Stock Purchase Agreement
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into this
16th day of October, 1997 by and between Associated Reciprocal Traders, Ltd., a
British Virgin Islands corporation with principal offices c/o First Anguilla
Trust Co., Xxxxxxxx Xxxxx, Xxx 00, Xxxxxxxx, Xxxxxxx Xxxx Indies ("ART") on the
one hand, and Quisqueya Lines y Constructora C. por A. a Dominican Republic
corporation with principal offices at Xxxxx 00, #0, Xx Xxxxxxx XX, Xxxxxxxx,
Xxxxxxxxx Dominicana ("Selling Shareholder"), Xx. Xxxx Xxxxxx and Xx. Xxxx Xxxxx
("Xxxxxx and Xxxxx") and Villa Punta Ballena C. por A., a Dominican Republic
corporation with principal offices at Xxxxx 00, #0, Xx Xxxxxxx XX, Xxxxxxxx,
Xxxxxxxxx Dominicana ( "VPB Samana"), on the other hand. Selling Shareholder,
Xxxxxx and Xxxxx, and VPB Samana may be referred to hereafter as "Sellers".
PREMISES
A. ART and Sellers have negotiated a transaction whereby ART will
acquire shares of the issued and outstanding common stock of VPB Samana held by
Selling Shareholder which represent sixty percent (60%) of the issued and
outstanding stock of VPB Samana, for consideration in the form and on the
schedule hereafter set forth in this Agreement.
B. The primary asset of VPB Samana is a project known as the Villas
Punta Ballena Samana Resort (the "Project") located in the northeast corner of
the Dominican Republic on the Bay of Samana. ART and Xxxxxx and Xxxxx desire to
construct and develop the Project as the primary business of VPB Samana.
C. The Parties have reached an agreement as to the business terms of
the transaction and desire to set forth the details in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the Parties
agree as follows:
I. ACQUISITION
Selling Shareholder shall sell and ART shall purchase three thousand
six hundred (3,600) shares of the issued and outstanding capital stock
of VPB Samana which is owned by Selling Shareholder (the "Selling
Shareholder Stock"), no matter how such stock may be denominated. The
number of VPB Samana shares purchased shall, in any event, constitute
not less than sixty percent (60%) of the issued and outstanding stock
of VPB Samana. In no event shall the balance of the shares issued and
outstanding be held by anyone other than Xxxxxx and Xxxxx, except for
the four shares currently issued at one share each to four
shareholders.
II. PURCHASE PRICE
A. ART agrees to purchase the Selling Shareholder Stock for the
sum of Seven Million Three Hundred Ninety-one Thousand Six
Hundred Ninety-one and 78/100 United States Dollars
(US$7,391,691.78).
B. The consideration for the Selling Shareholder Stock shall
be paid in the following form and on the following schedule:
(1) At the closing of this Agreement, as set forth
below, ART shall deliver to the Selling Shareholder
(i) Five Hundred Thousand United States Dollars
(US$500,000.00) in readily available funds and as
reasonably directed by Selling Shareholder;
(ii) Certificates representing the securities listed
on Exhibit "A" hereto which is incorporated herein by
this reference, and any dividends accruing thereto
but not yet paid together with stock powers in such
form as to allow transfer of such securities on the
books and records of the issuers thereof; and
(iii) a promissory note in the principal sum of Five
Hundred Thousand United States Dollars ($500,000.00)
payable to the Selling Shareholder according to its
terms as hereafter described.
(2) Upon the finalization and approval of a credit
facility agreement for funding of construction of the Project
in a sum of not less than Thirty-Five Million United States
Dollars (US$35,000,000.00) by a bank or other institution
reasonably acceptable to ART, ART shall pay to the Selling
Shareholder the sum of Two Hundred Fifty Thousand United
States Dollars (US$250,000.00) in readily available funds and
as reasonably directed by Xxxxxx and Xxxxx.
(3) Within five (5) business days of the substantial
beginning of construction on the Project, ART shall cause
issuance to the Selling Shareholder of One Million United
States Dollars (US$1,000,000.00) in value of the authorized
but previously unissued common stock of ITEX Corporation, a
Nevada corporation, in such denominations as the Selling
Shareholders shall reasonably direct in writing. The number of
shares making up said value shall be based upon US$1,000,000
divided by the average bid price of the common stock of ITEX
Corporation on the NASDAQ stock market for the five (5)
business days immediately preceeding the date upon which such
stock is to be issued. Fractional shares will not be issued.
