Exhibit 99.1
STOCK PURCHASE AGREEMENT
THIS AGREEMENT (this "Agreement"), entered into as of the 29th day of
April, 2005, is made by and between XXXXX XXXXXXXX AND UNA XXXXXXXX FOR HERSELF
AND AS EXECUTRIX OF THE ESTATE OF XXXXXXXX X. XXXXXXXX, XX. (each, a "Seller"
and collectively, the"Sellers"), REII INCORPORATED, a Delaware corporation
traded on the National Association of Securities Dealers, Inc.'s
Over-the-Counter Bulletin Board System which has no ongoing business or
operations (the "REII" or "Company") and LIVORNO INVESTMENTS LTD., a Luxemburg
corporation (the "Buyer").
WHEREAS, Sellers own 3,633,050 shares of common stock (the "Shares") of
the Company, such Shares representing approximately 78% of the issued and
outstanding shares, of the common stock of the Company; and
WHEREAS, Sellers desire to sell to Buyer, and Buyer wishes to purchase
from Sellers, the Shares, pursuant to the terms and conditions of this
Agreement; and
WHEREAS, the Company desires to facilitate the transactions set forth.
NOW, THEREFORE, in consideration of the representations, warranties and
agreements set forth herein, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Definitions. In this Agreement the following terms will have the following
meanings:
(a) "Agreement" means this Stock Purchase Agreement;
(b) "Closing" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 7
hereof;
(c) "Closing Date" means the day on which all conditions precedent to
the completion of the transaction as contemplated hereby have been
satisfied or waived;
(d) "Place of Closing" means the offices of Sichenzia Xxxx Xxxxxxxx
Xxxxxxx LLP, or such other place as the parties hereto may mutually
agree upon;
(e) "REII Accounts Payable and Liabilities" means all accounts payable
and liabilities of REII, on a consolidated basis, due and owing or
otherwise constituting a binding obligation of REII and its
subsidiaries (other than a REII Material Contract) as of April 15,
2005, as set forth is Schedule "A" hereto;
(f) "REII Accounts Receivable" means all accounts receivable and other
debts owing to REII, on a consolidated basis, as of April 15, 2005,
as set forth in Schedule "B" hereto;
(g) "REII Assets" means all the property and assets of the REII Business
of every kind and description wheresoever situated including,
without limitation, REII Equipment, REII Inventory, REII Material
Contracts, REII Accounts Receivable, REII Cash, REII Intangible
Assets and REII Goodwill, and all credit cards, charge cards and
banking cards issued to REII;
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(h) "REII Bank Accounts" means all of the bank accounts, lock boxes and
safety deposit boxes of REII and its subsidiaries or relating to the
REII Business as set forth in Schedule "C" hereto;
(i) "REII Business" means all aspects of any business conducted by REII
and its subsidiaries;
(j) "REII Cash" means all cash on hand or on deposit to the credit of
REII and its subsidiaries on the Closing Date;
(k) "REII Common Shares" means the shares of common stock in the capital
of REII;
(l) "REII Debt to Related Parties" means the debts owed by REII and its
subsidiaries to any affiliate, director or officer of REII as
described in Schedule "D" hereto;
(m) "REII Equipment" means all machinery, equipment, furniture, and
furnishings used in the REII Business, including, without
limitation, the items more particularly described in Schedule "E"
hereto;
(n) "REII Financial Statements" means, collectively, the audited
consolidated financial statements of REII for the fiscal year ended
December 31, 2004, and the unaudited consolidated financial
statements of REII for the three month period ended March 31, 2005,
true copies of which are attached as Schedule "F" hereto;
(o) "REII Goodwill" means the goodwill of the REII Business including
the right to all corporate, operating and trade names associated
with the REII Business, or any variations of such names as part of
or in connection with the REII Business, all books and records and
other information relating to the REII Business, all necessary
licenses and authorizations and any other rights used in connection
with the REII Business;
(p) "REII Insurance Policies" means the public liability insurance and
insurance against loss or damage to the REII Assets and the REII
Business as described in Schedule "G" hereto;
(q) "REII Intangible Assets" means all of the intangible assets of REII
and its subsidiaries, including, without limitation, REII Goodwill,
all trademarks, logos, copyrights, designs, and other intellectual
and industrial property of REII and its subsidiaries;
(r) "REII Inventory" means all inventory and supplies of the REII
Business as of _ April 15, 2005, as set forth in Schedule "H"
hereto;
(s) "REII Material Contracts" means the burden and benefit of and the
right, title and interest of REII and its subsidiaries in, to and
under all trade and non-trade contracts, engagements or commitments,
whether written or oral, to which REII or its subsidiaries are
entitled whereunder REII or its subsidiaries are obligated to pay or
entitled to receive the sum of $10,000 or more including, without
limitation, any pension plans, profit sharing plans, bonus plans,
loan agreements, security agreements, indemnities and guarantees,
any agreements with employees, lessees, licensees, managers,
accountants, suppliers, agents, distributors, officers, directors,
attorneys or others which cannot be terminated without liability on
not more than one month's notice, and those contracts listed in
Schedule "I" hereto; and
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(t) "Shares" shall have the meaning set forth in the Recitals.
