would constitute a default) under, any of the
terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license,
agreement or other instrument or obligation to which
such Transferor is a party, or by which he or any of
his or his properties or assets may be bound or
affected; or
B. violate any order, writ, injunction or
decree, or any statute, rule or regulation applicable
to Transferor or any of his or his properties or
assets.
(b) TITLE TO STOCK. The Transferor owns, beneficially
and of record, his/its shares of STI Stock set forth opposite his/its name on
Exhibit A, free and clear of all liens, charges, claims, pledges, restrictions
and encumbrances whatsoever of any kind or nature except as set forth on
SCHEDULE III.12(B). The Transferor represents and warrants as to his shares
that, except as set forth on SCHEDULE III.12(B), there are no community property
interests, voting trust agreements or other contracts, agreements or
arrangements restricting voting or dividend rights or transferability with
respect to such shares. (No Schedule Required)
(c) BROKERS; UNDERWRITERS. The Transferor has not used
the services of any brokers or underwriters in connection with this Agreement
and the transactions contemplated thereby. Further the Transferor has not taken
any action which could result in any other broker's, finder's or other fees or
commission being due and payable to any party with respect to this Agreement or
the transactions contemplated thereby. The Transferor has not entered into any
agreements, commitments, arrangements or understandings of any kind whatsoever
with any broker-dealer or underwriter in connection with the transactions
contemplated under this Agreement or the RHME Stock being acquired hereunder.
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(d) INVESTMENT.
(i) The Transferor acknowledges that the RHME Stock
to be received in exchange for the STI Stock has not
been registered under the Securities Act of 1933, as
amended (the "1933 Act") or qualified under the
Nevada Revised Statutes, as amended (the "Nevada
Securities Law") on the ground that no distribution
or public offering of the RHME Stock is to be
effected, and that in this connection RHME is relying
in part on the representations of the Transferor set
forth in this Section III.12(d)
(ii) The Transferor further acknowledges that a
public market now exists for only those securities
issued by RHME for which a registration statement
under the 1933 Act has been filed or for which
applicable exemSTIons from federal securities laws
may be available, and that a public market may never
exist or may otherwise be restricted or limited for
the RHME Stock issued pursuant to this Agreement..
(iii) By reason of their business or financial
experience or the business or financial experience of
their personal adviser/purchaser representative,
and/or by reason of their pre-existing relationship
with RHME, the Transferor has the capacity to protect
his interest in connection with the transactions
contemplated hereunder, is able to bear the risks of
an investment in RHME, and at the present time could
afford a complete loss of such investment.
(iv) The Transferor or his, her or its personal
adviser/purchaser representative has acquired
sufficient information about RHME to form an informed
decision to acquire the RHME Stock.
(v) The Transferor represents that he is acquiring
the RHME Stock for his account for investment
purposes and not with a view to, or for sale in
connection with, any distribution thereof in a manner
contrary to Section 5 of the 1933 Act or of the
Securities Law and Rules and Regulations of the
Nevada thereunder.
(e) TRANSFER OF SECURITIES. None of the RHME Stock
acquired pursuant to this Agreement shall be transferable except upon the
conditions specified in this Section III.12(e), which conditions are intended to
insure compliance with the provisions of the 1933 Act in respect to the transfer
of any shares of RHME Stock.
(i) LEGEND. Unless and until otherwise permitted by
this Section III.12(e), The certificate or other
document evidencing any of the RHME Stock shall be
endorsed with a legend substantially in the following
form:
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"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) COVERED BY AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, (B) IN COMPLIANCE WITH RULE 144 UNDER SUCH
ACT, OR (C) THE COMPANY HAS BEEN FURNISHED WITH AN OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT
THAT NO REGISTRATION IS REQUIRED BY SUCH TRANSFER."
(ii) RESTRICTIONS ON TRANSFER. None of the RHME Stock
shall be transferred, and RHME shall not be required
to register any such transfer on the books of RHME
unless and until one of the following events shall
have occurred:
A. RHME shall have received an opinion of
counsel, in form and substance reasonably
acceptable to RHME and its counsel, stating
that the contemplated transfer is exempt
from registration under the 1933 Act as then
in effect, and the Rules and Regulations of
the Securities and Exchange Commission (the
"Commission") thereunder. Within five
business days after delivery to RHME and its
counsel of such an opinion, RHME either
shall deliver to the proposed transferor a
statement to the effect that such opinion is
not satisfactory in the reasonable opinion
of its counsel (and shall specify in detail
the legal analysis supporting for any such
conclusion) or shall authorize RHME's
transfer agent to make the requested
transfer;
B. RHME shall have been furnished with a
letter from the Commission in response to a
written request in form and substance
acceptable to counsel for RHME setting forth
all of the facts and circumstances
surrounding the contemplated transfer,
stating that the Commission will take no
action with regard to the contemplated
transfer;
C. The shares of the RHME Stock are
transferred pursuant to a registration
statement which has been filed with the
Commission and has become effective; or
D. The shares of the RHME Stock are
transferred pursuant to and in accordance
with Rule 144 promulgated by the Commission
under the 1933 Act.
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(iii) TERMINATION OF RESTRICTIONS AND REMOVAL OF
LEGEND. The restrictions on transfer imposed by this
Section III.12(e) shall cease and terminate as to the
RHME Stock, when (i) such securities shall have been
effectively registered under the 1933 Act and sold by
the holder thereof in accordance with such
registration, (ii) an acceptable opinion as described
in Section III.12(e)(ii)(A) or a "no action" letter
described in Section III.12(e)(ii)(B) states that
future transfers of such securities by the transferor
or the contemplated transferee would be exempt from
registration under the 1933 Act, or (iii) such
securities may be sold under and in accordance with
Rule 144(k) promulgated by the Commission under the
1933 Act. When the restrictions on transfer contained
in this Section III.12(e) have terminated as provided
above, the holder of the securities as to which such
restrictions shall have terminated or the transferee
of such holder shall be entitled to receive promptly
from RHME, without expense to him, new certificates
not bearing the legend set forth in Section
III.12(e)(i).
(f) PROPRIETARY RIGHTS. Except as set forth on
Schedule III.12(f) STI possesses full ownership of or adequate and enforceable
rights to use all Proprietary Rights (as defined herein) owned by or registered
in the name of STI or used or to be used in the business or proposed business of
STI. STI has not received any notice of conflict which asserts the rights of
others with respect to STI's proprietary rights; and STI has in all material
respects performed all of the obligations required to be performed by it and is
not in default in any material respect under any agreement relating to any
Proprietary Right. As used herein the term "Proprietary Right" means trade
secrets, copyrights, patents, trademarks, service marks, designs, customer lists
films, scripts, treatments, scores and all similar types of intangible property
developed, created or owned by STI or used or to be used by STI in connection
with its business or proposed business whether or not the same are entitled to
legal protection. (No Schedule Required)
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF RHME
RHME represents and warrants to the Transferor as follows:
1. ORGANIZATION AND GOOD STANDING. RHME is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and has full corporate power and authority to own or lease its properties
and to carry on its business as now being conducted and as proposed to be
conducted. RHME is qualified to conduct business as a foreign corporation in no
other jurisdiction, and the failure to so qualify in any other jurisdiction does
not materially, adversely affect the ability of RHME to carry on its business as
most recently conducted. The Certificate of Incorporation of RHME and all
amendments thereto as presently in effect, certified by the Secretary of State
of Nevada, and the Bylaws of RHME as presently in effect, certified by the
President and Secretary of RHME, have been delivered to the Transferor and are
complete and correct and since the date of such delivery, there has been no
amendment, modification or other change thereto.
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2. AUTHORITY.
(a) RHME has full corporate power to enter into this
Agreement, to execute all attendant documents and instruments necessary to
consummate the transactions contemplated hereunder to, issue and transfer the
RHME Stock to the Transferor and to carry out all of its obligations hereunder.
The execution and delivery of this Agreement and all other agreements, documents
and instruments to be executed in connection herewith, and the consummation of
the transactions contemplated hereby, have been duly authorized by all necessary
corporate action required on the part of RHME. This Agreement constitutes the
valid and legally binding obligation of RHME and is enforceable against RHME in
accordance with its terms subject to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors' rights
generally and the application of equitable principles.
(b) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby nor compliance by RHME
with any of the provisions hereof will:
(i) violate or conflict with, or result in a breach
of any provisions of, or constitute a default (or an
event which, with notice or lapse of time or both,
would constitute a default) under, any of the terms,
conditions or provisions of the Articles of
Incorporation or Bylaws of RHME or any note, bond,
mortgage, indenture, deed of trust, license,
agreement or other instrument to which RHME is a
party, or by which it or its properties or assets may
be bound or affected; or
(ii) violate any order, writ, injunction or decree,
or any statute, rule, Permit, or regulation
applicable to RHME or any of its properties or
assets.
3. CAPITALIZATION. RHME's authorized capital stock consists of
50,000,000 shares of Common Stock, $0.001 par value (defined above as " RHME
Stock"), of which approximately 1,121,000 shares of common stock are issued and
outstanding and none of which are held by RHME as treasury shares. Except as set
forth in SCHEDULE IV.3, no other equity securities or debt obligations of RHME
are authorized, issued or outstanding and, except as set forth on Schedule IV.3,
as of the Initial Closing, there will be no outstanding options, warrants,
agreements, contracts, calls, commitments or demands of any character,
preemptive or otherwise, other than this Agreement, relating to any of the RHME
Stock, and there will be no outstanding security of any kind convertible into
RHME Stock except for the RHME Stock. All of shares of the RHME Stock to be
issued when issued, transferred and delivered as provided herein, will be duly
authorized, validly issued, fully paid and nonassessable. (No Schedule Required)
4. TITLE TO STOCK. (a) The shares of RHME Stock are free and clear of
all liens, charges, claims, pledges, restrictions and encumbrances whatsoever of
any kind or nature that would inhibit, prevent or otherwise interfere with the
transactions contemplated hereby. All of the outstanding shares of RHME Stock
are validly issued, fully paid and nonassessable and except as set forth on
Schedule IV.4 there are no voting trust agreements or other contracts,
agreements or arrangements restricting or affecting voting or dividend rights or
transferability with respect to the outstanding shares of RHME Stock. (No
Schedule Required)
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(a) All of the RHME Stock to be issued to or transferred to
the Transferor pursuant to this Agreement, when issued, transferred and
delivered as provided herein, will be duly authorized, validly issued, fully
paid and nonassessable, and will be free and clear of all liens, charges,
claims, pledges, restrictions and encumbrances whatsoever of any kind or nature.
5. SUBSIDIARIES. Except as may be set forth in its financial
statements, RHME has no subsidiaries and no investments, directly or indirectly,
or other financial interest in any other corporation or business organization,
joint venture or partnership of any kind whatsoever.
6. ABSENCE OF CERTAIN CHANGES. Except as set forth on Schedule IV.6,
since the date of RHME's Annual Report on Form 10K (the "10-K") as filed with
the Securities and Exchange Commission and delivered to the Transferor,(a) RHME
has not entered into any material transaction; (b) there has been no change in
the condition (financial or otherwise), business, property, prospects, assets or
liabilities of RHME as shown, other than changes that both individually and in
the aggregate do not have a consequence that is materially adverse to such
condition, business, property, prospects, assets or liabilities; (c) there has
been no damage to, destruction of or loss of any of the properties or assets of
RHME (whether or not covered by insurance) materially and adversely affecting
the condition (financial or otherwise), business, property, prospects, assets or
liabilities of RHME; (d) RHME has not declared, or paid any dividend or made any
distribution on its capital stock, redeemed, purchased or otherwise acquired any
of its capital stock, granted any options to purchase shares of its stock, or
issued any shares of its capital stock; (e) there has been no material change,
except in the ordinary course of business, in the contingent obligations of RHME
by way of guaranty, endorsement, indemnity, warranty or otherwise; (f) there
have been no loans made by RHME to its employees, officers or directors; (g)
there has been no waiver or compromise by RHME of a valuable right or of a
material debt owed to it; (h) there has been no compensation paid to of any of
RHME's employees, officers or directors and there has been paid or accrued
compensation of any such employee, officer or director; (i) there has been no
agreement or commitment by RHME to do or perform any of the acts described in
this Section IV.7; and (j) there has been no other event or condition of any
character which might reasonably be expected either to result in a material and
adverse change in the condition (financial or otherwise), business, property,
prospects, assets or liabilities of RHME or to impair materially the ability of
RHME to conduct the business now being conducted by it. (No Schedule Required)
7. OMITTED.
8. ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in the 10-K
or in Schedule IV.6, RHME does not have, and as of the Closing Date will not
have, any liabilities (secured or unsecured and whether accrued, absolute,
direct, indirect, or otherwise) of a kind required by generally accepted
accounting principles and consistent with past practice to be set forth on a
financial statement or the notes thereto that will be as of the Closing Date,
individually or in the aggregate, material to the results of operation or
financial condition of RHME. (No Schedule Required)
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9. LITIGATION. Except as disclosed in SCHEDULE IV.9, there are no
outstanding orders, judgments, injunctions, awards or decrees of any court,
governmental or regulatory body or arbitration tribunal against RHME or its
properties. Except as disclosed in SCHEDULE IV.9, there are no actions, suits or
proceedings pending, or, to the knowledge of RHME threatened, against or
affecting RHME, or any of its properties, at law or in equity, or before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, in connection
with the business, operations or affairs of RHME which might result in any
material adverse change in the operations or financial condition of RHME, or
which might prevent or materially impede the consummation of the transactions
contemplated under this Agreement. (No Schedule Required)
10. COMPLIANCE WITH LAWS. The operations and affairs of RHME do not
violate any law, ordinance, rule or regulation currently in effect, or any
order, writ, injunction or decree of any court or governmental agency, the
violation of which would substantially and adversely affect the business,
financial conditions or operations of RHME.
11. BROKERS; UNDERWRITERS. RHME has not used the services of or entered
into any agreement with, any broker, agent or finder in connection with this
Agreement or the transactions contemplated hereby, nor has RHME taken any action
which could result in any other broker's, finder's or other fees or commission
being due and payable to any party with respect to this Agreement or the
transactions contemplated hereby. RHME has not entered into any agreements,
commitments, arrangements or understandings of any kind whatsoever with any
broker-dealer or underwriter in connection with the transactions contemplated
under this Agreement or the STI Stock being acquired hereunder or the RHME Stock
being issued hereunder.
12. DISCLOSURE. Neither this Agreement, nor any certificate, exhibit,
schedule or other written document or statement, furnished to the Transferor by
RHME in connection with the transactions contemplated by this Agreement contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to be stated in order to make the statements
contained herein or therein not misleading.
13. REPORTING COMPANY REQUIREMENTS. RHME has not filed reports required
to be filed by it pursuant to Section 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and or the rules promulgated thereunder.
14. OPERATING AUTHORITIES. RHME has all material operating authorities,
governmental certificates and licenses, permits, authorizations and approvals
("Permits") required to conduct its business as presently conducted. There has
not been any notice or adverse development regarding the current validity of
such Permits; such Permits are in full force and effect; no material violations
are or have been recorded in respect of any Permit; and no proceeding is pending
or threatened to revoke or limit any Xxxxxx.
00
00. BOOKS AND RECORDS. The books and records of RHME are complete and
correct, are maintained in accordance with good business practice and accurately
present and reflect, in all material respects, all of the transactions therein
described, and there have been no transactions involving RHME which properly
should have been set forth therein and which have not been accurately so set
forth.
16. NO REGISTRATION RIGHTS. Except as set forth on Schedule IV.16
hereto, RHME has not granted or agreed to grant any rights relating to the
registration of its securities under applicable federal and state securities
laws, including piggy-back rights. (No Schedule Required)
ARTICLE V
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations, warranties and covenants of STI and the Transferor
contained herein shall survive the execution and delivery of this Agreement, the
Closing and the consummation of the transactions called for by this Agreement.
The representations, warranties and covenants of RHME contained herein shall
survive the execution and delivery of this Agreement, the Closing and the
consummation of the transactions called for by this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF RHME
The obligations of RHME under this Agreement in respect of the issuance
and transfer of the RHME Stock shall, at the option of RHME, be subject to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions precedent.
1. ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE. All
representations and warranties made by the Transferor in this Agreement shall be
true and correct in all material respects on and as of the Closing Date with the
same effect as if such representations and warranties had been made on and as of
the Closing Date; STI and the Transferor shall have performed or complied with
all covenants, agreements and conditions contained in this Agreement on its part
required to be performed or complied with at or prior to the Closing.
2. CONSENTS. All material authorizations, consents or approvals of any
and all governmental regulatory authorities necessary in connection with the
consummation of the transactions contemplated by this Agreement shall have been
obtained and be in full force and effect.
3. NO CONTRARY JUDGMENT. The Closing shall not violate any Permit or
order, decree or judgment of any court or governmental body having competent
jurisdiction and there shall not have been instituted any legal or
administrative action or proceeding to enjoin the transaction contemplated
hereby or seeking damages from RHME with respect thereto.
13
4. AGREEMENTS. No additional agreements have been entered into between
the parties hereto.
5. CONTROL OF OPERATIONS: There shall be a new Board of Directors of
RHME elected at Closing.
6. CLOSING. The Transferor shall deliver, or cause to be delivered, to
RHME at or prior to the Closing the following documents:
(a) A certificate of officers representing that all of the
Transferor' shares of STI Stock have been transferred to RHME
as required;
(b) A certificate of officers of STI confirming accuracy of
representations and warranties of Transferor referred to in
hereof;
(c) STI's Certificate of Incorporation:
(d) Such other documents, instruments or certificates as shall
be reasonably requested by RHME or its counsel.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF THE TRANSFEROR
The obligations of the Transferor under this Agreement to sell the STI
Stock shall, at the option of the Transferor, be subject to the satisfaction, on
or prior to the Closing Date, of each of the following conditions precedent.
1. ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE. All
representations and warranties made by RHME in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as if such representations and warranties had been made on and as of the
Closing Date; RHME shall have performed or complied with all covenants,
agreements and conditions contained in this Agreement on its part required to be
performed or complied with at or prior to the Closing Date. RHME shall have
delivered to the Transferor a certificate, dated the Closing Date, to the
foregoing effect.
2. CONSENTS. All material authorizations, consents or approvals of any
and all governmental regulatory authorities necessary in connection with the
consummation of the trans actions contemplated by this Agreement shall have been
obtained and be in full force and effect.
3. NO CONTRARY JUDGMENT. The Closing shall not violate any Permit or
order, decree or judgment of any court or governmental body having competent
jurisdiction and there shall not have been instituted any legal or
administrative action or proceeding to enjoin the transaction contemplated
hereby or seeking damages from the Transferor or STI with respect thereto.
14
4. CLOSING. RHME shall deliver, or cause to be delivered, to the
Transferor at or prior to the Initial Closing the following documents:
(a) Certificates representing the shares of the RHME Stock to be
newly issued by RHME under this Agreement, which
certificates shall be in the name of the Transferor and duly
executed by RHME;
(b) An officer's certificate signed by the President and
Secretary of RHME in the form of Exhibit D hereto, as to
such matters as the Transferor deem necessary, including,
without limitation, the matters referred to in Section VII.1
hereof;
(c) Copy of RHME's Certificate of Incorporation;
(e) Certified copies of resolutions adopted by the Board of
Directors of RHME authorizing the execution and delivery of
this Agreement and the transactions contemplated hereby;
(d) Bylaws of RHME, certified as of the Closing Date by the
President and Secretary of RHME;
(e) Evidence satisfactory to the Transferor and their counsel of
the authorization and issuance of the RHME Stock; and
(f) Such other documents, instruments or certificates as shall
be reasonably requested by the Transferor, or any of them,
or their special counsel.
ARTICLE VIII
ADDITIONAL COVENANTS OF THE PARTIES
1. EXPENSES. The of the parties hereto shall pay all of its respective
costs and expenses (including attorneys' and accountants' fees, costs and
expenses) incurred in connection with this Agreement and the consummation of the
transactions contemplated herein.
2. ACCESS TO PROPERTIES AND RECORDS. The Transferor shall use their
best efforts to cause STI to, and RHME shall, at all reasonable times prior to
Closing, make the properties, premises, books and records of STI and RHME
available to the other and the other's authorized representatives, during
reasonable business hours, in such a manner as not unduly to disrupt normal
business activities.
15
3. CORPORATE EXISTENCE, RIGHTS AND FRANCHISES. RHME and its authorized
representatives shall cause RHME to conduct its business in the ordinary course
and, to the extent not inconsistent with prudent business practice, in such a
manner as to preserve in effect all Permits, and, without the prior written
consent of the Transferor, shall not permit RHME's assets, if any, to become
bound by or subject to any contracts or other agreements. RHME shall respond
promptly to any reasonable requests for reports or additional information by the
Transferor.
4. CONFIDENTIALITY. Except for such documents, reports, information and
data (including financial statements) which are of a public nature, pending the
Closing (and, if this Agreement is terminated, at all times after the date
hereof), RHME shall treat as confidential and, except as may be required by law
or necessary or, in the opinion of counsel to Transferor or RHME, desirable, to
obtain required regulatory approval of the transactions contemplated hereby or
otherwise, will not use, submit or disclose to, or file with others, or permit
any person, firm, corporation or entity under its control to use, submit or
disclose to, or file with others, any documents, reports, information or data
(including financial statements) concerning STI which RHME may obtain from the
Transferor or STI; and, except for such documents, reports and other written
materials (including financial statements) which are of a public nature, if this
Agreement is terminated, RHME shall return to the Transferor any and all such
documents, reports and other written materials (including financial statements)
concerning STI as the Transferor may reasonably request.
5. PUBLIC REPORTING. RHME shall continue to make available current
public information in such a manner that the Transferor will be able to sell
shares of the RHME Stock pursuant to Rule 144 under the Exchange Act after
holding such shares for the period specified by such rule. STI shall make press
releases consistent with Securities and Exchange Commission Rules and
Regulations. This covenant may be modified or eliminated by a written agreement
between the RHME and the holders of sixty percent (60%) of the RHME Stock
received by the Transferor pursuant to this Agreement.
6 DISPUTE RESOLUTION. In the event of a dispute between the parties
hereto involving a claim of breach of representation or warranty hereunder, or
to enforce a covenant herein (either or both of which are referred to hereafter
as a "Claim"), if it is the desire of both parties for quick resolution, then
the rights and obligations of the parties hereto arising under the terms of this
Agreement with respect to such Claims and/or resolution of such disputes may be
by the means of the judgment of an independent third party ("Rent-A-Judge") who
has been selected and hired through the mutual agreement of the parties.
(g) In the event of a Claim by either party, either party may
make a written request upon the other party for a "Rent-A-Judge." A request by
either party for the employment of a "Rent-A-Judge" to resolve the Claim shall
be binding on the other party in accordance with the terms hereof upon written
agreement to such employment by the other party.
16
The parties may agree upon one "Rent-A-Judge," but in the event that
they cannot agree, there shall be three, one named in writing by The of the
parties within twenty (20) days after the demand for employment of a
"Rent-a-Judge," and a third chosen by the two appointed. Should either party
refuse or neglect to join in the appointment of the "Rent-A-Judge(s)" or to
furnish the "Rent-A-Judge(s)" with any papers or information demanded, the
"Rent-A-Judge(s)" are empowered by both parties to proceed ex parte.
(h) Claim resolution proceedings shall take place in the
County of Xxxxx, State of Nevada, or such other place as the parties may agree,
and the hearing before the "Rent-A-Judge(s)" of the matter to be arbitrated
shall be at the time and place within the city or county as is selected by the
"Rent-A-Judge(s)". The "Rent-A-Judge(s)" shall select such time and place
promptly after appointment and shall give written notice thereof to The party at
least thirty (30) days prior to the date so fixed. At the hearing any relevant
evidence may be presented by either party, and the formal rules or evidence
applicable to judicial proceedings shall not govern. Evidence may be admitted or
excluded in the sole discretion of the "Rent-A-Judge(s)." Said "Rent-A-Judge(s)"
shall hear and determine the matter and shall execute and acknowledge their
award in writing and cause a copy thereof to be delivered to the parties.
(i) If there is only one "Rent-A-Judge," his or her decision
shall be binding and conclusive on the parties, and if there are three
"Rent-A-Judge(s)" the decision of any two shall be binding and conclusive.
(j) If three "Rent-A-Judge(s)" are selected under the
foregoing procedure but two of the three fail to reach an agreement in the
determination of the matter in question, the matter shall be decided by three
new "Rent-A-Judge(s)" who shall be appointed and shall proceed in the same
manner, and the process shall be repeated until a decision is finally reached by
two of the three "Rent-A-Judge(s)" selected.
(k) The costs of such Claim resolution shall be borne by the
parties equally and The party shall pay its own attorneys' fees, provided,
however, that in the event either party challenges or in any way seeks to have
the Rent-A-Judge's decision or award vacated or corrected or modified, if the
challenge is denied or the original decision or award is affirmed, the
challenging party shall pay the costs and fees, including reasonable attorneys'
fees, of the non-challenging party, both for the challenge and for the original
Claim resolution process.