Said stock, will be "restricted stock" as that term is defined
pursuant to the Securities Act of 1933 (the "Act") and will
bear a legend substantially to the effect that the shares may
not be transferred without being registered under the Act or
ITEX Corporation receiving an opinion of counsel satisfactory
to ITEX Corporation that an exemption from registration is
available.
"Substantial beginning of construction" for purposes of this
subsection II.B(3) shall mean the taking of steps toward
actual construction, including, but not limited to delivery of
equipment, building materials, and construction labor to the
construction site and substantial breaking of ground as shown
by earth moving, the construction of foundation footings or
forms or such other steps as reflect a substantial and
material step toward construction.
III. CLOSING
A. The closing for the transaction shall be held on October
16, 1997, (the "Closing Date") at 11:00 a.m., local time, at
the offices of First Anguilla Trust Co., Victoria House,
Anguilla, British West Indies, or at such other time and place
as shall be mutually agreed to in writing by the Parties.
B. Deliveries by VPB Samana. VPB Samana shall deliver the
following to ART, in addition to such other instruments as ART
may reasonably request or as may otherwise be necessary to
consummate the transaction contemplated hereby:
(1) Certificate of good standing from the appropriate
authorities, issued as of a date no more than thirty (30) days
before or after the Closing Date, certifying that VPB Samana
is in good standing as a corporation in the jurisdiction of
incorporation.
C. Deliveries by Selling Shareholder. The Selling Shareholder
shall deliver the following to ART at Closing:
(1) Certificates representing sixty percent (60%) of the
issued and outstanding shares of VPB Samana and owned by
Selling Shareholder accompanied by blank stock powers in form
acceptable to ART and such as to permit transfer of the
Selling Shareholder Stock on the books and records of VPB
Samana.
D. Deliveries by ART. ART shall deliver the following to the
Selling Shareholder and/or VPB Samana in addition to any other
instruments as may otherwise be necessary to consummate the
transaction contemplated hereby:
(1) Negotiable funds in the sum of US$500,000.00.
(2) The securities listed on Exhibit "A" hereto which
is incorporated herein by this reference, together with stock
powers in such form as to allow transfer of such securities on
the books and records of the issuers thereof; and
(3) A promissory note in the principal sum of Five
Hundred Thousand United States Dollars ($500,000.00), bearing
no interest and payable to Xxxxxx and Xxxxx not later than
November 18, 1997, conditioned upon the fact that ART shall
receive the documents required to be delivered to it by VPB
Samana and Xxxxxx and Xxxxx pursuant to Article V.D hereof,
inspection of the same by ART and resulting in the reasonable
conclusion by ART (when combined with such independent
investigation as may be made by ART in its sole discretion)
that VPB Samana has no undisclosed liabilities and the
representations and warranties of the Selling Stockholders and
VPB Samana are true and correct.
IV. TERMINATION
A. This Agreement may be terminated by either Party at
any time prior to the Closing Date if:
(1) A review of all financial and corporate
information, proof of ownership of assets, accounts
receivable, bank statements and copies of deeds, liens,
mortgages, a certificate of good standing, and any other
documents that may be reasonably relied upon and required by a
Party to make an accurate determination of the status and
value of the other Party and to discharge the obligation of
due diligence, causes the Party to make a reasonable
determination that the transaction proposed in this Agreement
is not in its best interests. Should either Party so
determine, this Agreement may be terminated, with no further
obligation, or an amendment hereto agreeable to both Parties
may be proposed; OR
(2) There shall be any actual or threatened action or
proceeding before any court or any governmental body which
shall seek to restrain, prohibit, or invalidate the
transaction contemplated by this Agreement and which, in the
judgment of either Party, made in good faith and on the advice
of legal counsel, makes it inadvisable to proceed with the
transaction contemplated by this Agreement; OR
(3) Any of the transactions contemplated herein are
disapproved by any regulatory authority whose approval is
required to consummate such transactions, or in the judgment
of the board of directors of either Party, made in good faith
and based on the advice of counsel, there is substantial
likelihood that any such approval will not be obtained or will
be obtained only on a condition or conditions which would be
unduly burdensome, making it inadvisable to proceed with the
acquisition.
B. In the event of termination under this Article, no
obligation, right, or liability shall arise hereunder, and
each Party shall bear all of the expenses incurred by it in
connection with the negotiation, preparation, and execution of
this Agreement and the transaction contemplated hereby.
