VRI, Inc.
000 Xxxxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
February 23, 2000
VIA FACSIMILE: (000) 000-0000
Zorro Systems, Ltd.
Xxxxxxxx Xxxxx
Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx
Attention: Xx. Xxxx Xxxxxx
Re: Proposed Agreement for the Purchase of Common Stock of Intellashop,
Inc.
Dear Xx. Xxxxxx:
This letter, when countersigned by you and Intellashop, Inc., shall confirm
the agreement as of January 7, 2000, by and between VRI, Inc., a Nevada
corporation (the "Buyer"), Zorro Systems Ltd., a Barbados corporation (the
"Shareholder") and Intellashop, Inc., a Barbados corporation (the "Company"),
upon which the Shareholder will sell to Buyer shares of the Company's common
stock. Our agreement is on the terms, and subject to the conditions, described
below. Except for paragraphs 5, 6 and 7 below, however, this letter represents
only our current good-faith intention to negotiate and enter into a definitive
agreement for the purchase of common stock (the "Agreement for the Purchase of
Common Stock"), which shall be subject to the terms and conditions of this
letter satisfactory completion of the parties' due diligence investigation and
to negotiation of such as Agreement for the Purchase of Common Stock in a form
acceptable to the parties (except with respect to paragraphs 5, 6 and 7, below)
and none of the parties hereto shall have any liability to the other if the
parties fail to execute an Agreement for the Purchase of Common Stock.
Statements below as to what the parties will do, or agree to do, or the like,
are so expressed for convenience purposes only, and are understood in all
instances (except for paragraphs 5, 6 and 7 below) to be subject to our mutual
continued willingness to proceed with any transaction as our negotiations take
place.
1. Fundamental Terms. At the date of closing of the Agreement for the
Purchase of Common Stock (the "Closing"), the Buyer agrees to purchase
and Shareholders agrees to sell and deliver, such number of shares of
the Company's common stock, $100.00 par value, which shall represent
not less than 100% of the Company's issued and outstanding shares of
common stock as of the Closing, on a fully diluted basis
(collectively, the "Shares"), after giving effect to all outstanding
Company shares of common stock, options, warrants or rights to acquire
Company shares of common stock, as if all Company shares of common
stock which may be acquired by exercise or conversion of options,
warrants or rights, were deemed outstanding. As consideration for the
sale of Shares to Buyer, Buyer agrees to pay Shareholder
200,000,000 shares of common stock, $0.15 par value, of the Buyer
(collectively, the "Exchange Shares" or, the "Purchase Price"). The
parties hereto agree that the Shares and the Exchange Shares shall be
fully paid and nonassessable, free and clear of all liens,
encumbrances, options, and legal or equitable rights of others not a
party to this letter.
2. Definitive Agreement. The parties hereto mutually agree to proceed in
good faith toward negotiations and execution of the Agreement for the
Purchase of Common Stock, which shall provide for the sale and
purchase of the Shares and which shall contain representations,
warranties, conditions, covenants and the like typical in such
transaction.
3. Conditions. This letter is and, to the extent applicable, the
Agreement for the Purchase of Common Stock will be subject to the
following conditions:
a. A complete and satisfactory due diligence review by the Buyer of
the books, records, business and affairs of the Company. The
Company agrees to provide Buyer and its agents complete access to
all of the Company's books, records and personnel for purposes of
conducting Buyer's investigation;
b. A complete and satisfactory due diligence review by the
Shareholder and the Company of the books, records, business and
affairs of the Buyer. The Buyer agrees to provide Shareholder and
the Company and their respective agents complete access to all of
the Buyer's books, records and personnel for purposes of
conducting Shareholder's and Company's investigation;
c. The existence at the Closing of no material liabilities on the
books of the Company and the Buyer, and no undisclosed or
contingent liabilities, other than those expressly agreed upon by
the parties;
d. The approvals and consents of all applicable governmental bodies,
lenders, lessors, third parties, and Company's Buyers and
Seller's respective board of directors;
e. The occurrence of no material changes in the Company's and
Buyer's business or capitalization between the date of this
letter and the date of Closing, other than as required or
conditioned herein, or otherwise expressly agreed upon by the
parties in writing; and,
f. The completion and filing by Shareholder, Company and/or Buyer of
all documentation, reports, schedules and other information
necessary to bring the Company and/or the Buyer into compliance
with the rules and regulations of the U.S. Securities and
Exchange Commission and the Internal Revenue Service.
4. Expenses. Each party to this letter shall bear its own expenses,
except as specifically
provided to the contrary above.
5. Indemnification. The Company hereby agrees to defend, indemnify and
hold harmless the Buyer, and all of Buyer's officers, directors,
attorneys, stockholders, employees and agents against any and all
expenses of defense and investigation related thereto, of any and
every nature and description, however incurred, arising out of or
related to this letter of intent, the Agreement for the Purchase of
Common Stock, and any agreements or proceedings related thereto.
The Buyer hereby agrees to defend, indemnify and hold harmless
the Shareholders and the Company, and all of the Company's officers,
directors, attorneys, stockholders, employees and agents against any
and all expenses of defense and investigation related thereto, of any
and every nature and description, however incurred, arising out of or
related to this letter of intent, the Agreement for the Purchase of
Common Stock, and any agreements or proceedings related thereto.
6. Confidentiality. Buyer hereby agrees that all information provided by
Shareholder or the company and identified as "confidential" by
Shareholder or the Company will be treated as such, and that the Buyer
shall not make any use of such information other than with respect to
the transactions contemplated by this letter or by this letter are
terminated without the execution of a definitive Agreement for the
Purchase of Common Stock, Buyer shall return to Shareholder or the
Company all such confidential information in its possession, or will
certify to Shareholder and the Company that all of such that has not
been returned has been destroyed.
Shareholders and Company hereby agree that all information
provided by Buyer and identified as "confidential" by Buyer will be
treated as such, and that the Shareholder and Company shall not make
any use of such information other than with respect to the
transactions contemplated by this letter or by the Agreement for the
Purchase of Common Stock. If the agreements contemplated by this
letter are terminated without the execution of a definitive Agreement
for the Purchase of Common Stock, Shareholder and Company shall return
to Buyer all such confidential information in its possession, or will
certify to Buyer that all of such that has not been returned has been
destroyed.
7. Termination. This letter of intent may be terminated by mutual consent
of the Buyer, the Shareholder and the Company.
In the event of such termination, all provisions hereof shall
terminate except as provided in the initial paragraph preceding
paragraph 1, above, except that if a party is in breach of its
obligations hereunder, such transaction shall not relieve such party
of liability for such breach.
This letter agreement shall be governed by, and construed with, the laws of
the State of Nevada, without giving effect to conflict of laws principles
thereof, and in any action to enforce or interpret or arising under any of the
provisions of this agreement, the parties expressly agree to
submit to the jurisdiction of any Federal or State court sitting in Xxxxx
County, State of Nevada.
Sincerely,
VRI, INC.
By: /S/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
ACCEPTED AND AGREED TO as of the date first above written:
ZORRO SYSTEMS LTD.
By: /S/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
Title: Chairman
ACCEPTED AND AGREED TO as of the date first above written:
INTELLASHOP INC.
By: /S/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
Title: Chairman
