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EXHIBIT 99.10
AMENDED AND RESTATED AGREEMENT
This Amended and Restated Agreement (the "Agreement") is made
effective as of August 19, 1996 by and among INTERNATIONAL REALTY GROUP, INC.
("IRG"), a Delaware corporation, 000 Xxxxxxxxx 000 Xxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxx 00000, DSC, S.A. DE C.V. ("DSC"), a Mexico corporation,
Constituyentes Xx. 000, Xxx. 00 xx Xxxxxxxxxx, Xxxxxx, X.X. 00000, and
HEMISPHERE DEVELOPMENTS LIMITED ("Hemisphere"), an Isle of Man corporation,
Xxxxxxxx Xxxxx, 0-0 Xxxxxxxx Xxxx, Xxxxxxx, Xxxx xx Xxx.
RECITALS:
A. IRG has entered into a share exchange transaction with DSC, pursuant
to the terms of those certain agreements, dated October 6, 1995 (the
"Agreement"), February 7, 1996 (the "First Amendment") and July 31, 1996 (the
"Second Amendment"). Collectively, the Agreement, First Amendment and Second
Amendment are referred to herein as the "DSC Agreements."
B. IRG has also entered into a share exchange transaction with
Hemisphere, pursuant to the terms of those certain agreements, dated February 9,
1996 (the "Hemisphere Agreement"), and July 31, 1996 ("Hemisphere Amendment").
Collectively, the Hemisphere Agreement and the Hemisphere Amendment are referred
to herein as the "Hemisphere Agreements."
C. IRG, DSC and Hemisphere desire to amend and restate the DSC
Agreements and the Hemisphere Agreements in order to conform the terms of such
agreements to the accounting treatment of the share exchange transaction in
accordance with generally accepted accounting principles, and to make certain
amendments to such agreement, all in accordance with the terms and conditions of
this Agreement.
D. IRG, DSC and Hemisphere desire that this Agreement shall constitute
the entire agreement of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and undertakings, both written and
oral, between or among the parties hereto with respect to the subject matter
hereof, including, without limitation, the DSC Agreements and the Hemisphere
Agreements.
E. IRG, DSC and Hemisphere hereby acknowledge that they are aware of
the contents and legal effects of all the agreements, contracts, arrangements,
either written or verbal, including the Limited Partnership Agreements
(literally, "asociaciones en participation"), referred to herein as well as of
any other document creating, amending or terminating in any manner any rights or
obligations of the parties hereto.
NOW THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, IRG, DSC and Hemisphere agree as follows:
1. Recitals. The recitals set forth above are true and correct and are
made a part hereof.
2. Basic Transaction. IRG has consummated a share exchange transaction
with each of DSC and Hemisphere effective August 19, 1996 (the "Closing Date" or
the "Closing") pursuant to the terms and conditions of this Agreement. Such
transaction is intended to effect a reverse merger of IRG with DSC as the
acquiring party and shall be accounted for as a pooling of interest at
historical cost, according to U.S. Generally Accepted Accounting Principles.
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3. DSC Share Exchange. On the Closing Date, IRG shall have purchased from
DSC and DSC shall have sold to IRG the following assets (the "DSC Assets"): (i)
DSC's 100 percent interest in Centro de Promociones Xxxxxxxx X.X. de C.V.
("Centro"); (ii) DSC's 75 percent interest in Clusters Inmobiliaria de Ixtapa,
S.A. de C.V. ("Clusters Ixtapa"); (iii) a promissory note ("Clusters Note") in
the principal amount of $5,628,426 of Clusters Ixtapa; (iv) DSC's 30 percent
interest in Nueva Tierra, S.A. de C.V. ("Nueva Tierra"). The table attached
hereto as Exhibit "A" summarizes the DSC Assets acquired, the interests and
historical cost basis of each. In addition, DSC shall make advances to IRG in
the aggregate amount of $300,000, which amounts shall be treated as a capital
contribution to IRG.