V. REPRESENTATIONS, WARRANTIES, & COVENANTS OF VPB Samana AND XXXXXX AND XXXXX
VPB Samana and Xxxxxx and Xxxxx, jointly and severally, represent,
warrant and covenant as follows:
A. Organization. VPB Samana is, and will be on the Closing
Date, a corporation duly organized, validly existing, and in
good standing under the laws of the Dominican Republic and has
the corporate power, and is and will be duly authorized,
qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities, to
own all of its properties and assets and to carry on its
business, in all material respects as it is now being
conducted, and in particular, the Project. The execution and
delivery of this Agreement does not, and the consummation of
the transactions contemplated by this Agreement in accordance
with the terms hereof will not violate any provision of VPB
Samana's articles of incorporation or bylaws, or any other
agreement to which it is a party or by which it is bound.
B. Approval of Agreements. VPB Samana has full power,
authority, and legal right and has taken, or shall take, all
action required by law, its articles of incorporation, bylaws,
and otherwise to execute and deliver this Agreement and to
consummate the transaction herein contemplated. The board of
directors of VPB Samana has authorized and approved the
execution, delivery, and performance of this Agreement and the
transaction contemplated hereby. This Agreement has been duly
authorized, executed, and delivered by VPB Samana and is the
legal, valid and binding obligation of VPB Samana, enforceable
in accordance with its terms.
C. Capitalization. The authorized capitalization of VPB Samana
consists of ten thousand (10,000) shares of stock, of which
six thousand (6,000) shares are issued and outstanding as of
the Closing Date. All issued and outstanding shares are and
shall be legally issued, fully paid, and nonassessable and not
issued in violation of the preemptive or other right of any
person as of the Closing Date. There are no dividends or other
amounts due or payable with respect to any of the shares of
capital stock of VPB Samana.
Furthermore, VPB Samana represents and warrants to ART that
the Selling Shareholder Stock to be transferred hereunder is
entitled to be and will be transferred on its books and
records upon proper delivery and execution of the certificates
representing such Stock.
D. Financial Statements.
(1) Not later than November 15, 1997 VPB Samana will
have provided to ART the following with respect to VPB Samana:
(i) financial statements and financial documentation
for the period of time between the incorporation of
VPB Samana and the date of Closing, whether audited
or not;
(ii) any available pro-forma financial information
including business plans concerning the Project;
(iii) due-diligence materials reasonably requested by
ART;
(iv) articles of incorporation and by-laws;
(v) proof of ownership of assets, accounts
receivable, bank statements, and copies of deeds,
liens, mortgages;
(vi) a certificate of good standing issued by the
jurisdiction of incorporation;
(vii) any other documents that may be reasonably
required by ART to complete its due diligence for the
transactions contemplated in this Agreement and to
permit ART to act as a fully empowered majority
shareholder of VPB Samana upon transfer of the
Shareholders' Stock to ART.
(2) VPB Samana warrants that all financial statements
it provides have been prepared in accordance with generally
accepted accounting principles consistently applied throughout
the periods involved as explained in the notes to such
financial statements.
(3) The books and records, financial and otherwise,
of VPB Samana are in all material respects complete and
correct and have been maintained in accordance with sound
business and bookkeeping practices so as to accurately and
fairly reflect, in reasonable detail, the transactions in and
dispositions of the assets of VPB Samana.
(4) VPB Samana has filed or will have filed as of the
Closing Date all tax returns required to be filed by it from
inception to the Closing Date. Except as disclosed, there are
no tax liens upon any of the assets of, and there are no
outstanding agreements or waivers extending the statutory
period of limitation applicable to any tax return of VPB
Samana.
E. Information. The information concerning VPB Samana set
forth in this Agreement and in any Exhibits attached hereto
are, as of the respective dates of such information, complete
and accurate in all material respects and did not contain any
untrue statement of a material fact or omit to state a
material fact required to make the statements made, in light
of the circumstances under which they were made, not
misleading.
F. No Options or Warrants. There are no warrants or options,
other calls, or commitments of any character relating to the
authorized and unissued stock of VPB Samana as of the Closing
Date. In addition, from and after the execution of this
Agreement, VPB Samana will not issue any additional stock
without the written consent of ART.
G. Absence of Certain Changes or Events. Since the date of the
most recent balance sheet described in Article V.D, including
the additional information referred to in Article V.E:
(1) There has not been any material adverse change in
the business, operations, properties, level of inventory,
assets, or condition of VPB Samana taken as a whole.
