Exhibit 10.1
Barbados
December 2003
Asset Sale Agreement
This AGREEMENT is entered into as of the day of December 1, 2003 (the
"Agreement"), between Royal Caribbean Hotels Limited ("Seller") and Caribbean
American Health Resorts (Barbados) Inc. ("Purchaser"), and the terms,
conditions, provisions and agreements contained herein represent the final
understandings and agreements between the Seller and Purchaser and supersede all
prior understandings and agreements whether written or oral.
Recitals
WHEREAS, the Seller is the legal, equitable and beneficial owner of certain
assets of hotel properties consisting of:
Part 1
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All that land situate in the district called Hastings in the parish of Xxxxxx
Church in this island Barbados containing by estimation 2,549.17 square meters
which area represents the metric equivalent of 27,439 square feet as delineated
and shown on a plan certified on the 17th day of February, 1966, by Xxxxxx X.
Went, land surveyor abutting and Abounding towards the West on a public road
called Marine Garden Gap toward the North and East on the lands of places called
respectively "Westwood" and "Margate now or late the property of W. E. Blades
and towards the South on the public road known as Hastings Road or however else
the same may Abut or Abound and Together with the building as thereon Known and
forming part of Regency Cove Hotel.
Part 2
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All that land also situate in the district called Hastings in the said parish of
Xxxxxx Church in the island Containing by estimation 933.77 square metres which
area represents the metric of 10,051 square feet Abutting and bounding towards
the East on land now or late of X.X. Xxxxx towards the south on the sea shore
towards the west on Hastings Rocks and towards the North on the public Road
called Hastings Road or however else the same may abut and abound together with
the buildings thereon known as and forming part of Regency Cove Hotel.
WHEREAS, the Seller desires to sell certain assets set out herein and
Purchaser desires to purchase these said assets as described in this Agreement,
all pursuant to the terms and conditions hereinafter set forth;
In consideration of the premises and the mutual promises contained herein,
and other good and reasonable consideration, the parties hereto hereby agree as
follows:
ARTICLE 1
SALE AND PURCHASE OF ASSETS
1.1 Sale of Assets at the Closing. Subject to the terms and conditions set
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forth in this Agreement and on the basis of and in reliance upon the
representations, warranties, obligations and agreements set forth in this
Agreement, the Seller hereby agrees to sell to Purchaser and Purchaser hereby
agree to purchase from the Seller, the assets that have been specified in this
agreement. Closing shall occur on or before 30 days from the execution of this
agreement.
1.2 Consideration. The consideration for the sale and purchase of the
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Covered Assets is the agreement by the Purchaser to provide, or cause to be
provided, a total of $5.0 million dollars (U.S.), comprised of 2,500,000 shares
of Vital Health Technologies, Inc. common stock valued at $4.0 million dollars
U.S. and $1.0 million dollars (U.S.) in cash. Shares of the Purchaser's common
stock (restricted) will be held and delivered at closing. As additional
consideration, the Purchaser agrees that within ninety days (90) days from the
date hereof, the Purchaser will secure the release of the Seller from all
personal liability for obligations of the Seller related to the asset sale.
Seller represents and warrants that attached hereto as Schedule A is a true and
correct list of all obligations of the Seller any for which the Seller has
personal liability. In the event that the Seller has not been released from such
personal liability within the time specified, and provided further that the
Purchaser does not have a binding agreement that would result in the release of
the Seller within thirty (30) days from the end of such period (e.g., a loan
commitment that would pay in full all indebtedness which Seller has guaranteed),
then, in such event, the Covered Assets shall revert to the Seller.