In exchange for the DSC Assets, IRG shall have issued to DSC, as of the
Closing Date, a Convertible Promissory Note (the "DSC Note") in the principal
amount of $4,858,828 and convertible into 52,875,030 shares of IRG's common
stock, par value $.001 per share (the "Common Stock"); and (ii) 485,930 shares
of Common Stock. The form of the DSC Note is attached hereto as Exhibit "B" to
this Agreement.
4. Hemisphere Transaction. On the Closing Date, IRG shall have purchased
from Hemisphere and Hemisphere shall have sold to IRG its 100% interest in
Xxxxxxx Corporation (the "Hemisphere Asset"), which, in turn, holds a 70 percent
interest in Nueva Tierra. The table attached hereto as Exhibit "A" summarizes
the Nueva Tierra partnerships -- Villa Del Carbon, Hacienda Del Franco, and
Bahia xx Xxxxxx -- acquired, the interests and historical cost basis of each. As
of the Closing Date, Nueva Tierra's interest in the partnerships is as follows:
Xxxxx xx Xxxxxx 00.00%
Xxxxxxxx xxx Xxxxxx 81.13%
Villas Del Carbon 79.08%
In exchange for the Hemisphere Asset, IRG shall have issued to
Hemisphere, as of the Closing Date: (i) a Convertible Promissory Note (the
"Hemisphere Note") in the principal amount of $4,848,558 and convertible into
52,763,270 shares of Common Stock; and (ii) 514,070 shares of Common Stock. The
form of the Hemisphere Note is attached hereto as Exhibit "C" to this Agreement.
5. Representations and Warranties of IRG. IRG hereby represents and
warrants to each of DSC and Hemisphere:
a. IRG is authorized to issue 10,000,000 shares of Common Stock, of
which 8,954,187 shares have been issued and are outstanding as of the Closing
Date. IRG's majority shareholders agree to use their best efforts to cause an
increase in the number of authorized shares to 450,000,000. IRG owns all of the
issued and outstanding shares of stock of all of its subsidiaries: International
Realty Group (Holdings), Inc., a Florida corporation; The Appraisal Group, Inc.,
a Florida corporation; Appraisal Group International, Inc., a Florida
corporation; IRG Financial Services, Inc., a Florida corporation; U.S. Property
Investment and Auction, Inc., a Florida corporation; Caye Bokel, Ltd., a Belize
corporation, and Stragix International, Inc., a Florida corporation which in
turn owns 75% of Appraisal Group International Rt., a Hungary Corporation;
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b. IRG and its subsidiaries own no real properties except the Caye
Bokel property and two vacant lots in LaGrange, Texas, and all leases of real or
other property are valid, enforceable in accordance with their terms, and not in
default.
c. IRG and its subsidiaries have properly filed or caused to be filed
all United States federal, state, local, and foreign income and other tax
returns, reports and declarations that are required by applicable law to be
filed by them, and have paid, or made full and adequate provisions for the
payment of, all federal, state, local, and foreign income and other taxes
properly due for the periods covered by such returns, reports, and declarations,
except such taxes, if any, as are adequately reserved against in IRG's most
recent audited financial statements. Based upon due inquiry by IRG, IRG to the
best of its knowledge and belief states that Appraisal Group International Rt.
is in compliance with this paragraph.
d. There is no litigation pending or threatened, nor have any summons,
notices or warning been received from any governmental agency, department with
respect to any material fine, or material violation of any law or ordinance, or
other type of enforcement proceeding, including but not limited to environmental
matters, with respect to IRG or its subsidiaries which involve a potential
monetary recovery in excess of $25,000 in United States dollars.
e. IRG has or will have on the date of Closing good and unencumbered
title to the shares of IRG stock necessary to complete this transaction as
provided above, free and clean of all mortgages, liens and encumbrances of any
nature, and has or will have on the Closing Date the power and authority to
transfer said shares to Hemisphere and DSC free and clear of liens and
encumbrances on the Closing Date.
f. Except as specifically referenced in this Agreement, none of IRG or
its subsidiaries have or will enter into any transaction, incur any obligation
or conduct business affairs except in the normal course of business between
September 30, 1995 and the Closing Date.
