SHARE PURCHASE AGREEMENT
BANKNET Kft
and
DYNAMIC I-T, INC.
This Agreement ("Agreement"), dated as of January 28, 2000, among
BANKNET Kft ("BKN"), an Hungarian Corporation, DYNAMIC I-T, INC. ("DYN"), a
Colorado Corporation, and the shareholder of BANKNET Kft., which is SATNET, LTD.
("BKN Shareholder"), who will join this agreement by execution.
WITNESSETH:
A. WHEREAS, BNK and DYN are corporations duly organized under the
laws of the Nation of Hungary and the State of Colorado,
respectively.
B. The BKN Shareholder intends to purchase 30,400,000 shares of
common stock of DYN for $3,900,000.
C. The BKN Shareholder is the owner of all of the issued and
outstanding common stock of BKN.
D. WHEREAS, the parties hereto wish to enter into this Agreement,
pursuant to the provisions of the Colorado Statutes.
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE 1
The Consideration
1.1 (a) Subject to the conditions set forth herein the transactions
contemplated by this Agreement shall be completed at a closing
("Closing") on a closing date ("Closing Date") which shall be on or
before February 28th, 2000.
(b) The BKN Shareholder hereby agrees to pay $3,900,000 for
30,400,000 shares of stock of DYN which shall be paid by the transfer
to DYN of 100% of the shares in BKN representing a transfer of net
assets having an audited value of $3,100,000 as of 30th of June 1999,
a payment of $200,000 shall be paid as set forth in Article "6.2"
hereof and the balance, $600,000, shall be paid over the course of
the nine months commencing upon the Closing Date.
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On the Closing Date, all of the documents to be furnished to DYN
and BKN, including the documents to be furnished pursuant to Article
VII of this Agreement, shall be delivered to M.A. Xxxxxxx, to be held
in escrow until completion of all requirements of the Agreement or
the date of termination of this Agreement, whichever first occurs,
and thereafter shall be promptly distributed to the parties as their
interests may appear.
1.2 At the Closing Date, BKN shall become a wholly owned subsidiary of DYN.
ARTICLE II
Delivery of Shares
2.1 All shares of outstanding capital stock of BKN shall be delivered by the BKN
Shareholder to DYN at closing. DYN shall deliver 30,400,000 shares to the BKN
Shareholder at Closing.
2.2 BKN represents that no outstanding options or warrants for its unissued
shares exist. DYN represents that 1,800,000 shares represents the total
outstanding shares.
ARTICLE III
Representations, Warranties
and Covenants of Banknet Kft and The BKN Shareholder Limited
No representations or warranties are made by any director, officer,
employee or shareholder of BKN as individuals, except as and to the extent
stated in this Agreement or in a separate written statement (the "BKN Disclosure
Statement"), if any. BKN hereby represents,, warrants and covenants to DYN, as
follows:
3.1 BKN is a corporation duly organized, validly existing and in good
standing under the laws of the Hungary, and has the corporate power
and authority to own or lease its properties and to carry on its
business as it is now being conducted. The Articles of Incorporation
and Bylaws of BKN are complete and accurate, and the minute books of
BKN contain a record which is complete and accurate in all material
respects, of all meetings, and all corporate actions of the
shareholders and board of directors of BKN.
3.2 The aggregate number of shares of capital stock of BKN is one (1)
share of common stock with a par value of 376,960,000 HUF.
3.3 BKN and The BKN Shareholder Limited have complete and unrestricted
power to enter into and, upon the appropriate approvals are required
by law, to consummate the transactions contemplated by this Agreement.
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3.4 Neither the making of nor the compliance with the terms and provisions
of this Agreement and consummation of the transactions contemplated
herein by BKN and the BKN Shareholder Limited will conflict with or
result in a breach or violation of the Articles of Incorporation or
Bylaws of BKN or the BKN Shareholder Limited.
3.5 The execution, delivery and performance of this Agreement has been
duly authorized and approved by the BKN and the BKN Shareholder
Limited Board of Directors.
