EXHIBIT 10.5
AGREEMENT OF PURCHASE AND
SALE OF ASSETS
This Agreement is made as of the____ day of September 1997, between
International Health Network, LLC, ("IHN"), a Nevada Corporation and Tri-
National Development Corp. ("TND"), a Wyoming Corporation.
WHEREAS, "IHN" desires to purchase from "TND" and "TND" desires to sell to
"IHN", upon the terms and subject to the conditions of this Agreement, the
properties of "TND" described in Paragraph 1.01 in exchange for cash and
construction and management agreements from "IHN" described in Paragraph
1.02. In consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties
agree as follows;
ARTICLE I - Purchase and Sale of Assets
1.1 Sale of Assets
The assets to be conveyed, transferred, signed, and delivered, as
provided by this Agreement, shall, without limitation, include
150 acres of the property, (see Exhibit A-Legal Description)
known as Hills of Bajamar owned by Planificacion y Desarrollo
Regional Jatay, S.A. de C.V., ("PDRJ") a Mexican Corporation, a
wholly-owned subsidiary of "TND", but does not include any other
assets of "TND" or ("PDRJ"). The 150 acres will transferred to
"IHN" at a price of $25,000 per acre, for a total purchase price
of $3,750,000. Additionally, "IHN" will be granted an option to
acquire a contiguous 100 acres of the Hills of Bajamar Property
at a price of $60,000 per acre. This option shall be in effect
for a period of three years from the closing date of this
agreement.
1.02 Considerations
As full payment for the transfer of the assets by "TND" to "IHN",
"IHN" shall deliver at the closing, the following:
(i) Promissory Notes: "IHN" shall deliver to "TND", at
closing, Promissory Notes in the total amount of
$3,750,000 with interest at 8% interest per annum and the
subject property to remain in trust until fully paid. The
price and terms for the property is based on recent
negotiations between the parties and is subject to Board
of Director approvals. The promissory notes will be
divided into six notes of $625,000 each with interest at
8% per annum. The notes shall have due dates beginning
with February 28, 1998 for the first $625,000 and each of
the remaining five notes due every six months thereafter.
(ii) Construction and Management Agreements. It is agreed that
"IHN"' intends to proceed with the development of an
integrated medical campus, similar to plans originally
proposed by "TND". This medical campus is anticipated to
include a medical school, an acute care hospital in
association with a recognized U.S. provider, a medical
merchandise mart, facilities for continuing medical
education and housing for both students and faculty as
well as employees. "IHN" shall execute construction and
management agreements, dated as of the closing date, which
will provide "TND" with a 10% management fee for the
construction of all facilities to
be located on the 150 acres plus the 100 acres under
option, as well as a 10% of the monthly square foot rental
fee of all such facilities built on the subject property,
as its management fee. This provision and all other
aspects of this agreement and any amendments hereto or
modifications hereof shall be binding upon the parties
hereto and their respective heirs, successors and assigns.
The agreement will also contain language that allows "TND"
to review and pre-approve any usage for the property other
than as a medical campus. The agreement will also provide
and acknowledge that "IHN" reserves the exclusive right to
develop any and all facilities and offices related to the
medical industry on this site and the adjacent land, so
long as "IHN" is not in default under this agreement.
(iii) Closing: The closing is to take place on or before October
31, 1997.
1.03 Taxes
"IHN" shall pay all taxes and fees, excluding "TND"s income taxes,
arising out of the transfer of the assets.
ARTICLE 2 - Representations and Warranties of "TND"
2.01 Warranties-"TND" represents and warrants that:
(i) Organization. "TND" is a corporation duly organized,
validly existing, and in good standing under the laws of
Wyoming, has all necessary corporate powers to own and
sell its properties and carry on its business as now owned
and operated by it and is in good standing in the State of
Wyoming.
(ii) Title. "TND" through its wholly owned subsidiary is the
owner, beneficially and of record, of all the assets
identified or referred to in paragraph 1.01 which as of
closing shall be free and clear of all liens,
encumbrances, security agreements and any other
restrictions.
2.02 Absence of Changes. Since April 30, 1997, there has not been and
will not at closing be any changes in the financial condition or
operations of "TND", except changes in the ordinary course of
business, which changes have not in the aggregate been
materially adverse to "IHN"'s interests.
2.03 Compliance With Laws
"TND" represents that, to the best of its knowledge, it has
complied with, and is not in violation of, any applicable
federal, state or local statutes, laws or regulations, affecting
the assets or operation of the business of "TND", both in Mexico
and in the United States.
2.04 No Breach or Violation
The consummation of the transaction contemplated by this
Agreement shall not result in or constitute any of the following;
(i) A breach of any term or provision of this agreement;
(ii) A default or event that, upon notice or lapse of time or
both, would be a default, breach or violation of the
Articles of Incorporation or Bylaws of "TND", or any
lease, license, promissory note, contract, commitment or
other agreement, instrument or arrangement to which "TND"
is a party;
(iii) An event that would permit any party to terminate any
agreement.
