Exhibit 2.1
CO-OWNERSHIP AGREEMENT
THIS AGREEMENT is made and entered into this 21st day of October 2005 by
and between Azur Shell Landing Development II LLC, a Mississippi limited
liability company ("ASLD II"), Azur Shell Landing Resort Inc., a Mississippi
corporation ("ASLR") and Azur International, Inc., a Nevada corporation
("Azur"). ASLR and ASLD II are sometimes referred to herein below as the
"Co-Owners".
RECITALS
X. Xxxxxxxx Family Limited Partnership, a Mississippi limited partnership
("Xxxxxxxx"), and Xxxxxxx Family Limited Partnership, a Florida limited
partnership ("Xxxxxxx") each own 50% of the membership interests in ASLD
II.
B. ASLD II owns five (5) parcels of land with an as is undeveloped
appraised value of $19,170,000 (per the appraisal) described on the
attached Exhibit A (the "Property") and, subject to the terms and
conditions of this Agreement, desires to convey to ASLR a 95% undivided
tenants-in-common interest in the Property (the "Transferred Interest")
and require ASLR to manage and provide the financing to develop and sell
the Property, it being the intention of the parties that ASLR shall
develop the Property into a resort community.
C. The parties desire that the conveyance to ASLR of the Transferred
Interest shall be made subject to ASLD II (1) remaining the title owner of
record of the Property and (2) becoming and retaining the right to act as,
the sole trustee for the Co-Owners as beneficial owners of the Property;
D. ASLR and ASLD II desire to establish their relative ownership interests
in the Property as tenants-in-common and to set forth an agreed basis upon
which the Transferred Interest shall be conveyed to ASLR and thereafter
how the 95% undivided tenants-in-common interest in the Property owned by
ASLR and the 5% undivided tenants-in-common interest in the Property to be
retained by ASLD II shall be owned by them.
NOW, THERFORE, for and in consideration of Ten ($10.00) Dollars paid by
each of the parties hereto to the other, and in consideration of the mutual
promises of the parties hereto running one to the other, the receipt and
sufficiency of which is hereby acknowledged by each of the parties hereto, it is
hereby agreed as follows.
1. Incorporation of Recitals. The above recitals are incorporated herein by
reference.
2. Closing. The Closing Date shall be no later than November 4, 2005. (If the
Closing Date does not occur on or prior to November 4, 2005, then, except as
provided in Section 11(b) regarding the survival of the general releases and
indemnities given by the parties, this Agreement shall automatically terminate
and be of no further force and effect.) As consideration for the transfer of the
Transferred Interest, ASLR shall cause to be delivered on the Closing Date the
following consideration. All of the consideration set forth below shall be
deemed to be payment to ASLD II, but ASLD II directs that in lieu of a direct
payment to ASLD II, the consideration be paid to the members of ASLD II,
Xxxxxxxx and Xxxxxxx, as set forth below.
2.1 The following shall be paid directly to Xxxxxxx:
(a) On the Closing Date, ASLR shall pay to Xxxxxxx by check or
wire transfer of immediately available funds the sum of One
Million Dollars ($1,000,000),
(b) On the Closing Date, Azur shall issue to Xxxxxxx and/or those
persons designated by Xxxxxxx prior to the Closing Date a
certificate or certificates aggregating 5,000,000 restricted
shares of Common Stock, par value $.0001 per share, of Azur
("Azur Common Stock"), which shall be exchanged for an
aggregate of 2,500,000 shares of Common Stock, par value
$.0001, of New Harvest Capital Corporation, a Delaware
corporation ("New Harvest") upon a share exchange to be made
by all holders of Azur Common Stock upon the effectiveness of
a Registration Statement on Form S-4 which has been filed by
New Harvest with the Securities and Exchange Commission (the
"SEC"), such registration statement to be declared effective
within 180 days after the Closing Date.; provided, however,
that if Azur shall in its sole discretion determine not to
consummate the share exchange with New Harvest, Azur shall
file with the SEC a registration statement covering the resale
of the Azur Common Stock issued to Xxxxxxx and/or Xxxxxxx'x
designees under this Agreement and such registration statement
shall be declared effective within 180 days after the Closing
Date.
(c) On the Closing Date, Azur shall issue to Xxxxxxx a promissory
note in the principal amount of $250,000 in the form of
Exhibit B attached hereto (the "Xxxxxxx Note").