3.6 BKN will deliver to DYN before the Closing, current consolidated
audited financial statements of BKN, prepared by Ernst & Young as at
31-12-98 and as at 30 June 1999 made up to I.A.S. standards. All such
statements, herein sometimes called "BKN Financial Statements", are
complete and correct in all material respects and, together with the
notes to those financial statements, present fairly the financial
position and results of operations of BKN for the periods included.
3.7 Since the dates of the BKN Financial Statements, there have not been
any material adverse changes in the business or condition, financial
or otherwise, of BKN.
3.8 There are no legal proceedings or regulatory proceedings involving
material claims pending, or to the knowledge of the officers of BKN,
threatened against BKN or affecting any of its assets or properties,
and BKN is not in any material breach or violation of or default by
BKN under any contract or instrument to which BKN is a party, and no
material breach or violation of or default by BKN under any contract
or other instrument to which BKN is a party or by which it or any of
its properties may be bound or affected, or under its respective
Articles of Incorporation or Bylaws, nor is there any court or
regulatory order pending, applicable to BKN.
3.9 All liability of BKN has been properly provided for and is adequate to
comply with all regulatory requirements regarding same.
3.10 The representations and warranties of BKN shall be true and correct as
of the date hereof and as of the Closing Date.
3.11 No representation or warranty by BKN or the BKN Shareholder Limited in
this Agreement, the BKN Disclosure Statement or any certificate
delivered pursuant hereto contains any untrue statement of a material
fact or omits to state any material fact necessary to make such
representation or warranty not misleading.
3.12 a. Liens. Except as disclosed in the BKN financials, no one other than
the BankNet Shareholder has any right, title, interest, lien, claim,
security interest, restriction or encumbrance in, on or to BKN's
assets.
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b. No Undisclosed Liabilities. BKN does not have any material liabilities or
obligations, including, without limitation, contingent liabilities for the
performance of any obligation except for liabilities or obligations which are
(i) disclosed or fully provided for in BKN's Financial Statements, (ii) set
forth in this Agreement including any Exhibit or Schedule to this Agreement and
(iii) liabilities not in excess of USD $10,000 in the aggregate.
ARTICLE IV
Representations, Warranties and Covenants of
Dynamic I-T, Inc.
No representations or warranties are made by any director, officer,
employee or shareholder of DYN as individuals, except as and to the extent
stated in this Agreement or in a separate written statement.
DYN hereby represents, warrants and covenants to BKN, except as stated
in the DYN Disclosure Statement, as follows:
4.1 DYN is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado, and has the corporate power
and authority to own or lease its properties and to carry on its business as it
is now being conducted. The Articles of Incorporation and Bylaws of DYN, copies
of which have been delivered to BKN, are complete and accurate, and the minute
books of DYN contain a record, which is complete and accurate in all material
respects, of all meetings, and all corporate actions of the shareholders and
Board of Directors of DYN.
4.2 The aggregate number of shares which DYN is authorized to issue is
100,000,000 shares of common stock with a par value of $.0001 per share, of
which 1,800,000 shares of such common stock will be issued and outstanding,
fully paid and non-assessable, at closing under this agreement. DYN has no
outstanding options, warrants or other rights to purchase, or subscribe to, or
securities convertible into or exchangeable for any shares of capital stock. No
preferred stock of DYN is outstanding.
4.3 DYN has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement.
4.4 Neither the making of nor the compliance with the terms and
provisions of this Agreement and consummation of the transactions contemplated
herein by DYN will conflict with or result in a breach or violation of the
Articles of Incorporation or Bylaws of DYN.
4.5 The execution of this Agreement has been duly authorized and
approved by the DYN's Board of Directors.
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4.6 DYN has delivered to BKN financial statements of DYN dated March 31,
1998. All such statements, herein sometimes called "DYN Financial Statements"
are (and will be) complete and correct in all material respects and, together
with the notes to these financial statements, present fairly the financial
position and results of operations of DYN of the periods indicated. All
statements of DYN will have been prepared in accordance with generally accepted
accounting principles.
4.7 Since the dates of the DYN Financial Statements, there have not been
any material adverse changes in the business or condition, financial or
otherwise, of DYN. DYN does not have any material liabilities or obligations,
secured or unsecured except as shown on updated financials (whether accrued,
absolute, contingent or otherwise).