Any other terms defined within the text of this Agreement will have the
meanings so ascribed to them.
1.2 Captions and Section Numbers. The headings and section references in this
Agreement are for convenience of reference only and do not form a part of this
Agreement and are not intended to interpret, define or limit the scope, extent
or intent of this Agreement or any provision thereof.
1.3 Section References and Schedules. Any reference to a particular "Article",
"section", "paragraph", "clause" or other subdivision is to the particular
Article, section, clause or other subdivision of this Agreement and any
reference to a Schedule by letter will mean the appropriate Schedule attached to
this Agreement and by such reference the appropriate Schedule is incorporated
into and made part of this Agreement.
1.4 Severability of Clauses. If any part of this Agreement is declared or held
to be invalid for any reason, such invalidity will not affect the validity of
the remainder which will continue in full force and effect and be construed as
if this Agreement had been executed without the invalid portion, and it is
hereby declared the intention of the parties that this Agreement would have been
executed without reference to any portion which may, for any reason, be
hereafter declared or held to be invalid.
ARTICLE 2
PURCHASE AND SALE
2.1 Transfer of Shares. Upon the terms and subject to the conditions of this
Agreement, at the Closing Sellers shall sell, assign, transfer and convey to the
Buyer, and the Buyer shall purchase and accept from the Sellers, all of the
Shares as set forth on Exhibit A, free and clear of all encumbrances, liens,
charges and claims.
2.2 Purchase Price; Payment. The purchase price for the Shares is Four Hundred
Thousand Dollars ($400,000) (the "Purchase Price") and shall be paid by wire
transfer of immediately available funds or bank or certified check in accordance
with Exhibit A.
ARTICLE 3
SELLERS' AND REII'S REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties. The Company and the Sellers jointly and
severally represent and warrant in all material respects to the Buyer, with the
intent that the Buyer will rely thereon in entering into this Agreement and in
approving and completing the transactions contemplated hereby, that:
The Sellers
(a) Power and Capacity. Each Seller has the power, authority and
capacity to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement constitutes each
Seller's valid, legal and binding obligation and is enforceable
against such Seller in accordance with its terms, subject, however,
as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general principles of equity,
regardless of whether such enforceability is considered in equity or
at law;
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REII - Corporate Status and Capacity
(b) Incorporation. REII is a corporation duly incorporated and validly
subsisting under the laws of the State of Delaware, and is in good
standing with the office of the Secretary of State for the State of
Delaware;
(c) Carrying on Business. REII does not currently conduct business,
except for the actual operations of the corporation which are
carried on in the State of Florida and does not carry on any other
material business activity in any other jurisdictions. REII is duly
authorized to carry on such business in the State of Florida. The
nature of the REII Business does not require REII to register or
otherwise be qualified to carry on business in any other
jurisdictions;
(d) Corporate Capacity. REII has the corporate power, capacity and
authority to own the REII Assets;
(e) Reporting Status; Listing. REII is required to file current reports
with the Securities and Exchange Commission pursuant to section
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"),
REII Common Shares are quoted on the National Association of
Securities Dealers, Inc.'s Over-the-Counter Bulletin Board System
(the "OTC Bulletin Board"). Except as set forth on Schedule 3.1(e)
hereto, REII has filed all reports required to be filed by it under
the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the Closing Date (or such
shorter period as the REII was required by law to file such
material) (the foregoing materials being collectively referred to
herein as the "SEC Documents") and, while not having filed all such
SEC Documents prior to the expiration of any extension(s), is
nevertheless current with respect to its Exchange Act filing
requirements. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the
Securities Act of 1933 (the "Securities Act") and the Exchange Act
and the rules and regulations of the Commission promulgated
thereunder, as applicable, and none of such Documents, when filed,
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in
order to make the statement therein, in light of the circumstances
under which they were made, not misleading. All material agreements
to which REII is a party or to which the property or assets of REII
are subject have been appropriately filed as exhibits to the SEC
Documents as and to the extent required under the Exchange Act. The
financial statements of REII included in the SEC Documents comply in
all material respects with applicable accounting requirement and the
rules and regulations of the Commission with respect thereto as in
effect at the time of filing, were prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto, or, in the case of unaudited
statements as permitted by Form 10-Q of the Commission), and fairly
present in all material respects (subject in the case of unaudited
