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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 19, 1997
INTERNATIONAL RESORT DEVELOPERS, INC.
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(Exact name of registrant as specified in its charter)
IDAHO 1-6110 82-0291307
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
2980 S. Rainbow Blvd., Suite 100, Las Vegas, NV 89102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 876-9329
INTERNATIONAL BASIC RESOURCES, INC.
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(Former name or former address, if changed since last report.)
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FORM 8-K
Item 2. Sale of Assets
On July 20, 1997, International Resort Developers, Inc. ("IRDP") entered
into an agreement with International Container Terminal Services, Inc.
("ICTSI"), a major Philippine corporation, pursuant to which IRDP sold its
Mexican subsidiary, Ensenada Cruiseport Village S.A. de C.V. ("Cruiseport"), to
ICTSI.
The transaction was effected through a sale by IRDP to ICTSI of 100% of
the stock of Langer Holdings, Ltd. ("Langer"), a British West Indies
corporation, whose only asset was 99.99% of the shares of Cruiseport; and the
sale by IRDP to ICTSI of the remainder of the shares of Cruiseport (namely .01%
thereof) held directly by IRDP.
After the sale IRDP continued to own its other property interests in
Mexico, namely its Campeche properties and its contractual rights to the
adjoining Granjas Los Bucaneros property, through its Mexican subsidiary,
Playas Palmeras, S.A.
The purchase price, in the sale to ICTSI, was $5,150,000; $3,950,000 of
which has been received by IRDP. The balance is to be paid, $800,000 in
January, 1999 and $400,000 in July, 1999, with the latter payment to be reduced
to the extent that Cruiseport suffers any loss as the result of certain
specified contingent liabilities. The purchase price was based on an
arms-length negotiation in which the Company secured the maximum amount it was
able to negotiate.
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Under an agreement of December 19, 1995, with the Port Authority of
Ensenada, Baja, California, Mexico ("API"), Cruiseport holds a 35-year
concession entitling it to build and operate a pier and cruiseship terminal
with a marina and marina village and associated commercial and tourist
development at the Port of Ensenada. During the two fiscal years of the Company
ended June 30, 1997, the Company's capitalized costs in regard to the Ensenada
project, for pre-development activities, inclusive of fees and salaries of
consultants, engineers and Company staff directly engaged in the planning of
the project, and pre-development site work including clearing of debris and
dredging work, amounted to approximately $2,000,000. This amount is exclusive
of the purchase price of $854,000 payable to the former owners of the
concession rights in the Port (discussed below), and is exclusive of overhead
and administrative costs which were expensed by the Company.
There is no material relationship between ICTSI on the one hand and IRDP
or any of IRDP's affiliates, any director or officer of IRDP, or any associate
of any such director or officer.
Of the sales proceeds which have been received, the Company has utilized
$1,534,200 to repay all advances made to the Company by a Mr. Hugh Downey,
together with interest owing thereon (such advances through the quarter ended
March 31, 1997 having been discussed in the Company's most recent Form 10-KSB
and Form 10- QSB), and which amount also includes a fee in consideration of the
risk assumed by Mr. Downey and his willingness to forego making demand for
repayment prior to the receipt by the Company of
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proceeds from the sale of the Ensenada conession; and the Company has utilized
approximately $955,000 to satisfy amounts owing to the owners of two
corporations who previously owned the concession rights in the Port of
Ensenada. The $955,000 payment satisfies $854,000 of principal, plus interest
thereon. It had been reported previously that $360,000 of the principal owing
to the owners of the two corporations was payable in stock of the Company.
However, it has subsequently been agreed that the entirety of the principal,
plus interest, would be paid in cash.
In a press-release issued by the Company on July 21, 1997, the Company
stated as follows:
"Patrick Magee, President of IRDP, wished ICTSI all success in developing
and operating this promising project. Although the Company will not be
receiving the ultimate fruits of a project on which it has worked hard and
made significant investment, the sale represents a solution to the
Company's search for investment capital and, in the opinion of management,
removes a disproportionate area of risk to the Company's balance sheet."
Item 7. Exhibits: Agreements between IRDP and ICTSI, dated July
19, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERNATIONAL RESORT DEVELOPERS, INC.
by /s/Patrick Magee
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Patrick Magee, President
Date: July 30, 1997
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT dated of July 19, 1997, is entered into by and
between INTERNATIONAL RESORT DEVELOPERS, INC. (formerly International Basic
Resources, Inc.), a corporation incorporated and organized under the laws of
Idaho, United States of America, represented herein by Mr. Patrick Magee,
(hereinafter referred to as "SELLER"), and ICTSI INTERNATIONAL HOLDINGS CORP. a
company incorporated under the laws of the Cayman Islands, British West Indies,
represented herein by Mr. Jorge A. Cano (hereinafter referred to as
"Purchaser").
WHEREAS SELLER is the legal and beneficial owner of 100% (ONE HUNDRED PERCENT)
of the issued share capital of LANGER HOLDINGS LTD. ("LANGER" or the "Company"),
a company incorporated and registered in the Cayman Islands, British West
Indies.
WHEREAS, LANGER has a 99.99% (ONE HUNDRED PERCENT) participation in the capital
stock of ENSENADA CRUISEPORT VILLAGE, S.A. DE C.V., a company duly incorporated
under the laws of Mexico ("ECPV"), represented by 68,099 shares of the 68,100
shares in which the capital stock of ECPV is divided,
WHEREAS on July 9, 1997, SELLER and PURCHASER entered into a Letter of Intent
regarding the terms for the negotiation of a definitive written agreement for
the acquisition by PURCHASER of 100% (ONE HUNDRED PERCENT) of the shares of
LANGER in issue on completion of the sale ("Langer Shares") from the Seller.