(2) VPB Samana has not:
(i) amended its articles of incorporation or bylaws;
(ii) declared or made, or agreed to declare or make,
any payment or dividends or distributions of any
assets of any kind whatsoever to stockholders or
purchased or redeemed, or agreed to purchase or
redeem, any of its capital stock;
(iii) entered into any other material transactions;
(iv) made any accrual or arrangement for or payment
of bonuses or special compensation of any kind or any
severance or termination pay to any present or former
officer or employee;
(v) increased the rate of compensation payable or to
become payable by it to any of its officers or
directors or any of its employees whose monthly
compensation exceeds One Thousand United States
Dollars (US$1,000.00);
(vi) made any increase in any profit-sharing, bonus,
deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment,
or arrangement made to, for, or with its officers,
directors, or employees;
(vii) granted or agreed to grant any options,
warrants, or other rights for its stocks, bonds, or
other corporate securities calling for the issuance
thereof;
(viii) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material
obligation or liability (absolute or contingent)
except liabilities incurred in the ordinary course of
business and specifically except in connection with
the Project;
(ix) made or permitted any amendment or termination
of any contract, agreement, or license to which it is
a party if such amendment or termination is material;
OR
(x) issued, delivered, or agreed to issue or deliver
any stock, bonds, or other corporate securities
including debentures (whether authorized and unissued
or held as treasury stock).
H. Title and Related Matters. VPB Samana has good and
marketable title to all of its properties, inventory,
interests in properties, and assets, free and clear of all
mortgages, security interests, royalties, liens, pledges,
charges, or encumbrances, except (a) statutory liens or claims
not yet delinquent; and (b) such imperfections of title and
easements as do not, and will not, materially detract from, or
interfere with, the present or proposed use of the properties
subject thereto or affected thereby or otherwise materially
impair present business operations on such properties.
Specifically, and without limiting the generality of the
foregoing, VPB Samana has good and marketable title to all
aspects of the Project.
I. Litigation and Proceedings. There are no actions, suits,
administrative or other proceedings pending or, to the
knowledge of VPB Samana threatened by or against it or
affecting its properties, at law or at equity, before any
court or other governmental agency or instrumentality,
domestic or foreign, or before any arbitrator of any kind. VPB
Samana does not have any knowledge of any default on its part
or the part of with respect to any judgment, order, writ,
injunction, decree, award, rule, or regulation of any court,
arbitrator, or governmental agency or instrumentality.
J. Contracts.
(1) All contracts, agreements, franchises, license
agreements, and other commitments to which VPB Samana is a
party or by which its properties are bound and which are
material to the operations or financial condition of are valid
and enforceable by VPB Samana in all material respects;
(2) VPB Samana is not a party to or bound by, and its
properties are not subject to, any material contract,
agreement, other commitment or instrument; any charter or
other corporate restriction; or any judgment, order, writ,
injunction, decree, or award which materially and adversely
affects, or in the future may (as far as VPB Samana can now
foresee) materially and adversely affect, the business,
operations, properties, assets, or condition of VPB Samana,
particularly the Project;
AND
(3) VPB Samana is not a party to any oral or written:
(i) contract for the employment of any officer,
director, or employee which is not terminable on
thirty (30) days' (or less) notice;
(ii) profit-sharing, bonus, deferred compensation,
stock option, severance pay, pension benefit or
retirement plan, agreement, or arrangement;
(iii) agreement, contract, or indenture relating to
the borrowing of money other than as relates to the
Project;
(iv) guarantee of any obligation, other than one on
which VPB Samana is a primary obligor, for the
borrowing of money or otherwise, excluding
endorsements made for collection and other guarantees
of obligations, which, in the aggregate do not exceed
One Thousand United States Dollars (US$1,000);
(v) consulting or other similar contract with an
unexpired term for more than one year or providing
for payments in excess of One Thousand United States
Dollars (US$1,000) in the aggregate;
(vi) collective bargaining agreement;
(vii) agreement with any present or former officer,
or
(viii) contract, agreement, or other commitment
involving payments by it of more than One Thousand
United States Dollars (US$1,000), in the aggregate.
K. Material Contract Defaults. VPB Samana is not in default in
any material respect under the terms of any outstanding
contract, agreement, lease, or other commitment which is
material to its business, operations, properties, assets, or
condition taken as a whole, and there is no event of default
or other event which, with notice and lapse of time or both,
would constitute a default in any material respect under any
such contract, agreement, lease, or other commitment in
respect of which VPB Samana has not taken adequate steps to
prevent such a default from occurring.
L. No Conflict with Other Instruments. The execution of this
Agreement and the consummation of the transaction contemplated
by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any
material indenture, mortgage, deed of trust, or other material
contract, agreement, or instrument to which VPB Samana is a
party or to which any of its properties or operations is
subject.
M. Governmental Authorization. VPB Samana has all licenses,
franchises, permits, and other governmental authorizations
that are legally required to enable it to conduct its business
in all material respects as conducted on the date of this
Agreement and specifically, has received all permits and other
governmental authorizations necessary to proceed with the
Project. No authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or other
governmental body is required in connection with the execution
and delivery by VPB Samana of this Agreement and the
consummation by VPB Samana of the transactions contemplated
hereby.
N. Compliance with Laws and Regulations. VPB Samana has
complied with all applicable statutes and regulations of any
federal, state, or other governmental entity or agency
thereof, except to the extent that noncompliance would not
materially and adversely affect the business, operations,
properties, assets, or condition of VPB Samana taken as a
whole or except to the extent that noncompliance would not
result in the occurrence of any material liability for VPB
Samana.
The Selling Shareholder has complied will all
applicable statutes and regulation of any federal, state, or
other governmental entity or agency thereof necessary to
permit transfer of the VPB Samana stock to be transferred by
Selling Shareholder to ART as contemplated in this Agreement.
O. Membership of ART Representatives on VPB Board of
Directors. Immediately after Closing VPB Samana and Xxxxxx
and Xxxxx shall have taken such actions as may be
necessary to reflect membership on the board of directors
of VPB Samana of individuals designated by ART to serve as
directors in a number consistent with ART's majority
ownership of the stock of VPB Samana.
P. Corporate Opportunities. Xxxxxx and Xxxxx hereby covenant
and agree that should the possible acquisition of
additional property in the Samana area of the Dominican
Republic come to their attention, or alternatively, should
the Xxxxxx and Xxxxx have, at the time, of closing such
additional property in the Samana area, they, and each of
them must offer such property or the acquisition of such
property to the VPB Samana at the cost and upon the same
terms as the acquisition could or was made to the Xxxxxx
and Xxxxx. To effect this requirement to offer, Xxxxxx and
Xxxxx shall promptly notify each of the directors of VPB
Samana, in writing, that the Xxxxxx and Xxxxx have or are
proposing to acquire additional property in the Samana
aea, including the price and erms on which such
acquisition was or can be made. VPB Samana, through its
Board of Directors, shall then have thirty (30) calendar
days from the date of such notice to inform the Xxxxxx and
Xxxxx, in writing, that VPB Samana will exercise its right
to acquire such property on the same terms and conditions
available to Xxxxxx and Xxxxx. If VPB Samana elects not to
go forward with such acquisition or does not respond in
writing within the 30 day period, Xxxxxx and Xxxxx are
free to make such acquisition, or retain such property,
for themselves, so long as the price, terms and conditions
of such acquisitions are as disclosed to VPB Samana.
VI. REPRESENTATIONS, COVENANTS, & WARRANTIES OF ART
ART represents and warrants as follows:
A. Organization. ART is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good
standing under the laws of the British Virgin Islands and has
the corporate power, and is and will be duly authorized,
qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities, to
own all of its properties and assets and to carry on its
business in all material respects as it is now being
conducted, and there are no other jurisdictions in which it is
not so qualified in which the character and location of the
assets owned by it or the nature of the material business
transacted by it requires qualification, except where failure
to do so would not have a material adverse effect on its
business, operations, properties, assets, or condition. The
execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not,
violate any provision of ART's articles of incorporation or
bylaws, or other agreement to which it is a party or by which
it is bound.
B. Approval of Agreements. ART has full power, authority, and
legal right and has taken, or shall take, all action required
by law, its articles of incorporation, bylaws, and otherwise
to execute and deliver this Agreement and to consummate the
transaction herein contemplated. The board of directors of ART
has authorized and approved the execution, delivery, and
performance of this Agreement and the transaction contemplated
hereby.
C. Financial Statements.
(1) Prior to the Closing, ART will provide to VPB
Samana the following with respect to ART, if available:
(i) financial statements, whether audited or not;
(ii) pro-forma financial information;
(iii) any other documents that may be reasonably
required by VPB Samana to complete its due diligence
for the transactions contemplated in this Agreement.
(2) All such financial statements have been prepared
in accordance with generally accepted accounting principles
consistently applied throughout the periods involved. The
balance sheets of ART present fairly, as of their respective
dates, the financial position of ART. ART did not have, as of
the date of any such balance sheets, except as and to the
extent reflected or reserved against therein, any liabilities
or obligations (absolute or contingent) which should be
reflected in a balance sheet or the notes thereto prepared in
accordance with generally accepted accounting principles. and
all assets reflected therein present fairly the assets of ART,
in accordance with generally accepted accounting principles.
The statements of operations, stockholder's equity, and cash
flows present fairly the financial position and results of
operations of ART as of their respective dates and for the
respective periods covered thereby. ART maintains a standard
system of accounting established and maintained in a manner
permitting the preparation of financial statements in
accordance with generally accepted accounting principles.
D. Information. The information concerning ART set forth in
this Agreement and in any Schedules attached hereto is, as of
the respective dates of such information, complete and
accurate in all material respects and did not contain any
untrue statement of a material fact or omit to state a
material fact required to make the statements made, in light
of the circumstances under which they were made, not
misleading.
E. No Conflict with Other Instruments. The execution of this
Agreement and the consummation of the transaction contemplated
by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any
material indenture, mortgage, deed of trust, or other material
contract, agreement, or instrument to which ART is a party or
to which any of its properties or operations are subject.
F. Governmental Authorization. ART has all licenses,
franchises, permits, and other governmental authorizations
that are legally required to enable it to conduct its
businesses in all material respects as conducted on the date
of this Agreement. Except for the satisfaction of requirements
of federal and state securities and corporation laws, as
hereinafter provided, no authorization, approval, consent, or
order of, or registration, declaration, or filing with, any
court or other governmental body is required in connection
with the execution and delivery by ART of this Agreement and
the consummation by ART of the transactions contemplated
hereby.
G. Compliance with Laws and Regulations. ART has complied with
all applicable statutes and regulations of any federal, state,
or other governmental entity or agency thereof, except to the
extent that noncompliance would not materially and adversely
affect the business, operations, properties, assets, or
condition of ART taken as a whole or except to the extent that
noncompliance would not result in the occurrence of any
material liability for ART.
H. Title to and Status of Securities Transferred to VPB Samana
. ART has good and marketable title to all securities listed
on Exhibit "A" hereto, free and clear of all mortgages,
security interests, liens, pledges, charges, or encumbrances,
except (a) statutory liens or claims not yet delinquent; and
(b) such imperfections of title as do not, and will not,
materially detract from, or interfere with, the present or
proposed use of the properties subject thereto or affected
thereby or otherwise materially impair present business
operations on such properties. However, many or all of said
securities are "restricted securities" as that term is defined
pursuant to the Securities Act of 1933 (the "Act") and bear a
legend substantially to the effect that the shares may not be
transferred without being registered under the Act or the
issuer thereof receiving an opinion of counsel satisfactory to
the issuer that an exemption from registration is available.
Therefore, the Exhibit "A" securities may not be immediately
negotiable and, depending upon the issuer, may not be liquid
in the future.
VII. SPECIAL COVENANTS TO BE SATISFIED PRIOR TO CLOSING
A. Activities of VPB Samana and ART. Until Closing, VPB
Samana and ART shall each:
(1) carry on its business in substantially the same
manner as it has heretofore;
(2) perform in all material respects all of its
obligations under material contracts, leases, and instruments
relating to or affecting its assets, properties, and business;
(3) use its best efforts to maintain and preserve its
business organization intact, to retain its key employees, and
to maintain its relationships with its material suppliers and
customers;
(4) duly and timely file for all taxable periods on
or prior to the Closing Date all tax returns required to be
filed by or on behalf of such entity or for which such entity
may be held responsible and shall pay, or cause to pay, all
taxes required to be shown as due and payable during the
period commencing on the date of this Agreement and ending on
the Closing Date. All such tax returns shall be prepared in a
manner consistent with the preparation of prior years' tax
returns except as required by law or as agreed to by the
parties hereto prior to the filing thereof;
(5) fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal, state and
municipal laws and all rules, regulations, and orders imposed
by all governmental authorities.
B. Access to VPB Samana Properties and Records. VPB Samana
will afford to the officers and authorized representatives of
ART full access to the properties, books, and records of VPB
Samana in order that ART may have full opportunity to make
such reasonable investigation as it shall desire to make of
the affairs of VPB Samana and will furnish VPB Samana with
such additional financial and operating data and other
information as ART shall from time to time reasonably request.
C. Third-Party Consents. VPB Samana and ART agree to
cooperate with each other in order to obtain any third-party
consents to this Agreement and the transaction herein
contemplated that are required.