statements, to normal, recurring audit adjustments) the financial
position of REII as at the Closing Date and the results of its
operations and cash flows for the periods then ended. REII's Common
Stock is listed on the OTC Bulletin Board and, except as set forth
on Schedule 3.1(e), REII is not aware of any facts which would make
REII's Common Stock ineligible for quotation on the OTC Bulletin
Board;
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REII - Capitalization
(f) Authorized Capital. The authorized capital of REII consists of
20,000,000 REII Common Shares, $0.001 par value, of which 4,655,310
REII Common Shares are presently issued and outstanding;
(g) No Option. No person, firm or corporation has any agreement, warrant
or option or any right capable of becoming an agreement or option
for the acquisition of REII Common Shares or for the purchase,
subscription or issuance of any of the unissued shares in the
capital of REII;
REII - Records and Financial Statements
(h) Charter Documents. The charter documents of REII have not been
altered since its incorporation, except as filed in the record books
of REII;
(i) Corporate Minute Books. The corporate minute books of REII and its
subsidiaries are complete and each of the minutes contained therein
accurately reflect the actions that were taken at a duly called and
held meeting or by consent without a meeting. All actions by REII
and its subsidiaries which required director or shareholder approval
are reflected on the corporate minute books of REII and its
subsidiaries. REII and its subsidiaries are not in violation or
breach of, or in default with respect to, any term of their
respective Certificates of Incorporation (or other charter
documents) or by-laws.
(j) [INTENTIONALLY OMITTED];
(k) REII Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of REII or its subsidiaries
which are not disclosed in Schedule "A" hereto or reflected in the
REII Financial Statements except those incurred in the ordinary
course of business since the date of the said schedule and the REII
Financial Statements, and neither REII nor its subsidiaries have
guaranteed or agreed to guarantee any debt, liability or other
obligation of any person, firm or corporation. Without limiting the
generality of the foregoing, all accounts payable and liabilities of
REII and its subsidiaries as of April 15, 2005, are described in
Schedule "A" hereto;
(l) REII Accounts Receivable. All the REII Accounts Receivable result
from bona fide business transactions and services actually rendered
without, to the knowledge and belief of REII, any claim by the
obligor for set-off or counterclaim;
(m) REII Bank Accounts. All of the REII Bank Accounts, their location,
numbers and the authorized signatories thereto are as set forth in
Schedule "C" hereto;
(n) No Debt to Related Parties. Except as disclosed in Schedule "D"
hereto, neither REII nor its subsidiaries are, and on Closing will
not be, materially indebted to any affiliate, director or officer of
REII except accounts payable on account of bona fide business
transactions of REII incurred in normal course of the REII Business,
including employment agreements, none of which are more than 30 days
in arrears;
(o) No Related Party Debt to REII. No director or officer or affiliate
of REII is now indebted to or under any financial obligation to REII
or its subsidiaries on any account whatsoever, except for advances
on account of travel and other expenses not exceeding $5,000 in
total;
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(p) No Dividends. Except as set forth on Schedule 3.1(p), no dividends
or other distributions on any shares in the capital of REII have
been made, declared or authorized since the date of REII Financial
Statements;
(q) No Payments. Except as set forth on Schedule 3.1(p), no payments of
any kind have been made or authorized since the date of the REII
Financial Statements to or on behalf of officers, directors,
shareholders or employees of REII or its subsidiaries or under any
management agreements with REII or its subsidiaries, except payments
made in the ordinary course of business and at the regular rates of
salary or other remuneration payable to them;
(r) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans
affecting REII or its subsidiaries;
(s) No Adverse Events. Since the date of the REII Financial Statements
(i) there has not been any material adverse change in the
financial position or condition of REII, its subsidiaries, its
liabilities or the REII Assets or any damage, loss or other
change in circumstances materially affecting REII, the REII
Business or the REII Assets or REII's right to carry on the
REII Business, other than changes in the ordinary course of
business,
(ii) there has not been any damage, destruction, loss or other
event (whether or not covered by insurance) materially and
adversely affecting REII, its subsidiaries, the REII Business
or the REII Assets,
(iii) there has not been any material increase in the compensation
payable or to become payable by REII to any of REII's
officers, employees or agents or any bonus, payment or
arrangement made to or with any of them,
(iv) the REII Business has been and continues to be carried on in
the ordinary course,
(v) REII has not waived or surrendered any right of material
value,
(vi) Neither REII nor its subsidiaries have discharged or satisfied
or paid any lien or encumbrance or obligation or liability
other than current liabilities in the ordinary course of
business, and
(vii) no capital expenditures in excess of $10,000 individually or
$30,000 in total have been authorized or made.