g. All of the financial statements of IRG provided to either DSC or
Hemisphere and filings with the Securities and Exchange Commission shall be true
and accurate in all material respects for the periods indicated, and shall not
omit any material fact or circumstance necessary or required to prevent the
information from being misleading. Since the date of the most recent IRG audited
financial statement, IRG and its subsidiaries have no liabilities, fixed or
contingent which are not fully provided for in the IRG Audited Financial
Statements, except for trade payables incurred in the ordinary course of
business. IRG shall have provided Hemisphere and DSC a list of liabilities of
IRG and its subsidiaries as of the Closing Date which shall be certified by IRG
as true and correct, and incorporated herein by reference.
h. IRG and its subsidiaries have, and in the past have had no labor
agreements, and no employee benefit plans sponsored, maintained or contributed
to by IRG or its subsidiaries for the benefit of employees, officers or
directors.
i. To the best of IRG's knowledge and belief, IRG and its subsidiaries
are in good standing with the SEC, NASD, and each state and country where they
conduct business and have received no notification or inquiry giving reasonable
cause to believe otherwise, and IRG will provide at closing good standing
certificates or their equivalent from each such country, including Belize and
Hungary, and each such state in the United States. As a part of IRG's due
diligence response provided to Hemisphere and DSC, IRG will continue to provide
Hemisphere and DSC
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with copies of all filings made by IRG with the SEC or NASD, and copies of all
letters, notices or other documents sent by IRG to or received by IRG from the
SEC or the NASD up to and including the date of the Closing.
6. Representations and Warranties of Hemisphere. Hemisphere hereby
represents and warrants to IRG:
a. On the date of Closing, Hemisphere has or will cause good and
unencumbered title to the Hemisphere Assets to be sold and transferred to IRG.
b. There is no litigation pending or threatened, nor have any summons,
notices or warning or warning been received from any governmental agency, or
department with respect to any material fine, or material violation of any law
or ordinance,or other type of enforcement proceeding, including but not limited
to environmental matters, with respect to Xxxxxxx, Nueva Tierra or the
properties which involves in the aggregate a potential monetary recovery in
excess of $500,000 in United States dollars for all such litigation, claims or
fines. Based upon due inquiry by Hemisphere, Hemisphere to the best of its
knowledge and belief states that Xxxxxxx, Nueva Tierra and the properties are in
compliance with this paragraph.
c. The financial statement of Xxxxxxx provided to IRG shall be true and
accurate in all material respects for the periods indicated for the statement,
and shall not omit any material fact or circumstance necessary or required to
prevent the financial information from being misleading. Since the date of the
most recent Xxxxxxx financial statement and except as specifically referenced in
this Agreement, Xxxxxxx shall have conducted its business only in the ordinary
and usual course.
7. Representations and Warranties of DSC. DSC hereby represents and
warrants to IRG:
a. On the date of Closing, DSC has or will cause good and unencumbered
title to the DSC Assets to be sold and transferred to IRG.
b. There is no litigation pending or threatened, nor have any summons,
notices or warning or warning been received from any governmental agency, or
department with respect to any material fine, or material violation of any law
or ordinance,or other type of enforcement proceeding, including but not limited
to environmental matters, with respect to the DSC Assets which involves in the
aggregate a potential monetary recovery in excess of $500,000 in United States
dollars for all such litigation, claims or fines. Based upon due inquiry by DSC,
DSC to the best of its knowledge and belief states that all of the DSC Assets
are in compliance with this paragraph.
c. All of the financial statement provided by DSC to IRG are true and
accurate in all material respects for the periods indicated for the statement,
and shall not omit any material fact or circumstance necessary or required to
prevent the financial information from being misleading. Since the date of the
latest period covered by such financial statements and except as specifically
referenced in this Agreement, DSC shall have conducted its business only in the
ordinary and usual course.