4.8 There are no pending legal proceedings involving DYN, there are no
legal proceedings or regulatory proceedings involving material claims pending,
or, to the knowledge of the officers of DYN, threatened against DYN or affecting
any of its assets or properties, and DYN is not in any material breach or
violation of or default under any contract or instrument to which DYN is a
party, and no event has occurred which with the lapse of time or action by a
third party could result in a material breach or violation of or default by DYN
under any contract or other instrument to which DYN is a party or by which they
or any of their respective properties may be bound or affected, or under their
respective Articles of Incorporation or Bylaws, nor is there any court or
regulatory order pending, applicable to DYN.
4.9 a. DYN does not have any material liabilities or obligations,
including, without limitation, contingent liabilities for the performance of any
obligation, except for (i) liabilities or obligations which are disclosed or
fully provided for in DYN's Financial Statements, (ii) liabilities or
obligations disclosed in this Agreement or in any Exhibit or Schedule to this
Agreement, and (iii) liabilities not in excess of $10,000 in the aggregate. DYN
agrees to request that the relevant State and Federal environmental authorities
confirm that no action has been taken or contemplated against DYN.
b DYN has not received notice of any violation of or investigation
relating to any environmental or pollution law, regulation, or ordinance with
respect to assets now or previously owned or operated by DYN that hs not been
fully and finally resolved; (ii) all permits, licenses and other authorizations
which are required under United States, federal, state, provincial and local
laws with respect to pollution or protection of the environment ("Environmental
Laws") relating to assets now owned or operated by DYN, including Enviornmental
Laws relating to actual or threatened emissions, discharges or releases of
pollutants, contaminants or hazardous or toxic materials or wastes
("Pollutants"), have been obtained and are effective, and, with respect to
assets previously owned or operated by DYN or any third-party properties to
which any Pollutants generated by DYN were sent or released that could give rise
on the part of DYN to liability under any Environmental Laws, claims by third
parties under Environmental Laws or under common law or the occurrence of costs
to avoid any such
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liability or claim; and (iv) to the knowledge of DYN, all operators of DYN's
assets are in compliance with all terms and conditions of such Environmental
Laws, permits, licenses and authorizations, and are also in compliance with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in such laws or
contained in any regulation, code, plan, order, decree, judgment, notice or
demand letter issued, entered, promulgated, or approved thereunder, relating to
DYN's assets.
4.10 DYN is not a party to any contract performable in the future.
4.11 The representations and warranties of DYN shall be true and correct
as of the date hereof and as of the Closing Date.
4.12 DYN has made available at its office, to BKN, all of its corporate
books and records for review. DYN will also deliver to BKN on or before the
Closing Date any reports relating to the financial and business condition of DYN
which occur after the date of this Agreement and any other reports sent
generally to its shareholders after the date of this Agreement.
4.13 DYN has no employee benefit plan in effect at this time.
4.14 No representation or warranty by DYN in this Agreement, the DYN
Disclosure Statement or any certificate delivered pursuant hereto contains any
untrue statement of a material fact or omits to state any material fact
necessary to make such representation or warranty not misleading.
4.15 DYN agrees that all rights to indemnification now existing in favor
of the employees, agents, directors or officers of BKN and its subsidiaries, as
provided in the Articles of Incorporation or Bylaws or otherwise in effect on
the date hereof shall survive the transactions contemplated hereby in accordance
with their terms, and DYN expressly assumes such indemnification obligations of
BKN.