VIII. CONDITIONS PRECEDENT TO OBLIGATIONS OF ART
The obligations of ART under this Agreement are subject to the
satisfaction at or before the Closing, of the following conditions:
A. Accuracy of Representations. The representations and
warranties made by the Xxxxxx and Xxxxx and VPB Samana in this
Agreement were true when made and shall be true at the Closing
(except for changes therein permitted by this Agreement), and
the Xxxxxx and Xxxxx and VPB Samana shall have performed or
complied with all covenants and conditions required by this
Agreement to be performed or complied with by each prior to or
at the Closing.
B. No Material Adverse Change. Prior to the Closing Date,
there shall not have occurred any material adverse change in
the financial condition, business, or operations of VPB
Samana, nor shall any event have occurred which, with the
lapse of time or the giving of notice, may cause or create any
material adverse change in the financial condition, business,
or operations of VPB Samana.
D. Other Items. ART shall have received such further
documents, certificates, or instruments relating to the
transaction contemplated hereby as ART may reasonably request.
IX. CONDITIONS PRECEDENT TO OBLIGATIONS OF VPB Samana
The obligations of VPB Samana under this Agreement are subject to the
satisfaction at or before the Closing Date, of the following
conditions:
A. Accuracy of Representations. The representations and
warranties made by ART in this Agreement were true when made
and shall be true at the Closing Date (except for changes
therein permitted by this Agreement), and ART shall have
performed or complied with all covenants and conditions
required by this Agreement to be performed or complied with by
ART prior to or at the Closing.
B. Other Items. VPB Samana shall have received such further
documents, certificates, or instruments relating to the
transaction contemplated hereby as VPB Samana may reasonably
request.
X. DISPUTE RESOLUTION
A. Arbitration. Any controversy, claim or dispute of whatever nature
arising out of or relating to this Agreement or the breach,
termination, enforceability or validity thereof shall be
determined by binding arbitration before a single arbitrator
in London, England and in accordance with the commercial
arbitration rules of the London Arbitration Association.
Persons eligible to be selected as the arbitrator shall be
limited to barristers at law who (1) are on the Large, Complex
Case panel of the LAA, or who have professional credentials
similar to the arbitrators listed on such panels, and (2) who
have practices law for at least fifteen years as a barrister
specializing in either general commercial litigation or
general corporate and commercial litigation or general
corporate and commercial matters.
The arbitrator shall base his or her award on applicable law
and judicial precedent and include in such award a statement
of reasons upon which the award is based. Judgment based upon
the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof.
XI. MISCELLANEOUS
A. Survival. All representations, warranties and covenants in
this Agreement or pursuant hereto shall be deemed and
construed to be continuing representations, warranties and
covenants which shall survive the Closing Date and the
execution and delivery of all instruments and documents herein
provided for and any investigation at any time made on behalf
of either party..
B. Headings. Article and Section headings contained in this
Agreement are for reference purposes only and shall not affect
in any way the meaning of this Agreement or its
interpretation.
C. Entire Agreement. This Agreement and the Exhibits hereto
constitute the entire agreement between the parties pertaining
to the subject matter hereof, and supersede all prior
agreements, understandings, negotiations and discussions,
whether oral or written, of the parties.
D. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns
of the parties hereto.
E. Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if delivered
personally or sent by overnight delivery service, all charges
prepaid, as follows:
To ART:
x/x Xxxxx Xxxxxxxx Xxxxx Xx.
Xxxxxxxx House, Box 58
Anguilla
BRITISH WEST INDIES
with a copy to:
ITEX Corporation
ATTN: Legal Counsel
One Lincoln Center
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
X.X.X.
To VPB Samana and Xxxxxx and Xxxxx:
Xx. Xxxx Xxxxx
Xx. Xxxx Xxxxxx
Xxxxx 00, #0
Xx Xxxxxxx XX
Xxxxxxxx
XXXXXXXXX XXXXXXXX
To Quisqueya Lines & Constructora, C. por A.:
Xx. Xxxx Xxxxx
Quisqueya Lines & Constructores
Xxxxx 00, #0
Xx Xxxxxxx XX
Xxxxxxxx
XXXXXXXXX XXXXXXXX
or at such other address as shall be furnished in writing by
the party to the other, and shall be deemed to have been given
as of the date so delivered or deposited with an overnight
delivery service, as the case may be.
F. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original
instrument and together shall constitute the entire Agreement.
G. Applicable Law. This agreement shall be governed by and
construed in accordance with the laws of the United Kingdom
and in the English Language.