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8. Deliveries at Closing.
a. Prior to, or at Closing, DSC and Hemisphere shall each have received
from IRG the following:
i. Appropriate corporate resolutions authorizing the transfer of
stocks;
ii. A copy of the original request to American Stock Transfer for
the issuance of the IRG stock certificates to DSC and
Hemisphere;
iii. Documentation evidencing the authority of the signatories;
iv. Documentation evidencing the validity of the Charter and
By-Laws of IRG; and
v. Documentation evidencing the validity of the transfer of IRG's
stock to DSC and Hemisphere.
b. Prior to, or at Closing, IRG shall have received from DSC certified
English translation of the following:
i. Updated third party appraisals of the DSC Assets listed on
Exhibit A;
ii. Appropriate documentation evidencing the authority of all
signatories;
iii. Documentation evidencing the partnerships' and companies'
ownership interests in the properties listed on
iv. Exhibit A; 1 Appropriate corporate resolutions authorizing the
transfer of stock; 1 Original stock certificates duly endorsed
to IRG;
vi. An Opinion Letter from DSC's Mexican counsel opining as to (i)
the validity of the corporate status of each of the DSC
companies being acquired, (ii) the authority of the
signatories, (iii) the validity of the Charter and By-Laws of
the companies (attaching same as exhibits), (iv) the ownership
interest of the companies in the properties, (v) the validity
of the transfer of stock of those companies to IRG, (vi) IRG's
ownership interest in the companies and (vii) the fact that
the properties are not subject to any liens, loans or
encumbrances, except as provided for in their financial
statements; and
vii. A statement from DSC's Mexican accountants verifying that no
adverse, material changes in DSC's financial condition have
occurred from the date of DSC's most recent financial
statements to the date of the Closing.
c. Prior to, or at Closing, IRG shall have received from Hemisphere a
certified English translation of the following:
i. Updated third party appraisals of the Hemisphere Assets listed
on Exhibit A;
ii. Documentation evidencing the validity of the existence of the
limited partnerships listed on Exhibit A (including the Limited
Partnership Agreements);
iii. Documentation evidencing the validity of the existence of
Nueva Tierra and Xxxxxxx (including Charter and By-Laws of both
companies);
iv. Documentation evidencing the companies' ownership interest in
the partnerships listed on Exhibit A;
v. Appropriate corporate resolutions evidencing the authority of
all signatories;
vi. Documentation evidencing the ownership interest of the
partnerships in the subject properties;
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vii. Original stock certificates duly endorsed to IRG;
viii. An Opinion Letter from Hemisphere's Mexican counsel opining as
to (i) the validity of the Limited Partnerships and
Corporations, (ii) the validity of the equity interest held
by the Corporations in the Limited Partnerships, (iii) the
authority of the signatories, (iv) the validity of the
Charter and By-Laws of the companies (attaching same as
exhibits), (v) the ownership interest in the subject
properties, (vi) the validity of the transfer of stock of
those companies to IRG, (vii) IRG's ownership interest in
the companies and (vii) the fact that the properties are not
subject to any liens, loans or encumbrances, except as
provided for in their financial statements; and
xi. A statement from Nueva Tierra's Mexican accountants verifying
that no adverse, material changes in Nueva Tierra's financial
condition have occurred from the date of Nueva Tierra's most
recent financial statements to the date of the Closing.
9. Issuance of Shares and Registration Rights. The IRG stock issued to DSC
and Hemisphere pursuant to this transaction may be issued to DSC and Hemisphere
in reliance on Regulation "S" of the Securities Act of 1933 (the "Securities
Act"). DSC and Hemisphere on the Closing Date shall execute a subscription
agreement which among other things shall acknowledge that it has acquired the
IRG shares for investment purposes only, and such shares shall be subject to the
restriction on transfer set forth in Rule 144 of the Securities Act and will not
be tradable in the market without registration unless subject to an exemption
from registration. IRG hereby grants to DSC and Hemisphere piggyback and demand
registration rights to the shares acquired hereunder for a period of three years
following the Closing Date.
