AGREEMENT OF SETTLEMENT
This Agreement of Settlement (the "Agreement") is entered into this 20th
day of August 2005, by and between, Atlantic Wine Agencies, Inc., a Florida
corporation with its principal place of business formerly located at 00
Xxxxxxxxxxxxx, Xxxxxx XX SWIX but now with its principal place of business at
Xxxxxx Xxxxx Xxxxx, 0 Xxxxxxxxx Xxxxxx Xxxxxx, Xxxxxx, XX00XX ("Atlantic");
Dominion Wines Ltd, ACN 087183739 an Australian corporation with its principal
place of business at Xxxxx 0, 000 Xxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxx
("Wines "); Dominion Estates Pty Ltd, ACN 072221375 an Australian corporation
with its principal place of business at Xxxxx 0, 000 Xxxxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxx, Xxxxxxxxx ("Estates"); and Global Realty Development Corp (formerly
known as Australian Agriculture and Property Development Corporation) with its
principal place of business at 00000 Xxxxx Xxx Xxxxxxxxx, Xxxxx 000, Xxxxx
Xxxxxxx, Xxxxxxx 00000, XXX ("Global"). Collectively, Wines and Estates shall
sometimes be referred to as the "Dominion Estates Group".
W I T N E S S E T H:
--------------------
WHEREAS, Atlantic and the Dominion Estates Group entered into a Share
Exchange Agreement, effective as of September 4, 2004 ( "Exchange Agreement")
pursuant to which Atlantic acquired from A1 Financial Planners Pty Ltd (ACN 006
942 598) ("A1") all the shares in Estates and Estates acquired from the
shareholders as set out in Schedule 1 ("Dominion Estates Group Shareholders")
their shares in Wines ("Wines Shares");
WHEREAS, pursuant to the terms of the Exchange Agreement, Atlantic agreed
to, among other things, (i) deliver 20,000,000 restricted shares of common stock
of Atlantic to the shareholders of Wines and Estates; (ii) transfer to the
National Australia Bank the amount of AUD$3,097,677.91 to discharge the loans to
Wines specified in the Exchange Agreement ("National Loans"), (iii) assume the
Commonwealth Bank of Australia loan to Estates in the amount of AUD$4,081,387.11
("Commonwealth Loan"); and (iv) transfer AUD$262,322.09 to the Dominion Estates
Group's bank accounts as assurance of its good faith in servicing the
Commonwealth Loan;
1
WHEREAS, in part satisfaction of its obligations under the Exchange
Agreement, Atlantic has (i) issued and delivered to the parties set out in
Schedule 2 ("Atlantic Shareholders") shares in Atlantic ("Atlantic Shares"),
(ii) paid the National Australia Bank the amount of AUD$3,136,202.87, and (iii)
transferred the said sum of AUD$262,322.09 at the direction of the Dominion
Estates Group; WHEREAS Atlantic did not acquire the shares in Wines owned by
P.L.S Pty Ltd (ACN 006 449 485) ("PLS") but Atlantic incorrectly issued to PLS
shares in Atlantic in the mistaken belief that PLS had delivered its
shareholding in Wines to Atlantic;
WHEREAS, Atlantic has not assumed the Commonwealth Loan as a dispute had
arisen between the parties to the Exchange Agreement;
WHEREAS, pursuant to the terms of the Exchange Agreement, the Dominion
Estates Group Shareholders delivered to Atlantic all of their shares in Wines
and Estates, and Atlantic caused to be transferred all those shares in Wines to
Estates and all those shares in Estates to Atlantic;
WHEREAS, each of the boards of directors of Atlantic, Wines and Estates,
have each determined that it would be in the best interests of each of Atlantic,
Wines and Estates, and their respective stockholders and the Dominion Estates
Group Shareholders to unwind the transactions consummated in connection with the
Exchange Agreement;
WHEREAS, on February 28, 2005, Mount Xxxxxx Estates Pty Ltd, ("Mt Xxxxxx")
a wholly-owned subsidiary of Atlantic borrowed AUD$465,000 from Estates ( "Mt
Xxxxxx Loan");
WHEREAS, as additional consideration for this Agreement, Global has agreed
to assume Mt Xxxxxx'x obligation under the Mt Xxxxxx Loan and to issue a
promissory note to Estates as security for the repayment of the Mt Xxxxxx Loan,
and Estates has agreed to substitute Global for Mt Xxxxxx as the debtor of the
Mt Xxxxxx Loan as evidenced by a novation agreement;
WHEREAS, on April 4 2005, the board of directors of Estates placed Estates
into voluntary administration under Section 436A of the Corporations Act
(Commonwealth) 2001 ("the Act") and as a result, the transfer of any of its
shares is subject to approval of the Federal Court pursuant to Section 437F of
the Act.
2
WHEREAS, each of the boards of directors of Atlantic, Wines and Estates
have determined that it would be in the best interests of Atlantic, Wines,
Estates, A1 and the Dominion Estates Group Shareholders to have A1 acquire all
the issued shares in Estates ("the Estates Shares") from Atlantic in
consideration of A1 returning its shares in Atlantic to Atlantic;
WHEREAS Atlantic warrants that all the Estates Shares are unencumbered and
represents that, except for the appointment of the Administrators to Estates,
Atlantic has not created or caused any party to obtain or possess any
encumbrance, lien, charge or claim with respect to either the Estates Shares or
to the best of its knowledge and belief the Wines Shares and that subject to
paragraph 1.1 of Section 1 of this Agreement, it is entitled to transfer the
Estates Shares to Global in accordance with this Agreement;
WHEREAS this Agreement is conditional upon and will have no force and
affect unless either (a) the approval of the Federal Court pursuant to Section
437F of the Act ("Court Approval") to the transfer by Atlantic to A1 of the
Estates Shares is obtained or (b) the Deed of Company Arrangement (as defined in
the following recital) has come into force and effect and the Deed
Administrators (as defined in the next following recital) have consented to the
transfer by Atlantic to A1 of all right title and interest in and to the Estates
Shares; WHEREAS, following a meeting of creditors of Estates held on 29 July
2005 it was resolved that Estates execute a Deed of Company Arrangement which
will be executed pursuant to Section 444A of the Act ("Deed of Company
Arrangement"); WHEREAS, if the Deed of Company Arrangement comes into force and
effect the requirement to obtain Court Approval to the transfer by Atlantic to
A1 of the Estates Shares will not be necessary, in which event and with the
consent of those parties defined in the Deed of Company Arrangement as the Deed
Administrators ("Deed Administrators"), the transfer by Atlantic to A1 of the
Estates Shares can proceed in the manner set out in paragraph 1.6 of Section 1
of the Agreement;
WHEREAS, as additional consideration for this Agreement Global has, at
Atlantic's request, agreed to issue to Sapphire Developments Ltd a duly executed
promissory note for AUD$3.2 Millio together with a duly executed security
agreement in relation thereto;
WHEREAS in consideration of the Agreement Atlantic releases the Dominion
Estates Group from each and every obligation which Wines and/or Estates may have
to repay any monies which may be owing by Wines and/or Estates to Atlantic
including any monies which Atlantic may have advanced or provided to, or
provided for the benefit of, either or both of the companies comprising the
Dominion Estates Group (including without limitation the amount transferred to
discharge the National Loans and the amount of AUD$262,322.09 herein before
referred to as being transferred at the direction of the Dominion Estates
Group);
3
WHEREAS Atlantic warrants that to the best of its knowledge and belief it
has not caused Wines to become liable to or indebted to any third party and that
Estates is not liable or indebted to any party other than as disclosed to the
Administrators of Estates;
WHEREAS, the parties acknowledge that certain of the Atlantic Shares noted
with an asterisk in Schedule 2 ("DPP Controlled Shares") are the subject of a
restraint order obtained by the Director of Public Prosecutions of the
Commonwealth of Australia ("DPP") under proceedings in the Supreme Court of
Victoria (Australia) No. 1530 of 2004 and have been placed under the custody and
control of the Official Trustee at the Insolvency and Trustee Service Australia
("Official Trustee") and that any transfer of the DPP Controlled Shares is
subject to the approval of the Official Trustee;
WHEREAS Global and the Dominion Estates Group agree that once the Estates
Shares have been transferred to A1, Estates comes out of voluntary
administration and control is returned to its directors they shall cause all the
shares in Wines which were formerly held by the Dominion Estates Group
Shareholders to be transferred to each of the Dominion Estates Group
Shareholders upon each of the Atlantic Shareholders at the time of transfer of
the Estate Shares returning its Atlantic Shares to Atlantic (save for those
shareholdings marked with an asterisks in Schedule 1 which shall, subject to the
Official Trustee's approval, be transferred to the Official Trustee upon the
Official Trustee returning the relevant Atlantic Shares to Atlantic);
WHEREAS Atlantic has agreed subject to paragraph 1.1 of Section 1 of the
Agreement to (i) transfer to A1 all rights, title and interest to and in the
Estates Shares, (ii) deliver the resignations of directors appointed by it
namely Xxxx Xxxxxxxxxxx, Xxxxxx Xxxxxx and Xxxxx Kopitkke from the board of
Estates; and (iii) deliver to the Dominion Estates Group a general release;
WHEREAS Global has agreed subject to paragraph 1.1 of Section 1 to: (a)
assume the obligations under the Mt Xxxxxx Loan (by way of entering into a
novation agreement and issuing a promissory note to Estates); (b) deliver a
promissory note to Sapphire Developments Limited and execute a related security
agreement; (c) use its best endeavours to cause the Atlantic Shareholders to
return the Atlantic Shares other than the DPP Controlled Shares to Atlantic; (d)
use its best endeavours to cause the Official Trustee to return the DPP
Controlled Shares to Atlantic;
WHEREAS, the Dominion Estates Group has agreed subject to paragraph 1.1 of
Section 1 to deliver to Atlantic a general release; WHEREAS, the parties have
agreed that entering into this Agreement and related Releases, as referred to
below, is the best manner to ensure that each of Atlantic, Wines, Estates, A1
and the Dominion Estates Group Shareholders are returned the consideration they
exchanged in connection with the Exchange Agreement; and
4
NOW, THEREFORE, in consideration of the covenants, and agreements set forth
in this Agreement, Atlantic, Wines, Estates and Global intending to be legally
bound thereby, and hereby warranting that they each have the capacity and
authority to execute this Agreement, it is agreed by and among the undersigned
parties, that all of the claims asserted (or which could have been asserted) by
Atlantic against Wines or Estates and Wines or Estates against Atlantic will,
subject to paragraph 1.1 of Section 1 of this Agreement, be settled and
compromised on the following terms and conditions, to wit:
1. Compromise
1.1 This Agreement and the documents executed pursuant thereto are
conditional upon and will have no force and affect unless either of
following conditions precedent have been satisfied ("Conditions Precedent")
(a) the Court Approval to the transfer by Atlantic to A1 of the Estates
Shares has been obtained or (b) the Deed of Company Arrangement has come
into force and effect and the Deed Administrators have consented to the
transfer by Atlantic to A1 of the Estates Shares;
1.2 Atlantic agrees that subject to paragraph 1.1 of Section 1 of the
Agreement to (i) transfer to A1 all right, title and interest to and in the
Estates Shares, (ii) deliver the resignations of directors appointed by it
namely Xxxx Xxxxxxxxxxx, Xxxxxx Xxxxxx and Xxxxx Kopitkke from the board of
Estates and (iii) deliver to Wines and Estates a general release; and (iv)
deliver to Global a novation agreement in respect of the Mt Xxxxxx Loan
duly executed by Global;
1.3 Global agrees subject to paragraph 1.1 of Section 1 of the Agreement
to: (a) assume the obligations under the Mt Xxxxxx Loan (by way of entering
into a novation agreement and issuing a promissory note to Estates); (b)
deliver a promissory note to Sapphire Developments Limited and execute a
related security agreement; (c) use its best endeavours to cause the
Atlantic Shareholders to return the Atlantic Shares other than the DPP
Controlled Shares to Atlantic; and (d) use its best endeavours to cause the
Official Trustee to return the DPP Controlled Shares to Atlantic.
1.4 The Dominion Estates Group agrees to deliver to Atlantic a general
release;
1.5 In order to facilitate the carrying out of the respective parties
obligations under paragraphs 1.2, 1.3 and 1.4 of Section 1 as soon as
practicable after the signing of the Agreement: Global and the Dominion
Estates Group shall cause to be delivered to Atlantic's counsel, Xxxxx,
Bailan, Ortoli, Mayer & Xxxxx LLP 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 000000
or its appointed agent;
i. a duly executed Novation Agreement ("Novation") duly executed by
Global and Estates in the form attached hereto as Exhibit A;
5
ii. a duly executed promissory note to AUD$3.2 Million from Global to
Sapphire Developments Limited in the form attached hereto as Exhibit B
("Global Promissory Note");
iii. a duly executed promissory note from Global to Estates for
AUD$465,000.00 in the form attached hereto as Exhibit C together with
a legal certification from counsel for Global, Sichenzia Xxxx Xxxxxxxx
Xxxxxxx LLP (collectively, "Estates Promissory Note");
iv. a duly executed Security Agreement ("Global Security Agreement")
in the form attached hereto as Exhibit D;
v. the share certificates for the Atlantic Shares (other than the
DPP Controlled Shares) with duly executed stock powers in blank with
customary signature guarantees; and
vi. a general release duly executed by the Dominion Estates Group in
the form annexed hereto as Exhibit E in favour of Atlantic ("Dominion
Estates Group Release");
Atlantic shall deliver to Global and the Dominion Estates Group's counsel
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP or its appointed agent:
(a) the share certificate for the Estates Shares together with duly
executed share transfer pursuant to which Atlantic transfers to A1 all
of its right title and interest in and to the Estates Shares
(collectively the "Estates Shares Transfer Documents");
(b) the Novation duly executed by Mt Xxxxxx or confirmation from Mt
Xxxxxx'x counsel that they are holding the Novation executed by Mt
Xxxxxx and will deliver the original executed of the same to Global's
counsel when requested;
(c) the written resignations of Xxxx Xxxxxxxxxxx, Xxxxxx Xxxxxx and
Xxxxx Kopitkke from the board of Estates respectively; and
(d) a general release duly executed by Atlantic in the form annexed
hereto as Exhibit E in favour of the Dominion Estates Group.
6
1.6 Pending the satisfaction of one of the Conditions Precedent and the
receipt by Xxxxx Xxxxx of the Estates Shares Transfer Documents the
respective counsel referred to in paragraph 1.5 of Section 1shall hold the
documents referred to therein in escrow and they shall have no force or
effect. If neither of the Conditions Precedents are satisfied within 90
days from the date of the Agreement then the respective counsel will return
the documents referred to in paragraph 1.5 of Section 1 to the counsel who
provided them and the Agreement and those documents shall have no force or
effect.
Upon either of the Conditions Precedent being satisfied Atlantic's
counsel will then forward to Xxxxx Xxxxx the Estates Shares Transfer
Documents.