ARTICLE V
Obligations of the Parties Pending the Closing Date
5.1 At all times prior to the Closing Date during regular business
hours, each party will permit the other to examine its books and records and the
books and records of its subsidiaries and will furnish copies thereof on
request. It is recognized that, during the performance of this Agreement, each
party may provide the other parties with information which is confidential or
proprietary information. During the term of this Agreement, and for four years
following the termination of this Agreement, the recipient of such information
shall protect such information from disclosure to persons, other than members of
its own or affiliated organizations and its professional advisers, in the
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same manner as it protects its own confidential or proprietary information from
unauthorized disclosure, and not use such information to the competitive
detriment of the disclosing party. In addition, if this Agreement is terminated
for any reason, each party shall promptly return or cause to be returned all
documents or other written records of such confidential or proprietary
information, together with all copies of such writings and, in addition, shall
either furnish or cause to be furnished, or shall destroy, or shall maintain
with such standard of care as is exercised with respect to its own confidential
or proprietary information, all copies of all documents or other written records
developed or prepared by such party on the basis of such confidential or
proprietary information. No information shall be considered confidential or
proprietary if it is (a) information already in the possession of the party to
whom disclosure is made, (b) information acquired by the party to whom the
disclosure is made from other sources, or (c) information in the public domain
or generally available to interested persons or which at a later date passes
into the public domain or becomes available to the party to whom disclosure is
made without any wrongdoing by the party to whom the disclosure is made.
5.2 DYN and BKN shall promptly provide each other with information as to
any significant developments in the performance of this Agreement, and shall
promptly notify the other if it discovers that any of its representations,
warranties and covenants contained in this Agreement or in any document
delivered in connection with this Agreement was not true and correct in all
material respects or became untrue or incorrect in any material respect.
5.3 All parties to this Agreement shall take all such action as may be
reasonably necessary and appropriate and shall use their best efforts in order
to consummate the transactions contemplated hereby as promptly as practicable.
ARTICLE VI
Procedure for Closing
6.1 At the Closing Date, delivery shall be effected with common stock
certificates of BKN being delivered to DYN for 100% of the BKN capital stock and
delivery of the 30,400,000 common shares of DYN paid for and subscribed.
6.2 At Closing, $200,000 shall be disbursed to the Creditors listed in
Exhibit A hereto in settlement of the debts as indicated.
ARTICLE VII
Conditions Precedent to the
Consummation of the Exchange
The following are conditions precedent to the consummation of the
Agreement on or before the Closing Date:
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7.1 Each Party shall have performed and complied with all of its
respective obligations hereunder which are to be complied with or performed on
or before the Closing Date and each Party shall provide the other at the Closing
with a certificate to the effect that such party has performed each of the acts
and undertakings required to be performed by it on or before the Closing Date
pursuant to the terms of this Agreement.
7.2 This Agreement and the transactions contemplated herein shall have
been duly and validly authorized, approved and adopted, at a meeting of the
Board of Directors of each Party hereto duly and properly called for such
purpose in accordance with the applicable laws.
7.3 No action, suit or proceeding shall have been instituted or shall
have been threatened before any court or other governmental body or by any
public authority to restrain, enjoin or prohibit the transactions contemplated
herein, or which might subject any of the parties hereto or their directors or
officers to any material liability, fine, forfeiture or penalty on the grounds
that the transactions contemplated hereby, the parties hereto or their directors
or officers, have violated any applicable law or regulation or have otherwise
acted improperly in connection with the transactions contemplated hereby, and
the parties hereto have been advised by counsel that, in the opinion of such
counsel, such action, suit or proceeding raises substantial questions of law or
fact which could reasonably be decided adversely to any party hereto or its
directors or officers.
7.4 All actions, proceedings, instruments and documents required to
carry out this Agreement and the transactions contemplated hereby and the form
and substance of all legal proceedings and related matters shall have been
approved by counsel for BKN and DYN.
7.5 The representations and warranties made by BKN and DYN in this
Agreement shall be true as though such representations and warranties had been
made or given on and as of the Closing Date, except to the extent that such
representations and warranties may be untrue on and as of the Closing Date
because of (1) changes caused by transactions suggested or approved in writing
by all Parties or (2) events or changes (which shall not, in the aggregate, have
materially and adversely affected the business, assets, or financial condition
of DYN or BKN during or arising after the date of this Agreement) if approved by
the parties to this Agreement.
7.6 BKN and The BKN Shareholder Limited shall have furnished DYN with a
certified copy of a resolution or resolutions duly adopted by the shareholders
and Board of Directors of The BKN Shareholder Limited approving this Agreement
and the transactions contemplated by it;
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7.7 DYN shall furnish The BKN Shareholder Limited with a certified copy
of a resolution or resolutions duly adopted by the Board of Directors of DYN,
approving this Agreement and the transactions contemplated by it.