(d) After the Closing Date and until Xxxxxxx shall have received
payments in an aggregate amount of $16,000,000 as a result of
its 5% undivided tenants-in-common interest the Property,
Xxxxxxx shall receive directly and within 5 business days of
each closing, 5% of the Gross Proceeds. For purposes of this
Agreement, Gross Proceeds means revenue derived from the sale
of developed Property, sale of land, lease or rental of any or
all of the Property or any interest therein before closing
costs, commissions or other expenses paid in connection
therewith; provided, however, that in any event, Xxxxxxx shall
receive in respect of its 5% undivided interest in the
Property on a cumulative basis from the date hereof to
December 31 of the year specified below the aggregate amounts
set forth in the table below:
By December 31 Total Cumulative Amount of
-------------- Gross Proceeds Which Must be
Received by Xxxxxxx
-------------------
2006 $1,000,000
2007 $2,500,000
2008 $5,500,000
2009 $9,000,000
2010 $12,500,000
2011 $16,000,000
(e) ASLR shall pay all closing costs and reasonable attorney's
fees incurred by Xxxxxxx associated with the preparation and
implementation of this Agreement.
2.2 The following shall be paid directly to or on behalf of Xxxxxxxx:
(a) On the Closing Date, ASLR shall pay to Xxxxxxxx by check or wire
transfer of immediately available funds the sum of Two Hundred Fifty Thousand
Dollars ($250,000),
(b) On the Closing Date, ASLR shall issue to the order of Xxxxxxxx a
promissory note, dated the Closing Date, in the principal amount of $1,460,000
(which amount includes unpaid salary from February 1, 2005 - September 30, 2005
of $210,000), which shall be in the form of Exhibit C attached hereto (the
"Xxxxxxxx Closing Note"),
(c) On the Closing Date, Azur shall issue to Xxxxxxxx a certificate
for 5,000,000 restricted shares of Azur Common Stock, which shall be exchanged
for 2,500,000 shares of New Harvest Common Stock upon a share exchange to be
made by all holders of Azur Common Stock upon the effectiveness of a
Registration Statement on Form S-4 which has been filed by New Harvest with the
SEC, such registration statement to be declared effective within 180 days after
the Closing Date; provided, however, that if Azur shall in its sole discretion
determine not to consummate the share exchange with New Harvest, Azur shall file
with the SEC a registration statement covering the resale of the Azur Common
Stock issued to Xxxxxxxx under this Agreement and such registration statement
shall be declared effective within 180 days after the Closing Date.
(d) On the Closing Date, ASLR and Xxxx Xxxxxxxx shall enter in an
Employment Agreement in the form of Exhibit D attached hereto (the "Employment
Agreement").
(e) On the Closing Date ASLR shall pay to Shell Landing Golf, L.L.C.
("Shell Golf"), the entire outstanding principal balance and accrued interest of
the Purchase Money Promissory Note, dated November 17, 2004 from The Grand Shell
Landing, Inc. ("Shell Landing") and Xxxx Xxxxxxxx to the order of Shell Golf,
which outstanding principal amount and accrued interest is $1,136,000 in the
aggregate as of the date of this Agreement the Shell Golf Note"). Upon payment
of the Shell Golf Note, Azur and Xxxx Xxxxxxxx shall direct the Escrow Agent for
that transaction, Xxxxxxx X. Xxxxxx, to deliver all remaining shares of Azur in
his possession to Xxxx Xxxxxxxx and all remaining shares of The Grand Shell
Landing, Inc. to Azur.
(f) ASLR shall pay all closing costs and reasonable attorney's fees
incurred by Xxxxxxxx associated with the preparation and implementation of this
Agreement.
(g) After the Closing Date ASLR shall pay to Xxxxxxxx in perpetuity
5% of all gross proceeds received by ASLR or any of its subsidiaries from of
sales of land from the Property (including individual lots, tracts intended for
development as condos, hotels, retail areas, etc.) less only standard closing
costs and commissions paid by ASLR in connection with such land sales not to
exceed ten percent (10%) of the purchase price. In the event 75% or more of the
Property is sold by ASLR (or any combination of ASLR, its successors, parents,
subsidiaries, affiliates, directors, officers, employees, attorneys,
shareholders or agents), then Xxxxxxxx shall be paid from the proceeds of that
sale the difference between (i) $5 million and (ii) all prior payments made to
Xxxxxxxx by ASLR under this Section 2.2(g).