ARTICLE 2
CLOSING
2.1 Obligations of the Seller and Purchaser. The Seller and Purchaser
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hereby agrees to the following:
(a) The Purchaser shall issue and deliver certificate(s) representing the
Seller's Ownership Interest at closing. The Purchaser shall complete a
due diligence review as specified in ARTICLE 4 item 4.2 prior to
closing. In the event Seller does not satisfy the due diligence
requirements of the Purchaser, this Agreement shall be cancelled
(b) The Seller certifies that all authorizations, consents, approvals and
waivers or other action required to be obtained by the Seller in
connection with the execution, delivery and performance of this
Agreement and the consummation of all agreements and transactions
contemplated by this Agreement have been obtained;
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to Purchaser to enter into this Agreement and to
consummate the transactions contemplated herein, the Seller hereby represents
and warrants to Purchaser and agrees, as follows:
3.1 Organizations and Good Standing. The Seller is a limited liability
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company duly organized, existing and in good standing under the laws of
Barbados. The Seller has full corporate power and authority to own, lease and
operate its properties and conduct its business, and is duly qualified to
transact business and is in good standing in every jurisdiction in which the
business conducted by it makes such qualification necessary.
3.2 Authority Relative to this Agreement. The execution, delivery and
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performance of this Agreement by the Seller, has been duly authorized and
approved by all necessary actions by it and neither the execution nor the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby or thereby, nor compliance with or fulfillment of the terms
and provisions of this Agreement, will conflict with or result in a breach of
the terms, conditions or provisions of or constitute a default under (a) the
Seller's Articles of Organization or Operating Agreement,
(b) any law or administrative regulation applicable to the Seller or any of
their respective properties, or (c) any mortgage, judgment, order, award, decree
to which the Seller is a party or by which the Seller is bound, or give any
party with rights under any such indenture, agreement, mortgage, judgment,
order, award, decree or other instrument or restriction the right to terminate,
modify or otherwise change the rights or obligations of the Seller under such
indenture, agreement, mortgage, decree or other instrument or restriction; and,
no authorization, approval or consent of, or notice to or filing with any
governmental department, commission, bureau or agency or other public body or
authority is or will be required for the execution, delivery or performance of
this Agreement by the Seller or for the consummation by the Seller of the
transactions contemplated hereby or thereby. The Company and the Seller have
full power and authority to do and perform all acts and things required to be
done by such party under this Agreement. All corporate acts and other
proceedings required to be taken by or on the part of the Seller to authorize it
to carry out this Agreement and such other agreements and instruments as are
contemplated hereby and the transactions contemplated hereby and thereby have
been duly and properly taken or will be duly and properly taken prior to the
Closing. This Agreement constitutes the legal, valid and binding obligations of
the Seller and the Seller and will be enforceable against such party in
accordance with their respective terms.
3.3 Material Changes. The Seller has not (i) made any material change in
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its business or properties; (ii) sold or otherwise disposed of any of its real
property or leases, or entered into any renewals or extensions of existing
leases or entered into any new leases; (iii) entered into any contract, license,
franchise or commitment other than in the ordinary course of business
(consistent with its past practice), or made any capital expenditure or
commitment therefore in excess of $5,000.00, or waived any right; (iv) altered
or revised its procedures, methods or practices; (v) removed, or permitted to be
removed, from any building, facility or real property, any machinery, equipment,
fixture, vehicle or other personal property or parts thereof, except in the
ordinary course of business (consistent with its past practice).
3.4 Titles to Property; Absence of Liens and Encumbrances. Except as set
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forth in Schedule A , the Seller has good and marketable title to, or, valid and
subsisting leasehold interests in, all of its properties and assets, tangible
and intangible, free and clear of all liens, mortgages, security interests,
claims, charges and encumbrances, except for liens for current taxes or
assessments not yet due and payable.
3.5 Hazardous Waste. There is no substance or material defined or
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designated as hazardous or toxic waste, material, substance, or other similar
term, by any local environmental statute, regulation or ordinance currently in
effect, on, about, or in any of the real property owned by the Seller or in
which the Seller has any leasehold interest.
3.6 Utilities. All water, sewer, gas, electric, telephone and drainage
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facilities and all other utilities required by law or for the normal use and
operation of the real property owned by the Seller are installed to the property
lines of such real property and are connected pursuant to valid permits.
3.7 Inventories. Inventories of the Seller consist of items of quality and
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quantity usable or saleable in the ordinary course of the business and are or
will be saleable at values at least equal to the book value amounts thereof; the
value of all items of obsolete materials and of materials of below standard
quality has been written down to realizable market value or adequate reserves
have been provided therefore; and the values at which such inventories are
carried reflect the normal inventory valuation policy of such company.
3.8 Equipment. The fixtures, equipment, and operating assets of the Seller
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are suitable for the uses for which intended and are in good operating condition
and repair and free from any defects, except such minor defects as do not
substantially interfere with the continued use thereof in the conduct of normal
operations, ordinary wear and tear excepted. Since the date of last financial
statement received by Purchaser, the Seller has continued to maintain its
equipment in accordance with its past practices in such regard.
3.9 Compliance with Applicable Law. The Seller is not in violation of or
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alleged to be in violation of, or has received notice of any alleged violation
of or any citation for noncompliance with any applicable regulation, ordinance,
statute, order, law, or rule promulgated by governmental authorities relating to
employment, zoning, environmental matters relating to the operations, practices,
products, properties or assets of such Seller; and there is no such violation;
and all machines, equipment, furniture, fixtures, tools and buildings and other
structures owned or used by each such company conform with all applicable laws,
ordinances, codes and regulations.
3.10 Litigation. Except as set forth in Schedule B, there is no lawsuit,
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against, by or affecting the Seller which if decided adversely against the
Company would have an adverse effect upon the assets or business of the Seller,
in any court, or before any governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, or before any arbitrator of any
kind. The Seller is not in default with respect to any order, writ, injunction,
or decree of any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, affecting or relating to the
Seller.
3.11 Completeness of Schedules and Exhibits. The schedules and exhibits
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attached hereto, where provided by or on behalf of the Seller, completely and
correctly present the information required by this Agreement to be set forth
therein.
3.12 Broker's Fees. No person, firm, corporation or other entity is
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entitled by reason of any act or omission of the Seller to any broker's or
finder's fee, commission, or other similar compensation with respect to the
execution and delivery of this Agreement or any related agreement, or with
respect to the consummation of the transactions contemplated herein.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to the Seller to enter into this Agreement and to
consummate the transactions contemplated herein, Purchaser hereby represents and
warrants to the Seller and agrees, as follows:
4.1 Broker's Fees. No person, firm, corporation or other entity is entitled
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by reason of any act or omission of Purchaser to any broker's or finder's fee,
commission, or other similar compensation with respect to the execution and
delivery of this Agreement or any related agreement, or with respect to the
consummation of the transactions contemplated herein.
4.2 Purchaser's Completion of Due Diligence. Purchaser will have until
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closing to acknowledge to Seller that it has completed its due diligence in
reviewing the materials furnished by the Seller as reflected by the schedules
attached to this Agreement. Based upon the satisfactory review and approval of
the materials furnished by Seller, Purchaser will deliver certificate(s)
representing Seller's ownership.
ARTICLE 5
INDEMNIFICATION
5.1 The Seller's Indemnification. The Seller hereby agrees to indemnify and
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hold harmless Purchaser and any of its officers, directors, agents, and
employees, and any of Purchaser's parents or subsidiaries, (each such person,
its successors and assigns, is referred to herein as an "Indemnified
Purchaser"), at all times from and after the date of this Agreement, against and
in respect of the following:
(a) Any and all liabilities of the Seller or claims against it of any
nature, whether accrued, absolute, contingent or otherwise (i) existing at the
date hereof, to the extent not reflected in Purchasers due diligence;
(b) Any loss, claim, liability, expense or other damage incurred by any
Indemnified Purchaser caused by, resulting from or arising out of any failure on
the part of the Seller to perform any covenant in this Agreement or any exhibit,
annex, schedule or other instrument or certificate delivered pursuant hereto or
any breach of warranty or any inaccurate or erroneous representation made by or
on behalf of the Seller in this Agreement or in any exhibit, annex, schedule or
other instrument or certificate delivered pursuant hereto; and
(c) Any and all actions, suits, proceedings, demands, assessments,
judgments, costs and legal and other expenses, including attorneys' fees,
incidental to any of the foregoing.