WHEREAS, the parties hereto wish to provide for the terms and conditions upon
which Purchaser will acquire the Langer Shares.
WHEREAS the parties hereto wish to make certain representations, warranties,
covenants and agreements in connection with such acquisition of stock and also
to prescribe various conditions to such transaction. Accordingly, and in
consideration of the representations, warranties, covenants, agreements and
conditions herein contained, the parties hereto agree as follows:
SECTION 1
1. Purchase of Stock.
1.1 Shares to be Purchased. Upon satisfaction of all conditions to the
obligations of the parties contained herein (other than such conditions as shall
have been waived in accordance with the terms hereof), Seller shall sell and
transfer to Purchaser, and Purchaser
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shall purchase and take a transfer from such Seller the closing, all legal and
beneficial interest in and to the Langer Shares free and clear of all
encumbrances Upon completion, Purchaser will own 100% of LANGER.
1.2 Purchase Price. As consideration for the Langer Shares to be purchased from
Seller pursuant to this Agreement, Purchaser will pay to Seller the amount of
US$5,150,000.00 (FIVE MILLION OWE: HUNDRED AND FIFTY THOUSAND DOLLARS OF THE
UNITED STATES OF AMERICA) in the terms and conditions set forth below.
1.3 Terms of Payment. On closing date of the Agreement (as referred to in
Section 7 of this Agreement Purchaser shall pay to Seller, by certified or
cashier's check to the order of Seller, the amount of US$3,950,000.00 (THREE
MILLION NINE HUNDRED AND FIFTY THOUSAND DOLLARS OF THE UNITED STATES OF
AMERICA), The 1,200,000.00 (ONE MILLION TWO HUNDRED THOUSAND DOLLARS OF THE
UNITED STATES OF AMERICA) outstanding balance shall be paid as follows:
A) Eighteen (18) months after the date of execution of this Agreement,
Purchaser shall pay to Seller, upon written Instructions of Sale given
at least 72 hours in advance, the amount of US$800,000.00 (EIGHT
HUNDRED THOUSAND DOLLARS OF THE UNITED STATES OF AMERICA). In order to
guarantee payment of such amount, Purchaser shall deliver a promissory
note validly executed by the maker and guarantor in the form which is
attached to this Agreement as Exhibit 1;
B) Under the terms and conditions agreed by the parties, Twenty four (24)
months after the date of execution of this Tent, Purchaser shall pay to
Seller, upon written instructions of Seller Oven at least 72 hours in
advance, the amount of US$400,000.00 (FOUR HUNDRED THOUSAND DOLLARS OF
THE UNITED STATES OF AMERICA). In order to guarantee "d payment,
Peruser Call deliver a promissory note validly examined by the maker
and guarantor in the forth which is attached to this Agreement as
Exhibit II;
SECTION 2
2. Representations and Warranties of Seller.
Seller hereby represents and warrants to Purchaser is of the date hereof as
follows:
2.1 In regard to LANGER:
(a) Corporate organization. LANGER is duly incorporated, validly existing
and in good standing under the law of Grand Cayman, Cayman Islands,
British West Indies, has full corporate power and authority to carry on
its business as it is now being
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conducted and own, lease and operate its properties and assets, is duly
qualified or licensed to do business in good standing in every
jurisdiction in which the character or location of the properties and
assets owned, leased or operated by it or the conduct of its business
requires such qualification or licensing; and has heretofore delivered
to Purchase complete and correct copies of its certificate of
incorporation, certificate of good standing, share certificates, bylaws
and registration as presently in effect.
(b) Capitalization and Share Certificates. The authorized share capital of
LANGER is U.S.$900,000.00 (NINE HUNDRED THOUSAND DOLLARS OF THE UNITED
STATES OF AMERICA), represented by 900,000 shares of a nominal or par
value of U.S.$1.00 (ONE DOLLAR OF THE UNITED STATES OF AMERICA), each,
all of which have been issued and are legally and beneficially owned by
the Seller free and clear of all encumbrances. Seller hereby represents
and warrants that no other shares whatsoever have been issued. All
issued and outstanding shares of LARGER us duly authorized, validly
issues, fully paid, nonassessable and are without, and were not issued
in violation of, preemptive rights, There are no contracts,
commitments, understandings, arrangements or restrictions by which
WAGER is bound to issue or grant an,, additional shoos or other equity
securities or any options, warrants, conversion privileges or other
rights to purchase or acquire any capital stock or other equity
securities of LANGER or any securities convertible into or exchangeable
for such shares, securities or nights.
(c) Authorization. Seller has the legal capacity to enter into and has duly
authorized, executed and delivered this Agreement, and has the capacity
to carry out the transactions contemplated herein, including without
limitation the legal capacity to execute, deliver and perform the
agreements or contracts, if any, required to be executed and delivered
by any of them as a condition to the Closing.