(h) On the Closing Date ASLR shall issue to Xxxxxxxx, a number of
shares of its common stock so that immediately after the issuance of such
shares, Xxxxxxxx shall own 25% of the outstanding common stock of ASLR. On the
Closing Date there shall not be outstanding any other class of capital stock of
ASLR nor any securities convertible into, or exercisable or exchangeable for any
shares of ASLR capital stock.
2.3 Upon the payment by ASLR or its successors, parents, subsidiaries or
affiliates to Xxxxxxx of an aggregate of $16,000,000 pursuant Section 2.1(d),
the 5% undivided tenants-in-common interest in the Property beneficially owned
by ASLD II shall, without any further action or the payment of any additional
consideration being required, be transferred and conveyed by ASLD II to ASLR, it
being understood that immediately upon payment of such aggregate amount ASLR
shall own the Property in fee simple. In such event, promptly upon request by
ASLR, each of ASLD II, Xxxxxxx and Xxxxxxxx shall execute such documents,
agreements and instruments and take such actions as are reasonably necessary to
evidence the ownership of the Property in fee simple by ASLR.
3. Term. The term of this Agreement shall take effect immediately upon Closing
Date and shall continue until one of the following events occurs: dissolution by
mutual agreement; the sale of the Property; forfeiture of all of ASLR's
interests in the Property pursuant to this Agreement; or, the expiration of 99
years. In addition, each of the parties agrees that immediately upon the payment
by ASLR or its successors, parents, subsidiaries or affiliates to Xxxxxxx of an
aggregate of $16,000,000 pursuant Section 2.1(d), neither ASLD II, Xxxxxxx or
Xxxxxxxx have any right under Section 6.3 of this Agreement to require ASLR to
forfeit all or any portion of ASLR's interest in the Property and the only
remedy which may be sought for a breach of Section 2.2(g) by ASLR shall be in
money damages. It is the intent of the parties that this instrument binds the
parties hereto and their respective heirs, legal representatives, successors and
assigns.
4. Nature of the Ownership in Common. This Agreement shall not constitute the
parties hereto general partners or joint venturers, nor constitute any party the
agent of the other or, except as provided herein, in any manner limit any party
hereto in carrying on its respective separate business or activities, nor impose
upon any party hereto any fiduciary duty by reason of such party carrying on
his/its separate business or activity, nor impose upon any party hereto any
liability or obligation except as herein expressly provided.
5. Management. As long as ASLD II or ASLR shall own an interest in the Property,
ASLR shall supervise all work performed in relation to the Property, shall
conduct a sales campaign for retail sale of the Property and shall otherwise use
its best efforts to enable the Property to generate sufficient revenues so as to
enable ASLR to timely meet all of its obligations under Sections 2.1 and 2.2 of
this Agreement. ASLR shall be entitled to engage the services of third parties
to develop and sell the Property. In the performance of its duties, ASLR shall
keep ASLD II advised regarding all actions taken with respect to the Property.
6. Interests of the Parties; Defaults; Forfeitures.
6.1 Interests of the Parties. The parties agree that they are and shall be
tenants in common owning undivided percentage interests in the Property as
follows:
ASLD II: 5% equity interest in the fair market value of the Property.
ASLR: 95% interest in the fair market value of the Property.
6.2 Events of Default. ASLR shall be in default for any of the following:
(a) Failure to perform any material obligations contained either in
the Agreement or any document to which reference is made in this Agreement;
(b) Failure to maintain all debt obligations current, i.e. no
payment more than 29 days overdue, including, but not limited to, any and all
mortgages on the Property titled in ASLD II;
(c) Failure of Azur to fully and completely comply with applicable
federal laws and regulations regarding publicly-traded securities;
(d) If ASLR or Azur (i) makes an assignment for the benefit of
creditors; (ii) files a voluntary petition in bankruptcy; (iii) is adjudicated a
bankrupt or insolvent; (iv) files a petition or answer seeking for himself any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law or regulation; (v) files
an answer or other pleading admitting or failing to contest the material
allegations of a petition filed against it in any proceeding of the nature
described in this paragraph; or (vi) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the member or of all or any
substantial part of its properties;
(e) If one hundred twenty (120) days after the commencement of any
proceeding against ASLR or Azur seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any
statute, law or regulation, the proceeding has not been dismissed, or if within
ninety (90) days after the appointment without its consent or acquiescence of a
trustee, receiver or liquidator of the member or of all or any substantial part
of its properties, the appointment is not vacated or stayed or within ninety
(90) days after the expiration of any stay, the appointment is not vacated;
(f) If ASLR is in default under any financing agreement with any
party, which in any way binds or encumbers the Property; or
(g) Permitting a lien of any type to be filed against the Property
which is not removed by dismissal or otherwise within sixty (60) days after
notice thereof.
6.3. Forfeiture. Subject to Section 3, in the event of any default by
ASLR, then ASLR shall forfeit to ASLD II a 75% undivided percentage interest in
the Property, without further action by ASLD II or any other party; provided,
however, that if on the date of the occurrence of any Event of Default the
aggregate outstanding indebtedness secured by the Property exceeds $6,000,000,
then in lieu of a 75% interest, ASLR's entire 95% undivided interest in the
Property shall be forfeited to ASLD II. The forfeiture of the 75% or 95%
undivided interest in the Property by ASLR shall be ASLD II's sole remedy in the
case of the occurrence of an Event of Default. In the event of a forfeiture
under this Section 6.2, the Xxxxxxxx Employment Agreement shall, without any
action by either party being required, terminate immediately and the shares of
ASLR common stock issued to Xxxxxxxx pursuant to Section 2.2 of this Agreement,
whether held by Xxxxxxxx or any transferee, shall revert to Azur.
7. Representations and Warranties of ASLD II. ASLD II represents and warrants to
ASLR as follows:
(a) Organization. ASLD II is a limited liability company, duly
formed under the laws of the State of Mississippi.
(b) Ownership of Interest in Shell Landing Development. (i) ASLD II
owns the Transferred Interest, subject only to a Deed of Trust, dated May 4,
2005 held by Olympic Coast Investment, Inc. ("Olympic") in Shell Landing
Development (the "Deed of Trust"), and free and clear of all other liens,
encumbrances, charges, security interests, claims and assessments. The
Transferred Interest will be subject to no restrictions with respect to
transferability.
(c) Authority; No Conflict; Required Filings and Consents.
(i) ASLD II has all requisite entity power, right and
authority to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement.
The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this
Agreement have been duly and validly approved by all necessary
limited liability company action on the part of ASLD II, and
no other proceedings on the part of ASLD II are necessary to
approve this Agreement or to consummate the transactions
contemplated hereby. Except for Olympic, no approval by any
other person is required for the due authorization, execution
and delivery by ASLD II of this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and
delivered by ASLD II and constitutes a valid and legally
binding obligation of ASLD II, enforceable against ASLD II in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(ii) The execution and delivery by ASLD II of this Agreement
does not, and consummation of the transactions contemplated by
this Agreement will not, (i) conflict with, or result in any
violation or breach of any provision of, the operating
agreement or certificate of formation of ASLD II, (ii) result
in any violation or breach of, or constitute (with or without
notice or lapse of time, or both) a default (or give rise to a
right of termination, cancellation or acceleration of any
obligation or loss of any material benefit) under, any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, contract or other agreement, instrument or
obligation to which ASLDII is a party or by which any of its
properties or assets may be bound, or (iii) conflict with or
violate any permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation
applicable to ASLD II or any of its properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court,
administrative agency or commission or other governmental
authority or instrumentality ("Government Entity") is required
by or with respect to ASLD II in connection with the execution
and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for (i) such filings
as may be required under applicable state securities laws, and
(ii) such other consents, authorizations, filings, approvals
and registrations which, if not obtained or made, would not
materially burden or delay the consummation of the
transactions contemplated hereby.
(d) Litigation. To the best knowledge of ASLD II, (i) there is no
private or governmental action, suit, proceeding, claim, arbitration or
investigation pending before any agency, court or tribunal, foreign or domestic,
or threatened against ASLD II or any of its properties or any of its members or
managers , which, if determined adversely to any of them , would have a material
adverse effect on Shell Landing Development (a "Material Adverse Effect") and
(ii) to the best knowledge of ASLD II, there is no judgment, decree or order
against any person, the existence of which would have a Material Adverse Effect.
(e) Finder's Fees. ASLD II has not retained any finder or broker in
connection with the transactions contemplated by this Agreement and ASLD II
hereby agrees to indemnify and to hold ASLR and Azur harmless for and from any
liability for commission or compensation in the nature of a finder's fee to any
broker or other person or firm (and the costs and expenses of defending against
such liability or asserted liability) for which ASLD II or any person or entity
on behalf of ASLD II, is or may be responsible as a result of the transactions
contemplated hereby.
(f) Purchase Entirely for Own Account. The Azur Common Stock that
will be acquired by Xxxxxxx and Xxxxxxxx will be acquired by them solely for
investment purposes, for their own account, and not with a view to the resale or
distribution of any part thereof, except as permitted by law.
(g) No General Solicitation. ASLD II has not received any general
solicitation or advertising regarding the offering of the shares of Azur Common
Stock or entering into this Agreement.
(h) Restricted Securities. ASLD II and each of Xxxxxxxx and Xxxxxxx
understands that the Azur Common Stock is being offered in a transaction not
involving any public offering within the meaning of the Securities Act, that
such shares have not been registered under the Securities Act and that it may
not resell, pledge or otherwise transfer any such shares, except (A) pursuant to
an effective registration statement under the Act, (B) in an offshore
transaction complying with Rule 904 of Regulation S promulgated under the Act,
or (C) pursuant to another applicable exemption from registration.
(i) Legends. It is understood that the certificates evidencing the
shares of Azur Common Stock may bear the following legends:
(i) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR
TRANSFERRED EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS
CURRENT WITH RESPECT TO THESE SECURITIES, OR (B) PURSUANT TO A
SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
BUT ONLY UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE
WRITTEN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY, THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH ALL
APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY
APPLICABLE "BLUE SKY" OR SIMILAR SECURITIES LAW."
(ii) Any legend required by the By-laws of Azur. The By-law of
Azur in effect on the date hereof are attached hereto as
Schedule 7 and such By-laws shall not be amended prior to the
Closing Date.
8. Representations and Warranties of ASLR. ASLR hereby represents and warrants
to ASLD II as follows:
(a) Organization. Azur is a corporation duly organized, validly existing
and in good standing under the laws of Nevada. ASLR is a corporation duly
organized, validly existing and in good standing under the laws of Mississippi.
(b) Authority; No Conflict; Required Filings and Consents.
(i) ASLR has all requisite corporate power, right and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly and validly approved
by all necessary corporate action on the part of ASLR, and no other
proceedings on the part of ASLR are necessary to approve this
Agreement or to consummate the transaction contemplated hereby. This
Agreement has been duly executed and delivered by ASLR and
constitutes valid and legally binding obligations of ASLR,
enforceable against ASLR in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(ii) The execution and delivery by ASLR of this Agreement does not,
and consummation of the transactions contemplated by this Agreement
will not, (i) conflict with, or result in any violation or breach of
any provision of, the certificate of incorporation or by-laws of
ASLR, (ii) result in any violation or breach of, or constitute (with
or without notice or lapse of time, or both) a default (or give rise
to a right of termination, cancellation or acceleration of any
obligation or loss of any material benefit) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
lease, contract or other agreement, instrument or obligation to
which ASLR is a party or by which any of its properties or assets
may be bound, or (iii) conflict with or violate any permit,
concession, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to ASLR or any of
their respective properties or assets, except in the case of (ii)
and (iii) for any such violations, defaults, breaches, terminations,
cancellations, accelerations, losses or conflicts which would not
materially burden or delay the consummation of the transactions
contemplated hereby.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to ASLR in connection with the execution
and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for (i) such filings as may
be required under applicable state securities laws, and (ii) such
other consents, authorizations, filings, approvals and registrations
which, if not obtained or made, would not materially burden or delay
the consummation of the transactions contemplated hereby.
(c) Finder's Fees. ASLR has not retained any finder or broker in
connection with the transactions contemplated by this Agreement and hereby
agrees to indemnify and to hold each of ASLD II, Xxxxxxx and Xxxxxxxx harmless
for and from any liability for any commission or compensation in the nature of a
finder's fee to any broker or other person or firm (and the costs and expenses
of defending against such liability or asserted liability) for which ASLR, or
any person or entity acting on behalf of ASLR, is or may be reasonable as a
result of the transactions contemplated hereby.
(d) Delivery of Documents; Execution of Conveyance Documents. ASLR shall
promptly deliver to ASLD II for review any and all proposals to ASLR for the
financing of future operations, construction or the contemplated acquisition of
the Property or any interest therein prior to execution of same by ASLR. ASLR
acknowledges and agrees that all instruments conveying the Property or any
interest therein shall require the signatures of persons authorized to sign such
documents on behalf of ASLD II as trustee for the Co-Owners.
(e) Due Diligence. ASLR warrants that it has had the opportunity to
conduct a full and complete due diligence necessary to become knowledgeable
about the Property and the contemplated transaction prior to Closing. ASLR also
warrants that all documents, access and other information it has requested of
ASLD II and its Members have been provided to them. Finally, ASLR warrants that
it requires no other information of ASLD II or its members in order to close on
this transaction.
9. Closing Conditions
9.1 Conditions to ASLR's Obligations. The obligation of ASLR to purchase
from ASLD II the Transferred Interest and perform all of its other agreements to
be performed at or after the Closing is subject to the fulfillment on or prior
to the Closing Date of the following conditions:
(i) Representations and Warranties Correct; Performance of Obligations.
The representations and warranties made by ASLD II in Section 7 hereof
shall be true and correct when made, and shall be true and correct on the
Closing Date with the same force and effect as if they had been made on
and as of such date; and ASLD II shall have performed all obligations
herein required to be performed by it on or prior to the Closing Date.
(ii) No Injunction, Order, etc. There shall be no injunction, order or
decree of any nature of any court or Government Entity of competent
jurisdiction that is in effect that restrains or prohibits the
consummation of the transactions contemplated hereby.
(iii) General Release. Azur and its subsidiaries shall have received from
each of Xxxxxxx and Xxxxxxxx a general release in the form of Exhibit E
hereto.
9.2 Conditions to ASLD II's Obligations. The obligation of ASLD II to
transfer and convey to ASLR the Transferred Interest and perform all of its
other agreements to be performed at or after the Closing is subject to the
fulfillment on or prior to the Closing Date of the following conditions:
(i) Representations and Warranties Correct; Performance of Obligations.
The representations and warranties made by ASLR in Section 8 hereof shall
be true and correct when made, and shall be true and correct on the
Closing Date with the same force and effect as if they had been made on
and as of such date; and ASLR shall have performed all obligations herein
required to be performed by it on or prior to the Closing Date.
(ii) Qualifications. The issuance of the shares of Azur Common Stock to
Xxxxxxx and Xxxxxxxx pursuant to this Agreement shall be exempt from the
registration and/or qualification requirements of all applicable
securities laws. In addition, all other authorizations, approvals or
permits of any Government Entity that are required in connection with the
lawful issuance and sale of the shares shall have been duly obtained and
shall be effective on and as of the Closing Date.
(iii) No Injunction, Order, etc. There shall be no injunction, order or
decree of any nature of any court or Government Entity of competent
jurisdiction that is in effect that restrains or prohibits the
consummation of the transactions contemplated hereby.
(iv) Interest Reserve. During the term of this Agreement, ASLR agrees to
maintain a cash (or cash equivalent) reserve of no less than four months
of interest due on any mortgage or other indebtedness owed to ASLD II, its
members or any third party. Each of ASLD II, Xxxxxxx and Xxxxxxxx
acknowledges and agrees that (A) as of the date hereof an aggregate of
approximately $500,000 is being held in an interest bearing account at the
First Bank, Pascagoula, Mississippi (together with any interest earned
thereon, the "Reserve Funds") a reserve for interest payable on
outstanding indebtedness of ASLD II to Olympic secured by the Property,
(B) unless ASLR and ASLD II shall otherwise agree in writing, the Reserve
Funds shall be used solely to pay Olympic with respect to indebtedness of
ASLD II to Olympic secured by the Property and (c) in calculating the
amount of the interest reserve which must be maintained by ASLR under this
Section 9.2(iv), the Reserve Funds on a dollar for dollar basis, shall be
deemed to be amounts maintained by ASLR for interest reserves.
(v) Distributions to ASLR Shareholders. Commencing with the quarter
beginning October 1, 2005, ASLR agrees to make a distribution no less than
once per calendar quarter, to all of its shareholders pro rata of all cash
on hand (excluding cash received directly as financing secured by the
Property), which exceeds $250,000 after payment of current liabilities.
(vi) Payments of Gross Proceeds to Xxxxxxx. Commencing with the quarter
ending September 30, 2006, whether or not any Gross Proceeds have been
received in the quarter, Xxxxxxx shall receive a minimum cumulative
payment under Section 2.1(d) of this Agreement of $125,000 per quarter.
For example, if Gross Proceeds of $2,000,000 are received in the quarter
ended September 30, 2006, then in lieu of $100,000 (5% of such $2,000,000
of Gross Proceeds) for the entire quarter, Xxxxxxx shall be paid in
respect of his 5% undivided interest in the Property within 5 days after
the end of the quarter an amount, which when added to the total payments
made to Xxxxxxx pursuant to Section 2.1(d) during the quarter, equals
$125,000. If Xxxxxxx has received an aggregate of $300,000 in payments
under Section 2.1(d) for the six month period between July 1, 2006 and
December 31, 2005, then the minimum payment obligation to Xxxxxxx in the
quarter ending March 31, 2007 would be $75,000 rather than $125,000.
(vii) Payment of Xxxxxxx'x, Xxxxxxxx'x and ASLD II's Legal Fees. Azur
shall have paid all of the reasonable fees and disbursements of legal
counsel to Xxxxxxx, Xxxxxxxx and ASLD II from May 5, 2005 to the Closing
Date in connection with all transactions contemplated by this Agreement.
(viii) General Release. Each of Xxxxxxxx and Xxxxxxx shall have received
from Azur and its subsidiaries a general release in the form of Exhibit F
hereto.
(ix) Xxxxxxx Note. ASLR shall have delivered to Xxxxxxx the Xxxxxxx Note.
(x) ASLD II to Approve Bulk Sales . ASLR agrees that any Bulk Sale must be
approved in advance in writing by ASLD II, such approval not to be
unreasonably withheld. For purposes of this Agreement, "Bulk Sale" means
any sale of all or part of the land comprising Shell Landing Development
or any interest therein, except a sale in the normal course of business of
(1) one or more lots or (2) any interest in land which has been developed
by Azur and/or its subsidiaries.
(xi) Acceleration of Payments to Xxxxxxx. If upon an approval of a Bulk
Sale pursuant to Section 9.2 (x), the total payments made to Xxxxxxxx
under this Agreement, including any distributions made to Xxxxxxxx by ASLR
in respect of the 25% equity interest in ASLR issued to Xxxxxxxx under
Section 2.2(h) of this Agreement, but not including any payments made to
Xxxx Xxxxxxxx under the Employment Agreement, are in excess of the total
payments received by Xxxxxxx under this Agreement by such time, then
Xxxxxxx shall promptly receive an additional amount equal to such excess
and such additional amount shall be credited against the obligations to
Xxxxxxx under Section 2.1(d) and 9.2(vi).
(xii) Payment of Mortgages. ASLR shall timely pay all indebtedness secured
by all or any portion of the Property.
10. Indemnification. (a) Azur and ASLR jointly and severally agree to indemnify
each of Naranjo, Crawford, ASLD II, and their respective members, subsidiaries,
affiliates, officers, directors, partners, agents and employees, against any
losses, claims, suits, actions or other liability (including attorneys fees and
costs) directly or indirectly arising out of or relating to (i) the acquisition
by ASLR of the Transferred Interest; (ii) any action, suit, claim, etc. by any
shareholder, creditor or other party, in any way contesting the May 2005
purchase of the "Shell Landing Development" property by ASLD II, (iii) the
construction of the condominium project known as "The Islands at Shell Landing,"
or the validity of Azur's agreements with ASLD II, Xxxxxxx or Xxxxxxxx, (iv) the
breach of any representations made by ASLR in Section 8 of this Agreement, (v)
actions or omissions taken in the capacity as a director, officer, employee or
agent of Azur or any of its subsidiaries, or any other act or omission in breach
of Azur's and/or ASLR's obligations in connection with this agreement.
(b) ASLD II, Xxxxxxx and Xxxxxxxx agree to severally indemnify ASLR, Azur
and their respective stockholders, members, managers, subsidiaries, officers,
agents and employees, against any losses, claims, suits, actions or other
liability (including attorneys fees and costs) arising out of or due to (i) the
breach of any representations made by ASLD II in Section 7 of this Agreement or
(ii) the validity of any agreement between Xxxxxxx or Xxxxxxxx or between either
of them and ASLD II.
11. Representations Survive Closing; Releases and Indemnities to Survive
Automatic Termination of Agreement. (a) All the terms, representations and
covenants herein set forth are continuing terms, representations and warranties
and shall survive the closing and the execution and delivery of all conveyance
documents.
(b) Notwithstanding the automatic termination of this Agreement pursuant
to Section 2, the releases given pursuant to Section 9.1(iii) and 9.2 (viii) and
the indemnities given pursuant to Sections 10(a) and 10(b) shall survive and
remain in full force and effect, the consideration for each party's release and
indemnity being the other party's release and indemnity.
12. Transfer and Assignment. All the terms, covenants and conditions herein
contained shall be for and shall inure to the benefit of and shall bind the
respective parties hereto and their legal representatives, successors and
assigns, respectively.
13. Rules of Construction. In all references herein to any parties, persons,
entities or corporations the use of any particular gender or the plural or
singular number is intended to include the appropriate gender or number as the
text of the instrument may require
14. Banking. All funds derived from the Property shall be deposited in such bank
account or accounts as ASLR shall designate, and all withdrawals there from
shall be made upon checks signed by ASLR.
15. Attorney's Fees. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable costs and attorney's fees, including costs and attorney's fees for
any appellate proceedings.
16. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
17. No Assignment. Neither ASLD II nor ASLR may assign nor delegate any of its
rights or obligations hereunder without first obtaining the written consent of
the other party. Xxxxxxx or Xxxxxxxx may assign their rights to receive payment
from ASLR to a third party upon 14 days prior written notice to ASLR.
18. Successors and Assigns. This Agreement shall bind and inure to the benefit
of ASLD II and ASLR and their respective heirs, executors, administrators,
successors and assigns.
19. Amendment. The parties hereto may amend, modify and supplement this
Agreement only in such manner as may be agreed upon by them in writing.
20. Severability. If any provision of this Agreement is determined to be illegal
or unenforceable, such provision will be deemed amended to the extent necessary
to conform to applicable law or, if it cannot be so amended without materially
altering the intention of the parties, it will be deemed stricken and the
remainder of the Agreement will remain in full force and effect.
21. Additional Funding. To the extent that any funds are required to develop
and/or sell the Property, ASLR hereby agrees to provide 100% of such funding.
ASLR and Azur (as 75% shareholder of ASLR) agree that no distributions to
Xxxxxxxx as a shareholder of ASLR shall in any way be charged, assessed or
otherwise reduced by the costs of said financing incurred by ASLR, e.g.,
attorneys fees, title insurance, interest, prepayment penalties, origination or
broker fees, interest reserve, surveys, appraisals, due diligence costs of
lender, etc. opment costs incurred by ASLR or Azur (including its subsidiaries).
22. Notices. All notices, demands and acceptances required to be given hereunder
shall be in writing and shall be delivered by hand, mailed by certified or
registered mail, return receipt requested, or delivered by a nationally
recognized overnight delivery service, to the following addresses:
To ASLD II: 0000 Xxxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxx and Xx Xxxxxxx
Copy To: Xxxxxxx X. Xxxxxx
Williams, Heidelberg, Xxxxxxxxxxx & XxXxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
To ASLR: 000 XX 0xx Xxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: President
Copy to: Xxxxxx Xxxxxx, Esq.
Guzov Ofsink, LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
23. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Mississippi.
24. Tax Reporting. For federal and state income tax purposes, each party agrees
to report his share of income, deductions, gains and credits related or arising
out of the operation of the Property. The parties hereto agree that the tenancy
herein created shall be excluded from the provision of Subchapter K, Chapter 1,
Subtitle A of the Internal Revenue Code of 1986, as amended.
25. Books. ASLR shall maintain or cause to be maintained at its office in Ft.
Lauderdale, Florida, full and complete books and records relating to the
Property. Such books and records shall be made available to Co-Owners upon
request.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
Azur Shell Landing Development II LLC,
a Mississippi limited liability company
By: /s/ Xx Xxxxxxx
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Xx Xxxxxxx, one of its Managers
By: /s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx, one of its Managers
Azur Shell Landing Resort Inc.,
a Mississippi corporation
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx, Vice President
Azur International, Inc.
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx, President
