EXHIBIT 10.3
SHARE PURCHASE AGREEMENT
THIS AGREEMENT is dated for reference the 31St day of March, 1999 between Lari
Acquisition Company, Inc., (the "Purchaser"), Lari Corp. ("Lari") and Stanley
Zicklin, a businessman (the Vendor).
WHEREAS:
A. There are 82 Series A shares and 18 Series B shares issued and outstanding
in the capital of Neptune Management Corp., a company incorporated under
the laws of the State of California (the "Company");
B. The Vendor is the registered and beneficial owner of the 18 Series B shares
in the capital of the Company (the "Shares');
C. The 82 Series A shares in the capital of the Company are being purchased
from Emanuel Weintraub "(Weintraub") by the Purchaser pursuant to a
purchase agreement dated March 31, 1999 (the "Series A Purchase
Agreement");
D. The Vendor shall sell the Shares to the Purchaser and the Purchaser shall
purchase the Shares from the Vendor; and
E. The Company has advised the Purchaser of the following facts:
(a) the Company is asserting a claim against the Vendor based on the
Vendor's alleged obligation under a written agreement, which the
Company contends (and the Vendor denies) obligates the Vendor to offer
to the Company the right to purchase the Shares, at a specified price
(also set forth in the said written agreement) prior to the Vendor
having the right or authority to sell the Shares to others (the
"Disputed Obligation");
(b) the Company has made demand upon the Vendor to perform the Disputed
Obligation but the Vendor has refused to comply with such demand and
has denied the applicability, enforceability and validity of the said
written agreement;
(c) the Vendor, Weintraub and the Company are currently parties in an
action pending in the Superior Court for the State of California,
County of Los Angeles, denominated L.A.S.C. No. BC 203930, pertaining
to the Disputed Obligation (the "Action");
(d) the Company and Weintraub have advised the Purchaser of the said claim
and the Action and have instructed the Purchaser not to release to the
Vendor any of the purchase price for the Shares unless and until the
conditions referred to in Subsection 6(b) herein below occur or are
otherwise satisfied; and
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(e) the Company has, in order to permit this sales transaction to take
place prior to the resolution of the Disputed Obligation agreed to
allow the Shares to be sold to the Purchaser if the purchase price for
the Shares is delivered directly to a designated, recognized and
independent escrow/disbursing agent which the Purchaser and the
Company shall establish in Los Angeles, California, which escrow shall
be governed by an escrow agreement for the benefit of the Vendor and
Weintraub.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained
in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agrees as follows:
1. PURCHASE AND SALE OF SHARES
The Vendor hereby sells and transfers to Lari through the Purchaser, and Lari
through the Purchaser hereby purchases and acquires from the Vendor, all the
Vendor's right, title, and interest in and to the Shares.
2. PURCHASE PRICE
The Purchaser hereby agrees to pay the Vendor $2,561,572.00 (the "Purchase
Price") for the Shares.
3. PAYMENT OF PURCHASE PRICE
The Purchaser will pay the Purchase Price on March 31, 1999, or such other date
as the parties may agree to in writing (the "Closing Date") as follows:
(a) the sum of $ 101,866.00 by way of a solicitors' cheque payable to City
National Bank, 400 North Roxbury Drive, Beverly Hills, CA, 90210 (the
"Escrow Agent"), in trust for the joint benefit of the Vendor, the
Purchaser, Lari and Weintraub, subject to resolution of the Disputed
Obligation;
(b) 104,852 shares of common trading stock of Lari (the "Lari Shares")
issued by Lari to the Vendor and delivered to the Escrow Agent, in
trust for the joint benefit of the Vendor, the Purchaser, Lari and
Weintraub, subject to resolution of the Disputed Obiligation; and
(c) the sum of $1,935,446.00 by way of an undivided interest to the Vendor
in a promissory note ("Note"), in the form attached as Schedule "A" to
this Agreement, delivered to the Escrow Agent, in trust for the joint
benefit of the Vendor, the Purchaser, Lari and Weintraub subject to
resolution of the Disputed Obligation.
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4. VENDOR'S DOCUMENTS DELIVERED AT CLOSING
On the Closing Date, the Vendor will deliver or cause to be delivered to the
Purchaser the share certificate representing the Shares, duly endorsed for
transfer. If the Vendor cannot locate the certificate, the Vendor shall execute
and deliver to the Purchaser an affidavit of lost certificate in form and
substance reasonably acceptable to the Purchaser.
