AGREEMENT OF SALE
This Agreement is entered into this 30th day of August, 1999, by and between
Pinnacle Resources, Inc., a Wyoming corporation ("Buyer"), Plateau Resources
International Ltd., a Cayman Island, BWI corporation ("Seller") and Plateau
Resources (Pty) Ltd, a South African corporation ("Acquiree").
Whereas, Seller own 4,000 shares, Rand 1.00 par value (the "Acquiree Shares"),
of the issued and outstanding common stock of Acquiree (representing 100% of the
currently issued and outstanding common stock of Acquiree). Seller desires to
sell and Buyer desires to purchase all of the Acquiree Shares (the "Sale
Shares").
Now, Therefore, for the mutual consideration set out herein, the parties agree
as follows:
1. Purchase and Sale of Acquiree Shares.
1.1 Seller shall sell to Buyer and Buyer shall purchase from Seller the
Sale Shares at a closing of such sale (the "Closing") to be held at the place
and on the date hereinafter provided (the "Closing Date").
1.2 The purchase price (the "Price") shall be 1,500,000 restricted Common
Shares of Buyer ("Purchase Shares"). The Purchase Shares will not be
registered under the Securities Act of 1933 as amended (the "Act"). The
Purchase Shares will be subject to a usual and appropriate stop transfer order
on the books and records of Buyer's transfer agent pertaining to securities not
registered under the Act. The certificate for the Purchase Shares delivered
shall bear on its face the following restrictive legend:
"No sale, offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amended, with
respect to such shares is then in effect or an exemption from
the registration requirements of such Act is then in fact
applicable to such shares."
1.3 At the Closing Date, Seller will deliver a certificate representing the
Sale Shares duly endorsed so as to make Buyer the sole holder thereof, free and
clear of all claims and encumbrances. The Sale Shares are not registered under
the Securities Act of 1933 as amended (the "Act"). The Sale Shares will be
subject to a usual and appropriate stop transfer order on the books and records
of Acquiree's transfer agent pertaining to securities not registered under the
Act. The certificate for the Sale Shares delivered shall bear on its face the
following restrictive legend:
"No sale, offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amended, with
respect to such shares is then in effect or an exemption from
the registration requirements of such Act is then in fact
applicable to such shares."
2. Representations of Seller.
Seller hereby represents and warrants, to the extent of the facts known to
Seller and Acquiree, that, effective this date and the Closing Date, the
representations listed below are true and correct.
2.1 Seller are the sole owners of all of the issued and outstanding Shares
of Acquiree; such Acquiree Shares are free from claims, liens or other
encumbrances; and Seller has the unqualified right to transfer and dispose of
such shares.
2.2 The Sale Shares constitute validly issued shares of Acquiree fully-paid
and nonassessable.
2.3 Buyer is fully aware that the Purchase Shares, when delivered, will not
have been registered under the Act; that accordingly no sale, offer to sell or
transfer of the Purchase Shares shall be made unless a registration statement
under the Act with respect to the Purchase Shares is then in effect or an
exemption from the registration requirements of the Act is then in fact
applicable to the Purchase Shares or, in the opinion of Buyer's counsel,
registration is not required.
2.4 Buyer has been fully advised by Seller that Seller will sell the
Purchase Shares to Buyer without registration under the Act on the basis of the
statutory exemption in Section 4(2) of the Act relating to transactions not
involving a public offering and that Seller's reliance upon the statutory
exemption is based in large part upon Buyer's representations made in this
Agreement.
2.5 Buyer is acquiring the Purchase Shares for investment for their own
account and not with a view to resell or otherwise distribute the Purchase
Shares. In making the foregoing representations, Buyer understands that, in
the view of the Securities and Exchange Commission, the statutory exemption
under Section 4(2) would not be available if, notwithstanding Buyer's
representations, it had in mind merely acquiring the Purchase Shares for resale
upon the occurrence or nonoccurrence of some predetermined event.
2.6 Annexed hereto as Exhibit 2.3 is the unaudited financial statements
dated June 30, 1999 of the Acquiree. The financial statements in Exhibit 2.3
are substantially correct and complete and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis. The
financial statements present fairly the financial condition of Acquiree as of
the respective dates of said balance sheets and the results of operations for
the respective periods indicated in said statements of income and retained
earnings and, in the case of each such interim statement, is subject to year-end
adjustments consistent with past practice.
