Exhibit 10.1
WINCHESTER INTERNATIONAL RESORTS, INC.
0000 XXXXX XXXXXX XXXXXX, XXXXX 000
XXXXXX XXXX, XXXXXX, 00000
PHONE: 000-000-0000
AGREEMENT AND PLAN OF MERGER
In exchange for USD $10 (ten U.S. dollars), in hand paid by each Party hereto to
each other Party hereto, together with the mutually agreed receipt of other
good, valuable, and legally sufficient consideration by each Party hereto from
each other Party hereto, this AGREEMENT AND PLAN OF MERGER (the "Merger
Agreement") is mutually agreed, executed, and entered into as of September 2,
2010, by and between Winchester International Resorts, Inc., a Nevada
corporation ("WIR"), Lake W Holdings, Inc., a Colorado corporation ("LWH"), and
Northstar Global BT ("NGBT"), a Nevada business trust (as the sole shareholder
of LWH). NGBT, WIR, and LWH may be referred to herein, separately, as a "Party,"
and they may be referred to herein, collectively, as the "Parties." WIR and LWH
may also be referred to herein, collectively, as the "Constituent Corporations."
RECITALS
A. LWH was incorporated on November 22nd 2004. Its current authorized capital
stock consists of:
i. 1,000,000 Class A Stock issued and outstanding
ii. 10,000 Class B Stock authorized with none outstanding
iii. 1,000,000 Preferred Shares authorized with none outstanding
B. WIR was incorporated on August 18th 2003. Its authorized capital stock
consists of:
i. 75,000,000,000 Class A Stock authorized, with approximately
10,500,000,000 issued and outstanding on a fully diluted basis,
including the potential exercise of all outstanding warrants, rights,
and options.
C. The respective Boards of Directors of LWH and WIR deem it advisable and to
the advantage of each of the Constituent Corporations that LWH merge with,
and into, WIR upon the terms and subject to the conditions set forth in
this Merger Agreement for the purpose of affecting a monetary benefit for
each of the Constituent Corporations.
D. The Boards of Directors, and / or their duly empowered and authorized
representatives, of each of the Constituent Corporations have approved this
Merger Agreement.
NOW, THEREFORE, the parties do hereby adopt the plan of reorganization set forth
in this Merger Agreement and do hereby agree that LWH shall merge with and into
WIR on the following terms, conditions, and other provisions:
1. MERGER AND EFFECTIVE TIME
At the Effective Time (as defined below), LWH shall be merged with and into
WIR (the "Merger"), and WIR shall be the surviving corporation of the
Merger (the "Surviving Corporation"). The Merger shall become effective
upon the close of business (5:00 P.M.) on the date when a duly executed
copy of this Merger Agreement, along with all required officers'
certificates, are filed with the Secretary of State of the State of
Colorado (the "Effective Time"), such filing to occur on the first business
day following the special shareholders meeting of the shareholders of WIR,
as is contemplated below at paragraph
2. EFFECT OF MERGER
At the Effective Time, the separate corporate existence of LWH shall cease;
the corporate identity, existence, powers, rights and immunities of WIR as
the Surviving Corporation shall continue unimpaired by the Merger; and WIR
shall succeed to and shall possess all the assets, properties, rights,
privileges, powers, franchises, immunities and
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WINCHESTER INTERNATIONAL RESORTS, INC.
0000 XXXXX XXXXXX XXXXXX, XXXXX 000
XXXXXX XXXX, XXXXXX, 00000
PHONE: 000-000-0000
purpose, and be subject to all the debts, liabilities, obligations,
restrictions, and duties of LWH, all without further act or deed.