5. VENDOR'S WARRANTIES AND REPRESENTATIONS
5.1 The Vendor represents, warrants and covenants to the Purchaser as
follows:
(a) the Vendor is the registered and beneficial owner of the Shares;
(b) the Shares are validly issued and outstanding as fully paid and
non-assessable in the capital of the Company and are free and clear of
all liens, charges and encumbrances save and except for any claims set
forth in the Action.
(c) the Vendor has good and sufficient right and authority to enter into
this Agreement and to transfer legal and beneficial title and
ownership of the Shares to the Purchaser;
(d) the Vendor has not previously entered into a binding agreement for the
sale of, or the granting of an option to purchase the Shares;
(e) subject to any claims set forth in the Action, the Vendor is not
indebted to the Company and the Company is not indebted to the Vendor;
(f) the Vendor has not relied on any representations, understandings or
other inducements not expressly set forth in this Agreement;
(g) the Vendor has been fully advised by independent legal counsel
concerning the terms and effect of this Agreement;
(h) the Vendor enters into this Agreement voluntarily, without duress or
undue influence;
(i) the Vendor has the legal capacity, power and authority to hold the
Lari Shares and the Note (collectively, the "Securities") to be owned
by him on the Closing Date;
(j) the Vendor is accepting the Securities as part of the Purchase Price
as set out in Subsection 3(b) only for investment purposes on his own
account and not for the purpose of selling the Securities in
connection with any distribution of the Securities. The Vendor
acknowledges that the Lari Shares are subject to resale restrictions
and, for this reason, shall display the legend, substantially in the
form as follows:
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"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH
SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH
SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO
THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT OR RULE
144 UNDER THE SECURITIES ACT, IF APPLICABLE, OR (D) IN A TRANSACTION
THAT IS OTHERWISE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS, PROVIDED THAT PRIOR TO SUCH SALE
THE CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL OF
RECOGNIZED STANDING, IN FORM AND SUBSTANCE SATISFACTORY TO IT, AS TO
THE AVAILABILITY OF AN EXEMPTION."
(k) the Vendor acknowledges that the Lari Shares to be received by the
Vendor on the Closing Date were not advertised in printed media of
general and regular paid circulation, radio or television;
(1) the Vendor is an "accredited investor" as such term is defined in Rule
501 of Regulation D promulgated by the Securities and Exchange
Commission under the Securities Act of 1933, as amended (U.S.); and
(m) the Vendor is a resident at the following address:
3503 Via Del Prado
Calabasas, CA 91302
(n) The Vendor will indemnify the Purchaser against any loss or damage
sustained by the Purchaser, directly or indirectly, by reason of a
breach of any of the warranties or representations set forth in this
Section 5. The Vendor acknowledges that the Purchaser has entered into
this Agreement relying on the warranties and representations and other
terms and conditions of this Agreement and that no information which
is now known or which may hereafter become known to the Purchaser or
its professional advisers will limit or extinguish the obligation to
indemnify hereunder.
(o) The representations, warranties, covenants and agreements contained in
the Agreement and in any certificates and documents delivered in
connection herewith will be true at and as of the Closing Date and
will survive the Closing Date, the purchase and sale contemplated
herein and any re-organization or amalgamation of any party hereto.
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6. CONDITIONS OF CLOSING
The obligation of the Purchaser and Lari to complete the sale and purchase of
the Shares is subject to the following terms and conditions for the exclusive
benefit of the Purchaser and Lari, to be fulfilled or performed at or prior to
the Closing Date or waived by the Purchaser and Lari at their sole discretion:
(a) The transactions contemplated in the Series A Purchase Agreement have
been completed and the Purchaser is the registered and beneficial
owner of the Series A shares of the Company;
(b) The Vendor has entered into an escrow agreement with the Escrow Agent
on terms and conditions which are satisfactory to the Vendor,
Weintraub, the Purchaser, Lari and the Company. The signing of such
agreement is also a condition of the Vendor's obligation to sell the
Shares as provided herein;
(c) The Vendor has executed the Certificate of Accredited Investor
attached as Schedule "B" to this Agreement; and
(d) The Vendor has executed a release agreement attached as Schedule "C"
to this Agreement. Such release (Schedule "C") shall not be valid or
binding unless and until the Vendor executes and delivers the escrow
agreement referred to in Section 6(b) above.