2.7 To the best of Acquiree's knowledge, there are no actions, suits,
proceedings or investigations (whether or not purportedly on behalf of Acquiree)
pending or, threatened against or affecting Acquiree, at law, or in equity or
admiralty, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau agency or instrumentality, domestic or
foreign, which involve the likelihood of any adverse judgment of liability, not
fully covered by insurance, in excess of $50,000 in any one case or $100,000 in
the aggregate, or which may result in any material adverse change aside from a
monetary adverse judgment or liability) in the business, operations, properties
or assets or in the condition, financial or otherwise, of Acquiree, except in
each as listed and described in Exhibit 2.4 annexed hereto. To the best of
Acquiree's knowledge, Acquiree is not in default with respect to any order,
writ, injunction or decree of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign.
2.8 Acquiree has, to its best knowledge, complied in all material respects
with all laws, regulations and judicial or administrative tribunal orders
applicable to its business of which it is aware.
2.9 Seller has borrowed US$75,000 from Buyer on a note, which is due in
August 1999 together with interest in the total amount of US$100,000. The note
is secured by a 5% shareholding in Seller whose only asset is the Common Shares
of Acquiree. The note shall be repaid prior to Closing or Buyer shall withhold
500,000 Common Shares until the note is paid in full..
Acquiree and Seller agree that any and all tax deficiencies and all other
liabilities of Acquiree disclosed on the balance sheet will be paid or settled
prior to Closing.
2.10 Since the date of the balance sheet there has not occurred:
(i) any material and adverse change in the financial
condition or operations of Acquiree;
(ii) any damage, destruction or loss to or of any of the
material assets or properties owned or leased by Acquiree;
(iii) the creation or attachment of any lien against any of
the currently issued and distributed common stock of Acquiree;
(iv) any waiver, release, discharge, transfer, or
cancellation by Acquiree of any rights or claims of material
value;
(v) any issuance by Acquiree of any securities, or any merger
or consolidation of Acquiree with any other person, or any
acquisition by Acquiree of the business of any other person;
(vi) any incurrence, assumption or guarantee by Acquiree of
any indebtedness or liability other than in the ordinary course
of business;
(vii) any declaration, setting aside or payment by Acquiree
of any dividends on, or any other distribution with respect to,
any capital stock of Acquiree or any repurchase, redemption, or
other acquisition of any capital stock of Acquiree;
(viii) (A) any payment of any bonus, profit sharing,
pension or similar payment or arrangement or special
compensation to any employee of Acquiree, except in the
ordinary course of the business of Acquiree, or (B) any
increase in the compensation payable or to become payable to
any employee of Acquiree.
2.11 Except as set forth in the documents listed or referred to in Exhibits
hereto, the execution and carrying out of this Agreement will not conflict with,
or result in any breach of any of the terms, or create a charge or encumbrance
upon any of the properties or assets, or outstanding stock of Acquiree pursuant
to any corporate charter, by-law, indenture, mortgage or lease to which Acquiree
or any of its stockholders is a party or by which it is bound. The execution
and carrying out of this Agreement will not violate any provision of law.
2.12 To the best knowledge of Seller and Acquiree, none of the written
information and documents which have been or will be furnished by Acquiree or by
any representatives of Acquiree to Buyer or any of the representatives of Buyer
in connection with the transactions contemplated by this Agreement contains or
will contain, as the case may be, any untrue statement of a material fact, or
omits or will omit to state a material fact necessary in order to make the
statements therein not misleading in light of the circumstances in which made.
To the knowledge of Acquiree, Acquiree has disclosed to Buyer as the purchaser
of the Sale Shares all material information relating to Acquiree and its
activities as currently conducted.
2.13 The representations and warranties made hereinabove in this Section 2
will be correct in all material respects on and as of the Closing Date with the
same force and effect as though such representations and warranties had been
made on the Closing Date.
2.14 The Acquiree is authorized to issue Four Thousand (4,000) shares of
common stock, Rand 1.00 par value, of which 4,000 shares are issued and
outstanding. All outstanding shares have been duly authorized, validly issued
and are fully paid and nonassessable with no personal liability attaching to the
ownership thereof. There are no outstanding convertible securities, warrants,
options or commitments of any nature, which may cause authorized but unissued
shares to be issued to any person.