H. Attorney's Fees and Costs. In the event that any party
institutes arbitration as permitted hereunder, the breaching
party or parties shall reimburse the non-breaching party or
parties for all costs, including reasonable legal fees,
incurred in connection therewith and in enforcing or
collecting any judgment rendered therein.
I. Schedules; Knowledge. Whenever in any section of this
Agreement reference is made to information set forth in the
schedules provided by either Party, such reference is to
information specifically set forth in such schedules and
clearly marked to identify the section of this Agreement to
which the information relates. Whenever any representation is
made to the knowledge" of either Party, it shall be deemed to
be a representation that no officer or director of such party,
after reasonable investigation, has any knowledge contrary to
the statements made (or omitted) regarding such matters.
J. Third-Party Beneficiaries. This Agreement is solely between
ART on the one hand and the Selling Stockholders and VPB
Samana on the other side and, except as specifically provided,
no other person or entity shall be deemed to be a third party
beneficiary of this Agreement.
K. Amendment or Waiver. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether
conferred herein, at law, or in equity, and such remedies may
be enforced concurrently, and no waiver by any party of the
performance of any obligation by the other shall be construed
as a waiver of the same or any other default then,
theretofore, or thereafter occurring or existing. This
Agreement may be amended only by a writing signed by both
Parties, with respect to any of the terms herein, and any term
or condition of this Agreement may be waived or the time of
performance thereof may be extended by a writing signed by the
Party for whose benefit the provision is intended.
L. Brokers. Each party represents that there are no brokers
or finders involved in the contemplated transaction, other
than as prevously disclosed and payment to whom is the sole
responsibility of the Xxxxxx and Xxxxx.
IN WITNESS WHEREOF, the parties have duly executed this Acquisition
Agreement on the date above written.
Associated Reciprocal Traders, Ltd.
By First Auguilla Trust Company Ltd. Director
By /s/ Xxxx X. Xxxxx, Authorized Officer
Date:October 16, 1997
Xxxxxx and Xxxxx:
By /s/ Xxxx X. Xxxxxx
-------------------
Xxxx Xxxxxx
Date: October 16, 1997
By /s/ Xxxx Xxxxx
---------------
Xxxx Xxxxx
Date:October 16, 1997
Villa Punta Ballena C. por A.
By /s/ Xxxx X. Xxxxxx
-------------------
Xxxx X. Xxxxxx, President
Date: October 16, 0000
Xxxxxxxxx Xxxxx y Constructora C. por A.
By /s/ Xxxx Xxxxx
---------------
Xxxx Xxxxx
Date:October 16, 1997
Exhibit A
List of Securities
Issuing Company Address Equity NASDAQ # of Shares Cost Basis
Symbol
Acquest Corporation 000 Xxxxxxxx Xxxx Common AQST 2,500 $ 5,000.00
000-000-0000 Xxx Xxxxxxx, XX 00000 Preferred 75,000
BioFlorescent Technologies 0000 X. Xxxxxxxxxx Xxxx Xxxxxx BFTI 200,000 500,000.00
000-000-0000 Suite D222
Xxxxxxxxxx, XX 00000
Biostasis Corporation P. O. Box 17260 Preferred BSAS 4,000 400,000.00
Xxxx Xxxxx Xxxxxxxxx Xxxx Xxxx Xxxx, XX 00000
000-000-0000
BRIA Communications, Inc. 000 Xxxx 000 Xxxxx Xxxxxx XTRMA 500,000 500,000.00
000-000-0000 Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
FRC Racing Products, Inc. 000 Xxxxx Xxxxxxxxxx Xxxxxxx Xxxxxx FRCR 20,000 500,000.00
000-000-0000 Xxxx Xxxxx, Xxxx
Nordic 4485 S. Abinadi Preferred 40,000 400,000.00
Xxxx Xxxx Xxxx, XX 00000
North American Resorts, Inc. 000 Xxxx Xxxxxxxxx Xxxxxx Preferred NIAR 50,000 500,000.00
000-000-0000 Xxxxxxx, XX 00000
OTS Holdings Preferred OTSH 5,000 500,000.00
Parkside LABCO P. O. Box 273 Common LBCO 165,000 500,000
Pharmaceuticals, Inc. Califon, NJ
000-000-0000
Valufax, Inc. 4485 S. Abinadi Preferred 4,000 400,000.00
Xxxx Xxxx Xxxx, XX 00000
Shares $4,955,000.00
Accrued dividends:
OTS Holdings 84,054.79
North American Resorts 35,136.99
Acquest, Inc. 67,500.00
-------------
Total $5,141,691.78