REII - Income Tax Matters
(t) Tax Returns. All tax returns and reports of REII and its
subsidiaries required by law to be filed have been filed and are
true, complete and correct, and any taxes payable in accordance with
any return filed by REII and its subsidiaries or in accordance with
any notice of assessment or reassessment issued by any taxing
authority have been so paid;
(u) Current Taxes. Adequate provisions have been made for taxes payable
for the current period for which tax returns are not yet required to
be filed and there are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the filing of any
tax return by, or payment of, any tax, governmental charge or
deficiency by REII or its subsidiaries. REII is not aware of any
contingent tax liabilities or any grounds which would prompt a
reassessment including aggressive treatment of income and expenses
in filing earlier tax returns;
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REII - Applicable Laws and Legal Matters
(v) Licenses. REII and its subsidiaries hold all licenses and permits as
may be requisite for carrying on the REII Business in the manner in
which it has heretofore been carried on, which licenses and permits
have been maintained and continue to be in good standing except
where the failure to obtain or maintain such licenses or permits
would not have a material adverse effect on the REII Business;
(w) Applicable Laws. Neither REII nor its subsidiaries have been charged
with or received notice of breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which they are subject or
which apply to them the violation of which would have a material
adverse effect on the REII Business (greater than $2,500), and to
REII's knowledge, neither REII nor its subsidiaries are in breach of
any laws, ordinances, statutes, regulations, bylaws, orders or
decrees the contravention of which would result in a material
adverse impact on the REII Business;
(x) Pending or Threatened Litigation. There is no material (greater than
$2,500) litigation or administrative or governmental proceeding
pending or, to Sellers' or REII's knowledge, threatened against or
relating to REII, its subsidiaries, the REII Business, or any of the
REII Assets nor does REII have any knowledge of any deliberate act
or omission of REII or its subsidiaries that would form any material
basis for any such action or proceeding;
(y) No Bankruptcy. Neither REII nor its subsidiaries have made any
voluntary assignment or proposal under applicable laws relating to
insolvency and bankruptcy and no bankruptcy petition has been filed
or presented against REII or its subsidiaries and no order has been
made or a resolution passed for the winding-up, dissolution or
liquidation of REII or its subsidiaries;
(z) Labor Matters. Neither REII nor its subsidiaries are party to any
collective agreement relating to the REII Business with any labor
union or other association of employees and no part of the REII
Business has been certified as a unit appropriate for collective
bargaining or, to the knowledge of REII, has made any attempt in
that regard;
(aa) Finder's Fees. Neither REII nor its subsidiaries are party to any
agreement which provides for the payment of finder's fees, brokerage
fees, commissions or other fees or amounts which are or may become
payable to any third party in connection with the execution and
delivery of this Agreement and the transactions contemplated herein;
Execution and Performance of Agreement
(bb) Authorization and Enforceability. The completion of the transactions
contemplated hereby, have been duly and validly authorized by all
necessary corporate action on the part of REII;
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(cc) No Violation or Breach. The execution and performance of this
Agreement will not:
(i) violate the charter documents of REII or result in any breach
of, or default under, any loan agreement, mortgage, deed of
trust, or any other agreement to which REII or its
subsidiaries are party,
(ii) give any person any right to terminate or cancel any agreement
including, without limitation, the REII Material Contracts, or
any right or rights enjoyed by REII or its subsidiaries,
(iii) result in any alteration of REII's or its subsidiaries'
obligations under any agreement to which REII or its
subsidiaries are party including, without limitation, the REII
Material Contracts,
(iv) result in the creation or imposition of any lien, encumbrance
or restriction of any nature whatsoever in favor of a third
party upon or against the REII Assets,
(v) result in the imposition of any tax liability to REII or its
subsidiaries relating to the REII Assets, or
(vi) violate any court order or decree to which either REII or its
subsidiaries are subject;