3. GOVERNING DOCUMENTS
At the Effective Time,
i. the Certificate of Incorporation of LWH in effect immediately prior to
the Effective Time shall be amended and restated by virtue of the
Merger to notify the Secretary of State of the State of Colorado, so
that the neither the company LWH nor its Certificate of Incorporation
survive the Merger, and
ii. the Certificate of Incorporation and / or Bylaws of WIR, as may be
required or appropriate, in effect immediately prior to the Effective
Time, shall be amended and restated by virtue of the Merger as
approved by the Board of Directors of WIR, such that: a) WIR shall be
re-domiciled and shall become a Wyoming company; b) the authorized
Class A Stock shall be increased to 150,000,000 shares; c) a preferred
Class B Stock of 100,000 authorized shares shall be created (having a
par value of USD $0.00001), the only rights of which shall be Super
Voting rights wherein each Class B share is granted the right to cast
a vote, in any vote in which the Class A shares are authorized to
vote, which is a multiple of each authorized Class A share (whether
issued or not), such multiple to vary as necessary (even if the number
of authorized Class A shares should be increased), the effect of which
variance (if any) is that the Class B shares (in total, as a class)
may always cast votes (on any issue in which the Class A shares are
entitled to vote), equal to two (2) times or 200.0% of the amount of
the (total of) number of the authorized Class A shares, and wherein
all (100.0%) of the authorized Class B shares shall be sold to the
Colindo Trust for cash (at the purchase price of the par value
thereof) as of the Effective Time; and d) a preferred Class C Stock
shall be created, consisting of 25,000,000 authorized shares having a
par value of USD $0.00001, the same to be held in treasury, wherein
the terms and conditions and preferences afforded to the shares of
such Class C stock, may be set by the Board of Directors of WIR from
time to time, without any requirement that the Class C shares issued
at any given time have the identical rights of Class C shares issued
at a different time. The Class C shares shall be issued at such
time(s), and upon such terms and conditions, as the Board of Directors
of WIR sees fit, in its sole discretion, without any requirement of
shareholder approval in respect of any issuance of any of the Class C
shares.
iii. The name of the Surviving Corporation shall be changed to Winchester
Resources, Inc. (if available - or to Winchester Minerals, Inc. or
similar, as may be available), and all reasonable efforts will be made
to retain the stock symbol WNCH, such that the existing DTC
eligibility and DTC registration may be maintained, if possible.
iv. Other terms and conditions governing this Merger Agreement and / or
the relationship of the signatories / parties are set forth in a
separate / additional agreement between the signatories / parties
dated September 2, 2010.
4. DIRECTORS AND OFFICERS
At the Effective Time, the directors of WIR shall be and become the
directors of the Surviving Corporation, and the officers of WIR shall be
and become the officers (holding the same offices) of the Surviving
Corporation after the Effective Time and shall serve in accordance with the
Certificate of Incorporation and Bylaws of the Surviving Corporation. At
the Effective Time, a special shareholders' meeting will be held, and the
agenda shall include, inter-alia, the election of new officers and
directors of the Surviving Corporation. Such
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WINCHESTER INTERNATIONAL RESORTS, INC.
0000 XXXXX XXXXXX XXXXXX, XXXXX 000
XXXXXX XXXX, XXXXXX, 00000
PHONE: 000-000-0000
shareholders' meeting shall be the first order of business of the
Surviving Corporation, and no resolution(s) of the Board of Directors
of WIR shall be passed by the Board of Directors of WIR prior to such
elections and the qualification and installation of the new officers
and directors of the Surviving Corporation. Further, any resolution
granting any shares or options or warrants or rights which might result
in the issuance of any shares of WIR, whether for services or
otherwise, which are or have been adopted by WIR since the date of July
1, 2010, are subject to review, alteration, amendment, and / or
revocation by the Board of Directors of the Surviving Corporation.
5. CONVERSION OF SHARES OF LWH
At the Effective Time, by virtue of the Merger and without any further
action on the part of the Constituent Corporations or their shareholders,
i. each share of LWH Class A Stock issued and outstanding immediately
prior thereto shall be converted into: a) that number of fully paid
and non-assessable shares of WIR Class A Stock which is equal to nine
(9) times the then issued and outstanding WIR Class A Stock
immediately prior to such issuance to LWH's shareholders (assuming all
options and warrants and rights to receive WIR Class A Stock have been
exercised, i.e., on a fully diluted basis). The intended effect is
that the now existing shareholders of WIR shall hold, following the
merger, 10.0% of the Class A shares of the Surviving Corporation.
ii. all LWH Class B Stock and all LWH Preferred Shares immediately prior
thereto shall be cancelled, nonexistent, and invalid, and no rights of
any such shares shall survive.