5.2 Purchaser's Indemnification. Purchaser hereby indemnifies and holds
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harmless the Seller (such person, its successors and assigns, is referred to
herein as an "Indemnified Seller"), at all times from and after the date of this
Agreement, against and in respect of the following:
(a) Any loss, claim, liability, expense or other damage incurred by any
Indemnified Seller caused by, resulting from or arising out of any failure on
Purchaser's part to perform any covenant in this Agreement or any exhibit,
annex, schedule or other instrument or certificate delivered pursuant hereto or
any breach of warranty or any inaccurate or erroneous representation made by or
on behalf of Purchaser in this Agreement or in any exhibit, annex, schedule or
other instrument or certificate delivered pursuant hereto; and
(b) Any and all actions, suits, proceedings, demands, assessments,
judgments, costs and legal and other expenses, including attorneys' fees,
incidental to any of the foregoing.
5.3 Third Party Claims. If a claim by a third party is made against any of
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the indemnified parties, and if such indemnified party intends to seek indemnity
with respect thereto under this Article 5, such indemnified party shall promptly
notify Purchaser or the Seller, as the case may be, of such claim. The
indemnifying party shall have thirty (30) days after receipt of the
above-mentioned notice to undertake, conduct and control, through counsel of its
own choosing (subject to the consent of the indemnified party, such consent not
to be unreasonably withheld) and at its expense, the settlement or defense
therefore, and the indemnified party shall cooperate with it in connection
therewith; provided that: (i) the indemnifying party shall not thereby permit to
exist any lien, encumbrance or other adverse charge upon any asset of any
indemnified party, (ii) the indemnifying party shall permit the indemnified
party to participate in such settlement or defense through counsel chosen by the
indemnified party, provided that the fees and expenses of such counsel shall be
borne by the indemnified party, and (iii) the indemnifying party shall agree
promptly to reimburse the indemnified party for the full amount of any loss
resulting from such claim and all related expense incurred by the indemnified
party within the limits of this Article 5. So long as the indemnifying party is
reasonably contesting any such claim in good faith, the indemnified party shall
not pay or settle any such claim. Notwithstanding the foregoing, the indemnified
party shall have the right to pay or settle any such claim, provided that in
such event the indemnified party shall waive any right to indemnity therefore by
the indemnifying party. If the indemnifying party does not notify the
indemnified party within thirty (30) days after receipt of the indemnified
party's notice of a claim of indemnity hereunder that it elects to undertake the
defense thereof, the indemnified party shall have the right to contest, settle
or compromise the claim in the exercise of its exclusive discretion at the
expense of the indemnifying party. The indemnified party shall, however, notify
the indemnifying party of any compromise or settlement of any such claim.
Nothing contained in this Section 5.3 shall be construed as a limitation on the
right of any party to indemnification under Sections 5.1, 5.2 or 5.4 herein.
5.4 Tax Liabilities. In addition to the other indemnifications given in
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this Article 5, (i) the Seller agrees to indemnify and hold harmless the
Indemnified Purchaser against and in respect of any Property Transfer Tax and
Stamp Duties, whether or not due, arising out of the sale of the assets.
ARTICLE 6
6 Related Parties. Xxxxxx Xxxxxx is the C.E.O and majority shareholder of
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Caribbean American Health Resorts Inc, which is the parent of Caribbean American
Health Resorts (Barbados) Inc. and is also a majority shareholder of the Seller.
However, this transaction is deemed to be an arms length transaction supported
by bona fide appraisals and valuations of the assets agreed to be sold and
purchase using current market values.
ARTICLE 7
MISCELLANEOUS
6.1 Notices. Any notice, request or other communication hereunder shall be
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given in writing and shall be served either personally or delivered by mail,
postage prepaid and addressed to the following addresses:
If to Purchaser:
Caribbean American Health Resorts (Barbados), Inc.
Regency Cove Hotel
Hastings Main Road
Hastings, Xxxxxx Church
Barbados
to Seller:
Royal Caribbean Hotels Limited
Regency Cove Hotel
Hastings Main Road
Hastings, Xxxxxx Church
Barbados
Notices shall be deemed received at the earlier of actual receipt or three (3)
business days following mailing.
6.2 Survival of Representations and Warranties. All representations,
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warranties and covenants contained in this Agreement or any statement, deed,
certificate, instrument, schedule, exhibit or other document delivered pursuant
hereto or otherwise in connection herewith--each and every one of which
representations, warranties and covenants is strictly relied upon--shall survive
the Closing and continue in full force and effect thereafter.
6.3 Entire Agreement. This Agreement, including the exhibits attached
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hereto and other documents referred to herein, contains the entire understanding
of the parties hereto in respect of its subject matter. There are no
restrictions, promises, warranties, covenants, or undertakings, other than those
expressly set forth herein and therein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
6.4 Expenses. Each of the parties will pay its own fees and expenses,
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including its own counsel fees and accountants' fees incurred in connection with
this Agreement or any transaction contemplated by this Agreement.
6.5 Amendments; Waiver. This Agreement may not be amended, supplemented,
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cancelled or discharged except by written instrument executed by the party
affected thereby. No failure to exercise and no delay in exercising, any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
the exercise of any other right, power or privilege (hereunder or otherwise). No
waiver of any breach of any agreement hereunder or any other agreement shall be
deemed to be a waiver of any preceding or succeeding breach of the same or any
other agreement. No extension of time of performance of any obligations or other
acts hereunder or under any other agreement shall be deemed to be an extension
of the time for performance of any other obligations or any other acts. The
rights and remedies of the parties under this Agreement, and the exhibits
hereto, are in addition to all other rights and remedies, at law or in equity,
that they may have against the other.
6.6 Time. Time is of the essence in the performance of the parties'
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respective obligations herein contained.
6.7 Severability. Any provision of this Agreement, which is prohibited or
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unenforceable in any jurisdiction, shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
6.8 Successors and Assigns. This Agreement shall be binding upon and inure
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to the benefit of Purchaser and the Seller and its successors and assigns;
provided, however, that the Seller shall not directly or indirectly transfer or
assign any of its rights hereunder in whole or in part without the written
consent of Purchaser, and any such transfer or assignment without said consent
shall be void, ab initio.
6.9 Counterparts. This Agreement may be executed in one or more
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counterparts, each of whom shall be deemed an original, but all such
counterparts together shall constitute but one and the same Agreement.
6.10 Recitals, Schedules and Exhibits. The Recitals, Schedules and Exhibits
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to this Agreement are incorporated herein and, by this reference, made a part
hereof as if fully set forth at length herein.
6.11 Section Headings. The section headings used herein are inserted for
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reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
6.12 Governing Law. This Agreement shall be governed by and construed in
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accordance with the internal laws (and not the law of conflicts) of the island
of Barbados.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
binding and effective as of the day and year first above written.
SELLER
Royal Caribbean Hotels Limited.
By /s/ Xxxxxxxx Xxxxx
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Name Xxxxxxxx Xxxxx
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Title Managing Director
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Date 12/01/03
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PURCHASER
Caribbean American Health Resorts (Barbados) Inc.
By /s/ Xxxxxx Xxxxxx
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Name Xxxxxx Xxxxxx
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Title CEO
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Date 12/01/03
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LIST OF SCHEDULES (To be prepared by Seller and attached)
Financial Valuation (ss.1.2)
Documents of Ownership
1. Purchase Contract
2. Title Policies
3. Escrow Instruction
Necessary authorizations, approvals, or consents (ss.3.2)
Real Property (ss.3.8[a])
Equipment (ss.3.8[b])
Certain Leases and Contracts (ss.3.8[e])
Litigation (ss.3.8[h])
Permits, Licenses, Etc. (ss.3.8[I])
Liens and Encumbrances (ss.3.9)
Tax Matters (ss.3.24)