REII Assets - Ownership and Condition
(dd) Business Assets. The REII Assets comprise all of the property and
assets of the REII Business, and no other person, firm or
corporation owns any assets used by REII or its subsidiaries in
operating the REII Business, whether under a lease, rental agreement
or other arrangement, other than as disclosed in Schedules "E" or
"H" hereto;
(ee) Title. REII or its subsidiaries are the legal and beneficial owner
of the REII Assets, free and clear of all mortgages, liens, charges,
pledges, security interests, encumbrances or other claims
whatsoever, save and except as disclosed in Schedules "E" or "H"
hereto;
(ff) No Option. No person, firm or corporation has any agreement or
option or a right capable of becoming an agreement for the purchase
of any of the REII Assets;
(gg) REII Insurance Policies. REII and its subsidiaries maintain the
public liability insurance and insurance against loss or damage to
the REII Assets and the REII Business as described in Schedule "G"
hereto;
(hh) REII Material Contracts. The REII Material Contracts listed in
Schedule "I" constitute all of the material contracts of REII and
its subsidiaries;
(ii) No Default. There has not been any default in any material
obligation of REII or any other party to be performed under any of
the REII Material Contracts, each of which is in good standing and
in full force and effect and unamended (except as disclosed in
Schedule "I" hereto), and REII is not aware of any default in the
obligations of any other party to any of the REII Material
Contracts;
(jj) No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances
on termination of employment of any employee of REII or its
subsidiaries. Neither REII nor its subsidiaries are obliged to pay
benefits or share profits with any employee after termination of
employment except as required by law;
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REII Assets - REII Equipment
(kk) REII Equipment. The REII Equipment has been maintained in a manner
consistent with that of a reasonably prudent owner and such
equipment is in good working condition;
REII Assets - REII Goodwill and Other Assets
(ll) REII Goodwill. REII and its subsidiaries do not carry on the REII
Business under any other business or trade names. REII does not have
any knowledge of any infringement by REII or its subsidiaries of any
patent, trademarks, copyright or trade secret;
REII Business
(mm) Maintenance of Business. Since the date of the REII Financial
Statements, REII and its subsidiaries have not entered into any
material agreement or commitment except in the ordinary course and
except as disclosed herein;
(nn) Subsidiaries. REII does not own any subsidiaries and does not
otherwise own, directly or indirectly, any shares or interest in any
other corporation, partnership, joint venture or firm; and
REII - Shares
(oo) Shares. The Shares when delivered to the Buyer shall be validly
issued and outstanding as fully paid and non-assessable shares and
the Shares shall be transferable upon the books of REII, in all
cases subject to the provisions and restrictions of all applicable
securities laws.
3.2 Survival. The representations and warranties of the Sellers contained herein
will be true at and as of the date hereof in all material respects.
Notwithstanding the completion of the transactions contemplated hereby, the
waiver of any condition contained herein (unless such waiver expressly releases
a party from any such representation or warranty) or any investigation made by
the Buyer, the representations and warranties of the Sellers shall survive the
Closing and be effective for a period of eighteen (18) months from the date
hereof.
3.3 Indemnity. The Sellers agree to indemnify and save harmless the Buyer from
and against any and all claims, demands, actions, suits, proceedings,
assessments, judgments, damages, costs, losses and expenses, including any
payment made in good faith in settlement of any claim (subject to the right of
the Sellers to defend any such claim), resulting from the breach by them of any
representation or warranty made under this Agreement or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by REII to the Buyer hereunder (collectively,
"Losses"). Notwithstanding the preceding: (i) in no event shall Sellers
indemnify or hold harmless Buyer until and unless the aggregate Losses
indemnifiable hereunder incurred by Buyer exceed $50,000; and (ii) in no event
shall either Seller be required to indemnify or hold harmless Buyer for an
amount in excess of the Purchase Price pursuant to this Section 3.3. The
indemnification and hold harmless provisions contained in this Section 3.3 is
the sole and exclusive mechanism for recovery of any Losses incurred by Buyer or
any party affiliated with Buyer.