2.06 Authority
"TND" has the right, power, legal capacity and authority to enter into
and perform its respective obligations under this Agreement, subject
only to Board of Director approval, which should be secured prior to
closing.
2.07 Full Disclosure
None of the representations and warranties made by "TND", hereunder,
or on its behalf, contains or shall contain any untrue statement of
material fact, or omits or shall omit any material fact the, omission
of which would be misleading.
ARTICLE 3 - "IHN"'s Representations and Warranties
3.1 "IHN" represents and warrants that:
(i) Organization. "IHN" is a corporation duly organized,
validly existing, and in good standing under the laws of
the State of Nevada, has all necessary corporate powers to
own and sell its properties and carry on its business as
now owned and operated by it and is in good standing in
Nevada.
(ii) Pre-existing Relationship. "IHN" has a pre-existing
business relationship with "TND" of a nature and duration
that has enabled it to evaluate the business and financial
circumstances of "TND" and the risks and merits of this
acquisition.
ARTICLE 4 - Obligations Before Closing
4.01 "TND"'s Covenants
"TND" covenants that from the date of this Agreement until the
closing:
(i) Access to Information. "IHN" and its representatives
shall have, full access during all business hours to all
properties, books, accounts, records, contracts, and
documents of, or relating to the assets and property of
"TND" being sold hereunder.
(ii) Conduct of Business. "TND" shall carry on its business
and activities diligently and in substantially the same
manner as it previously has been carried on, and shall not
institute or use any unusual or novel methods of
manufacture, purchase, sale, lease, management, accounting
or operation that shall vary materially from those methods
used by "TND" as of the of this Agreement.
4.02 Warranties at Closing
All representations and warranties of "IHN" and "TND" set forth in
this Agreement, shall also be true and correct as of the closing date
as if made on that date.
ARTICLE 5 - Conditions Precedent to "IHN"'s Performance
5.01 Conditions
The obligations of "IHN" to purchase the assets under this agreement
are subject to the satisfaction, at or before the closing, of all the
conditions set out below in this Article 5. "IHN" may waive any or all
of these conditions in whole or in part without prior notice.
2.2 Accuracy of Representations
Except as otherwise set forth in this Agreement, all representations
and warranties by "TND" in this Agreement shall be true on and as of
the closing date as though made at that time.
5.03 Performance of "TND"
"TND" shall have performed, satisfied and complied with all covenants,
agreements and conditions required by this Agreement to be performed
or complied with by it on or before the closing date. During the
period from execution of this Agreement by both parties to the closing
date, there shall not have been any material adverse change in the
financial condition or the results of operations of "TND" and "TND"
shall not have sustained any material loss or damage to its assets,
whether or not insured, that materially affects its ability to conduct
a material part of its business.
5.04 Absence of Litigation
No action, suit or proceeding before any court or any governmental
body or authority, pertaining to the transaction contemplated by this
Agreement, shall have been instituted or threatened on or before the
closing date,
5.05 Consents
--------
All necessary agreements and consents to the consummation of the
transaction contemplated by this Agreement, if any, shall have been
obtained by "TND" and delivered to "IHN" at or before closing.
Further this agreement shall be subject to approval of "TND"'s outside
legal and tax counsel prior to closing.
ARTICLE 6 - Conditions Precedent to "TND"'s Performance
6.01 Conditions.
The obligations of "TND" to sell and transfer the assets under this
Agreement are subject to the satisfaction, at or before the closing,
of all the following conditions in this Article 6.
6.02 Accuracy of Representations.
Except as otherwise set forth in this Agreement, all representations
and warranties by "IHN" in this Agreement shall be true on and as of
the closing date as though made at that time.
6.3 "IHN"'s Warranties.
All representations and warranties by "IHN" contained in this
Agreement shall be true on and as of the closing date as though such
representations and warranties were made on and as of that date.
6.4 Absence of Litigation.
No action, suit or proceeding before or any governmental body or
authority, pertaining to the transaction contemplated by this
Agreement, shall have been instituted or threatened on or before the
closing date.
6.05 "IHN"'s Performance
"IHN" shall have performed and complied with all covenants and
agreements, satisfied all conditions required by this Agreement to
perform, comply with, or satisfy, before or after closing.
6.05.1 " - "IHN"s Promissory Notes presented pursuant to this
agreement shall be equal to the purchase price. "IHN" may at it's sole
option redeem all the Promissory Notes with out penalty in exchange
for a total payment of $3,750,000 plus appropriate interest at any
time that has sufficient cash to do so, which payment would represent
the original purchase price. In the event of bankruptcy, receivership
or insolvency by "IHN", "TND" shall succeed to "IHN"s rights and or
position in the 150 acres and or any subsequent contracts that "IHN"
may have entered into for the development of the property, at "TND"s
option.