(d) Non-Contravention. Neither the execution, delivery and performance of
this Agreement nor the consummation of the transactions contemplated
herein will: (i) violate or be in conflict with any provision of the
certificate of incorporation or Memorandum or Articles of Association
of LANGER; or (ii) be in conflict with, or constitute a default,
however defined (or an event which, with the giving of due notice or
lapse of tinge, or both, would constitute such a default), under. or
cause or permit the acceleration of the maturity of, or give rise to
any right of termination, cancellation, imposition of fees or penalties
under, any debt, note, bond, lease, mortgage, license, obligation,
contract, commitment, franchise, permit, instrument or other agreement
or obligation to which LANGER or Seller is a party, or result in the
creation or imposition of any mortgage, pledge, lien,
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security interest, encumbrance, restriction, adverse claim or change of
any kind, upon any properties or assets of LARGER or Seller under any
debt, obligation, contract, agreement or commitment to which LARGER or
Seller is a party or by which LANGER or Seller or any of its or
Seller's assets or properties is or may be bound; or (iii) violate any
statute, treaty, law, judgment, writ, injunction, decision, decree,
order, regulation, or other similar authoritative matters of any
foreign, federal state or local governmental or quasi-governmental,
administrative, regulatory or judicial court, department, commission,
agency, board, bureau, or other authority (hereinafter sometimes
separately referred to as an "Authority" and sometimes collectively as
"Authorities") (sometimes hereinafter separately referred to as a "Law"
and sometimes collectively as "Laws").
(e) Consents and Approvals. No consent, approval, order or authorization of
or from, or registration, notification, declaration or filing with
(hereinafter sometimes separately referred to as a "Consent" and
sometimes collectively as "Consents") any individual or entity,
including without limitation any Authority, is required in connection
with the execution, delivery or performance of this Agreement by Seller
or the consummation by Seller of the transactions contemplated herein.
(f) Litigation. There is no lethal, administrative, arbitration, or other
proceeding, suit, claim or action of any nature or investigation,
review or audit of any kind (including without limitation a proceeding,
suit, claim or action, or an investigation, review or audit, involving
any environmental Law or matter), judgement, decree, decision,
injunction, writ or order pending, noticed, scheduled or, to the
knowledge of LARGER, and Seller, threatened or contemplated by or
against or involving LANGER, its assets properties or businesses or its
directors, officers, agents or employees (but only in their capacity as
such), whether at law or in equity, before or by any person or entity
or Authority or which questions or challenges the validity of this
Agreement or any action taken or to-be taken by the panics hereto
pursuant to this Agreement or in connection with the transactions
contemplated herein.
(g) Tax Returns. LANGER has duly and timely filed all tax end information
reports, returns and related documents required to be fiend by it
including, but not limited to, income tax, value added tax, asset tax,
and employment-related taxes in its jurisdiction.
(h) Contracts and Commitment; No Default. LANGER has no contract,
commitment, liability, agreement or arrangement, whether oral or
written, which (I) requires payments individually in excess of
U.S.$10,000 (TEN THOUSAND DOLLARS OF THE UNITED STATES OF
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AMERICA) annually or in excess of U.S.$50,000 (FIFTY THOUSAND DOLLARS
OF THE UNITED STATES OF AMERICA) over its term (including without
limitation periods covered by say option to extend or renew by either
party) and (2) is not terminable on thirty (30) days' or less notice
without cost or other liability.
LANGER is not subject obligation or requirement to provide Ends to or
make any investment (in the form of a loan, capital contribution or
otherwise) in any person or entity.
2.2 In regard to ECPV:
(a) Corporate organization. ECPV is duly organized, validly existing and in
good standing undo the laws of Mexico, has full corporate power and
authority to carry on its business as it is now being conducted and to
own, less end operate its properties and assets, is duly qualified or
licensed to do business in good standings in every jurisdiction in
which the character or location of the properties and assets owned,
leased or operated by it; and has heretofore delivered to Purchaser
complete and correct copies of its certificate of incorporation, share
certificates, bylaws and registration, as presently in effect.
(b) Capitalization and Share Certificates. The authorized capital stock of
ECPV is $6,810,000.00 pesos (SIX MILLION EIGHT HUNDRED AND TEN THOUSAND
MEXICAN PESOS), represented by 68,100 shares, of which LANGER is the
legitimate owner and holder of 68,099 shares, which shall be delivered
to Purchaser on closing date ("ECPV Certificates"). Other than the
single share owned as to this date by Seller, Seller hereby represents
and warrants that no other shares or certificates issued by ECPV have
been issued and/or are in possession or title of any third party. All
issued and outstanding shares of capital stock of Company are duly
authorized, validly issued, fully paid, nonassessable and are without,
and were not issued in violation of, preemptive rights There ere no
contracts, commitments, understandings, arrangements or restrictions by
which ECPV is bound to issue any additional shares of its capital stock
or other equity securities or any options, warrants, conversion
privileges or other rights to purchase or acquire any capital stock or
other equity securities of ECPV or any securities convertible into or
exchangeable for such shares, securities or rights.
(c) Non-Contravention. Neither the execution, delivery and performance of
this Agreement nor the consummation of the transactions contemplated
herein will: (i) violate or be in conflict with any provision of the
certificate of incorporation or bylaws of ECPV; or (ii) be in conflict
with, or constitute a default, however defined (or an event which,
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with the giving of due notice or lapse of time, or both, would
constitute such a default), under, or cause or permit the acceleration
of the maturity of, or give rise to any right of termination,
cancellation, imposition of fees or penalties under, any debt, note,
bond, lease, mortgage, license, obligation, contract, commitment,
franchise, permit instrument or other agreement or obligation to which
ECPV or Seller is a party, or result in the creation or imposition of
any mortgage, pledge. lien, security interest, encumbrance,
restriction, adverse claim or change of any kind, upon any properties
or assets of ECPV or Seller under any debt, obligation, contract,
agreement or commitment to which ECPV or Seller is a party or by which
ECPV or Seller or any of its or Seller's assets or properties is or may
be bound; or (iii) violate any Lava of any Authority.
(d) Disclosure. No representation or warranty by Seller in this Agreement
contains or will contain any untrue statement of material fact, or
omits or will omit to state any material fact necessary in order to
make the statements herein or therein, in light of the circumstances
under which made, not misleading as of the date of the representation
or warranty.
(e) Consents and Approvals. Other than the prior approval to be granted by
Administracion Portuaria Integral de Ensenada, S.A. de C.V. ("API")
attached hereto as Exhibit III, no Consent of or from any individual or
entity, including without limitation any Authority, is required in
connection with the execution, delivery or performance of this
Agreement by Seller or the consummation by Seller of the transactions
contemplated herein.
(f) Litigation. There is no legal, administrative, arbitration, or other
proceeding, suit, claim or action of any nature or investigation,
review or audit of any kind (including without limitation a proceeding,
suit, claim or action, or an investigation, review or audit, involving
any environmental Law or matter), judgment, decree, decision,
injunction, writ or order pending, noticed, scheduled or, to the
knowledge of ECPV and Seller, threatened or contemplated by or against
or involving ECPV, its assets, properties or businesses or its
directors, officers, agents or employees (but only in their capacity as
such), whether at law or in equity, before or by any person or entity
or Authority, or which questions or challenges the validity of this
Agreement or any action taken or to be taken by the panics hereto
pursuant to this Agreement Or in connection with the transactions
contemplated herein.
(g) Tax Returns. ECPV has duly and timely filed all tax and information
reports, returns and related documents required to be bled by each of
them including, but not limited to, income tax. value added tax, asset
tax. and employment-related taxes
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in Mexico.
(h) Insurance and Bonds. Exhibit IV contains an accurate and complete list
of all policies of fire and other casualty. general liability, theft
and other forms of all insurance owned or held by ECPV, as well as of
all bond policies posted by ECPV, specifically those required under the
Assignment of Rights Agreement entered into by ECPV and API. All
present policies are in All force and effect and all premiums with
respect thereto have been paid.
(i) Labor Matters and Benefit Plans ECPV is and has been in compliance with
all applicable Laws respecting employment and employment practices,
terms and conditions of employment and wages and hours, including
without limitation any such Lows respecting employment discrimination
and occupational safety and health requirements, and has not and is not
engaged in any unfair labor practice. ECPV does not sponsor, maintain
or contribute to, and has never sponsored, maintained, contributed to
any employee pension benefit plan. There are no pending or threatened
claims, suits or other proceedings against ECPV by present or former
employees of ECPV.
(j) Bank Accounts; Powers Or Attorney. Exhibit V sets Forth: (i) the names
of all financial institutions at which ECPV maintains accounts,
deposits, safe deposit boxes of any nature, and the names of all
individuals authorized to draw thereon or make withdrawals therefrom;
(ii) the terms and conditions thereof and any limitations or
restrictions as to use, withdrawal or otherwise; and (iii) the names of
Al individuals or entities holding general or Special powers of
attorney from Company and a Summary of the terms thereof.
(k) Contracts and Commitments; No Default. Other than the Agreement of
Rights Agreement entered into with API, ECPV has no contract,
commitment, liability, agreement or arrangement whether oral or
written, which (1) requires payments collectively in excess of
US$ 10,000.00 (TEN THOUSAND U.S. DOLLARS) annually or in excess of
US$ 50,000.00 (FIFTY THOUSAND U.S. DOLLARS) over its term (including
without limitation periods covered by any option to extend or renew by
either panty) and (Z) is not terminable on thirty (30) days or less
notice without cost or other liability.
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(l) Authorizations and other Operating Rights. ECPV possesses en permits
and other authorizations (including but not limited to environmental
authorizations) from all Authorities presently required necessary to
permit it operate its businesses in the manner in which they presently
are conducted.
(m) Compliance with Law. Except as cd forth in Exhibit Al, than are no I
outstanding and unsatisfied deficiency reports, plans of correction,
notices of noncompliance or work orders against ECPV, relating any
Authorities, and no discussions with any Authorities are scheduled or
pending.
(n) ISEFI Agreement - With regard to the agreement entered into by ECPV
with Internacional Servicios Financieros, S.A. de C.V. (LSEFI), Seller
represents and warrants that all fees due to ISEFI by ECPV will be
undertaken and paid directly by Seller to ISEFI on behalf of ECPV.
SECTION 3
3. Representations and Warranties of Purchaser
Purchaser represents and warrants to Seller as of the date hereof as follows:
(a) Corporate Organization. Purchaser is a company duly incorporated,
validly existing and in good standing under the laws of the Cayman
islands, British West Indies.
(b) Authorization. Purchaser has full corporate power and authority to
enter info this Agreement and to carry out the transactions
contemplated herein. The Board of Directors of Purchaser has taken all
action required by law, its articles or certificate of incorporation
and bylaws or otherwise to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein.
(c) Non-Contravention. Neither the execution, delivery end performance of
this Agreement nor the consummation of the transactions contemplated
herein veil: (i) violate any provision of the articles or certificates
of incorporation or bylaws of Purchaser, or (ii) violate, be in
conflict with, or constitute a default, however defined (or an event
which, with the giving of due notice or lapse of time, or both, would
constitute such a default), under, or cause or permit the acceleration
of the maturity of or give rise to, any right of termination,
cancellation, imposition of fees or penalties under, any debt, note,
bond, lease, mortgage, license, obligation, contract, commitment,
franchise, permit, instrument or other agreement or obligation to which
Purchaser is a parry or by Purchaser or any of its properties or assets
is or may be bound, or (iii) result in the creation or imposition of
any mortgage, pledge lien, security interest, encumbrance, restriction
or charge of any kind, upon any property or assets of Purchaser under
any debt, obligation, contract, agreement or commitment to which
Purchaser is 8 party or by which Purchaser or any of its assets or
properties
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is or may be bound; or (iii) to the knowledge of Purchaser violate any
Law.
(d) Disclosure. No representation or warranty by Purchaser in this
Agreement contains or Ail contain any untrue statement of material fact
or omits or will omit to state any material fact necessary in order to
make the statements herein or therein, in light of the circumstances
under which made, not misleading as of the date of the representation
or warranty.
(e) Consents and Approvals. To is required by any person or entity,
including without limitation any Authority in connection with the
execution, delivery and performance by purchaser of this Agreement, or
the consummation of the transactions contemplated herein.
SECTION 4
4. Covenants.
(a) Confidentiality. Each of the parties hereto agrees that it will not use
or permit the use of, any of the information relating to any other
party hereto furnished to it in connection with the transactions
contemplated herein ("Information") in a planner or for a purpose
detrimental to such other party or otherwise than in connection with
the transaction, and that they will not disclose, divulge, provide or
make accessible (collectively "Disclose"), or permit the Disclosure of,
any of the information to any person or entity, other than their
responsible directors, officers, employees, investment advisors,
accountants, counsel and other authorized representatives and agents,
except as may be required by judicial or administrative process or, in
the opinion of such party's regular counsel, by other requirements of
Low; provided. however, that prior to any Disclosure of any information
permitted hereunder, the disclosing party shall first obtain the
recipients' undertaking to comply with the provisions of this
subsection with respect to such information. The term "Information" IS
used herein shall not include any information relating to a party which
the party disclosing such information can show: (i) to have been in its
possession prior to its receipt from another party hereto; (ii) to be
now or to later become generally available to the public through no
fault of the disclosing party; (iii) to have been available to the
public at the time of it, receipt by the disclosing party; (iv) to have
been received separately by the disclosing any in an unrestricted
manner Tom a person entitled to disclose such information; or (v) to
have been developed independently by the disclosing party without
regard to any information received in connection with this transaction.
Each party hereto also agrees to promptly return to the party from whom
originally received all original and duplicate copies of written
materials containing information should the
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transactions contemplated herein not occur.
(b) Filings; Consents; Removal of Objections. Subject so the terms and
conditions herein provided, the parties hereto shall use their best
efforts to take or cause to be taken all actions and do or cause to be
done all things necessary, proper or advisable under applicable Laws to
consummate and make effective, as soon as reasonably practicable, the
transactions contemplated hereby, including without limitation
obtaining Al Consents of any person or entity (including API's consent
if pending). whether private or governmental, required in connection
with the consummation of the transactions contemplated herein.
(c) Conduct of LANGER's and ECPV's Business, Seller shell cause LARGER and
ECPV to carry on its businesses and operations only in the ordinary
course until closing, in the understand that during said integers
Seller and ECPV shell follow Buyer recommendations as to the operation
and activities of ECPV.
(d) Further Assurances; Cooperation; Notification. Each party hereto shall,
before, at and after Closing, execute and deliver such instruments and
take such other actions as the other party or panties, as the c&se may
be, may reasonably require in order to carry out this Agreement. At all
times from the date hereof until the Closing, each party shall promptly
notify the other in writing of the occurrence of any event which it
reasonably believes Ail or may result in a failure by such party to
satisfy the conditions specified in Article S and Article 6 hereof.
(e) Employment Contracts. Purchaser shall offer an employment contract in
ECPV to Mr. Stephen Barker and Ms. Olga Cealia Rodriguez, all current
employees in ECPV, for a minimum period of three months starting from
the date of execution of this Agreement, in the understanding that the
conditions provided in Ad, employment contracts shall not be less
favorable than those which are currently in force for the above
mentioned individuals.
SECTION 5
5. Conditions to Obligations of Purchaser.
Notwithstanding any other provision of this Agreement to the contrary, the
obligation of Purchaser to effect the transactions contemplated herein shall be
subject to the satisfaction at or prior to the Closing of each of the following
conditions:
(a) Representations and Warranties True. The representations and warranties
of Seller contained in this Agreement, shall be in all material
respects true, complete and accurate as of the
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date When made slid at and as of the Closing as though such
representations and warranties were made at and as of such
time, except for changes specifically permitted or
contemplated by this Agreement, and except insofar as the
representations and warranties relate expressly end solely to
a particular or period, in which case they shall be true and
correct in all material respects at the Closing with respect
to such date or period.
(b) Performance. Seller shall have performed and complied in all
material respects with all agreements, covenants, obligations
and conditions required by this Agreement to be performed or
complied with by Seller on or prior to the Closing.
(c) Required Approvals and Consents.
(i) All action required by law and otherwise to be taken
by the Seller to authorize the execution, delivery
and performance of this Agreement and the
consummation of the transactions contemplated hereby
shall have been duly end validly taken.
(ii) All Consents of or from all Authorities (specifically
API's consent) required hereunder to consummate the
transactions contemplated herein shall have been
delivered, made or obtained, and Purchaser shell have
received copies thereof.
(d) No Proceeding or Instigation. No suit. action, investigation
inquiry or other proceeding, by any Authority or other person
or entity shall have been instituted or threatened which
questions the validity or legality of the transactions
contemplated hereby.
(e) Certificates.
(i) The Seller shall have satisfied the Purchaser that it
shall on closing have available for delivery to the
Purchaser the ECPV Certificates
(ii) The Purchaser's attorneys in the Cayman Islands,
Messrs. Maples and Calder, shall have received from
Euro Bank Corporation ( a bank authorized to carry
on banking; business in the Cayman Islands)
confirmation in terms satisfactory to them that the
bank has custody of the Hanger Certificates and
transfers thereof in favor of the Purchaser executed
by the Seller, a certificate for 100% of the share
capital of LANGER in the name of the Purchaser, the
corporate books and records of LANGER, including the
Register of Members of LANGER showing the Purchaser
as the holder old all the issued share capital of
LANGER and signed resignations of LANGER's officers
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<PAGE> 16
and directors (the "Langer Document").
(f) Release Letters. On closing date, Purchaser shall receive copies of
written communications ("Release Letters") to its complete satisfaction,
signed by each of the former shareholders of Ensenada Nautico-Turistico,
S.A. de C.V. ("ENATUR") and Terminales Charities Nacionales, S.A. de
C.V. ("TERMANAL"), in the format attached to this Agreement as Exhibit
VII. The individuals and corporations that acted as former shareholders
of ENATUR and TERMINAL who shall each sign their respective Release
Letter are individually identified below:
- Holding Alta, S. A. de C. V., represented by Jose Carral
Escalante
- Grupo Aquascotum, S. A. de C.V., represented by Jacobo
JasquiAmiga and David Guillen Llarena
- Jacobo Jasqui Amigo
- Miguel Arroyo Ramirez
- David Lawrence Placek
SECTION 6
6. Conditions to Seller's Obligations.
Notwithstanding anything in this Agreement to the contrary, the obligation of
Seller to effect the transactions contemplated herein shall be subject to the
satisfaction at or prior to the Closing of each of the following conditions:
(a) Representations and Warranties True. The representations and warranties
of Purchaser contained in this Agreement shall be in all material
respects true, complete and accurate as of the date when made and at
and as of the Closing, as though such representations and warranties
were made at and as of such time, except for changes permitted or
contemplated in this Agreement, and except insofar as the
representations and warranties relate expressly and soled to a
particular date or period, in which case they shall be true and correct
in all material respects at the Closing with respect to such date or
period.
(b) Performance. Purchaser shall have performed and complied in all
material respects with all agreements, covenants, obligations and
conditions required by this Agreement to be performed or complied with
by Purchaser at or prior to the Closing.
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<PAGE> 17
(c) Approvals. All actions required to be taken by Purchaser to authorize
the execution, delivery and performance of this Agreement by Purchaser
and the consummation of the transactions contemplated hereby shall
have been duly and validly taken.
SECTION 7
7. Closing And Post Closing Issued.
7.1 This Agreement shall be closed on July 19, 1997 or such other date as the
parties shall agree at Ensenada, BCN., Mexico, when:
(a) The Purchaser shall deliver to the Seller a certified or Cashier's cheque
drawn on a bank approved by the Seller, in favour of the Seller in the sum
of US$3,950,000.00 (THREE MILLION NINE HUNDRED AND FIFTY THOUSAND DOLLARS
OF THE UNITED STATES OF AMERICA) and the executed Promissory Notes pursuant
to Section 1.2. above.
(b) The Seller shall:
(i) deliver into custody of the Purchaser the corporate books and records
of ECPV end the resignations of the Board and of the officers of ECPV ("the
ECPV Documents") and shall place at the disposal of the Purchaser the
physical assets of ECPV,
(ii) deliver copies of the Release Letters in accordance Ruth Section 5(f)
above and the Side Better in accordance with the forth annexed to this
Agreement.
(iii) provide the Purchaser with a schedule of liabilities attached hereto
as Exhibit VIII, in which Section 2.2(k) applies and of deposits and
prepayments made by ECPV, in the case of pre-payments apportioned so as to
show the proportion attributable to periods after the date of closing
hereof The Seller shall within 14 days from closing or from the amount of
any liability becoming due (whichever shall be the later) reimburse to the
Purchaser the amount of such liability after offsetting such deposits and
the proportion of the scheduled pre-payments attributable to periods after
closing as specified above.
(c) the confirmation given by Euro Bank Corporation pursuant to Section 5
paragraph (e) of this Agreement shall forthwith become creative so that
immediately upon closing the Langer Documents shall be held by Euro Bank
Corporation for the sole benefit and to the order of the Purchaser.
7.2 Within 3 working days after closing, Seller shall deliver to Purchaser the
hard copies of the Release Letters in accordance with Section 5(f) above.
SECTION 8
8. Termination and Abandonment.
(a) Methods of Termination. This Agreement may be terminated end the
transactions contemplated herein nosy be abandoned at any time, but not
later than the closing:
(i) By mutual written consent of Purchaser and Seller; or
(ii) By Purchaser, if API does not grant its consent for the
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<PAGE> 18
performance of the transactions contemplated herein
within a period of two months following the date of
execution of this Agreement.
(b) Procedure Upon Termination. In the event of termination and
abandonment pursuant to subsection (a) above, the provisions
of this Agreement shall terminate, and the transactions
contemplated herein shall be abandoned, without finisher
action by any party hereto. If this Agreement is terminated as
provided herein: (i) each party will, upon request, redeliver
all documents, work papers and other material of any other
party (and all copies thereof) relating to the transactions
contemplated herein. whether so obtained before or after the
execution hereof, to the party furnishing the same; (ii) the
confidentiality obligations of subsection 4(a) shell continue
to be applicable; and (iii) except as provided in this
subsection, no party shall have any liability for a breach of
any representation, warranty, agreement, covenant or other
provision of this Agreement, unless such breach was due to a
William or bad faith action or omission of such ply or any
representative, agent, employee or independent contractor
thereof.
SECTION 9
9. Survival and Indemnification.
(a) Survival. The representations and warranties of each of the
panics hereto shall survive the closing.
(b) Indemnification by Purchaser. Purchaser agree lo indemnify
Seller from and against any and all loss, liability or damage
suffered or incurred by it by reason of (i) any untrue
representation of or breach of warranty by, Purchaser in any
pen of this Agreement, provided, honeyed, that no claim for
indemnity may be made pursuant to this subsection after the
first anniversary of the Closing Date; and (ii) any
nonfulfillment of any covenant, agreement or undertaking of
Purchaser in any pert of this Agreement which by its terms is
to remain in effect after the Closing and has not been
specifically waived In whiting at the Closing by the party or
parties hereof entitled to the benefits thereof.
(c) Indemnification by Seller - Untrue Representation or Breach of
Warranty. Seller agrees to indemnify Purchaser and LANGER from
and against any and 411 loss, liability or damage suffered or
incurred by Purchaser and/or LANGER by reason of any untrue
representation of, or breach of warranty by Seller in this
Agreement, provided, however, that no claim for indemnity may
be made pursuant to this subsection after the first
anniversary of the date of execution of this Agreement.
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<PAGE> 19
(d) Indemnification Seller - Tax. Seller agrees to indemnify
Purchaser and LANGER from and against any and all loss,
liability or damage suffered or incurred by them in connection
with any tax obligations that were the responsibility of
LANGER or ECPV prior to the date of execution of this
Agreement The Purchaser shall notify the Seller of any of such
loss, liability or damage, within 3 (three) calendar days
following the day when the Purchaser become aware of same.
SECTION 10
Miscellaneous Provisions.
(a) Expenses. Purchaser and Seller shall each be solely
responsible for and bear all of its own respective costs, fees
and expenses, including, without limitation, expenses of legal
counsels investment bankers, consultants, accountants and
other advisors, in connection with the preparation, execution,
delivery and performance of this Agreement and the
consummation of the transactions contemplated herein.
(b) Amendment and Modification.. Subject to applicable Law, this
Agreement may be amended or modified by the parties hereto at
any time any of the teens contained herein; provided, however,
that all such amendments and modifications must be in writing,
duly executed by all of the parties hereto,
(c) Waiver of Compliance; Consents. Any failure of a party to
comply with any obligation, covenant, agreement or condition
herein may be expressly waved in writing by the party
entitled hereby to such compliance, but such waver or failure
to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a
waiver of, or estoppel with respect to, any subsequent or
other failure. No single or partial exercise of a right or
remedy shall preclude any other or further exercise thereof
or of any other right or remedy hereunder, Whenever this
Agreement requires or permits the consent by or on behalf of
a party, such consent shall be given in writing in the same
manner as for waivers of compliance.
(d) No Third Party Beneficiaries. Nothing in this Agreement shall
entitle any person or entity (other than a party hereto and
his, her or its respective successors and assigns permitted
hereby) to any claim, cause of action remedy or right of any
kind.
(e) Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be made
in writing and shall be deemed to have boon duly\ given and
effective, (i) on the date of delivery, if delivered
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<PAGE> 20
personally; or (ii) on the earlier of the fourth (4th) day
after mailing or the date of the return receipt
acknowledgement, if mailed, postage prepaid, by certified or
registered mail, return receipt requested;
If to Seller: Suinaga y Suinaga Abogedos, S.C.
Att'n Carlos Fernandez Suinaga
Rio Tiber No. 67, 3er. Piso
Col. Cuauhtemoc, Mexico, D.F., 06500
With a copy to: Patrick Magee
101 Main Street, 3rd Floor
Huntington Beach, CA 97648
If to Purchaser: Jorge A. Cano Rio Duero No. 31
Col. Cuauhtemoc
Mexico 06500, D.F.
With a copy to: Rubio Villegas y Asociados, SC.
Att'n: Louis Rubio Barnetche
Rio Duero No. 31 Col. Cuauhtemoc
Mexico 06500, D.F.
(f) Assignment. l his agreement and all of the provisions hereof
shell be binding upon end inure to the benefit of the parties
hereto and their respective successors and permitted assigns,
but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned (whether voluntarily,
involuntarily, by operation of law or otherwise) by any of the
parties hereto without the prior written consent of the other
parties, provided, however, that Purchaser may assign this
Agreement, in whole or in any pat, and Rom time to time, to a
wholly-owned, direct or indirect, subsidiary of Purchaser.
(g) Governing Law. This Agreement and the legal relations among
the parties hereto shall be governed by and construed in
accordance with the laws of the Cayman Islands, British West
Indies.
(h) Counterparts. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be decreed an
original, but all of which together shall constitute one and
the same instrument, and shall, in its governing form, be in
the English language.
(i) Headings. The table of contents and the headings of the
sections and subsections of this Agreement arc inserted for
convenience only and shell not constitute a part hereof
SECTION 11
11. Arbitration.
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<PAGE> 21
Any controversy or claim arising, out of or relating to this Agreements or the
making, performance or interpretation thereof, including without limitation
alleged fraudulent inducement thereof, shall be settled by binding, arbitration
in New York, United States of America, by a panel of three arbitrators in
accordance with the Rules of the International Chamber of Commerce. Judgment
upon any arbitration award may be entered in any court having, jurisdiction
thereof and the parties consent to the jurisdiction in either entity of the
courts for tab purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
"SELLER"
/s/ PATRICK MAGEE
-------------------------------------
INTERNATIONAL RESORT DEVELOPERS, INC.
BY: PATRICK MAGEE
"PURCHASER"
/s/ JORGE A. CANO
----------------------------------
ICTSI INTERNATIONAL HOLDINGS CORP.
BY: JORGE A. CANO
20
<PAGE> 22
SIDE LETTER AGREEMENT: DATED AS OF JULY 19, 1997, ENTERED BY AND BETWEEN
INTERNATIONAL RESORT DEVELOPERS, INC., A CORPORATION ORGANIZED UNDER THE LAWS
OF THE UNITED STATES OF AMERICA, REPRESENTED HEREIN BY MR. PATRICK MAGEE,
(HEREINAFTER REFERRED TO AS "SELLER"), AND ICTSI INTERNATIONAL HOLDINGS CORP. A
CORPORATION ORGANIZED UNDER THE LAWS OF THE CAYMAN ISLANDS, BRITISH WEST
INDIES, REPRESENTED HEREIN BY MR. JORGE A. CANO, (HEREINAFTER REFERRED TO AS
"PURCHASER").
WHEREAS, on this same dale, July 19, 1997, Seller and Purchaser entered info a
Stock Purchase Agreement for the I anger Shares (the "Stock Purchase
Agreements).
WHEREAS, paragraph B) of Section 1.3 of the Stock Purchase Agreement provides
that, upon the teams and conditions agreed by the parties, Purchaser Shall pay
to Seller, twenty four (24) months after the date of execution of the Stock
Pureness Agreement, the amount of US$400,000.00 (FOUR HUNDRED THOUSAND DOLLARS
OF THE UNITED STATES OF AMERICA), as final installment of the Purchase Price for
the Shares ("Final Installment Amount");
WHEREAS, in order to guarantee payment of the above referred US$400,000.00 (FOUR
HUNDRED THOUSAND DOLLARS OF THE UNITED STATES OF AMERICA), Purchaser has
subscribed in this same date a promissory note ("Promissory Note") in such
amount, which is attached to the Stock Purchase Agreement as Exhibit II.
WHEREAS, Section 9, paragraph d) of the Stock Purchase Agreement provides that
Seller shall indemnify Purchaser and LANGER From and against any and ail loss,
liability or damage suffered or incurred by them in connection with any tax
obligations that were talc responsibility of LANGER or ECPV prior lo the date of
execution of the Stock Purchase Agreement.
WHEREAS, Seller agrees and acknowledges that certain tax liabilities, losses and
damages may be suffered or incurred by ECPV in the future, in connection with
certain tax obligations that were the responsibility of ECPV prior to the date
of execution of the Stock Purchase Agreement
WHEREAS, Section 9, paragraph c) of the Stock Purchase Agreement provides that
no claim for indemnity may be made after the second anniversary of the date of
execution of the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the declarations herein contained, to
parties hereto agree as follows:
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<PAGE> 23
ONE. For a period of 24 months after the date of execution of the Stock Purchase
Agreement, Seller will be responsible, and therefore, shall indemnify Purchaser
and/or LANGER, for any and all loss, liability or damage suffered or incurred by
ECPV or LANGER in connection with any tax obligations float were the
responsibility of LANGER or ECPV prior to the date of execution of the Stock
Purchase Agreement ("Contingent Tax Liabilities"), in the understanding that
Seller's responsibility shall not exceed the amount of US$400,000.00 (FOUR
HUNDRED THOUSAND DOLLARS OF THE UNITED STATES OF AMERICA).
TWO. At the time any Mexican tax authority, from time to time, requests payment
from ECPV and/or Purchaser of any Contingent Tax Liabilities, Purchaser shall
notify Seller of such circumstance. Seller will be entitled, at its own costs
and expenses, to challenge, on behalf of ECPV and/or Purchaser, the respective
request of payment from the lax authority in order to reduce or eliminate such
requested payment. However, if by a final resolution issued by any competent
authority, ECPV and/or Purchaser is obliged to pay any requested amount as a
consequence of any Contingent Tax liability, said amount will be deducted from
the Promissory Hole pursuant to Section 3 below.
THREE. Both parties agree that the amount resulting from all Contingent Tax
Liabilities, if any, shall be deducted from the Final Installment Amount
(US$400,000.00) set forth in the Promissory note, and therefore, the
corresponding records shall be performed, from time to time, to the Promissory
Note.
FOUR. Both parties agree that, at the end of the 24-month period referred to in
Section One above, Purchaser will only be obligated to pay to Seller the
difference between the Final Installment Amount and the amount resulting from
all Contingent Tax Liabilities, without prejudice of the limit of responsibility
set forth in Section One above, in the understanding that in case at the end of
the above referred 24-month period, there is any pending litigation or procedure
pursuant to Section One above, all the pending, amounts regarding any litigation
or procedure ("Pending Amounts") shall be deducted from the Promissory Note as
provided in this Section; provided, however, that in case the Pending Amounts
are eventually reduced or eliminated by a resolution frown a competent authority
then Purchaser shall reimburse the Seller accordingly.
FIVE. Once else 24-month period referred to in Section One above has expired,
Seller shall not be anymore responsible For any Contingent Tax Liabilities.
SIX. Unless otherwise specified hi this document, the terms and definitions
contained herein shall have the same meaning as the one granted to them in the
Stock Purchase Agreement.
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<PAGE> 24
SEVEN. This Side Letter shall be governed by and construed in
accordance with the laws of Mexico City, Federal District, Mexico.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first above written.
"SELLER" "BUYER"
/s/ PATRICK MAGEE /s/ JORGE A. CANO
-------------------- --------------------
INTERNATIONAL RESORT ICTSI INTERNATIONAL
DEVELOPERS, INC. HOLDINGS CORP.
By: Patrick Magee By: Jorge A. Cano
26