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3.4 Release of Sellers. Effective upon the Closing, the Company does release and
waive, any and all claims, demands, causes of action, obligations, damages, or
liabilities the Company has or in the future may have against either Seller or
their respective agents, attorneys, assigns, heirs, executors and/or
administrators, related in any way to either Seller's status as an officer,
director, employee, consultant or advisor of the Company. This release also
includes, but is not limited to, any and all claims under any federal, state, or
local law, regulation, or ordinance and/or claims under contract, and any claims
under tort or common law and any claims for attorneys' fees that exist or may
exist as of the date of the signing of this Agreement (whether known or
unknown).
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE BUYER
4.1 Representations and Warranties. The Buyer represents and warrants in all
material respects to REII, with the intent that it will rely thereon in entering
into this Agreement and in approving and completing the transactions
contemplated hereby, that:
(a) Power and Capacity. Buyer has the power, authority and capacity to
enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement constitutes Buyer's valid, legal
and binding obligation and is enforceable against it in accordance
with its terms, subject, however, as to enforcement, to bankruptcy,
insolvency, fraudulent transfer, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general principles of equity, regardless of whether such
enforceability is considered in equity or at law;
(b) No Conflict. Neither the execution and delivery of this Agreement by
Buyer, nor compliance with any of the provisions hereof, nor the
consummation of the transactions contemplated hereby, will: (a)
result in a default, or give rise to any right of termination,
cancellation or acceleration, under any term, condition or provision
of any contract or other instrument or obligation to which Buyer is
a party or by which its assets may be bound; or (b) violate any
order, writ, injunction or decree applicable to Buyer, or any of its
properties or assets.
(c) Legal Proceedings, Etc. There is no legal, equitable, administrative
or arbitration action, suit, proceeding or known investigation
pending or threatened against or affecting Buyer. There is no
judgment, decree, injunction, rule or order of any court,
governmental department, commission, agency, instrumentality or
arbitrator outstanding against Buyer and there is no basis for any
action, suit, proceeding or investigation against Buyer.
(d) Investment Purpose. Buyer is purchasing the Shares for its own
account, for investment purposes only, and without the intent to
distribute such Shares. Buyer understands that the Shares may not be
offered or sold except pursuant to an effective registration
statement under the Securities Act or pursuant to an available
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and in accordance with applicable
state securities laws. Buyer understands that the Shares are
"restricted securities" within the meaning of Rule 144(3) of the
Securities Act and may not be resold publicly under Rule 144 until
certain holding period and other requirements are met.
4.2 Survival. The representations and warranties of the Buyer contained herein
will be true at and as of Closing in all material respects as though such
representations and warranties were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by the Sellers, the
representations and warranties of the Buyer shall survive the Closing and be
effective for a period of eighteen (18) months from the date hereof.
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4.3 Indemnity. The Buyer agrees to indemnify and save harmless the Sellers and
REII from and against any and all claims, demands, actions, suits, proceedings,
assessments, judgments, damages, costs, losses and expenses, including any
payment made in good faith in settlement of any claim (subject to the right of
the Buyer to defend any such claim), resulting from the breach by any of them of
any representation or warranty of such party made under this Agreement or from
any misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by the Buyer hereunder.
ARTICLE 5
FURTHER COVENANTS
5.1 Legend. The Buyer agrees to the imprinting of the following legend on any
certificates representing the Shares:
"THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
THESE SECURITIES ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE
144(3) OF THE SECURITIES ACT AND MAY NOT BE RESOLD PUBLICLY UNDER RULE 144
UNTIL CERTAIN HOLDING PERIOD REQUIREMENTS ARE MET."
5.2 Expenses of the Parties. Except as otherwise expressly provided in this
Agreement, all expenses involved in the preparation, negotiation, authorization
and consummation of this Agreement and the transactions contemplated hereby,
including all fees and expenses of agents, representatives, counsel and
accountants, shall be borne solely by the party who shall have incurred the
same, and no other party shall have any responsibility with respect thereto.
5.3 Reporting. After the Closing, the Buyer shall take all reasonably required
actions to ensure the fulfillment of the filing obligations of REII under the
Exchange Act in connection with the transactions contemplated herein.
5.4 Further Assurances. Each party shall cooperate with the other, take such
further action and execute and deliver such further documents as may be
reasonably requested by any other party in order to carry out the terms and
purposes of this Agreement.