7.8 At closing, the Shareholder of BKN will produce the Audited Accounts
of BKN as at 30 June, 1999, audited by Ernst & Young showing a net asset value
of (U.S.) $3,114,054.
ARTICLE VIII
Termination and Abandonment
8.1 Anything contained in this Agreement to the contrary
notwithstanding, the Agreement may be terminated and abandoned at any time
(whether before or after the approval and adoption thereof by the shareholders
of BKN) prior to the Closing Date:
(a) By mutual consent of the Parties;
(b) By either Party, if any condition set forth in Article VII
relating to the other party has not been met or has not been
waived;
(c) By either Party, if any suit, action or other proceeding shall be
pending or threatened by the federal or a state government before
any court or governmental agency, in which it is sought to
restrain, prohibit or otherwise affect the consummation of the
transactions contemplated hereby;
(d) By any party, if there is discovered any material error,
misstatement or omission in the representations and warranties of
another party;
(e) By any party if the Agreement Closing Date is not within 30 days
from the date hereof; or
8.2 Any of the terms or conditions of this Agreement may be waived at
any time by the party which is entitled to the benefit thereof, by action taken
by its Board of Directors provided; however, that such action shall be taken
only if, in the judgment of the Board of Directors taking the action, such
waiver will not have a materially adverse effect on the benefits intended under
this Agreement to the party waiving such term or condition.
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ARTICLE IX
Termination of Representation and
Warranties and Certain Agreements
9.1 The respective representations and warranties of the parties hereto
shall expire with, and be terminated and extinguished by consummation of the
Agreement; provided, however, that the covenants and agreements of the parties
hereto shall survive in accordance with their terms.
ARTICLE X
Miscellaneous
10.1 This Agreement embodies the entire agreement between the parties,
and there have been and are no agreements, representations or warranties among
the parties other than those set forth herein or those provided for herein.
10.2 To facilitate the execution of this Agreement, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one instrument. Counterparts shall include the execution of the
Agreement by The BKN Shareholder, Ltd.
10.3 All parties to this Agreement agree that if it becomes necessary or
desirable to execute further instruments or to make such other assurances as are
deemed necessary, the party requested to do so will use its best efforts to
provide such executed instruments or do all things necessary or proper to carry
out the purpose of his Agreement.
10.4 This Agreement may be amended upon approval of the Board of
Directors of each party provided that the shares issuable hereunder shall not be
amended without approval of the requisite shareholders of BKN.
10.5 Any notices, requests, or other communications required or
permitted hereunder shall be delivered personally or sent by overnight courier
service, fees prepaid, addressed as follows:
To Banknet Kft:
00 Xx. Xxxxxx Xxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
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To Satnet Limited:
C/o Complex Holdings, Ltd.
00 Xx. Xxxxxx Xxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
To Dynamic I-T, Inc.
C/o Xxxxxxx X. Xxxxxxx
00000 Xxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxx. 00000
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.
10.6 No press release or public statement will be issued relating to the
transactions contemplated by this Agreement without prior approval of the
Parties, except for 8K's required by SEC Regulations. However, DYN may issue at
any time any press release or other public statement it believes on the advice
of its counsel it is obligated to issue to avoid liability under the law
relating to disclosures, but the party issuing such press release or public
statement shall make a reasonable effort to give the other party prior notice of
and opportunity to participate in such release or statement.
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IN WITNESS WHEREOF, the parties have set their hands and seals this 28th day of
January, 2000.
Banknet Kft
By: _______________________________
Its:_______________________________
Dynamic I-T, Inc.
By:________________________________
Its:_______________________________
Satnet Limited
By:________________________________
Its:_______________________________
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EXHIBIT A
PAYMENTS DUE AT CLOSING
FIRST TRUST CORP $50,000
XXXXXXX XXXXXXX $25,000
XXXX XXXXXXX $25,000
XXXX XXXXX $25,000*
V. VENKATESH $25,000*
COKE XXXXXX $25,000
XXXXXXX XXXXX $25,000
TOTAL $200,000
* Assigned $50,000 balance due 31st March 2000
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