3. Representations by Buyer.
Buyer warrants and represents, to the extent of the facts known to Buyer, that,
effective this date and the Closing Date, the representations listed below are
true and correct.
3.1 To the best of each Buyer's knowledge, there are no actions, suits,
proceedings or investigations (whether or not purportedly on behalf of Buyer)
pending or, threatened against or affecting each Buyer, at law, or in equity or
admiralty, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau agency or instrumentality, domestic or
foreign, which involve the likelihood of any adverse judgment of liability, not
fully covered by insurance, in excess of $5,000 in any one case or $10,000 in
the aggregate, or which may result in any material adverse change aside from a
monetary adverse judgment or liability) in the business, operations, properties
or assets or in the condition, financial or otherwise, of each Buyer, except in
each as listed and described in Exhibit 3.1 annexed hereto. To the best of each
Buyer's knowledge, each Buyer is not in default with respect to any order,
writ, injunction or decree of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign.
3.2 Except as set forth in the documents listed or referred to in Exhibits
hereto, the execution and carrying out of this Agreement will not conflict with,
or result in any breach of any of the terms, charge or encumbrance upon any of
the properties or assets, of Buyer pursuant to any corporate charter, by-law,
indenture, mortgage or lease to which Buyer or any of its stockholders is a
party or by which it is bound. The execution and carrying out of this Agreement
will not violate any provision of law.
3.3 Buyer is fully aware of the condition and prospects, financial and
otherwise, of the Acquiree, having been supplied with such financial and other
data relating to the Acquiree as Buyer considered necessary and advisable to
enable them to form a decision concerning the purchase herein provided.
3.4 Buyer is fully aware that the Sale Shares, when delivered, will not
have been registered under the Act; that accordingly no sale, offer to sell or
transfer of the Sale Shares shall be made unless a registration statement under
the Act with respect to the Sale Shares is then in effect or an exemption from
the registration requirements of the Act is then in fact applicable to the Sale
Shares or, in the opinion of Acquiree's counsel, registration is not required.
3.5 Buyer has been fully advised by Seller that Seller will sell the Sale
Shares to Buyer without registration under the Act on the basis of the statutory
exemption in Section 4(2) of the Act relating to transactions not involving a
public offering and that Seller's reliance upon the statutory exemption is based
in large part upon Buyer's representations made in this Agreement.
3.6 Buyer is acquiring the Sale Shares for investment for their own account
and not with a view to resell or otherwise distribute the Sale Shares. In
making the foregoing representations, Buyer understand that, in the view of the
Securities and Exchange Commission, the statutory exemption under Section 4(2)
would not be available if, notwithstanding Buyer's representations, it had in
mind merely acquiring the Sale Shares for resale upon the occurrence or
nonoccurrence of some predetermined event.
3.7 Buyer has the full right, power and authority to purchase the Sale
Shares in accordance with the terms of this agreement and otherwise to
consummate and close the transaction provided for in this agreement in the
manner and upon the terms herein specified.
3.8 Buyer is acquiring the Sale Shares for the purpose of controlling
Acquiree.
4. Closing Date.
The Closing Date herein referred to shall be upon such date as the parties
hereto may mutually agree upon but is expected to be during August 1999. At
the Closing, Buyer will be provided with and accept delivery of the Sale Shares,
and in connection therewith, and will make payment of all sums due to Seller.
Certain closing documents may be delivered subsequent to the Closing Date upon
the mutual agreement of the parties hereto.
5. Conditions Precedent To the Obligations of Seller.
All obligations of Seller under this Agreement are subject to the fulfillment,
prior to or as of the Closing Date, of each of the following conditions:
5.1 The representations and warranties by Buyer contained in this Agreement
or in any certificate or document delivered to Seller pursuant to the provisions
hereof shall be true in all material respects at and as of the time of Closing
as though such representations and warranties were made at and as of such time.
5.2 Buyer shall have performed and complied with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
them prior to or at the Closing including the payment of the Price in accordance
with the terms hereof.
5.3 All instruments and documents delivered to Seller pursuant to the
provisions hereof shall be reasonably satisfactory to legal counsel for Seller.
6. Conditions Precedent To The Obligations Of Buyer.
All obligations of Buyer under this Agreement are subject to the fulfillment,
prior to the or at the Closing on the Closing Date, of each of the following
conditions:
6.1 The representations and warranties by Seller contained in this
Agreement or in any certificate or document delivered to Buyer pursuant to the
provisions hereof shall be true at and as of the time of Closing as though such
representations and warranties were made at and as of such time.
6.2 Seller shall have prepared and filed all governmental, tax or related
returns and reports due or required to be filed and have arranged for payment of
all taxes or assessments which have become due as of Closing.
6.3 Acquiree and Seller shall have performed and complied with all other
covenants, agreement and conditions required by this Agreement to be performed
or complied with by them prior to or at the Closing.
7. Documents At Closing.
At the Closing, the following transactions shall occur, all of such transaction
being deemed to occur simultaneously:
7.1 Seller and Acquiree, as the case may be, will deliver, or cause to be
delivered, to Buyer the following:
a. stock certificates for the Sale Shares, duly endorsed in blank with
appropriate signature guarantees.
b. all records of Acquiree, including without limitation such books and
records, charter documents and Colorado certificate of good standing, as may
reasonably be available to Seller and requested by Buyer.
c. certified copies of resolutions by Seller's and Acquiree's boards of
directors or executive committees thereof, thereunto duly authorized,
authorizing this transaction.
d. resignations of the present officers and directors of Acquiree to
take effect.
e. a copy of a reasonably current shareholder list of Acquiree
certifying the number of shares outstanding.
f. current financial statements, in addition to those provided by
Exhibit 2.3 of Acquiree showing no assets or debts of any substance not
otherwise disclosed, except for such sums as may be owed to Acquiree's transfer
agent and certain nominal state taxes.
g. such other instruments, documents and certificates, if any, as are
required to be delivered pursuant to the provisions of this Agreement or which
may be reasonably requested in furtherance of the provisions of this Agreement;
7.2 Buyer will deliver or cause to be delivered to Seller
a. stock certificates for the Sale Shares; and
b. such other instruments and documents as are required to be delivered
pursuant to the provisions of this Agreement or which may be reasonably
requested in furtherance of the provisions of this Agreement.
8. Miscellaneous
8.1 The respective representation of Seller and Buyer contained herein or
in any certificates delivered prior to or at Closing shall survive for a period
of one year from the Closing Date.
8.2 Further Assurances. At any time, and from time to time, after the
effective date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this Agreement.
8.3 Waiver. Any failure on the part of any party hereto to comply with
any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
8.4 Arbitration. Any and all disputes and differences between or among
the parties with respect to the construction or performance of the terms of this
Agreement which cannot be resolved amicably shall be resolved by arbitration
before the American Arbitration Association in accordance with its rules then
obtaining sitting in Denver, Colorado.
8.5 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or if sent
by prepaid first class registered or certified mail, return receipt requested,
fax or recognized courier then upon receipt thereof to the following addresses:
To Seller:
Plaueau Resources International Ltd.
c/o Xxxxx Xxxxxx, Managing Director
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, X.X. X0X 0X0
To Acquiree:
Plauteau Resources (Pty) Ltd.
c/o Xxxx Xxxxxxxxx, Managing Director
00 Xxxxx Xxxxxx
Xxxxxxxxxxxxxx XXX 0000
To Buyer:
Pinnacle Resources, Inc.
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
With copies to:
Xxxx X. Xxxxxx
Attorney-At-Law
0000 Xxxxx Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
8.6 Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.7 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.8 Governing Law. This Agreement shall be governed by the laws of the
State of Colorado.
8.9 Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
8.10 Entire Agreement. This Agreement is the entire agreement of the
parties covering everything agreed upon or understood in the transaction.
There are no oral promises, conditions, representations, understandings,
interpretations or terms of any kind as conditions or inducements to the
execution hereof.
8.11 Severability. If any part of this Agreement is deemed to be
unenforceable the balance of this Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.
SELLER:
Plateau Resources International Ltd.
/s/ Xxxxx X. Xxxxxx
-----------------------------------
By: Xxxxx X Xxxxxx, Chairman
ACQUIREE:
Plateau Resources (Pty) Ltd.
/s/ Xxxx X.X. Xxxxxxxxx
-----------------------------------
By: Xxxx X.X. Xxxxxxxxx, Managing Director
BUYER:
Pinnacle Resources, inc.
/s/ Xxxx X. Xxxxxx
-----------------------------------
By: Xxxx X. Xxxxxx, President