ARTICLE 6
CONDITIONS PRECEDENT
6.1 Conditions Precedent in favor of the Sellers. The Sellers' obligations to
carry out the transactions contemplated hereby are subject to the fulfillment of
each of the following conditions precedent on or before the Closing:
(a) all documents or copies of documents required to be executed and
delivered to the Sellers hereunder will have been so executed and
delivered;
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(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by the Buyer at or prior to the Closing
will have been complied with or performed; and
(c) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject
matter hereof, if any.
6.2 Waiver by the Sellers. The conditions precedent set out in the preceding
section are inserted for the exclusive benefit of the Sellers and any such
condition may be waived in whole or in part by the Sellers at or prior to
Closing by delivering to the Buyer a written waiver to that effect signed by the
Sellers. In the event that the conditions precedent set out in the preceding
section are not satisfied on or before the Closing, the Sellers shall be
released from all obligations under this Agreement.
6.3 Conditions Precedent in Favor of the Buyer. The obligation of the Buyer to
carry out the transactions contemplated hereby is subject to the fulfillment of
each of the following conditions precedent on or before the Closing:
(a) all documents or copies of documents required to be executed and
delivered to the Buyer hereunder will have been so executed and
delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by the Sellers or REII at or prior to the
Closing will have been complied with or performed;
(c) The Sellers will have delivered the Shares along with medallion
guaranteed stock powers to the Buyer at the Closing;
(d) title to the Shares will be free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other claims
whatsoever;
(e) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject
matter hereof, if any;
(f) the satisfaction of all liabilities of REII on or prior to the
Closing Date;
(g) subject to Schedule 6.3(g), REII and the Sellers shall be current in
their respective filing obligations with the Securities and Exchange
Commission;
6.4 Waiver by the Buyer. The conditions precedent set out in the preceding
section are inserted for the exclusive benefit of the Buyer and any such
condition may be waived in whole or in part by the Buyer at or prior to the
Closing by delivering to the Sellers a written waiver to that effect signed by
the Buyer. In the event that the conditions precedent set out in the preceding
section are not satisfied on or before the Closing the Buyer shall be released
from all obligations under this Agreement.
6.5 Closing Date. Notwithstanding any provision herein to the contrary, the
parties hereto agree that the Closing shall occur on or before April 29, 2005
and that time is of the essence with respect to such date.
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6.6 Confidentiality Notwithstanding any provision herein to the contrary, the
parties hereto agree that the existence and terms of this Agreement are
confidential and that if this Agreement is terminated pursuant to the preceding
section the parties agree to return to one another any and all financial,
technical and business documents delivered to the other party or parties in
connection with the negotiation and execution of this Agreement and shall keep
the terms of this Agreement and all information and documents received from the
Buyer and REII and the contents thereof confidential and not utilize nor reveal
or release same, provided, however, that REII will be required to issue news
releases regarding the execution and consummation of this Agreement and file a
Current Report on Form 8-K with the Securities and Exchange Commission
respecting the proposed transaction contemplated hereby together with such other
documents as are required to maintain the currency of REII's filings with the
Securities and Exchange Commission, subject to the review and approval of the
Buyer, not to be unreasonably withheld, of any and all copy and/or documents
drafted by REII.
ARTICLE 7
CLOSING
7.1 Closing. The sale of the Shares and the other transactions contemplated by
this Agreement will be closed at the Place of Closing in accordance with the
closing procedure set out in this Article.
7.2 Closing Deliveries of the Buyer. On or before the Closing, the Buyer will
deliver or cause to be delivered to the Sellers:
(a) this Agreement, duly executed by the Buyer;
(b) the Purchase Price
(c) all reasonable consents or approvals required to be obtained by the
Buyer for the purposes of completing the transaction contemplated
herein and preserving and maintaining the interests of the Buyer;
and
(d) such other documents as REII may reasonably require to give effect
to the terms and intention of this Agreement.
7.3 Closing Deliveries of the Sellers. On or before the Closing, the Sellers
shall deliver or cause to be delivered to the Buyer:
(a) this Agreement, duly executed by the Sellers;
(b) share certificates representing the Shares, along with medallion
guaranteed stock powers;
(c) resignations of all of the officers of REII as of the Closing Date;
(d) a certified copy of a resolution of the directors of REII dated as
of the Closing Date appointing the nominees of the Buyer as officers
of the Buyer;
(e) an undated resolution of the directors of REII appointing the
nominee of the Buyer listed below in Article 8 to the board of
directors of REII;
(f) undated resignation of Una Xxxxxxxx as a director of REII;
(g) resignations of all directors other than Una Xxxxxxxx as directors
of REII dated as of the Closing Date;
(h) all reasonable consents or approvals required to be obtained by the
Buyer for the purposes of completing the transaction contemplated
herein and preserving and maintaining the interests of the Buyer;
and
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(i) such other documents as the Buyer may reasonably require to give
effect to the terms and intention of this Agreement.