6.06 Consents
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All necessary agreements and consents to the consummation of the
transaction contemplated by this Agreement, if any, shall have been
obtained by "TND" and delivered to "IHN" at or before closing.
Further, this agreement shall be subject to the approval of "IHN"s
outside legal and tax counsel prior to closing.
ARTICLE 7 - The Closing
7.01 Closing
The closing of the purchase and sale described herein shall take place
on or before October 31, 1997 at 10:00 A.M. Pacific Time, at the
offices of "TND" 000 Xxxxxx xxx Xxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx or at
another time and place agreeable to the parties.
7.02 "TND"'s Obligations
At the, closing, "TND" shall deliver or cause to be delivered to
"IHN":
i) Instruments of placement of all assets or other property of "TND"
being acquired hereunder by "IHN"into an escrow, with title being
available subject only to receipt by "TND" of full payment pursuant to
this agreement.
7.03 "IHN"'s Obligations
"IHN" shall execute and deliver to "TND":
(i) Promissory Notes described in paragraph 1.02 (i) in a form
acceptable to "TND".
(ii) Construction and Management agreements as identified in Paragraph
1.02 (ii).
Article 8 - Costs
8.01 Broker
Each of the parties represents and warrants that they have dealt no
outside broker as a broker or finder in connection with the
transactions contemplated by this Agreement, and, insofar as it knows,
no broker or other person is entitled to any commission or finder's
fee in connection with any of these transactions. Each party agrees
that it will be responsible for it's own commission arrangements.
8.02 Expenses
Each of the parties shall pay all costs and expenses incurred or to be
incurred by it in negotiation and preparation of this Agreement and in
closing and carrying out the transactions contemplated by this
Agreement.
ARTICLE 9 - Form of Agreement
9.01 Headings
The subject Headings of the paragraphs and subparagraphs of this
Agreement are included for purposes of convenience only, and shall not
affect the construction or interpretation of any of its provisions.
9.02 Modification and Waiver
This Agreement constitutes the agreement between the parties
pertaining to the subject matter contained in it and supersedes all
prior and contemporaneous agreements, representations, and
understandings of the parties. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in
writing by all the parties. No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a Waiver of any
other provisions, whether or not similar, nor shall any Waiver
constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
9.03 This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
ARTICLE 10 - Parties
10.01 Rights of Parties
Nothing in this Agreement, whether express or implied, is intended to
confer any rights or remedies under or by reason of this Agreement on
any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third persons
to any party to this agreement, nor shall any provision give any third
persons any right of subrogation or action over or against any party
to this Agreement.
10.02 Assignment
This Agreement shall be binding on, and shall inure to the benefit of
the parties to it and their respective heirs, legal representatives,
successors, and assigns; provided, however, "IHN" may not assign any
of its rights under it, except to a wholly owned subsidiary
corporation of the "IHN". No such assignment by "IHN" to its wholly
owned subsidiary shall relieve "IHN" of any of its obligations or
duties under this Agreement.
ARTICLE 11 - Remedies
11.01 Arbitration
Any controversy or claim arising out of or relating to this Agreement,
or the making, performance, or interpretation thereof, shall be
settled by arbitration in San Diego, California in accordance with the
Rules of the American Arbitration Association then existing, and
judgment on the arbitration award may be entered in any court having
jurisdiction over the subject matter of the controversy.
11-02 Time is of the Essence
Time is of the essence as to this agreement.
ARTICLE 12 - Nature and Survival of Representations and Obligations
12.01 Effect of Closing
All representations, warranties, covenants, and agreements of the
parties contained in this Agreement, or in any instrument,
certificate, opinion or other writing provided for in it, shall.
survive the closing.
ARTICLE 13 - Notices
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom
notice is to be given, or on the third day after mailing if mailed to
the party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid, and properly addressed as
follows:
To "IHN" at: Att: Mr. _______________________
International Health Network, LLC
____________________________
Las Vegas, Nevada ____________
To "TND" at: Att: Xx. Xxxxxxx Xxxxxxxx
000 Xxxxxx xxx Xxx Xxxxx #000
Xxx Xxxxx, Xxxxxxxxxx 00000
Any party may change its address for purposes of this paragraph by giving
the other party written notice of the new address in the manner set forth
above.
ARTICLE 14 - Governing Law
This Agreement shall be construed in accordance with, and governed by,
the laws of the State of California.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it on
the day and year first above written.
"IHN":
International Health Network, LLC
by___________________________________
"TND":
Tri-National Development Corp.
by____________________________________
Xxxxxxx X. Xxxxxxxx, President & CEO