Shares of WIR Class A Stock issued in the Merger upon conversion of shares
of LWH Common Stock, respectively, shall by virtue of the Merger, continue
to be subject to the same contractual restrictions on transfer, rights of
repurchase, vesting and other provisions, if any, to the same extent as
were applicable immediately prior to the Effective Time to the shares of
LWH Class A Stock so converted. Continuous employment or existing option
agreements with LWH will be credited to holders of LWH Class A Stock for
purposes of determining the vesting of shares of WIR Class A Stock subject
to exercise under any converted LWH option rights at the Effective Time.
6. EXISTING SHARES OF WIR
At the Effective Time, by virtue of the Merger and without any further
action on the part of the Constituent Corporations or their shareholders,
all of the previously issued and outstanding shares of WIR Class A Stock,
that were issued and outstanding prior to the Effective Time shall remain
intact, under current ownership, without a change of status. All shares
provided for conversion for the appropriate shares of LWH, by virtue of the
Merger and without any further action on the part of the Constituent
Corporations, unless dictated by existing agreements, will be converted
from shares currently held by WIR, of WIR Class A Stock held in the
Treasury Account of WIR.
7. STOCK CERTIFICATES
At and after the Effective Time, all of the outstanding certificates that,
prior to that date, represented shares of LWH Class A Stock shall be deemed
for all purposes to evidence ownership of and to represent the number of
shares of WIR Class A Stock into which such shares of LWH Class A Stock are
converted as provided herein. The registered owner on the books and records
of LWH of any such outstanding stock certificate for LWH Class A Stock
shall, until such certificate is surrendered for transfer or otherwise
accounted for to WIR or its transfer agent, be entitled to exercise any
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WINCHESTER INTERNATIONAL RESORTS, INC.
0000 XXXXX XXXXXX XXXXXX, XXXXX 000
XXXXXX XXXX, XXXXXX, 00000
PHONE: 000-000-0000
voting and other rights with respect to, and to receive any dividend and
other distributions upon, the shares of WIR Class A Stock evidenced by such
outstanding certificates as provided above.
8. ASSUMPTIONS OF OPTIONS AND WARRANTS
No LWH warrants or options exist or existed prior to the Effective Time,
therefore no conversion to WIR Class A Stock is necessary or authorized for
any options or warrants claims that may arise in relation to LWH.
9. FRACTIONAL SHARES
No fractional shares of WIR Class A Stock will be issued in connection with
the Merger.
10. EMPLOYEE BENEFIT PLANS
No LWH Employee Benefit Plans exist or existed prior to the Effective Time,
therefore no obligation to retain, continue, or offer such plan will
transfer to WIR.
11. FURTHER ASSURANCES
From time to time, as and when required by the Surviving Corporation or by
its successors or assigns, there shall be executed and delivered on behalf
of LWH, such deeds, assignments and other instruments, and there shall be
taken or caused to be taken by it all such further action, as shall be
appropriate, advisable or necessary in order to vest, perfect or confirm,
of or otherwise, in the Surviving Corporation the title to and possession
of all property, interests, assets, rights, privileges, immunities, powers,
franchises and authority of LWH, and otherwise to carry out the purposes of
this Merger Agreement. The officers and directors of LWH, or otherwise, are
to take any and all such actions and to execute and deliver any and all
such deeds and other instruments as may be necessary or appropriate to
accomplish the foregoing.
12. AMENDMENT
At any time before the Effective Time, this Merger Agreement may be
amended, modified, or supplemented by the Boards of Directors of the
Constituent Corporations, notwithstanding approval of this Merger Agreement
by the majority shareholders of LWH and / or the majority shareholders of
WIR; provided, however, that any amendment made subsequent to the adoption
of this Merger Agreement by the majority shareholders of LWH or the
majority shareholders of WIR shall not:
i. alter or change the amount or kind of shares, securities, cash,
property and / or rights to be received in exchange for or upon
conversion of any shares of any class or series of LWH;
ii. alter or change of any of the terms of the Certificate of
Incorporation or by-laws of the Surviving Corporation to be effected
by the Merger as contemplated herein, or
iii. alter or change any of the terms or conditions of this Merger
Agreement if such alteration or change would adversely affect the
holders of any shares of any class or series of LWH or WIR.
13. CONDITIONS
The consummation of the Merger is subject to the approval of this Merger
Agreement and the Merger contemplated hereby by the majority vote of the
shareholders of LWH and by the majority (or other requisite percentage)
vote of the shareholders of WIR, prior to or at the Effective Time. WIR
shall send a formal notice of a special shareholders meeting to consider
such approval (by mail, in the manner as is required or permitted by WIR's
bylaws), such special shareholders' meeting of the WIR shareholders to be
held at 10:00 A.M. on the first day following the required legal notice
period in respect of a special shareholders meeting, such period to be
computed from the first day following the mailing of the notice of such
meeting. Such mailing of the notice of said meeting shall be effected by
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WINCHESTER INTERNATIONAL RESORTS, INC.
0000 XXXXX XXXXXX XXXXXX, XXXXX 000
XXXXXX XXXX, XXXXXX, 00000
PHONE: 000-000-0000
the officers and directors of WIR to all of its shareholders of record, and
shall contain the appropriate record date and eligibility requirements for
voting at such meeting, on the first (1st) business day following the date
of the execution of this Merger Agreement. The Board of Directors and
management of WIR shall recommend a "yes," vote in respect of this Merger
Agreement to the WIR shareholders.
14. ABANDONMENT
This Merger Agreement is subject to final review and due diligence being
conducted by LWH, including confirmation of representations made by WIR,
and may be terminated and the Merger abandoned by the Board of Directors of
LWH based upon such final review and due diligence.
15. TAX-FREE REORGANIZATION
The Merger is intended to be a tax-free plan of reorganization within the
meaning of Section 368 (a) (1) (F) of the Code.
16. GOVERNING LAW
This Merger Agreement shall be governed by and construed under the laws of
the State of Colorado as applied to agreements among Colorado residents
entered into and to be performed entirely within Colorado, without
reference to the principles of conflicts of law or choice of laws, and such
law would apply in all matters relating to the internal affairs of WIR and
the Merger. Following the Merger, the controlling law will be that of the
domicile of WIR, i.e, Wyoming (following the redomiciliation of WIR).
17. COUNTERPARTS
In order to facilitate the filing and recording of this Merger Agreement,
it may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one
and the same legal document and instrument. Any duly executed counterpart
hereof transmitted electronically shall be legal, valid, and binding upon
the Party(ies) who signed the same.
IN WITNESS WHEREOF, the parties hereto have caused this Merger Agreement to be
duly executed on the date and year first above written.
LAKE W HOLDINGS, INC. WINCHESTER INTERNATIONAL RESORTS, INC.
By: X.X. Xxxxxx, President By: Xxxxx X. Xxxxxxx, President, CEO, &
Chairman of the Board of Directors
NORTHSTAR GLOBAL BT
By: X.X. Xxxxxx, Trustee
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AGREEMENT REGARDING ADDITIONAL TERMS AND CONDITIONS
OF MERGER BETWEEN
WINCHESTER INTERNATIONAL RESORTS, INC.
AND
LAKE W. HOLDINGS, INC.
THIS AGREEMENT REGARDING ADDITIONAL TERMS AND CONDITIONS OF MERGER BETWEEN
WINCHESTER INTERNATIONAL RESORTS, INC. AND LAKE W. HOLDINGS, INC., hereinafter
the "Additional Agreement" is entered into this 2nd day of September, 2010, by
and between Winchester International Resorts, Inc. (WIR), a Nevada corporation,
Lake W. Holdings, Inc. (LWH), a Colorado corporation, and Northstar Global BT
(NGBT), a Nevada business trust, as the sole shareholder of LWH. NGBT, WIR, and
LWH may be referred to herein, separately or individually, as a "Party," and
they may be referred to herein, collectively, as the "Parties." WIR and LWH may
also be referred to, collectively, as the "Constituent Corporations."
In consideration of USD $10 (ten U.S. dollars), in hand paid by each Party
hereto to each of the other Parties hereto, together with the mutual exchange
and receipt of the additional consideration by and between the Parties as
recited in that certain "Agreement and Plan of Merger," dated September 2, 2010,
as to which this Additional Agreement is to be deemed a part and parcel thereof
and incorporated therein by this reference, the Parties' hereby represent,
warrant, covenant, and agree as follows:
1. NGBT agrees to vend or cause to be vended into WIR, each by way of a
tax-free plan of reorganization within the meaning of Section 368 (a) (1)
(F) of the Code:
A. Two, contiguous, (2) Bureau of Land Management (BLM) placer mining
claims located in Washoe County, Nevada, now owned by LWH, namely the
Adders #30 and Adders #31 claims, also known and identified as NMC
numbers 1006222 and 1006223, respectively. The Parties agree that NGBT
shall receive in the merger, Class A WIR (voting / participating /
common) Shares, having an agreed value of USD $5 per Class A share
(computed and issued at twenty-five per cent (25.0%) of the claims'
in-ground precious metals values as of August 29, 2010, but as
subsequently determined by an NI 43-101 report which the Parties agree
shall be secured by WIR immediately following the merger / acquisition
of the Adders #30 and the Adders #31 claims. NGBT and LWH represent
and warrant that LWH has no liabilities and will have no liabilities
at the time of the merger, and that the only assets owned at the time
of the merger will be the two (2) above referenced BLM mining claims
and a checking account with a very nominal balance, which will be
closed or maintained as WIR may determine. The Parties agree that the
number of authorized Class A Shares may need to be increased to allow
WIR to issue to NGBT the so computed number of Class A Shares of WIR.
The Parties further agree that the Class A Shares of WIR to be issued
to NGBT will, immediately upon issuance in the name of NGBT placed
into a mutually agreed third party escrow pending the receipt of the
NI 43-101 report on the two (2) mining claims, at which time the
number of Class A Shares will be determined and either additional
shares will be (authorized and) issued, as necessary, or the
appropriate number of shares then held in escrow will be cancelled. In
either event, the escrow will be terminated and the appropriate number
of Class A shares will be delivered to NGBT.
B. Seventeen (17), contiguous, BLM lode mining claims located in San
Bernardino County, California, now owned by NGBT, namely the El Dorado
claims numbers 1 through 9, inclusive, also known and identified as
CAMC numbers 0290834 through 0290942, respectively, the El Dorado
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claims numbers 10 through 12, inclusive, also known and identified as
CAMC numbers 0293895, 0293896, and 0293583, respectively, and the King
of California claims, numbers 1 through 5, inclusive, also known and
identified as CAMC numbers 0295541 through 0295545, respectively. The
Parties agree that NGBT shall receive in the merger, Rule 144
restricted, Class A WIR (voting / participating / common) Shares,
having an agreed exchange value of the greater of the then current
average of the closing bid prices for the last thirty (30) trading
days, or USD $5, per Class A share (computed and issued at twenty-five
per cent (25.0%) of the claims' in-ground precious metals values as of
the date the merger to acquire such claims is completed, but as
subsequently determined by an NI 43-101 report which the Parties agree
shall be secured by WIR immediately following the merger / acquisition
of the El Dorado and King of California claims. The Parties agree that
the number of authorized Class A Shares may need to be increased to
allow WIR to issue to NGBT the so computed number of Class A Shares of
WIR. The Parties further agree that said claims may be owned by up to
three different subsidiaries of NGBT, and that, at NGBT's discretion,
the three mergers in which the said claims are acquired, may be
accomplished in the order and at the times as elected by NGBT, but
that the period during which all of such claims are vended (by merger)
into WIR shall not exceed eighteen (18) months.
C. NGBT agrees to, in good faith, make best efforts to secure and vend
into WIR, in exchange for a license fee and continuing royalties as
negotiated by NGBT from the inventor, a license to certain Water
Recovery Technology for processing and recovering precious metals from
water, such license to be secured initially from the inventor, namely
Xxxxxx X. Xxxxxxx.
D. NGBT agrees to, in good faith, make best efforts to secure and vend
into WIR, in exchange for a license fee and continuing royalties as
negotiated by NGBT from the inventor, a license to certain TMBT
Reactor Technology for processing and recovering precious metals, such
license to be secured initially from the inventor, namely Xxxxxx X.
Xxxxxxx.
E. NGBT agrees to, in good faith, make best efforts to secure and vend
into WIR, additional mining properties from time to time. The Parties
agree that NGBT shall receive in any such merger, Rule 144 restricted,
Class A WIR (voting / participating / common) Shares, having an agreed
exchange value of the greater of the then current average of the
closing bid prices for the last thirty (30) trading days, or USD $5,
per Class A share (computed and issued at twenty-five per cent (25.0%)
of the claims' in-ground precious metals values as of the date the
merger to acquire such claims is completed, but as subsequently
determined by an NI 43-101 report which the Parties agree shall be
secured by WIR immediately following the merger / acquisition of any
such mining properties. The Parties agree that the number of
authorized Class A Shares may need to be increased to allow WIR to
issue to NGBT the so computed number of Class A Shares of WIR.
2. NGBT will "sell at par," or "donate," as may be appropriate, up to thirty
per cent (30.0%) of the (then issued) Class A shares (i.e, currently
anticipated to be up to 31,500,000 shares) back to the treasury of WIR, in
order that WIR may issue same to Auctus Private Equity Fund, LLC (and / or
such other Party(ies) as the Board of Directors of WIR may determine),
wherein said shares are to be registered and / or sold pursuant to a Form S
registration statement, pursuant to an appropriate Form S registration
statement of such shares. NOTE: When the NI 43-101 reports are issued (as
contemplated above), it is likely that additional Class A Shares of WIR
will be required to be issued to NGBT, but the Parties agree that Class A
Shares of WIR initially issued to NGBT will be cancelled by WIR and
returned to treasury if the NI 43-101 report(s) indicate less than a value
of USD $472,500,000 in Class A Shares are to be issued to NGBT in respect
of the Adders #31 and Adders #31 values (i.e., if less than 94,500,000
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shares are to be issued at the agreed value of USD $5 per share when the
number of shares is computed based on twenty-five per cent (25.0%) of the
"in-ground" values as reflected in the NI 43-101 report).
3. The Parties agree that WIR, following the initial merger with LWH, shall
agree to retain Xxxxx X. Xxxxxxx, and Xxxxx X. Xxxxxxx, by his signature
hereon, agrees to be so retained and to provide the services herein
contemplated, beginning on the effective date of the merger between WIR and
LWH to act as a marketing / fund raising consultant and to immediately
raise (in his capacity as a corporate officer, not as a securities broker)
in the minimum amount of USD $850,000 (eight hundred fifty thousand U.S.
dollars) as and for operating capital for WIR, via the issuance of
promissory note(s) by WIR, wherein the lender(s) shall have an option to
convert their note(s) to WIR Class A Shares (restricted under rule 144) as
held by NGBT at a conversion price to be determined in good faith between
NGBT and Xxxxx X. Xxxxxxx, wherein NGBT would receive the WIR note(s) from
the lender(s) in exchange for the "X," amount of WIR Class A Shares upon
conversion by the lenders. Xxxxx X. Xxxxxxx shall be authorized to be paid
a fixed consulting fee of USD $200,000 (two hundred thousand U.S. dollars)
plus expenses as mutually agreed or pre-approved by the (new) Board of
Directors of WIR after the merger of WIR and LWH, plus a commission or
success fee for such (marketing / fund raising) services equal to ten per
cent (10.0%) of the cash raised by Xxxxx X. Xxxxxxx pursuant to the terms
of this paragraph 3, such fixed consulting fee to be paid pro-rata from the
appropriate additional percentage of the funds raised by Xxxxx X. Xxxxxxx
for WIR. WIR and Xxxxx Norquary (by his signature hereon) agree that they
shall mutually waive any conflict of interest in respect of the consulting
services contemplated in this paragraph 3, and those contemplated vis-a-vis
Xxxxx X. Xxxxxxx'x also acting as the President of WIR (per paragraph 4,
below).
4. The Parties agree that WIR, following the initial merger with LWH, shall
retain or employ Xxxxx X. Xxxxxxx, as the President of WIR for a term of
two (2) years, who shall serve in such capacity in good faith at no charge
or cost to WIR except actual out of pocket expenses incurred for the
benefit of WIR in good faith and as pre-approved by the new Board of
Directors of WIR following the merger of WIR and LWH, such expenses to
include, inter alia, a milage allowance / reimbursement at the maximum rate
per mile permitted by the Internal Revenue Service for use of the personal
automobile of Xxxxx X. Xxxxxxx for WIR business travel, and the payment /
reimbursement of a private phone line and internet services, including long
distance charges in the residence of Xxxxx X. Xxxxxxx, and Xxxxx X. Xxxxxxx
by his signature hereon, agrees to be so retained and to perform such
services for WIR for such period, beginning on the effective date of the
merger between WIR and LWH. Beginning as of the date of the second
anniversary of the date of the merger, Xxxxx X. Xxxxxxx may be retained
annually to serve as President of WIR upon the mutual agreement of WIR and
Xxxxx X. Xxxxxxx, with the annual salary for year(s) three (3) and later to
be USD $100,000 per annum, plus cost of living increases per the U.S.
Government index thereof upon any such further annual renewal, wherein the
annual salary is to be paid annually in arrears (or a proportionate part
thereof if services are not received by WIR for the full year for any
reason). If such salary is not paid in cash to Xxxxx X. Xxxxxxx (or his
estate or legal representative as may be applicable) when due (i.e.,
annually in arrears, on each anniversary date of the merger between WIR and
LWH), the salary due shall be "paid," in Rule 144 (restricted) shares,
issued at a value equal to the greater of fifty per cent (50.0%) of the
average closing bid price for the last thirty (30) trading days prior to
the issuance thereof, or such other (greater) percentage of market value as
is permitted by the Securities and Exchange Commission regulations. Xxxxx
X. Xxxxxxx, by his signature hereon in his capacity as President of and as
a director of WIR, also agrees personally to, and shall be personally bound
by and personally perform the duties required of him as per the terms of
paragraphs 3 and 4 of this Additional Agreement.
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5. The Parties agree that WIR shall not be debt free as of the date and time
of the merger between WIR and LWH, that WIR shall remain liable for and
shall pay the same following the merger of WIR and LWH, and that a list of
the outstanding debts and payables of WIR is attached hereto as Exhibit "A.
WIR shall utilize a portion of the funds to be raised by Xxxxx X. Xxxxxxx
as contemplated in paragraph 3., above, to pay the outstanding debt and
payables.
6. In respect of the contract which WIR has executed wherein it has agreed to
purchase a fifty-one per cent (51.0%) interest in Factory Outlet Trailers,
Inc. (FOT), the Parties agree that WIR shall assign said contract (subject
to and upon approval of such assignment by the owners / sellers of the
51.0% interest in FOT, namely, Xx. Xxxxx Xxxxxxxxx and Xxx. Xxxxxx
Xxxxxxxxx), to a private (non-publicly traded, company (Newco) although the
owners of Newco may elect to take Newco public or merge with a public
company). The owners of Newco shall be (exclusively and ratably, in
proportion to their current holdings of WIR shares) the current
shareholders of WIR, including Mr. and Xxx. Xxxxxxxxx, which (current)
shareholders of WIR will thus own 51.0% of FOT in and through the auspices
of the (initially) private company, Newco. WIR shall provide a loan to
Newco, to be funded at such times and in such amounts as is appropriate and
timely such that the payment obligations to acquire the 51.0% interest in
FOT from Mr. and Xxx. Xxxxxxxxx are met (whether as now agreed and
specified in the existing agreement, or as may be re-negotiated), provided
however, that there shall be no default possible or declared vis-a-vis the
obligations of WIR to fund such loan until after WIR can make "draws,"
i.e., sell stock to Auctus (or other parties) pursuant to an S-1
Registration with the Securities and Exchange Commission, which
registration WIR agrees to undertake immediately. The Parties acknowledge
and agree that the registration process may take 90 to 120 days, and WIR
shall ensure that Mr. and Xxx. Xxxxxxxxx approve the assignment of the
agreement from WIR to Newco with this proviso included. Said loan shall be
at the U.S. Prime rate plus two per cent (2.0%), and shall be fixed as of
the date of the first advance of loan proceeds from WIR to Newco. Said loan
shall be secured by the shares of FOT owned by Newco, the same to be
endorsed in blank and pledged into a mutually agreed third party attorney's
escrow account. No repayment obligations will be due to WIR until the full
amount of the loan has been funded (i.e., until the sellers have been paid
in full), and the repayment obligations of Newco (or its successor in
interest) shall be computed as of the date the final installment of the
loan funding is made, wherein any interest then accrued shall be converted
to principal, and said principal amount shall be amortized in a straight
line amortization schedule with monthly payments over a one hundred twenty
(120) month period, with payments to be due monthly in arrears. In the
event of any default which remains uncured after a thirty (30) day notice
period, the loan may be accelerated, and if the full amount of the loan
(including all accrued but unpaid interest) is not paid within thirty (30)
days after the note has been accelerated, the stock held in escrow
representing a 51.0% interest in FOT shall be delivered forthwith to WIR,
and WIR may assume control of FOT. There shall be a negative covenant such
that Newco (or its successor) shall not, prior to the repayment in full of
the loan from WIR, sell the assets (or any of them) constituting the FOT
business enterprise and business assets, and shall not pledge or
hypothecate the same except upon commercially competitive terms, and unless
the proceeds of same are in good faith used exclusively for the expansion
and / or operation of FOT pursuant to a reasonable business plan generated
in good faith.
As a condition of the assignment of the purchase contract from WIR to
Newco, Mr. and Xxx. Xxxxxxxxx must agree to a twelve (12) month standstill
agreement in respect to all of their shareholdings in WIR, whether such
shares are free trading or restricted shares, and no sale of any such
shares shall be made without the prior written approval of WIR. WIR shall
have a first right of refusal to redeem at the market price (defined as the
average of the closing bid prices for the last thirty (30) trading days
before any such sale) all or any of such shares which Mr. and Mrs.
INITIALS: Winchester International Resorts, Inc. Page 4 of 5
Chuchmuch wish to sell during the standstill period (as are approved for
sale by WIR in its sole and arbitrary discretion). In the event that the
sellers (Mr. and Xxx. Xxxxxxxxx) or the current shareholders of WIR do not
all agree to the terms of the assignment of the sales contract as herein
set forth, WIR shall terminate the contract to purchase FOT and WIR will
forfeit the amount(s) it has paid to Mr. and Xxx. Xxxxxxxxx as may be
required under the terms of the existing purchase agreement (for the 51.0%
interest in FOT by WIR).
7. This document may be executed in counterparts, each of which has only one
or more signatures thereon, but all of which shall constitute one and the
same legal document. Any duly executed counterpart hereof transmitted
electronically shall be legal, valid, and binding upon the Party(ies) who
signed the same.
In Witness Whereof, the parties hereto have caused this Merger Agreement to be
duly executed on the date and year first above written.
LAKE W HOLDINGS, INC. WINCHESTER INTERNATIONAL RESORTS, INC.
By: X.X. Xxxxxx, President By: Xxxxx X. Xxxxxxx, President, CEO, &
Chairman of the Board of Directors
NORTHSTAR GLOBAL BT
By: X.X. Xxxxxx, Trustee
INITIALS: Winchester International Resorts, Inc. Page 5 of 5