10. Change in the Board of Directors and Officers of IRG on the Closing
Date. On the Closing Date, Xxxx Day, Xxxxxxxx Xxxx and Xxxx Xxxxxxxx shall have
resigned from the IRG Board of Directors, and the remaining Directors Xxxxxxx
Xxxxxxxx and Xxxxx Xxxxxx shall have elected Xxxxxxxx Xxxxxxxxx C. to the Board
of Directors of IRG. Xxxxxxx Xxxxxxxx shall have resigned as Secretary of IRG on
the Closing Date and shall be replaced with Xxxxx Xxxxxx. Simultaneous or prior
to the Closing Date, Xxxxxxx Xxxxxxxx shall have entered into a one-year
employment contract satisfactory to Xx. Xxxxxxxx and DSC. Xx. Xxxxxxxx will
receive the same salary, without bonus or stock awards, as reflected for the
year 1994 in IRG's 10K Report for the year ending December 31, 1994. After the
authorization of the increase of capital, as called for herein, IRG shall
immediately call for a special meeting of the shareholders to increase the
number of Directors from three to five and to elect five new Directors retaining
one director designated by IRG at the time of Closing, one director designated
by Hemisphere, and three directors designated by DSC.
11. Information Statement. After Closing, IRG will amend its Certificate of
Incorporation to increase the number of authorized shares of Common Stock from
its current level of 10,000,000 shares to 450,000,000 shares. Xxxx Xxxxxxxx and
Xxxxxxx Xxxxxxxx, who jointly control more than a majority of the issued and
outstanding Common Stock, will execute a written Stockholder Consent approving
such amendment to the Certificate of Incorporation. In accordance with
regulations of the SEC, IRG must file an Information Statement with the SEC.
Among other things, this Information Statement describes the amendment to the
Certificate of Incorporation to be approved by the written consent of two
stockholders as well as the transaction contemplated in this Agreement,
including a description of the properties to be acquired by IRG. Immediately
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after Closing, IRG shall diligently prepare the Information Statement for review
by the SEC. After the staff of the SEC has completed its review of the
Information Statement, IRG will mail a copy of the Information Statement,
including all exhibits, to each stockholder. Twenty-one days after the
Information Statement is presented to its shareholders, and as soon as practical
thereafter, IRG shall amend its Certificate of Incorporation increasing the
authorized shares and the DSC and Hemisphere Notes referenced in this Agreement
will be converted to Common Stock of IRG as provided for therein.
12. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, U.S.A. and the parties hereby submit to the jurisdiction
thereof.
13. Notices. Any notices sent to DSC relating to this Agreement shall be
sent by facsimile and overnight delivery addressed as follows:
Xxxxxxxx Xxxxxxxxx C. Xxxxx Xxxxxx
DSC S.A. de C.V. DSC S.A. de C.V.
Constituyentes Xx. 000, Xxxxxxxxxxxxxx Xx. 000,
Col. 16 de Septiembre Col. 00 xx Xxxxxxxxxx
Xxxxxx, X.X. 00000 Xxxxxx, D.F. 11810
Telephone: 000 00 0 000-0000 Telephone: 000 00 0 000-0000
Facsimile: 011 52 5 277-9012 Facsimile: 011 52 5 277-9012
Any notices sent to Hemisphere relating to this Agreement shall be sent
by facsimile and overnight delivery addressed as follows:
Xx. Xxxxxxx Xxxxxxx-Ciana, Director
Hemisphere Developments Limited
Xxxxxxxx Xxxxx, 0-0 Xxxxxxxx Xxxx, Xxxxxxx, Xxxx xx Xxx
Telephone: 000 00 00 000 0000
Facsimile: 011 41 22 300 1711
Any notices sent to IRG relating to this Agreement shall be sent by
facsimile and overnight delivery addressed as follows:
Xx. Xxxxxxx X. Xxxxxxxx
International Realty Group, Inc.
000 X.X. 000 Xx., Xxxxx 000, Xxxxx, Xxxxxxx 00000 U.S.A.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any notice sent to either DSC, Hemisphere or IRG relating to this
Agreement shall be sent by facsimile and overnight delivery addressed as
follows:
Xx. Xxx C. Schmachtenbrg, Esq. Information copies sent to:
Schmachtenberg & Associates
0000 Xxxxxx Xxxxx, Xxxxx 000 Xx. Xxxx Xxxxxxxx
Xxxxx, Xxxxxxx 00000 0000 X.X. 000 Xxxxxx
Telephone: (000) 000-0000 North Xxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
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14. Confidentiality. Each party shall keep information disclosed to it by
the other party relating to its business and financial affairs strictly
confidential, except where disclosure is required by law or the information is
public knowledge. Each party shall ensure that its obligation of confidence is
observed by its employees and professional advisors and/or representatives.