Upon Xxxxx Xxxxx receiving the Estates Shares Transfer Documents,
i. Global's counsel shall promptly forward (a) the Estates
Promissory Note and Novation to Estates' Administrators: C/- Xxxxx
Xxxxxxx-Xxxxx, Deloittes, 180 Lonsdale Street, Melbourne, VIC,
Australia 3000, (b) to Atlantic's counsel the Atlantic Shares
(including the DPP Controlled Shares to the extent it has physical
possession of such, if at all), the Global Promissory Note, the Global
Security Agreement and the Dominion Estates Group Release;
ii. Atlantic's counsel will forward to Xxxxxxx + Xxxxxx, Atlantic's
Australian counsel (a) the resignations of Xxxx Xxxxxxxxxxx, Xxxxxx
Xxxxxx and Xxxxx Kopitkke from Estates; (b) the Atlantic Release; and
(c) the Novation executed by Mt Xxxxxx. Xxxxxxx + Xxxxxx shall
promptly forward the documents referred to in (a), (b) and (c) of this
subparagraph to Xxxxx Xxxxx, Global's counsel in Australia.
1.7 Global and the Dominion Estates Group agree that once the Estates
Shares have been transferred to A1 and Estates comes out of voluntary
administration and control returning to its directors to cause all the
shares in Wines which were formerly held by the Dominion Estates Group
Shareholders to be transferred to each of the Dominion Estates Group
Shareholders upon each of Atlantic Shareholders returning its Atlantic
Shares to Atlantic (save for those shareholdings marked with an asterisks
in Schedule 1 which shall, subject to the Official Trustee's approval, be
transferred to the Official Trustee upon the Official Trustee returning the
DPP Controlled Shares to Atlantic).
1.8 Global and the Dominion Estates Group agree that once the Estates
Shares have been transferred to A1 and Estates comes out of voluntary
7
administration and control has been returned to its directors, they will
use their best endeavors to cause the Official Trustee to return the DPP
Controlled Shares to Atlantic and in return issue to the Official Trustee
the shares in Wines marked with the asterisks in Schedule 1 in the name of
the Official Trustee.
In the event that Atlantic reasonably forms the view that the matters
referred to in the preceding paragraph are not completed to its reasonable
satisfaction, or Estates is placed into liquidation (whichever occurs
first) then and if those situations are capable of being remedied and the
matters are not remedied to Atlantic's satisfaction following notice to
that effect given by Atlantic and giving 14 calendar days to remedy that
default, Atlantic shall then be entitled to deal with the DPP Controlled
Shares according to law.
1.9 Atlantic warrants that all the Estates Shares are unencumbered and
represents that, except for the appointment of the Administrators to
Estates, Atlantic has not created or caused any party to obtain or possess
any encumbrance, lien, charge or claim with respect to either the Estates
Shares or to the best of its knowledge and belief the Wines Shares and that
subject to paragraph 1.1 of Section 1 of the Agreement, it is entitled to
transfer the Estates Shares to A1 in accordance with the Agreement.
1.10 Dominion Estates Group warrants that the Atlantic Shares (other than
the DPP Controlled Shares) are to the best of its knowledge an belief
unencumbered and that the holders of the Atlantic Shares (other than the
registered holders of the DPP Controlled Shares) are entitled to return the
Atlantic Shares to Atlantic.
1.11 In consideration of this Agreement Atlantic, subject to paragraph 1.1
of Section 1 releases the Dominion Estates Group from each and every
obligation which Wines and/or Estates may have to repay any monies which
may be owing by Wines and/or Estates to Atlantic including any monies which
Atlantic may have advanced or provided to, or provided for the benefit of,
either or both of the companies comprising the Dominion Estates Group
(including without limitation the amount transferred to discharge the
National Loans and the amount of AUD$262,322.09 herein before referred to
as being transferred at the direction of the Dominion Estates Group).
1.12 Atlantic warrants that to the best of its knowledge and belief it has
not caused Wines to become liable to or indebted to any third party and
that Estates is not liable or indebted to any party other than as disclosed
to the Administrators of Estates by the date of the Agreement.
8
2. Termination of Exchange Agreement. Upon execution of this Agreement,
paragraph 1.1 of Section 1 being satisfied and the consummation of the
aforementioned transactions, including the exchange of the releases contemplated
hereby, the Exchange Agreement and any and all obligations of any of the parties
arising from such Exchange Agreement shall, in all respects, be deemed null and
void and of no further force and effect and none of the parties thereto shall
have any remaining obligations or liabilities pursuant to the Exchange
Agreement, including, but not limited to: (i) the Dominion Estates Group's right
to 20% representation on the Board of Directors of Atlantic; (ii) any Atlantic
liabilities resulting from the Commonwealth Bank of Australia loan referenced in
the Exchange Agreement; and (iii) any Atlantic liabilities resulting from the GE
Commercial Corporation of Australia Pty Ltd Facility Agreement to which the
Dominion Estates Group is a party.
3. Confidentiality. The parties agree to keep the terms of this Agreement
and the matters raised herein as confidential, and shall not disclose the terms
of this Agreement unless compelled to by court order, subpoena, or request by a
self-regulatory organization.
4. Binding Agreement. The terms of this Agreement are binding upon and
inure to the benefit of each of the parties hereto, their respective successors,
assigns, dependents, and all other related persons, affiliates or associates.
5. Headings. The captions of the paragraphs and sections of this Agreement
are provided solely for convenience, and shall not affect the substance or
meaning of this Agreement.
6. Representation. Each of the parties hereto represents that each has read
and fully understands each of the provisions as contained herein, and has been
afforded the opportunity to review same with his attorney of choice; and further
that each of the parties hereto represents that each and every one of the
provisions contained in this Agreement is fair and not unconscionable to either
party.
7. Counterparts. The Agreement may be executed in facsimile counterparts,
each of which when all parties have executed at least one such counterpart,
shall be deemed an original, with the same force and effect as if all signatures
9
were appended to one instrument, but all of which together shall constitute one
and the same Agreement.
8. Severability. Should any provision of the Agreement be declared or be
determined by any court or tribunal to be illegal or invalid, the validity of
the remaining parts, terms or provisions shall not be affected thereby and said
illegal or invalid part, term or provision shall be severed and deemed not to be
part of the Agreement.
9. Choice of Laws. The Agreement shall be governed by and construed in
accordance with the substantive law of the State of New York and the parties
hereto consent that the jurisdiction will lie with Courts of the State of New
York.
10. Further Acts.Each party agrees to do all things as may be necessary or
desirable to give full effect to every part of the Agreement.
11. Pre-Emptive Rights. Each of the parties waives and will, to the extent
that it is within their power (respectively), waive or ensure the waiver of any
pre-emptive rights in relation to the transfer of any shares pursuant to the
Agreement.
12. Corporate Steps. Each of the parties to transfers of shares and each of
the companies in respect of which shares are being transferred will, to the
extent that it is within their power (respectively), take or procure to be taken
all necessary corporate steps to facilitate the transfers of shares contemplated
by the Agreement including, but not limited to, the proper calling of board
meetings to resolve that the aforesaid transfers of shares are registered and
the filing of appropriate documents at the relevant corporate regulator.
10
IN WITNESS WHEREOF, the parties have read and executed this Agreement of
Settlement as of the date and year first above written.
ATLANTIC WINE AGENCIES, INC.
By: /s/ Xxxxx Xxxxxx
------------------
Name: Xxxxx Xxxxxx
Title:
DOMINION ESTATES PTY LTD
By: /s/ Xxxxxxxxx Xxxxxx
----------------------
Name: Xxxxxxxxx Xxxxxx
Title:
DOMINION WINES LTD
By: /s/ Xxxx Xxxxx Xxxx
---------------------
Name: Xxxx Xxxxx Xxxx
Title:
GLOBAL REALTY DEVELOPMENT GROUP
By: /s/ Xxxxx Xxxxxxx Xxxxx
--------------------------
Name: Xxxxx Xxxxxxx Xxxxx
Title