ARTICLE IX
MISCELLANEOUS
1. ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules hereto) contains the entire agreement between the parties with respect
to the transactions contemplated hereby, and supersedes all negotiations,
representations, warranties, commitments, offers, contracts, and writings prior
to the date hereof. No waiver and no modification or amendment of any provision
of this Agreement shall be effective unless specifically made in writing and
duly signed by the party to be bound thereby.
17
2. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, The of which shall be deemed an original, but all of which
together, shall constitute one and the same instrument.
3. SEVERABILITY. If any provisions hereof shall be held invalid or
unenforceable by any court of competent jurisdiction or as a result of future
legislative action, such holding or action shall be strictly construed and shall
not affect the validity or effect of any other provision hereof.
4. ASSIGNABILITY. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the parties hereto; provided, that
neither this Agreement nor any right hereunder shall be assignable by the
Transferor, or any of them, or RHME without the prior written consent of the
other party.
5. CAPTIONS. The captions of the various Articles and Sections of this
Agreement have been inserted only for convenience of reference and shall not be
deemed to modify, explain, enlarge or restrict any of the provisions of this
Agreement.
6. GOVERNING LAW. The validity, interpretation and effect of this
Agreement shall be governed exclusively by the laws of the State of Nevada.
7 NOTICES. All notices, requests, demands, and other
communications under this Agreement shall be in writing and delivered in person
or sent by certified mail, postage prepaid and properly addressed as follows:
TO THE TRANSFEROR: With a Copy to:
Spartan Tours Inc.
X/X Xxxxxxxx Xxxxxxxx
0000 Xxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxx X0X 0X0
WITH A COPY TO:
Facsimile
TO THE ACQUIRER:
Royal Holiday Mobile Estates, Inc.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Facsimile: (714)
18
Any party may from time to time change its address for the
purpose of notices to that party by a similar notice specifying a new address,
but no such change shall be deemed to have been given until it is actually
received by the respective party hereto.
All notices and other communications required or permitted under this
Agreement which are addressed as provided in this Section IX.7 if delivered
personally, shall be effective upon delivery; and, if delivered by mail, shall
be effective three days following deposit in the United States mail, postage
prepaid.
8. FINDERS FEES: Upon the closing of this transaction as contemplated
by this Agreement Osatron Holdings, LTD shall receive 349,204 restricted shares
of RHME whcch shall not be subject to dilution without its consent.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
TRANSFEROR SHAREHOLDERS OF ROYAL HOLIDAY MOBILE ESTATES, INC.
SPARTAN TOURS INC. A Nevada Corporation
A Canadian Corporation
By:/s/ XXXXXXXX MALTZEOS By: R. XXXXX XXXXXX
------------------------ --------------------
Xxxxxxxx Maltzeos R. Xxxxx Xxxxxx
President and holder of Chairman of the Board
Power of Attorney for Shareholders
19
EXHIBIT A TO
STOCK TRANSFER AND EXCHANGE AGREEMENT
-------------------------------- --------------------------------------
Number of shares of Common Stock
Transferor: Royal Holiday Mobile Estates, Inc.
1. Xxxxxxxx Maltzeos 2,196,206
2. Xxxxxxxx Xxxxxxx 3,000
3. PARA ORPNANCE 6,000
-------------------------------- ---------
Total: 2,205,206
-------------------------------- --------------------------------------
20
SCHEDULE III.2(B) OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
TRANSFEROR'S TITLE TO STOCK
---------------------------
21
SCHEDULE III.2(F) OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
PROPRIETARY RIGHTS OF STI.
--------------------------
22
SCHEDULE IV.6 OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
ABSENCE OF CERTAIN CHANGES
--------------------------
NONE
23
SCHEDULE IV.9 OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
LITIGATION
----------
NONE
24
SCHEDULE IV.13 OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
REPORTING COMPANY REQUIREMENTS
------------------------------
25
SCHEDULE IV.14 OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
TITLE TO ASSETS
---------------
26
SCHEDULE IV.16 OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
CONTRACTS
---------
27
SCHEDULE IV.20 OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
NO REGISTRATION RIGHTS
28