15. Headings. The headings in this Agreement are for reference purposes
only and are not intended to have any meaning or substantive effect.
16. Entire Agreement. This Agreement, including all of the Exhibits
attached hereto which are incorporated herein by this reference, constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and thereof and supersedes all prior agreements and undertakings, both written
and oral, between or among the parties hereto with respect to the subject matter
hereof and thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
DSC, S.A. de C.V. Hemisphere Developments Limited
By: /s/ Xxxxxxxx Xxxxxxxxx C. By: /s/ Xxxxxxx Xxxxxxx-Ciana
----------------------------------------- --------------------------
Xxxxxxxx Xxxxxxxxx C. Xxxxxxx Xxxxxxx-Ciana
INTERNATIONAL REALTY GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxx Xxxxxxxx
----------------------------------------- --------------------------
Xxxxxxx X. Xxxxxxxx, President, Xxxx Xxxxxxxx
Chief Financial Officer, and Shareholder Shareholder
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Xxxxxxx X. Xxxxxxxx
Shareholder
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EXHIBIT A
INTERNATIONAL REALTY GROUP, INC.
AS OF 6/30/96
ACQUISITION OF DSC / HEMISPHERE ASSETS
ASSETS DSC DSC CLUSTERS CENTRO HACIENDA
CAPITAL NOTE
------------------------------------------------------------------------------------------------------------------------------
Real estate held for development 9,054,885 403,591 547,186
Cash 132,525 17,756
Due from DSC 104,975 1,912,189 247,277
VAT Receivable 32,646 109
Other Assets 237
Cancellation of
Notes to Bank 5,628,426 (5,628,426) (659,508) (483,618)
Accounts Payable (69,571) (59,290)
Accrued Interest (66,984)
Accrued liabilities (119,653) (7,767)
------------------------------------------------------------------------------------------------------
Net Assets 300,000 5,628,426 5,200,063 (75,588) (3,416)
======================================================================================================
Paid-in Capital 300,000 5,628,426 6,788,276 776,744 29,174
Retained earnings (2,888,229) (852,332) (31,945)
------------------------------------------------------------------------------------------------------
300,000 5,628,426 3,900,047 (75,588) (2,771)
Minority interest 1,300,016 (645)
------------------------------------------------------------------------------------------------------
Net Assets 300,000 5,628,426 5,200,063 (75,588) (3,416)
======================================================================================================
Minority share % 0.00% 0.00% 25.00% 0.00% 18.87%
======================================================================================================
Common Shares: net equity transfer value $9,799,278 or $0.0919 per share.
DSC 53,360,960 issued at closing 485,930 $44,653
Hemisphere Note: 53,277,340 issued at closing 514,070 $47,239
----------- --------- -------
106,638,300 1,000,000 $91,892
ASSETS VILLA BAHIA TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
Real estate held for development 43,104 19,358 10,068,124
Cash 150,281
Due from DSC 2,264,441
VAT Receivable 32,755
Other Assets 237
Cancellation of
Notes to Bank (1,143,126)
Accounts Payable (128,861)
Accrued Interest (66,984)
Accrued liabilities (127,420)
-------------------------------------------------------------------
Net Assets 43,104 19,358 11,111,947
===================================================================
Paid-in Capital 34,087 15,078 13,571,784
Retained earnings (3,772,506)
-------------------------------------------------------------------
34,087 15,078 9,799,278
Minority interest 9,017 4,280 1,312,869
-------------------------------------------------------------------
Net Assets 43,104 19,358 11,111,947
===================================================================
Minority share % 20.92% 22.11%
===================================================================
Common Shares:
DSC Note: $4,858,828 convertible to 52,875,030 shares
Hemisphere Note: Note: $4,848,558 convertible to 52,763,270 shares
---------- -----------
$9,707,386 105,638,300
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