7. MISCELLANEOUS
7.1 This Agreement shall be governed by and construed in accordance with
the laws of the State of California. Any dispute arising out of or in
connection with this Agreement, including any question regarding its
existence, validity or termination, but not including any matter
arising out of the Action, shall be referred to and finally resolved
by arbitration under the rules of the American Arbitration Association
which rules are deemed to be incorporated by reference into this
clause. The number of arbitrators shall be one. The place of
arbitration shall be Los Angeles, California. The language of
arbitration shall be English. The parties expressly waive and forego
any right to punitive or exemplary damages unless an applicable
statute requires the award of such damages or that compensatory
damages be increased in a specified manner. This provision is not
intended to apply to any award of arbitration costs to a party to
compensate for dilatory or bad faith conduct in the arbitration
pursuant to this paragraph. The prevailing parties shall also be
entitled to an award of reasonable attorneys' fees.
7.2 The Vendor will execute and deliver all such further documents and
instruments and do all acts and things the Purchaser may reasonably
require to carry out the
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full intent and meaning of this Agreement and to assure the Purchaser
the transfer of the Shares.
7.3 This Agreement constitutes the entire agreement and understanding of
the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings of the parties with
respect to the subject matter hereof. Nothing herein shall prejudice
or otherwise affect the respective rights and claims of the Vendor and
Weintraub in or relating to the Action.
7.4 This agreement will be binding upon and inure to the benefit of, and
be enforceable by, the parties hereto and their respective permitted
successors, assigns, heirs, executors and administrators. There is no
third party beneficiary of this Agreement.
7.5 The Vendor will not assign his rights or obligations provided by this
Agreement without the prior written consent of the Purchaser. The
Purchaser will be entitled to assign any of its respective rights and
obligations provided by this Agreement without any prior consent of
the Vendors, but no such assignment shall relieve the Purchaser of its
obligations hereunder to the Vendor.
7.6 Any notice or other communication required or permitted to be given
hereunder shall be in writing and delivered or sent by telefax and, if
telefaxed, shall be deemed to have been received on the next business
day following transmittal and acknowledgment of receipt by the
recipient's telefax machine or if delivered by hand shall be deemed to
have been received at the time it is delivered. Notices addressed to
an individual shall be validly given if left on the premises indicated
below. Notice of change of address shall also be governed by this
Subsection 7.6. Notices shall be delivered or addressed as follows:
If to the Purchaser and Lari, to:
Brent Lokash
Barrister & Solicitor
1708-808 Nelson Street
Vancouver, B.C. V6Z 2H2
Fax: (604) 68l-9579
If to the Vendor:
Sandler and Rosen, LLP
1801 Avenue of the Stars, Suite 510
Los Angeles, CA 90067
Fax: (310) 277-5954
7.7 In the event that any one or more of the provisions of this Agreement
should be invalid, illegal or unenforceable in any respect, the
validity, legality and
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enforceability of the remaining provisions contained herein will not
in any way be affected or impaired thereby.
7.8 Time will be of the essence of this Agreement,
7.9 The captions and headings of the sections and the subsections in this
Agreement have been inserted as a matter of convenience and reference
only.
7.10 Whenever the singular or the masculine are used in this Agreement the
same will be deemed to include the plural or the feminine or the
corporate where the context or the parties so require.
7.11 All dollar amounts referred to in this Agreement are stated in United
States of America currency, unless otherwise expressly stated.
7.12 This Agreement may be executed in any number of counterparts, each of
which will be treated as an original but all of which, collectively,
will constitute a single instrument. This Agreement will be binding
once signed and delivered and a signature by facsimile, will be deemed
to be execution and delivery.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first hereinabove written.
LARI ACQUISITION COMPANY, INC.
Per: /s/ Suzanne Wood
---------------------------------
Authorized Signatory
LARI CORP.
Per: /s/ Suzanne Wood
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Authorized Signatory
SIGNED, SEALED AND DELIVERED by )
STANLEY ZICKLIN in the presence of: )
)
/s/ Wm. F. Tisch )
Witness )
1801 Ave. of the Stars, Suite 510 )
Los Angeles, CA 90067 )
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Address ) /s/ Stanley Zicklin
) ---------------------------------
Attorney ) STANLEY ZICKLIN
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Occupation )