ARTICLE 8
POST-CLOSING MATTERS
Forthwith after the Closing, the Buyer and the Sellers agree to use all
their respective best efforts to:
(a) file with the Securities and Exchange Commission a report on Form
14f1 disclosing the change in control of REII and, 10 days after
such filing, date the resolutions appointing to the board of
directors of REII Xxxxxxxxx Xxxxx and Xxxxxx Xxxxxx, and forthwith
date and accept the resignation of Una Xxxxxxxx as a director of
REII;
(b) file a Form 8-K with the Securities and Exchange Commission
disclosing the terms of this Agreement;
(c) file reports on Forms 13D and 3 with the Securities and Exchange
Commission disclosing the acquisition of the Shares by the Buyer;
and
(d) take such steps are required to change the name of REII to "ESHEL
Enterprises Inc." or such similar name as may be acceptable to the
board of directors of REII.
ARTICLE 9
GENERAL PROVISIONS
9.1 Arbitration. The parties hereto shall attempt to resolve any dispute,
controversy, difference or claim arising out of or relating to this Agreement by
negotiation in good faith. If such good negotiation fails to resolve such
dispute, controversy, difference or claim within fifteen (15) days after any
party delivers to any other party a notice of its intent to submit such matter
to arbitration, then any party to such dispute, controversy, difference or claim
may submit such matter to arbitration in Xxxxxxx County, Florida.
9.2 Notice. Any notice required or permitted to be given by any party will be
deemed to be given when in writing and delivered to the address for notice of
the intended recipient by personal delivery, prepaid single certified or
registered mail, or telecopier. Any notice delivered by mail shall be deemed to
have been received on the fourth business day after and excluding the date of
mailing, except in the event of a disruption in regular postal service in which
event such notice shall be deemed to be delivered on the actual date of receipt.
Any notice delivered personally or by telecopier shall be deemed to have been
received on the actual date of delivery.
9.3 Addresses for Service. The address for service of notice of each of the
parties hereto is as follows:
(a) the Sellers:
Una Xxxxxxxx
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
with a copy to: XXXXXX, XXXXXXX & XXXXX LLP
0000 Xxxxxx xxx Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
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(b) the Buyer:
Xxxxxx Xxxxxx
Xxxxxx Xxxxxxxx 00
Xxxxxxxxx, Xxxxxx
with a copy to: SICHENZIA XXXX XXXXXXXX XXXXXXX LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
9.4 Change of Address. Any party may, by notice to the other parties change its
address for notice to some other address in North America and will so change its
address for notice whenever the existing address or notice ceases to be adequate
for delivery by hand. A post office box may not be used as an address for
service.
9.5 Amendment. This Agreement may be amended only by a writing executed by each
of the parties hereto.
9.6 Entire Agreement. The provisions contained herein constitute the entire
agreement among the Buyer and the Sellers respecting the subject matter hereof
and supersede all previous communications, representations and agreements,
whether verbal or written, among the Buyer and the Sellers with respect to the
subject matter hereof.
9.7 Enurement. This Agreement will enure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns.
9.9 Assignment. This Agreement is not assignable without the prior written
consent of the parties hereto.
9.10 Counterparts. This Agreement may be executed in counterparts, each of which
when executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by telecopier will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.
9.11 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida applicable to agreements made
and to be performed entirely within such State. The parties agree to be subject
to the jurisdiction and venue of the state and federal courts located in Xxxxxxx
County, Florida.
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IN WITNESS WHEREOF the parties have executed this Agreement effective as
of the day and year first above written.
The Sellers:
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Una X. Xxxxxxxx
For herself and as the Executrix of
the Estate of Xxxxxxxx X. Xxxxxxxx, Xx.
---------------------------------------
Xxxxx Xxxxxxxx
The Company:
REII Incorporated
By:
------------------------------------
Name:
Title:
The Buyer:
Livorno Investments Ltd.
By:
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Name:
Title:
