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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): AUGUST 19, 1996
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INTERNATIONAL REALTY GROUP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-20180 62-1277260
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(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification No.)
111 NORTHWEST 183RD STREET, SUITE 350, MIAMI, FLORIDA 33169
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (305) 944-8811
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ITEM 2. ACQUISITION OF ASSETS
GENERAL
On August 19, 1996, International Realty Group, Inc. (the "Company")
consummated a share exchange transaction with: (i) DSC, S.A. de C.V. ("DSC"), a
company organized under the laws of Mexico; and (ii) Hemisphere Developments
Limited ("Hemisphere"), a company organized under the laws of Isle of Man. As
more fully described below, the share exchange transactions with DSC and
Hemisphere will result in a change in the control of the Company that is
expected to occur during the fourth quarter of 1996.
DSC TRANSACTION
Pursuant to the share exchange transaction with DSC (the "DSC
Transaction"), the Company acquired the following assets as of August 19, 1996
(the "Closing Date"): (i) DSC's 100 percent interest in Centro de Promociones
Guerraro S.A. de C.V.; (ii) DSC's 75 percent interest in Clusters Inmobiliaria
de Ixtapa, S.A. de C.V. ("Clusters Ixtapa"); (iii) a promissory note ("Clusters
Note") in the principal amount of $5,625,000 from Clusters Ixtapa; and (iv)
DSC's 30 percent interest in Nueva Tierra. Such assets acquired by the Company
are collectively referred to herein as the "DSC Assets."
In exchange for the DSC Assets, the Company issued to DSC on the
Closing Date 485,930 shares of the Company's common stock, par value $.001 per
share (the "Common Stock") and a Convertible Promissory Note (the "DSC Note")
in the principal amount of $29,673,658. The DSC Note is convertible into
37,945,854 shares of Common Stock.
The Company has the right to force the conversion of the DSC Note
after the Company's Certificate of Incorporation has been amended to increase
the number of authorized shares of Common Stock from 10,000,000 to 450,000,000.
The increase in the authorized Common Stock will be approved by written consent
executed by two stockholders of the Company, Jack Birnholz and Richard
Bradbury, who jointly control a majority of the Common Stock of the Company.
In accordance with the regulations of the Securities and Exchange Commission
(the "Commission"), the Company intends to distribute an Information Statement
to stockholders describing the stockholder action to increase the authorized
Common Stock. See below under the caption "Information Statement." The
Company anticipates that the authorized Common Stock will be increased and the
DSC Note converted to Common Stock during the fourth quarter of 1996. In the
event that the DSC Note is not converted prior to December 31, 1996, the DSC
Note becomes immediately payable together with interest at a rate of five
percent per year. The DSC Note is secured by the DSC Assets.
The DSC Transaction was consummated pursuant to the Second Amendment
to Agreement between the Company and DSC, dated July 31, 1996. The Second
Amendment to Agreement modified and supplemented the First Amendment to
Agreement, dated February 7, 1996, as described in the Company's Current Report
on Form 8-K, dated February 28, 1996. The Second
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Amendment to Agreement modified and supplemented the original Agreement between
the parties, dated October 6, 1995, as described in the Company's Current
Report on Form 8-K, dated October 18, 1995. The Second Amendment, the First
Amendment and the original Agreement are collectively referred to herein as the
"DSC Agreement."
The original Agreement and the First Amendment contemplated the
acquisition by the Company of Tropical Club Ixtapa S.A. de C.V., Impulsora
Turistica de Occidente, S.A. de C.V., Tropical Club Isla Mujeres S.A. de C.V.,
Promocaribe, S.A. de C.V., DSC Casa Blanca, S.A. de C.V. and Pez Maya, S.A. de
C.V. The Company decided not to acquire such companies in the DSC Transaction
because such companies and their assets are presently the subject of
debt-related legal proceedings in Mexico. To the extent that in the future the
Company is able to negotiate a restructuring of such debt with the banks and
other debt holders, the Company may in the future consider acquiring such
companies through a share exchange transaction or otherwise. Neither the
Company, nor DSC, however, is presently involved in any such negotiations or
has any understanding, agreement or arrangement with any such banks or debt
holders for the debt restructuring or settlement of such debt.
In addition to the DSC Assets, the DSC Agreement also provides for the
acquisition by the Company of DSC's 12.3 percent interest in Malecon S.A. de
C.V. and DSC's 30 percent interest in Corporacion Inmobiliaria del Norte, S.A.
de C.V. The acquisition of such interests by the Company is subject to the
waiver of a right of first refusal by the majority stockholders of the
respective companies and the clarification of any pledges of such minority
interests to banks or other financial institutions. In the event that the
Company proceeds with acquisition of such assets, the Company will issue to DSC
a convertible note (on terms similar to the DSC Note) in the principal
aggregate amount of $2,600,855.
Pursuant to the DSC Agreement, DSC has loaned approximately $170,000
to the Company. Approximately $105,000 of the proceeds of such loans have been
used by the Company for costs incurred in connection with the DSC Transaction
and the balance has been used for working capital purposes. Such loans were
repaid by the Company on the Closing Date through the reduction of account
receivables due from DSC to the companies acquired. After the Closing Date,
DSC has made advances in the approximate amount of $25,000 and may in the
future make additional advances to the Company that will likewise be repaid
through the reduction of such accounts receivables.
The shares of Common Stock issued to DSC on the Closing Date and upon
conversion of the DSC Note have and will be issued by the Company in reliance
on the exemption from registration under the Securities Act of 1933 provided by
Regulation S. The DSC Agreement provides that the shares of Common Stock
issued to DSC will be afforded certain demand and piggyback registration
rights.
Pursuant to the DSC Agreement, John Day, Geoffrey Bell and Jack
Birnholz resigned from the Company's Board of Directors on the Closing Date and
the remaining members of the Board--
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Richard Bradbury and Alton Hollis--appointed Bernardo Dominguez C. (the
President of DSC) to fill a vacancy on the Company's Board of Directors.
As required by the DSC Agreement, Messrs. Bradbury and Birnholz
executed a proxy agreement on the Closing Date, pursuant to which DSC may vote
the Common Stock held by such persons in order to effectuate the transactions
contemplated by the DSC Agreement. The proxy agreement terminates upon the
earlier of the Company's authorization to increase the Common Stock or December
31, 1996.
For purposes of the DSC and Hemisphere Transactions, the Common Stock
has been valued at $.782 per share, based upon an agreed upon value of the
Company and its subsidiaries of $7,000,000, divided by the 8,954,187 issued and
outstanding shares of Common Stock. The agreed upon value of the Company is
based upon the value of the Company's present operations (approximately
$1,500,000) and the Company's land on Caye Bokel, Belize (approximately
$5,500,000, predicated on a land residual approach, assuming a 250 unit
destination resort).
DSC ASSETS
The DSC Assets consist of: (i) 100 percent equity interest in Centro
de Promociones Guerraro S.A. de C.V.; (ii) 75 percent equity interest in
Clusters Ixtapa; (iii) a note receivable in the principal amount of $5,625,00;
and (iv) DSC's 30 percent interest in Nueva Tierra. For information regarding
Nueva Tierra, see below under the caption "Hemisphere/Nueva Tierra Assets."
Centro de Promociones Guerraro S.A. de C.V. is a company formed under
the laws of Mexico which owns land located in Acapulco, Mexico. The
eight-acre, partially developed property is being held for investment or future
development and is subject to a mortgage in the approximate amount of $659,508.
The Company believes that all necessary licenses, permits, and governmental
approvals have been obtained for the construction of residential housing on
such property.
Clusters Ixtapa is a company formed under the laws of Mexico which
owns land in Ixtapa on the pacific coast of Mexico in the state of Guerrero.
The 26-acre property is being held for investment or future development.
Clusters Ixtapa has received loans in the principal amount of $23,007,000 (the
"NAFIN Debt") from its lender, National Financiera, S.N.C. Bank ("NAFIN"). On
December 29, 1995, Clusters Ixtapa, DSC and NAFIN entered into a restructuring
plan with respect to the NAFIN Debt. Pursuant to this plan, DSC has assumed
the NAFIN Debt in exchange for Clusters Ixtapa's payment of approximately
$15,341,000 and DSC's payment of the difference. Such payment by DSC, as well
as the repayment of certain other debt of DSC to NAFIN, will be made by the
transfer from DSC to NAFIN of approximately 15,991,000 shares of the Company's
Common Stock upon the conversion of the DSC Note. Pursuant to the DSC
Transaction, the Company acquired from DSC a $5,625,000 debt obligation of
Clusters Ixtapa on the Closing Date.
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The DSC Assets have been valued at $30,053,655 for purposes of the DSC
Transaction. Based upon the $.782 per share value of the Common Stock, the
Company will issue an aggregate 37,945,854 shares of Common Stock as
consideration for the DSC Assets.
HEMISPHERE TRANSACTION
Simultaneously with the DSC Transaction, the Company consummated a
share exchange transaction ("Hemisphere Transaction") with Hemisphere, a real
estate investment business. Pursuant to the Hemisphere Transaction, the
Company acquired from Hemisphere on the Closing Date all of the common stock of
Newland Corporation ("Newland"), a Marshall Isles company, which owns 70
percent of the common stock of Nueva Tierra. As a result of the Hemisphere
Transaction and the DSC Transaction, the Company owns 100 percent of the stock
of Nueva Tierra. As more fully described below, Nueva Tierra owns a majority
interest and is the general partner of four real estate Participating
Associations, a form of limited partnership in Mexico: (i) Villas Del Carbon;
(ii) Barra del Tordo; (iii) Hacienda del Franco; and (iv) Bahia de Cortes.
In exchange for the 70 percent interest in Nueva Tierra, the Company
issued 514,070 shares of Common Stock to Hemisphere on the Closing Date and a
convertible note (the "Hemisphere Note") in the principal amount of
$32,120,440. The Hemisphere Note is identical in form to the DSC Note and is
convertible into an aggregate of 41,074,732 shares of Common Stock. The shares
of Common Stock issued to Hemisphere on the Closing Date and upon conversion of
the Hemisphere Note have and will be issued by the Company in reliance on the
exemption from registration under the Securities Act of 1933 provided by
Regulation S. The Hemisphere Agreement provides that such shares of Common
Stock will be afforded certain demand and piggyback registration rights.
The Hemisphere Transaction was consummated pursuant to the Amendment
to Agreement between the Company and Hemisphere, dated July 31, 1996. The
Amendment to Agreement modified and supplemented the original Agreement with
Hemisphere, dated February 7, 1996, as described in the Company's Current
Report on Form 8-K, dated February 28, 1996. The original Agreement with
Hemisphere contemplated the acquisition of Las Arboledas, Ensenada Blanca,
Playas de Brisa Mar, and El Quelele, which Participating Associations the
Company has elected not to acquire in the Hemisphere Transaction as a result of
the completion of the Company's due diligence review of the transaction.
HEMISPHERE/NUEVA TIERRA ASSETS
Nueva Tierra, all of the stock of which the Company has acquired in
the DSC and Hemisphere Transactions, has a majority interest in four real
estate projects in Mexico, as set forth below.
Villas del Carbon is a residential development located in Villa del
Carbon, State of Mexico, in which Nueva Tierra has a 79 percent interest. The
25-acre property is partially developed and presently has a clubhouse, roads
and utility lines to the property boundary. Development plans
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call for development of 180 home sites for sale to builders or individuals who
wish to construct weekend country houses. Prior to the sale of home sites,
development plans call for construction of electric lines, water supply, storm
water drain pipes and street lighting to each of the individual lots. The
preliminary estimate to complete this project is approximately $1,700,00 in
four stages. The first stage would require Nueva Tierra to obtain financing of
$400,000. This property is not subject to any mortgage.
Barra del Tordo is a resort development project located in Barra del
Tordo in the state of Tamaulipas, Mexico, in which Nueva Tierra has a 79
percent interest. The property consists of approximately 670 acres of land,
including 3.5 kilometers of beachfront property facing the Gulf of Mexico. At
present, construction of 24 condominiums is approximately 80 percent complete.
Roads, sewers, waterlines and utilities have been constructed for these
condominiums. Nueva Tierra had planned to complete the initial 24 condominiums
at some point in the future when market conditions are appropriate; accordingly
the project is being held for investment or future development. The property
is subject to a mortgage in the amount of $3,490,298.
Hacienda del Franco is a residential development project located near
Silao in the State of Guanajuato, in which Nueva Tierra has a 81 percent
interest. The property consists of approximately 260 acres of land and
includes a traditional colonial style hacienda. Roads on the property have
been graded and there are utilities, sewers and water pipes on the property,
which is being held for investment or possible development centered around the
hacienda. The property is subject to a mortgage in the amount of $511,227.
Bahia de Cortez is a resort development project located in Baja
California near La Paz, in which Nueva Tierra has a 78 percent interest. The
property consists of approximately 3,080 acres of land, including over five
kilometers of beachfront property. The property is not subject to any
mortgage.
INFORMATION STATEMENT
Pursuant to the terms of the DSC and Hemisphere Agreements, the
Company has agreed to diligently prepare an Information Statement describing
this transaction and amend its Certificate of Incorporation to increase the
number of authorized shares of Common Stock from its current level of
10,000,000 shares to 450,000,000 shares. Messrs. Birnholz and Bradbury, who
jointly control more than a majority of the issued and outstanding Common
Stock, have informed the Company that they will execute a written stockholder
consent approving such amendment to the Certificate of Incorporation.
In accordance with regulations of the Commission, the Company will
submit an Information Statement containing, among other things, information
describing the DSC and Hemisphere Transactions including a description of the
properties acquired by the Company as well as the Amendment to the Certificate
of Incorporation to be approved by the written consent of two stockholders.
After the staff of the Commission has completed its review of the Information
Statement, the Company will mail a copy of the Information Statement to each
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stockholder. The Company intends to amend its Certificate of Incorporation
with the State of Delaware as soon as possible after the expiration of the
twenty day period following the mailing of the Information Statement to
stockholders.
CHANGE IN CONTROL OF COMPANY
A change in control of the Company will occur upon the conversion of
the DSC and Hemisphere Notes. At such time, DSC will own approximately 25
percent, Hemisphere will own approximately 47 percent, and NAFIN will own
approximately 18 percent of the then outstanding Common Stock. As a result,
any two of these companies acting in concert will be in a position to determine
the outcome for the election of directors and thereby control the Company. The
change of control is expected to occur during the fourth quarter of 1996. At
such time, approximately 88,974,773 shares of Common Stock will be issued and
outstanding.
The Company intends to call a special meeting of the stockholders
after the conversion of the DSC and Hemisphere Notes to elect three to five
directors, designated by DSC. The DSC Agreement provides that Mr. Bradbury
will enter into an employment agreement with the Company on terms similar to
his present employment agreement with the Company.
ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS
a. Financial Statements
Pursuant to Item 7(a)(4) of Form 8-K, the required financial
statements of the Company and the acquired businesses will be filed as an
amendment to this Form 8-K as soon as practicable after such financial
statements have been finalized and in no event later than 60 days after the
date hereof.
b. Pro Forma Financial Information
Pursuant to Item 7(a)(4) of Form 8-K, the required pro forma
financial information will be filed as an amendment to this Form 8-K as soon as
practicable after such financial information has been finalized and in no event
later than 60 days after the date hereof.
c. Exhibits
99.1 Amendment to Agreement, dated July 31, 1996, between
the Company and Hemisphere Developments, Limited.
99.2 Convertible Note, dated as of August 19, in favor of
Hemisphere Developments, Limited.
99.3 Second Amendment to Agreement, dated July 31, 1996,
between the Company and DSC, S.A. de C.V.
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99.4. Memorandum, dated August 19, 1996, between the
Company and DSC, S.A. de C.V.
99.5 Convertible Note, dated as of August 19, in favor of
DSC, S.A. de C.V.
99.6 Convertible Note, dated as of August 19, in favor of
DSC, S.A. de C.V.
99.7 Proxy, dated July 31, 1996, between DSC S.A. de C.V
and Jack Birnholz.
99.8 Proxy, dated July 31, 1996, between DSC S.A. de C.V
and Richard Bradbury.
99.9 Assignment Agreement, dated August 15, 1996, between
theCompany, DSC S.A. de C.V. and Clusters Inmobiliaria de Ixtapa, S.A. de C.V.
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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 REALTY GROUP, INC.
(Registrant)
Date: September 4, 1996 By: /s/ Richard Bradbury
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Richard Bradbury, President
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EXHIBIT 99.1
AMENDMENT TO AGREEMENT
This Amendment to Agreement, ("Amendment"), dated this 31ST day of
July, 1996, modifies, supplements and amends the February 9, 1996 Agreement
("Agreement") between INTERNATIONAL REALTY GROUP, INC., a Delaware corporation
("IRG") and HEMISPHERE DEVELOPMENTS, LIMITED, an Isle of Man corporation
("Hemisphere").
WHEREAS, IRG and Hemisphere have entered into an agreement whereby
Hemisphere shall sell, transfer and convey stock in a company that owns certain
assets all as more specifically set forth and described in the Agreement and
the Amendment and, in consideration for such sale, transfer and conveyance, IRG
shall purchase said company and issue to Hemisphere, IRG common stock as more
specifically set forth and described in the Agreement.
WHEREAS, IRG and Hemisphere desire to further amend the Agreement so
as to provide for the immediate consummation and closing of the transaction as
more particularly set forth in this Amendment.
NOW THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, IRG and Hemisphere agree to amend the Agreement as
follows:
1. RECITALS:
The Recitals hereinabove contained are true and correct and are made a
part hereof.
2. NUEVA TIERRA PARTNERSHIPS:
Nueva Tierra S.A. de C.V., is a Mexico corporation, ("Nueva Tierra")
of which DSC S.A. de C.V. ("DSC") owns 30% of the issued and outstanding stock,
and of which Newland Corporation, a Marshall Islands corporation ("Newland"),
holds the remaining 70% ownership interest. Newland is owned 100% by
Hemisphere. Hemisphere and IRG have agreed that IRG shall purchase, in
exchange for common stock of IRG as stated below, Hemisphere's ownership of
Newland and its 70% ownership interest in Nueva Tierra on the terms and
conditions set forth herein.
The table attached as Exhibit "A", summarizes Nueva Tierra's General
Partnership Interests, Limited Partner Interests, DSC's Ownership Interest,
Book Value Debt, Property Values, and Net Transfer Values as of June 30, 1996.
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3. HEMISPHERE TRANSFER VALUE:
The value of Nueva Tierra and the value of Newland's 70% interest in
Nueva Tierra, as shown in Exhibit "A", is collectively referred to herein as
the "Hemisphere Transfer Value." The Hemisphere Transfer Value is an agreed
upon value, which is based upon appraisals previously prepared by third party
appraisers less the Net Book Value Debt, DSC's Ownership Interest and the
Limited Partners' Interest equity holdings. The Hemisphere Transfer Value as
of June 30, 1996 is $32,522,443 U.S. Dollars.
IRG'S Common Stock has had limited trading activity at prices ranging
between $.75 and $1.00, but not in what is considered to be a liquid or fluid
market; therefore, for purposes of this transaction, IRG and Hemisphere have
agreed that the value of IRG and its subsidiaries is $7,000,000.00 U.S.
Dollars. Based upon the 8,954,187 shares of IRG common stock presently issued,
IRG has a per share value of $.782. This agreed-upon value is based on the
value of its domestic and foreign valuation operations (approximately
$1,500,000) and the market value of the Caye Bokel undeveloped land predicated
on discounted forecasted cash flows, assuming a fully-developed 250 unit
hotel/villa destination resort (approximately $5,500,000). This per share value
will change if the number of shares issued changes before the Closing. IRG
will issue to Hemisphere, at Closing, the number of shares of IRG common stock
which, when multiplied by the per share value, equals the Hemisphere Transfer
Value. Based upon a Hemisphere Transfer Value of $32,522,443 U.S. Dollars, as
of June 30, 1996, IRG would issue at Closing, 41,588,802 shares to Hemisphere.
4. CLOSING
Hemisphere and IRG agree that the transfer of all required documents
by and between Hemisphere and IRG shall constitute the Closing. The parties
agree to a Closing date on or before 15 days after the execution of this
Amendment. In the event any documents required to consummate the Closing can
not be delivered by the Closing date, through no fault of Hemisphere or IRG
using diligent efforts, the parties may mutually agree in writing to extend
the Closing date to such time as said required documents are available. If the
date which falls 15 days after the execution of this Amendment is a weekend
or holiday, the Closing date shall occur on the next business day.
Hemisphere and IRG have concluded their due diligence examination of
each other's respective companies.
As provided for herein, IRG is required to issue to Hemisphere a total
of 41,588,802 shares of its Common Stock. As of June 30, 1996, IRG has
authorized 10,000,000 shares of Common Stock. IRG will prepare an Information
Statement describing this transaction and the authorization of an increase in
Capital from 10 million to 450 million shares of Common Stock. Until such time
as the increase in Common Stock is authorized, IRG shall issue at closing
514,070 shares to Hemisphere and prepare and execute a Convertible Note (a
proposed copy of the Convertible Note
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is attached hereto as Exhibit "C") in the amount of $32,120,440. The balance
of the Common Stock, 41,074,732 shares, as stipulated in the Convertible Note,
shall be immediately delivered to Hemisphere 21 days after the issuance of the
Information Statement to IRG shareholders and the increase in authorized
capital.
Prior to, or at Closing, IRG shall receive from Hemisphere a certified
English translation of the following:
1) Updated third party appraisals of the subject Properties
listed on Exhibit A;
2) Documentation evidencing the validity of the existence of the
Limited Partnerships listed on
Exhibit A (including the Limited Partnership Agreements);
3) Documentation evidencing the validity of the existence of
Nueva Tierra S.A. de C.V. and Newland Corporation (including
Charter and By-Laws of both companies);
4) Documentation evidencing the Companies' ownership interest in
the Partnerships listed on Exhibit A;
5) Appropriate corporate resolutions evidencing the authority of
all signatories;
6) Documentation evidencing the ownership interest of the
Partnerships in the subject Properties;
7) Original stock certificates duly endorsed to IRG;
8) An Opinion Letter from Hemisphere's Mexican counsel opining
as to (i) the validity of the Limited Partnerships and
Corporations, (ii) the validity of the equity interest held by
the Corporations in the Limited Partnerships, (iii) the
authority of the signatories, (iv) the validity of the Charter
and By-Laws of the Corporations, (v) the ownership interest in
the subject Properties, and (vi) the validity of the transfer
of stock of the Companies to IRG.
9) A statement from Hemisphere's Mexican accountants verifying
that no adverse, material changes in Hemisphere's financial
condition have occurred from the date of Hemisphere's
financial statements to the date of the Closing.
Prior to, or at Closing, Hemisphere shall receive from IRG the
following:
1) Appropriate corporate resolutions authorizing the transfer of
stock;
2) A copy of the original request to American Stock Transfer for
the issuance of the IRG
stock certificates;
3) Documentation evidencing the authority of the signatories;
4) Documentation evidencing the validity of the Charter and
By-Laws of the Companies (attaching same as exhibits); and
5) Documentation evidencing the validity of the transfer of IRG's
stock to Hemisphere.
The IRG stock issued to Hemisphere pursuant to this transaction shall
be issued to Hemisphere pursuant to SEC Regulation S since Hemisphere is a
company outside of the United States and no directed selling efforts have been
made in the United States by IRG for the sale of the IRG stock to be issued to
Hemisphere.
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5. INFORMATION STATEMENT:
After Closing, IRG will amend its Certificate of Incorporation to
increase the number of authorized shares of Common Stock from its current level
of 10,000,000 shares to 450,000,000 shares. Jack Birnholz and Richard
Bradbury, who jointly control more than a majority of the issued and
outstanding Common Stock, will execute a written Stockholder Consent approving
such amendment to the Certificate of Incorporation.
In accordance with regulations of the Securities and Exchange
Commission ("SEC"), IRG must file an Information Statement to the SEC. Among
other things, this Information Statement describes the amendment to the
Certificate of Incorporation to be approved by the written consent of two
stockholders as well as the transaction contemplated in this Amendment,
including a description of the properties to be acquired by IRG. Immediately
after Closing, IRG shall diligently prepare the Information Statement for
review by the SEC. After the staff of the SEC has completed its review of the
Information Statement, IRG will mail a copy of the Information Statement to
each stockholder. Twenty-one days after the Information Statement is presented
to its shareholders, and as soon as practical thereafter, IRG shall amend its
Certificate of Incorporation increasing the authorized shares and the
Convertible Notes referenced in this Agreement will be converted to Common
Stock of IRG in the amounts provided for in each note, with DSC and Hemisphere.
8. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Delaware,
U.S.A. and the parties hereby submit to the jurisdiction thereof.
9. NOTICES TO HEMISPHERE OR IRG
Any notices sent to Hemisphere relating to this Agreement shall be
sent by facsimile and overnight delivery addressed as follows:
Mme. Monique Roggero-Ciana
Hemisphere Developments, Limited
Atlantic House
4-8 Circular Road
Douglas, Isle of Man
Fax Number: 44-22-300-1711
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Any notice sent to IRG relating to this Agreement shall be sent by
facsimile and overnight delivery addressed as follows:
Mr. Richard M. Bradbury, President
International Realty Group, Inc.
111 Northwest 183rd Street
Miami, Florida 33169
Telephone: (305) 944-8811
Fax Number: (305) 651-3394
Any notice sent to either Hemisphere or IRG relating to this Agreement
shall be sent by facsimile and overnight delivery addressed as follows:
Mr. Lee C. Schmachtenberg, Esq.
Schmachtenberg & Associates
1533 Sunset Drive, Suite 201
Miami, Florida 33143
Telephone: (305) 666-4676
Fax Number: (305) 666-4780
10. CONFIDENTIALITY
Each party shall keep information disclosed to it by the other party
relating to its business and financial affairs strictly confidential, except
where disclosure is required by law or the information is public knowledge.
Each party shall ensure that its obligation of confidence is observed by its
employees and professional advisors and/or representatives.
11. HEADINGS
The headings in this Amendment are for reference purposes only and are
not intended to have any meaning or substantive effect.
12. TIME IS OF THE ESSENCE
This Amendment establishes the terms and conditions of the
contemplated transaction. The parties hereto agree that time is of the essence
and that the parties shall use all diligence necessary to expeditiously
consummate this transaction. This Amendment may be executed in counterparts,
and facsimile shall be deemed to be originals.
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13. CONFLICT IN TERMS
Except as herein modified, all of the terms, provisions and conditions
of the Agreement shall be unmodified and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
HEMISPHERE DEVELOPMENTS, LIMITED
By: / S / Monique Roggero-Ciana
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Monique Roggero-Ciana
INTERNATIONAL REALTY GROUP, INC.
By: / S / Richard M. Bradbury By:/ S / Jack Birnholz
---------------------------------- -------------------------------
Richard M. Bradbury Jack Birnholz
President, Chief Financial Officer Chairman of the Board
and as Shareholder and as Shareholder
6
<PAGE> 7
EXHIBIT A
The Table below summarizes Nueva Tierra's General Partnership Interests,
Limited Partner Interests, Book Value Debt, Property Values, Ownership
Interests and Net Transfer Values as of June 30, 1996.
<TABLE>
PROPERTIES HELD
FOR INV.
<S> <C> <C> <C> <C> <C>
Villa Del Carbon L.P. 79.08% Villa Del Carbon N$9,309,040 $1,227,878 256,872
Hacienda Del Franco L.P. 81.13% Hacienda Del 38,590,230 5,090,119
Less Book Value Debt Franco -511,228
Transfer Value $4,578,891 864,037
Barra Del Tordo L.P. 79.82% Barra Del Tordo 76,950,740 10,149,806
Less Book Value Debt -3,490,312
Transfer Value $6,659,494 1,343,886
Bahia de Cortes L.P. Bahia de Cortes 353,920,000 $46,682,671 10,223,505
Total Transfer Value $59,148,934 12,688,300
Less Ltd. Ptner. Interest 12,688,300
Net Transfer Value IRG Stock @ .782 59,412,575 shs $46,460,634
(NTV)
DSC 30% IRG Stock @ .782 17,823,773 shs $13,938,191
HEMISPHERE 70% IRG Stock @ .782 41,588,802 shs $32,522,443
</TABLE>
(1) Peso Exchange Rate 7.5814
<PAGE> 1
EXHIBIT 99.2
INTERNATIONAL REALTY GROUP, INC.
MIAMI, FLORIDA
AUGUST 19, 1996
CONVERTIBLE NOTE
DUE UPON AUTHORIZED ISSUANCE OF COMMON STOCK
$32,120,440 U.S. DOLLARS
INTERNATIONAL REALTY GROUP, INC., a Delaware corporation (the
"Corporation"), for value received promises to pay to HEMISPHERE DEVELOPMENTS,
LIMITED the equivalent face amount of Common Stock, immediately upon the
Corporation's ability to issue authorized Common Stock, which amount equals
41,074,732 shares.
In the event this Convertible Note is not converted on or before
December 31, 1996, then this Note shall be due and payable on DECEMBER 31,
1996, ("Maturity Date") together with interest at the rate of FIVE PERCENT
(5.0%) per annum. Failure to pay the face amount of this Convertible Note plus
accrued interest on the Maturity Date shall be an Event of Default.
1. CONVERSION. This debenture shall convert the principal amount
hereof into the Corporation's Common Stock. To convert this
Note, the holder or holders hereof must surrender the same at
the office of the Corporation, together with a written
instrument of transfer in a form satisfactory to the
Corporation, properly completed and executed and with a
written notice of conversion within FIFTEEN (15) days of the
Corporation's notification to the holder that the Corporation
is authorized to issue Common Stock. It is expressly agreed
and understood that the Corporation has the sole and absolute
right to force conversion of this Note into a like amount of
Common Stock. In the event that the holder of this Note does
not surrender same to the Corporation after notice of its
intent to convert, then, in that event, the holder
hereof agrees that this Note shall be canceled on the books of
the Corporation and the Corporation shall have no further
obligation hereunder other than to issue the shares required
herein.
2. REDEMPTION. The Corporation may at any time prepay in whole
or in part, the principal amount, plus accrued interest to the
date of prepayment, upon THIRTY (30) days written notice by
certified or registered mail to the registered owners of all
outstanding convertible notes. Such notice shall be mailed to
their addresses appearing on the Corporation's books.
3. REGISTERED OWNER. The Corporation may treat the person or
persons whose name or names appear on this Convertible Note as
the absolute owner or owners hereof for the purpose of
receiving payment of, or on account of, the principal and
interest due on this Convertible Note and for all other
purposes.
4. RELEASE OF SHAREHOLDERS, OFFICERS AND DIRECTORS. This
Convertible Note is the obligation of the Corporation only and
no recourse shall be had for the payment of any principal or
interest hereon against any shareholder, officer or director
of the Corporation, either directly or through the
Corporation, by virtue of any statute for the enforcement of
any assessment or otherwise. The holder or holders of this
Convertible Note, by the acceptance hereof, and as part of the
consideration for this Convertible Note, release all claims
and waive all liabilities against the foregoing persons in
connection with this Convertible Note.
5. COLLATERAL. This Convertible Note is secured by 30% of the
shares of stock of Nueva Tierra S.A. de C.V. and the companies
listed on the Exhibit attached hereto. In the Event of
Default, all shares shall be immediately transferred to the
holder thereof.
IN WITNESS WHEREOF, the Corporation has signed and sealed this
Convertible Note this 19TH day of AUGUST, 1996.
INTERNATIONAL REALTY GROUP, INC.
Attest: By: / S / Richard Bradbury
---------------------------------
President
By: / S / Rita Templer
----------------------------------
Assistant Secretary
<PAGE> 1
EXHIBIT 99.3
SECOND AMENDMENT TO AGREEMENT
This Second Amendment to Agreement, ("Second Amendment"), dated this
31ST day of July, 1996, modifies, supplements and amends the October 6, 1995
Agreement ("Agreement") and the February 7, 1996 First Amendment to Agreement
("First Amendment") . Hereinafter, the Agreement, First Amendment and Second
Amendment shall be referred to as the "DSC Agreement" between INTERNATIONAL
REALTY GROUP, INC., a Delaware corporation ("IRG") and DSC, S.A. DE C.V. a
Mexico corporation ("DSC").
WHEREAS, IRG and DSC have entered into an agreement whereby DSC shall
sell, transfer and convey stock in companies that own certain assets all as
more specifically set forth and described in the Agreement and the First
Amendment and, in consideration for such sale, transfer and conveyance, IRG
shall purchase said companies and issue to DSC, IRG common stock as more
specifically set forth and described in the DSC Agreement.
WHEREAS, the assets of Tropical Club Ixtapa S.A. de C.V., Impulsora
Turistica de Occidente, S.A. de C.V., Tropical Club Isla Mujeres S.A. de C.V.,
Promocaribe, S.A. de C.V., DSC Casa Blanca, S.A. de C.V., and Pez Maya, S.A. de
C.V. are the subject of certain legal proceedings which prevent the
contemplated sale, transfer and conveyance. At this time, neither IRG nor DSC
has an understanding or agreement with any Banks or debt holders for debt
restructuring or settlement of any of the above-referenced companies' debt
which is the subject of the proceedings. IRG and DSC cannot ascertain at the
present time whether it is probable or possible that any agreement can be
reached with any of the banks or debt holders for debt settlement or debt
restructuring of the above-referenced companies and the termination of the
legal proceedings.
WHEREAS, IRG has requested and DSC has agreed to the sale, transfer
and conveyance of the stock in Cluster Inmobiliaria de Ixtapa S.A. de C.V.,
Malecon Cancun S.A. de C.V., Corporacion Inmobiliaria del Norte, S.A. de C.V.,
Centro de Promociones Guerrero S.A. de C.V. and its 30% ownership interest in
Nueva Tierra S.A. de C.V.
WHEREAS, IRG and DSC desire to further amend the Agreement and First
Amendment so as to provide for the immediate consummation and closing of the
transaction as more particularly set forth in this Second Amendment.
NOW THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, IRG and DSC agree to amend the DSC Agreement as follows:
1. RECITALS:
The Recitals hereinabove contained are true and correct and are made a
part hereof.
1
<PAGE> 2
2. NUEVA TIERRA PARTNERSHIPS:
Nueva Tierra, S.A. de C.V., is a Mexico corporation, ("Nueva Tierra")
of which DSC owns 30% of the issued and outstanding stock, and of which Newland
Corporation, a Marshall Islands corporation ("Newland"), holds the remaining
70% ownership interest. Newland is owned 100% by Hemisphere Developments
Limited, an Isle of Man corporation, ("Hemisphere"). DSC and IRG have agreed
that IRG shall purchase, in exchange for common stock of IRG as stated below,
DSC's 30% ownership interest in Nueva Tierra on the terms and conditions set
forth herein. IRG and Hemisphere have entered into a separate agreement for
IRG's purchase of Newland from Hemisphere (the "Hemisphere Agreement").
The table attached as Exhibit "A", summarizes Nueva Tierra's General
Partnership Interests, Limited Partner Minority Interests, Book Value Debt,
Property Values, and Net Transfer Values as of June 30, 1996.
3. DSC COMPANIES:
DSC and IRG entered into the Agreement and First Amendment to
acquire certain majority and minority owned companies from DSC. DSC and IRG
have agreed that IRG shall purchase, in exchange for common stock of IRG as
stated below, DSC's 75% interest in Cluster Inmobiliaria de Ixtapa S.A. de
C.V., DSC's 12.3% interest in Malecon Cancun, S.A. de C.V., DSC's 30% interest
in Corporacion Inmobiliaria del Norte, S.A. de C.V., and DSC's 99.9% interest
in Centro de Promociones Guerrero, S.A. de C.V.
The table attached hereto as Exhibit "B", summarizes the DSC
companies being acquired, the Majority / Minority Interests, Book Value Debt,
Property Values and Net Transfer Values as of June 30, 1996.
4. DSC TRANSFER VALUE:
The Majority / Minority Interest, Net Property Values, Book Value Debt
and Net Transfer Value, as shown on Exhibit B, has been adjusted by DSC and
IRG, based upon the unaudited financial statements of the respective companies
as of June 30, 1996, utilizing the Diario Oficial de la Federacion's U.S.
dollar exchange rate, irrespective of when published, which is in effect on the
same date of the DSC Companies' unaudited financial statements.
The value of the DSC Companies and the value of DSC's 30% interest in
Nueva Tierra, as shown in Exhibit B, is collectively referred to herein as the
"DSC Transfer Value." The DSC Transfer Value is an agreed upon value, which is
based upon appraisals previously prepared by third party appraisers less the
Net Book Value Debt and the Majority/Minority equity holdings. The DSC
Transfer Value as of June 30, 1996 is $30,742,321 U.S. Dollars. This is the
sum of $16,804,130 U.S.
2
<PAGE> 3
Dollars for the DSC Companies as provided in Exhibit B and $13, 938,191 U.S.
Dollars for the value of DSC's 30% interest in Nueva Tierra as provided in
Exhibit A.
IRG'S Common Stock has had limited trading activity at prices ranging
between $.75 and $1.00, but not in what is considered to be a liquid or fluid
market; therefore, for purposes of this transaction, IRG and DSC have agreed
that the value of IRG and its subsidiaries is $7,000,000.00 U.S. Dollars.
Based upon the 8,954,187 shares of IRG common stock presently issued, IRG has a
per share value of $.782. This agreed-upon value is based on the value of its
domestic and foreign valuation operations (approximately $1,500,000) and the
market value of the Caye Bokel undeveloped land predicated on discounted
forecasted cash flows, assuming a fully-developed 250 unit hotel/villa
destination resort (approximately $5,500,000). This per share value will change
if the number of shares issued changes before the Closing. IRG will issue to
DSC at Closing, the number of shares of IRG common stock which, when multiplied
by the per share value, equals the DSC Transfer Value. Based upon a DSC
Transfer Value of $30,742,321 U.S. Dollars, as of June 30, 1996, IRG would
issue 39,312,430 shares to DSC.
5. CLOSING
DSC and IRG agree that the transfer of all required documents by and
between DSC and IRG shall constitute the Closing, which shall only occur if
done simultaneously with the closing of the Hemisphere Agreement. The parties
agree to a Closing date on or before 15 days after the execution of this
Second Amendment. In the event any documents required to consummate the
Closing can not be delivered by the Closing date, through no fault of DSC or
IRG using diligent efforts, the parties may mutually agree in writing to
extend the Closing date to such time as said required documents are available.
If the date which falls 15 days after the execution of this Second Amendment
is a weekend or holiday, the Closing date shall occur on the next business day.
DSC and IRG have concluded their due diligence examination of each
other.
It is acknowledged by DSC and IRG that DSC, on December 29, 1995,
reached an agreement with Nacional Financiera, S.N.C. ("NAFIN"), one of the
lenders to the DSC companies, for the restructuring of debt (the "NAFIN Debt
Restructuring"). Pursuant to the NAFIN Debt Restructuring, NAFIN received
monies held in a trust account of Cluster Inmobiliaria de Ixtapa, S.A. de C.V.,
amounting to approximately $15,340,000 U.S. Dollars, and NAFIN will receive IRG
stock valued by DSC and NAFIN at approximately $12,505,000 U.S. Dollars, which,
based upon an IRG per share value of $.782, would amount to 15,991,049 shares.
The IRG stock to be received by NAFIN will be transferred to NAFIN from the IRG
stock to be received by DSC at the Closing.
As provided for herein, IRG is required to issue to DSC and Hemisphere
at Closing, a total of 80,901,236 shares of its Common Stock. As of June
30, 1996, IRG has authorized 10,000,000 shares of Common Stock. IRG will
prepare an Information Statement describing this transaction and the
authorization of an increase in Capital from 10 million to 450 million shares
of Common Stock.
3
<PAGE> 4
Until such time as the increase in Common Stock is authorized, IRG shall issue
at Closing 1,000,000 shares to DSC and Hemisphere for their individual
proportionate share of the Net Transfer Value and prepare and execute
convertible notes (a copy of the proposed Convertible Note is attached hereto
as Exhibit "C") for the balance of the Net Transfer Value. The balance of the
Common Stock, as stipulated in the Convertible Note, shall be immediately
delivered to the respective parties 21 days after the issuance of the
Information Statement and the increase in authorized capital.
Based on the Net Transfer Value of DSC and Hemisphere, the following
shall be issued by IRG:
<TABLE>
<CAPTION>
COMMON STOCK CONVERTIBLE NOTE BALANCE OF
(AT CLOSING) (AT CLOSING) COMMON STOCK
(AT CONVERSION OF NOTE)
- - ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DSC 485,930 shares $30,362,322 38,826,500 shares
HEMISPHERE 514,070 shares $32,120,440 41,074,732 shares
- - ----------------------------------------------------------------------------------------------------------
</TABLE>
Prior to, or at Closing, IRG shall receive from DSC a certified
English translation of the following:
1) Updated third party appraisals of the subject Properties
listed on Exhibits A and B;
2) Documentation evidencing the validity of the existence of the
Limited Partnerships listed on Exhibit A;
3) Documentation evidencing the validity of the existence of
Nueva Tierra, S.A. de C.V. and the Companies listed on
Exhibit B;
4) Appropriate documentation evidencing the authority of all
signatories;
5) Documentation evidencing the Partnerships' and Companies'
ownership interests in the Properties listed on Exhibits A and
B;
6) Documentation evidencing the Companies' ownership interest in
the Partnerships;
6) Appropriate corporate resolutions authorizing the transfer of
stock;
7) Original stock certificates duly endorsed to IRG;
8) An Opinion Letter from DSC's Mexican counsel opining as to (i)
the validity of the corporate status of each of the DSC
companies being acquired, (ii) the authority of the
signatories, (iii) the validity of the Charter and By-Laws of
the companies (attaching same as exhibits), (iv) the ownership
interest of the companies in the Properties, (v) the validity
of the transfer of stock of those companies to IRG, (vi) IRG's
ownership interest in the companies and (vii) the fact that
the Properties are not subject to any liens, loans or
encumbrances.
9) A statement from DSC's Mexican accountants verifying that no
adverse, material changes in DSC's financial condition have
occurred from the date of DSC's financial statements to the
date of the Closing.
4
<PAGE> 5
Prior to, or at Closing, DSC shall receive from IRG the following:
1) Appropriate corporate resolutions authorizing the transfer of
stocks;
2) A copy of the original request to American Stock Transfer for
the issuance of the IRG stock certificates;
3) Documentation evidencing the authority of the signatories;
4) Documentation evidencing the validity of the Charter and
By-Laws of the Companies (attaching same as exhibits);
5) Documentation evidencing the validity of the transfer of IRG's
stock to DSC; and
6) Documentation evidencing the appraised valued of the Caye
Bokel Property.
The IRG stock issued to DSC pursuant to this transaction shall be
issued to DSC pursuant to SEC Regulation S since DSC is a company outside of
the United States and no directed selling efforts have been made in the United
States by IRG for the sale of the IRG stock to be issued to DSC.
DSC has represented to IRG that under the laws of Mexico, each of the
DSC companies must have more than one shareholder. Accordingly, IRG shall take
appropriate corporate action such that in addition to IRG, one of IRG's wholly
owned subsidiaries shall become a shareholder of each of the DSC companies at
the Closing.
6. CHANGE IN IRG BOARD OF DIRECTORS AND OFFICERS AT CLOSING
JOHN DAY, GEOFFREY BELL and JACK BIRNHOLZ shall resign from the IRG
Board of Directors immediately at the Closing, and the remaining Directors,
RICHARD BRADBURY and ALTON HOLLIS shall elect BERNARDO DOMINGUEZ C. to the
Board of Directors of IRG. SHIRLEY BIRNHOLZ shall resign as Secretary of IRG
at the Closing.
7. PROXY AGREEMENT
Simultaneous with the execution of this Second Amendment, Jack
Birnholz and Richard M. Bradbury shall execute a Proxy Agreement, effective at
the Closing, whereby they shall transfer to DSC the only proxy rights to a
sufficient number of shares of stock in IRG to constitute a majority
controlling interest in IRG. Said shares shall be subject to the terms and
conditions of the Proxy Agreement which will remove all voting rights from Jack
Birnholz and Richard Bradbury and vest such voting rights in DSC. A copy of
the Proxy Agreement is attached hereto as Exhibit "D".
8. INFORMATION STATEMENT:
After Closing, IRG will amend its Certificate of Incorporation to
increase the number of authorized shares of Common Stock from its current level
of 10,000,000 shares to 450,000,000 shares. Jack Birnholz and Richard
Bradbury, who jointly control more than a majority of the issued and
outstanding Common Stock, will execute a written Stockholder Consent approving
such amendment to the Certificate of Incorporation.
5
<PAGE> 6
In accordance with regulations of the Securities and Exchange
Commission ("SEC") , IRG must file an Information Statement to the SEC. Among
other things, this Information Statement describes the amendment to the
Certificate of Incorporation to be approved by the written consent of two
stockholders as well as the transaction contemplated in this Second Amendment,
including a description of the properties to be acquired by IRG. Immediately
after Closing, IRG shall diligently prepare the Information Statement for
review by the SEC within fifteen days from the Closing. After the staff of the
SEC has completed its review of the Information Statement, IRG will mail a copy
of the Information Statement to each stockholder. Twenty-one days after the
Information Statement is presented to its shareholders, and as soon as
practical thereafter, IRG shall amend its Certificate of Incorporation
increasing the authorized shares and the Convertible Notes referenced in this
Agreement will be converted to Common Stock of IRG in the amounts provided for
in each note, with DSC and Hemisphere.
9. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Delaware,
U.S.A. and the parties hereby submit to the jurisdiction thereof.
10. NOTICES TO DSC OR IRG
Any notices sent to DSC relating to this Agreement shall be sent by
facsimile and overnight delivery addressed as follows:
Bernardo Dominguez C.
DSC S.A. de C.V.
Monterey 150 Col. Roma Sur, C.P. 06760 Mexico, D.F.
Telephone: 011 52 5 564-8040
Fax Number: 011 52 5 574-1620
Pablo Macedo
DSC S.A. de C.V.
Monterey 150 Col. Roma Sur, C.P. 06760 Mexico, D.F.
Telephone: 011 525 564-8040
Fax Number: 011 525 574-1620
Any notice sent to IRG relating to this Agreement shall be sent by
facsimile and overnight delivery addressed as follows:
Mr. Richard M. Bradbury, President
International Realty Group, Inc.
6
<PAGE> 7
111 Northwest 183rd Street
Miami, Florida 33169
Telephone: (305) 944-8811
Fax Number: (305) 651-3394
Any notice sent to either DSC or IRG relating to this Agreement shall
be sent by facsimile and overnight delivery addressed as follows:
Mr. Lee C. Schmachtenberg, Esq. Information copies sent to:
Schmachtenberg & Associates
1533 Sunset Drive, Suite 201 Mr. Jack Birnholz
Miami, Florida 33143 2221 N.E. 202nd Street
Telephone: (305) 666-4676 North Miami Beach, FL 33180
Fax Number: (305) 666-4780
11. CONFIDENTIALITY
Each party shall keep information disclosed to it by the other party
relating to its business and financial affairs strictly confidential, except
where disclosure is required by law or the information is public knowledge.
Each party shall ensure that its obligation of confidence is observed by its
employees and professional advisors and/or representatives.
12. HEADINGS
The headings in this Second Amendment are for reference purposes only
and are not intended to have any meaning or substantive effect.
13. TIME IS OF THE ESSENCE
This Second Amendment establishes the terms and conditions of the
contemplated transaction. The parties hereto agree that time is of the essence
and that the parties shall use all diligence necessary to expeditiously
consummate this transaction. This Second Amendment may be executed in
counterparts, and facsimile shall be deemed to be originals.
14. CONFLICT IN TERMS
Except as herein modified, all of the terms, provisions and conditions
of the Agreement and First Amendment shall be unmodified and shall remain in
full force and effect.
7
<PAGE> 8
IN WITNESS WHEREOF, the parties have executed this Second Amendment as
of the date first above written.
DSC, S.A. DE C.V.
By: / S / Bernardo Dominguez C.
-------------------------------
Bernardo Dominguez C.
INTERNATIONAL REALTY GROUP, INC.
By: / S / Richard M. Bradbury By: / S / Jack Birnholz
----------------------------------- ----------------------------
Richard M. Bradbury Jack Birnholz
President, Chief Financial Officer Chairman of the Board
and as Shareholder and as Shareholder
8
<PAGE> 9
EXHIBIT A
The Table below summarizes Nueva Tierra's General Partnership Interests,
Limited Partner Interests, Book Value Debt, Property Values, Ownership
Interests and Net Transfer Values as of June 30, 1996.
<TABLE>
PROPERTIES HELD
FOR INV.
<S> <C> <C> <C> <C> <C>
Villa Del Carbon L.P. 79.08% Villa Del Carbon N$9,309,040 $1,227,878 256,872
Hacienda Del Franco L.P. 81.13% Hacienda Del 38,590,230 5,090,119
Less Book Value Debt Franco -511,228
Transfer Value $4,578,891 864,037
Barra Del Tordo L.P. 79.82% Barra Del Tordo 76,950,740 10,149,806
Less Book Value Debt -3,490,312
Transfer Value $6,659,494 1,343,886
Bahia de Cortes L.P. 77.89% Bahia de Cortes 353,920,000 $46,682,671 10,223,505
Total Transfer Value N$480,270,010 $59,148,934 12,688,300
Less Ltd. Ptner. Interest 12,688,300
Net Transfer Value IRG Stock @ .782 59,412,575 shs $46,460,634
(NTV)
DSC 30% IRG Stock @ .782 17,823,773 shs $13,938,191
HEMISPHERE 70% IRG Stock @ .782 41,588,802 shs $32,522,443
</TABLE>
(1) Peso Exchange Rate 7.5814
<PAGE> 10
EXHIBIT B
The Table below summarizes the DSC Companies being acquired, Majority/Minority
Interests, Book Value Debt, Property Values, Note Receivable and Net Transfer
Values as of June 30, 1996.
<TABLE>
DEVELOPMENT
PROPERTIES
<S> <C> <C> <C> <C> <C>
Cluster Inmobiliaria de Ixtapa 75.0% Clusters N$131,801,937 17,384,907
Less Book Value Debt -3,905,461
Transfer Value $13,479,446 $3,369,861
PROPERTIES HELD FOR
INV.
Malecon Cancun 12.3% Malecon 135,096,000 17,819,400
Less Book Value Debt -5,699,703
Transfer Value $12,119,697 10,628,974
Corporacion 30.0% Las Flores 43,741,610 5,769,595
Inmobiliaria del Norte
Less Book Value Debt -2,069,156
Transfer Value $3,700,439 2,590,307
Centro de 99.9% Campo de Trio 8,370,000 1,104,018
Promociones Guerrero
Less Book Value Debt -726,565
Transfer Value $377,453 -0-
Total Transfer Value N$319,009,547 $29,677,035 $16,589,142
Plus Note Receivable 3,716,237
Less Major/Minority Interest -$16,589,142
Net Transfer Value (NTV) IRG Stock @ .782 21,488,657 shs $16,804,130
</TABLE>
(1) Peso Exchange Rate 7.5814
<PAGE> 1
EXHIBIT 99.4
MEMORANDUM
This memorandum between INTERNATIONAL REALTY GROUP, INC., and DSC, S.A. DE
C.V., in conjunction with the Second Amendment to Agreement dated July 31,
1996, and the closing of the proposed transaction described therein.
The parties met in Mexico City (Mexico), on August 15/16, 1996, and exchanged
the necessary documents call for in the agreement to effectuate the closing as
of August 19, 1996.
At the closing, the parties modified the Agreement to close, as follows:
NET TRANSFER
------------
VALUE
-----
1. MALECON CANCUN, S.A. DE C.V. $1,496,723
2. CORPORACION INMOBILIARIA DEL NORTE,
S.A. DE C.V. $1,110,132
The above corporate stock to be acquired by IRG is subject to the right of
first refusal between the majority shareholders of the respective corporations.
DSC shall submit the request to the respective corporations to exercise such
right of first refusal.
Fifteen days after such submission has been given, DSC shall advise IRG if the
right of first refusal has been accepted or rejected. At such time, IRG will
acquire the subject stock as called for in the Agreement.
In addition to the above, IRG acquired DSC's secured indebtness of Clusters
Inmobiliaria de Ixtapa, S.A. de C.V. in the amount of $5,628,426 instead of
$3,716,237 as called for in the Agreement.
/s/ Bernardo Dominguez C. /s/ Richard Bradbury
- - ------------------------- -----------------------------
DSC, S.A. DE C.V. INTERNATIONAL REALTY
BERNARDO DOMINGUEZ C. GROUP, INC.
RICHARD BRADBURY
Mexico City, August 19, 1996.
<PAGE> 1
EXHIBIT 99.5
INTERNATIONAL REALTY GROUP, INC.
MIAMI, FLORIDA
AUGUST 19, 1996
CONVERTIBLE NOTE
DUE UPON AUTHORIZED ISSUANCE OF COMMON STOCK
$27,761,467 U.S. DOLLARS
INTERNATIONAL REALTY GROUP, INC., a Delaware corporation (the
"Corporation"), for value received promises to pay to DSC, S.A. DE C.V. the
equivalent face amount of Common Stock, immediately upon the Corporation's
ability to issue authorized Common Stock, which amount equals 35,500,597
shares.
In the event this Convertible Note is not converted on or before
December 31, 1996, then this Note shall be due and payable on DECEMBER 31,
1996, ("Maturity Date") together with interest at the rate of FIVE PERCENT
(5.0%) per annum. Failure to pay the face amount of this Convertible Note plus
accrued interest on the Maturity Date shall be an Event of Default.
1. CONVERSION. This debenture shall convert the principal
amount hereof into the Corporation's Common Stock. To convert
this Note, the holder or holders hereof must surrender the same
at the office of the Corporation, together with a written
instrument of transfer in a form satisfactory to the Corporation,
properly completed and executed and with a written notice of
conversion within FIFTEEN (15) days of the Corporation's
notification to the holder that the Corporation is authorized to
issue Common Stock. It is expressly agreed and understood that
the Corporation has the sole and absolute right to force
conversion of this Note into a like amount of Common Stock. In
the event that the holder of this Note does not surrender same to
the Corporation after notice of its intent to convert, then, in
that event, the holder hereof agrees that this Note shall be
canceled on the books of the Corporation and the Corporation
shall have no further obligation hereunder other than to issue
the shares required herein.
2. REDEMPTION. The Corporation may at any time prepay in
whole or in part, the principal amount, plus accrued interest to
the date of prepayment, upon THIRTY (30) days written notice by
certified or registered mail to the registered owners of all
outstanding convertible notes. Such notice shall be mailed to
their addresses appearing on the Corporation's books.
3. REGISTERED OWNER. The Corporation may treat the person
or persons whose name or names appear on this Convertible Note as
the absolute owner or owners hereof for the purpose of receiving
payment of, or on account of, the principal and interest due on
this Convertible Note and for all other purposes.
4. RELEASE OF SHAREHOLDERS, OFFICERS AND DIRECTORS. This
Convertible Note is the obligation of the Corporation only and no
recourse shall be had for the payment of any principal or
interest hereon against any shareholder, officer or director of
the Corporation, either directly or through the Corporation, by
virtue of any statute for the enforcement of any assessment or
otherwise. The holder or holders of this Convertible Note, by the
acceptance hereof, and as part of the consideration for this
Convertible Note, release all claims and waive all liabilities
against the foregoing persons in connection with this Convertible
Note.
5. COLLATERAL. This Convertible Note is secured by 30% of
the shares of stock of Nueva Tierra S.A. de C.V. and the
companies listed on the Exhibit attached hereto. In the Event of
Default, all shares shall be immediately transferred to the
holder thereof.
IN WITNESS WHEREOF, the Corporation has signed and sealed this
Convertible Note this 19TH day of AUGUST, 1996.
INTERNATIONAL REALTY GROUP, INC.
Attest: By: / S / Richard Bradbury
-----------------------------
President
By: / S / Rita Templer
-----------------------------
Assistant Secretary
<PAGE> 1
EXHIBIT 99.6
INTERNATIONAL REALTY GROUP, INC.
MIAMI, FLORIDA
AUGUST 19, 1996
CONVERTIBLE NOTE
DUE UPON AUTHORIZED ISSUANCE OF COMMON STOCK
$1,912,191.00 U.S. DOLLARS
INTERNATIONAL REALTY GROUP, INC., a Delaware corporation (the
"Corporation"), for value received promises to pay to DSC, S.A. DE C.V. the
equivalent face amount of Common Stock, immediately upon the Corporation's
ability to issue authorized Common Stock, which amount equals 2,445,257 shares.
In the event this Convertible Note is not converted on or before
December 31, 1996, then this Note shall be due and payable on DECEMBER 31,
1996, ("Maturity Date") together with interest at the rate of FIVE PERCENT
(5.0%) per annum. Failure to pay the face amount of this Convertible Note plus
accrued interest on the Maturity Date shall be an Event of Default.
1. CONVERSION. This debenture shall convert the principal
amount hereof into the Corporation's Common Stock. To convert
this Note, the holder or holders hereof must surrender the same
at the office of the Corporation, together with a written
instrument of transfer in a form satisfactory to the Corporation,
properly completed and executed and with a written notice of
conversion within FIFTEEN (15) days of the Corporation's
notification to the holder that the Corporation is authorized to
issue Common Stock. It is expressly agreed and understood that
the Corporation has the sole and absolute right to force
conversion of this Note into a like amount of Common Stock. In
the event that the holder of this Note does not surrender same to
the Corporation after notice of its intent to convert, then, in
that event, the holder hereof agrees that this Note shall be
canceled on the books of the Corporation and the Corporation
shall have no further obligation hereunder other than to issue
the shares required herein.
2. REDEMPTION. The Corporation may at any time prepay in
whole or in part, the principal amount, plus accrued interest to
the date of prepayment, upon THIRTY (30) days written notice by
certified or registered mail to the registered owners of all
outstanding convertible notes. Such notice shall be mailed to
their addresses appearing on the Corporation's books.
3. REGISTERED OWNER. The Corporation may treat the person
or persons whose name or names appear on this Convertible Note as
the absolute owner or owners hereof for the purpose of receiving
payment of, or on account of, the principal and interest due on
this Convertible Note and for all other purposes.
4. RELEASE OF SHAREHOLDERS, OFFICERS AND DIRECTORS. This
Convertible Note is the obligation of the Corporation only and no
recourse shall be had for the payment of any principal or
interest hereon against any shareholder, officer or director of
the Corporation, either directly or through the Corporation, by
virtue of any statute for the enforcement of any assessment or
otherwise. The holder or holders of this Convertible Note, by the
acceptance hereof, and as part of the consideration for this
Convertible Note, release all claims and waive all liabilities
against the foregoing persons in connection with this Convertible
Note.
5. COLLATERAL. This Convertible Note is secured by 30% of
the shares of stock of Nueva Tierra S.A. de C.V. and the
companies listed on the Exhibit attached hereto. In the Event of
Default, all shares shall be immediately transferred to the
holder thereof.
IN WITNESS WHEREOF, the Corporation has signed and sealed this
Convertible Note this 19TH day of AUGUST, 1996.
INTERNATIONAL REALTY GROUP, INC.
Attest: By: / S / Richard Bradbury
------------------------------
President
By: / S / Rita Templer
-------------------------------
Assistant Secretary
<PAGE> 1
EXHIBIT 99.7
PROXY
THIS PROXY is entered into as of this 31st day of
July 1996, between Jack Birnholz ("Birnholz"), an individual, and DSC
S.A. de C.V. ("DSC"), a corporation organized under the laws of Mexico.
RECITALS:
A. As of the date hereof, DSC has entered into the Second
Amendment to Agreement (the "Agreement") with International Realty Group, Inc.
(the "Company") with respect to a share exchange transaction ("Transaction")
between the parties;
B. DSC will acquire 485,930 shares of the Company's common stock,
par value $.001 per share (the "Common Stock") and a promissory note (the
"Note") convertible into 38,826,500 shares of Common Stock, at the closing (the
"Closing") of the Transaction as provided for in the Agreement;
C. The Company has filed an Information Statement with the
Securities and Exchange Commission ("SEC"), and intends to amend and refile the
Information Statement, in order to increase the number of authorized shares of
Common Stock from 10,000,000 shares to 450,000,000 shares;
D. Twenty days after the SEC has completed its review of the
Information Statement and the Information Statement has been mailed to the
holders of the Common Stock, the Company will amend its Certificate of
Incorporation with the State of Delaware to increase the authorized shares of
Common Stock and DSC will thereafter convert the Note into 38,826,500 shares of
Common Stock;
E. In order to obtain certain control of the Company prior to the
conversion of the Note, DSC has requested that Birnholz grant a proxy to DSC
with respect the 4,160,000 shares (the "Shares") of Common Stock owned by
Birnholz; and
F. As a show of his good faith, Birnholz is willing to honor
DSC's request and grant DSC a proxy with respect to the Shares, pursuant to the
terms and conditions set forth herein.
NOW, THEREFORE, it is agreed as follows:
1. Recitals. All of the foregoing recitals contained
herein are true and correct, and are incorporated herein by reference.
2. Grant of Proxy. Subject to the terms and conditions
set forth herein, Birnholz hereby grants to DSC a proxy with respect to the
Shares. The proxy granted hereby shall permit DSC to exercise the following
rights during the term hereof: (i) to attend all meetings of the Company's
stockholders (as duly called for in accordance with Delaware law and the
Company's Certificate of Incorporation and Bylaws) in the name, place and stead
of Birnholz with respect to the Shares, including the right to present the
Shares to be counted as
<PAGE> 2
attending the meeting by proxy for purposes of establishing a quorum, or the
right to withhold the Shares in whole or in part from attendance at any such
meeting; (ii) to cast such votes at any meeting of the Company's stockholders
and any adjournment thereof as shall be entitled to be cast by the holder in
accordance with Section 3 hereof; (iii) to execute any documents required or
advisable, in accordance with Section 3 hereof, to be executed by the holder of
the Shares, including the call of any special meeting of the Company's
stockholders, waiver of notice of any meeting of the Company's stockholders,
written consents of stockholders, whether unanimous or otherwise, ballots,
attendance records or any other similar document; and (iv) to do any or all of
the foregoing on behalf of the holder of the Shares to the same effect as if
such holder had taken such actions directly all in accordance with Section 3
hereof. DSC shall give Birnholz 10 days prior written notice of any meeting of
the Company's stockholders held during the term of this Proxy.
3. Vote of Proxy. Notwithstanding Section 2 hereof, the
proxy granted hereby shall be used by DSC solely to vote the Shares in order to
approve and consummate the Transaction as contemplated by the Agreement.
Without limiting the generality of the foregoing, the proxy granted hereby
shall not permit DSC to vote the Shares or otherwise approve any of the
following actions, other than as contemplated by the Agreement: (i) the merger,
consolidation, dissolution or liquidation of the Company; (ii) the sale of all
or substantially all of the assets of the Company; (iii) the amendment of the
Certificate of Incorporation or By-Laws, or other corporate governing
instruments of the Company; (iv) the issuance, sale, pledge, disposal of,
grant, or authorization of any shares of capital stock of any class of the
Company, (v) the declaration or payment of any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock, or enter into or amend any contract, agreement, commitment or
arrangement with respect to any of the foregoing; or (vi) the reclassification,
combination, split, subdivision or redemption or purchase of any of the
Company's capital stock.
4. Term of Proxy. The Proxy shall be valid for the
period commencing as of the Closing of the Transaction as provided for in the
Agreement and terminating upon the earlier of: (i) the date of effectiveness of
the amendment to the Company's Certificate of Incorporation to increase the
Common Stock as contemplated by the Information Statement, (ii) the termination
of the Transaction by the parties thereto; (iii) the breach by DSC or an event
of default by DSC of any of the agreements related to the Transaction; or (iv)
December 31, 1996.
5. Assignment of Proxy. The proxy granted hereby may be
exercised exclusively by DSC, acting through any person designated in writing
by DSC. The rights and obligations of the parties hereto may not be assigned.
6. Confirming Documentation. In order to facilitate the
exercise of the proxy granted hereby, Birnholz will, upon request of DSC,
execute and deliver written confirmation of the grant of the proxy for the
Shares.
7. Irrevocability. Except as herein provided, the proxy
granted hereby shall be irrevocable during the term of this Proxy.
8. Indemnification and Compensation. The DSC agrees to
hold Birnholz harmless from and against any and all liability arising out of
any action taken by DSC (or any of its agents acting by, through or on behalf
of DSC) pursuant to the proxy granted hereby.
<PAGE> 3
9. Representation and Warranty. Birnholz represents and
warrants to DSC that he has good and marketable title to and record ownership
of the Shares and that the Shares are free and clear of any security interest,
pledge, lien or other encumbrance.
10. Covenant. Birnholz hereby covenants that the Shares
shall not be transferred in any manner whatsoever during the term of this Proxy
unless agreed to in writing by DSC and hereby agrees that, during the term of
this Proxy, stop transfer instructions may be placed on the Shares with the
Company's transfer agent.
11. Arbitration.
(a) Referral to Arbitral Authority. Any
controversy or claim arising out of or relating to this Proxy, or the alleged
breach hereof, shall be settled by arbitration before the American Arbitration
Association ("AAA") in Miami, Florida. Arbitration under this Section shall be
final and binding on the parties The arbitration shall be heard and determined
by a panel of three arbitrators, selected in accordance with AAA procedures.
In selecting the presiding arbitrator of the panel, the party-appointed
arbitrators or the appointing authority shall not select a person who is
related to or who has had prior business dealings with either party or with
either party-appointed arbitrator.
(b) Conditions of Arbitration. Each party shall
be permitted to conduct reasonable pretrial discovery, subject to whatever
reasonable limitations the arbitrators may be requested to impose on such
discovery procedure or which the arbitrators determine will be necessary in
their discretion. Any award rendered by the arbitral tribunal shall be payable
in U.S. dollars free of any tax or any other deduction. The award shall
include: (i) interest from the date of any breach or other violation of this
contract (the arbitrators shall fix an appropriate rate of interest); and (ii)
the reasonable attorneys fees and costs incurred by the prevailing party in the
arbitration. The arbitrators shall determine all matters in dispute in
accordance with the law of Florida.
12. Notices. All notices required to be given under this
Proxy shall be in writing, sent by certified mail, return receipt requested,
postage prepaid, to the following addresses (or such other address as shall be
provided in writing from one party hereto to the other parties hereto):
If to Jack Birnholz:
2221 N.E. 202nd St.
North Miami Beach, FL 33180
If to DSC S.A. de C.V.:
Monterrey 150,
Col. Roma Sur, C.P. 06760
Mexico, D.F.
13. Governing Law. This Proxy shall be governed by and
construed in accordance with the laws of the State of Delaware.
<PAGE> 4
14. Severability. None of the provisions of this Proxy
is dependent upon the validity of any other provisions, and the invalidity,
illegality or unenforceability, in whole or in part, of any provision shall not
affect any other provisions herein contained.
15. Waiver. The failure of any party hereto to enforce
any provision or provisions of this Proxy shall not be construed as a waiver of
any such provision or provisions as to any future violations thereof, nor
prevent that party thereafter from enforcing each and every other provision of
this Proxy. The waiver of any single remedy shall not constitute a waiver of
such party's right to assert all other legal remedies available to such party
under the circumstances.
16. Binding Effect. This Proxy shall be binding upon the
parties hereto, their heirs, personal representatives and successors. The
parties hereto hereby agree for themselves, their heirs, personal
representatives and successors to execute any instruments and to perform all
acts which may be necessary or proper to carry out the purposes of this Proxy.
17. Entire Agreement. This Proxy contains the entire
understanding of the parties and supersedes any prior written or oral agreement
or understanding among the parties hereto relating to the subject matter
hereof.
18. Captions and Paragraph Headings. Captions and
paragraph headings in this Proxy are for convenience, are not a part of this
Proxy and shall not be used in construing it.
19. Counterparts. This Proxy may be executed in any
number of counterparts, all of which shall together constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Proxy the
day and year first above written.
/s/ Jack Birnholz
-------------------------------------
Jack Birnholz
DSC S.A. de C.V.
/s/ Bernardo Dominguez C.
-------------------------------------
By:
Its:
<PAGE> 1
EXHIBIT 99.8
PROXY
THIS PROXY is entered into as of this 31st day of July 1996,
between Richard Bradbury ("Bradbury"), an individual, and DSC S.A. de C.V.
("DSC"), a corporation organized under the laws of Mexico.
RECITALS:
A. As of the date hereof, DSC has entered into the Second
Amendment to Agreement (the "Agreement") with International Realty Group, Inc.
(the "Company") with respect to a share exchange transaction ("Transaction")
between the parties;
B. DSC will acquire 485,930 shares of the Company's common stock,
par value $.001 per share (the "Common Stock") and a promissory note (the
"Note") convertible into 38,826,500 shares of Common Stock, at the closing (the
"Closing") of the Transaction as provided for in the Agreement;
C. The Company has filed an Information Statement with the
Securities and Exchange Commission ("SEC"), and intends to amend and refile the
Information Statement, in order to increase the number of authorized shares of
Common Stock from 10,000,000 shares to 450,000,000 shares;
D. Twenty days after the SEC has completed its review of the
Information Statement and the Information Statement has been mailed to the
holders of the Common Stock, the Company will amend its Certificate of
Incorporation with the State of Delaware to increase the authorized shares of
Common Stock and DSC will thereafter convert the Note into 38,826,500 shares of
Common Stock;
E. In order to obtain certain control of the Company prior to the
conversion of the Note, DSC has requested that Bradbury grant a proxy to DSC
with respect the 4,160,000 shares (the "Shares") of Common Stock owned by
Bradbury; and
F. As a show of his good faith, Bradbury is willing to honor
DSC's request and grant DSC a proxy with respect to the Shares, pursuant to the
terms and conditions set forth herein.
NOW, THEREFORE, it is agreed as follows:
1. Recitals. All of the foregoing recitals contained
herein are true and correct, and are incorporated herein by reference.
2. Grant of Proxy. Subject to the terms and conditions
set forth herein, Bradbury hereby grants to DSC a proxy with respect to the
Shares. The proxy granted hereby shall permit DSC to exercise the following
rights during the term hereof: (i) to attend all meetings of the Company's
stockholders (as duly called for in accordance with Delaware law and the
Company's Certificate of Incorporation and Bylaws) in the name, place and stead
of Bradbury with respect to the Shares, including the right to present the
Shares to be counted as
<PAGE> 2
attending the meeting by proxy for purposes of establishing a quorum, or the
right to withhold the Shares in whole or in part from attendance at any such
meeting; (ii) to cast such votes at any meeting of the Company's stockholders
and any adjournment thereof as shall be entitled to be cast by the holder in
accordance with Section 3 hereof; (iii) to execute any documents required or
advisable, in accordance with Section 3 hereof, to be executed by the holder of
the Shares, including the call of any special meeting of the Company's
stockholders, waiver of notice of any meeting of the Company's stockholders,
written consents of stockholders, whether unanimous or otherwise, ballots,
attendance records or any other similar document; and (iv) to do any or all of
the foregoing on behalf of the holder of the Shares to the same effect as if
such holder had taken such actions directly all in accordance with Section 3
hereof. DSC shall give Bradbury 10 days prior written notice of any meeting of
the Company's stockholders held during the term of this Proxy.
3. Vote of Proxy. Notwithstanding Section 2 hereof, the
proxy granted hereby shall be used by DSC solely to vote the Shares in order to
approve and consummate the Transaction as contemplated by the Agreement.
Without limiting the generality of the foregoing, the proxy granted hereby
shall not permit DSC to vote the Shares or otherwise approve any of the
following actions, other than as contemplated by the Agreement: (i) the merger,
consolidation, dissolution or liquidation of the Company; (ii) the sale of all
or substantially all of the assets of the Company; (iii) the amendment of the
Certificate of Incorporation or By-Laws, or other corporate governing
instruments of the Company; (iv) the issuance, sale, pledge, disposal of,
grant, or authorization of any shares of capital stock of any class of the
Company, (v) the declaration or payment of any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock, or enter into or amend any contract, agreement, commitment or
arrangement with respect to any of the foregoing; or (vi) the reclassification,
combination, split, subdivision or redemption or purchase of any of the
Company's capital stock.
4. Term of Proxy. The Proxy shall be valid for the
period commencing as of the Closing of the Transaction as provided for in the
Agreement and terminating upon the earlier of: (i) the date of effectiveness of
the amendment to the Company's Certificate of Incorporation to increase the
Common Stock as contemplated by the Information Statement, (ii) the termination
of the Transaction by the parties thereto; (iii) the breach by DSC or an event
of default by DSC of any of the agreements related to the Transaction; or (iv)
December 31, 1996.
5. Assignment of Proxy. The proxy granted hereby may be
exercised exclusively by DSC, acting through any person designated in writing
by DSC. The rights and obligations of the parties hereto may not be assigned.
6. Confirming Documentation. In order to facilitate the
exercise of the proxy granted hereby, Bradbury will, upon request of DSC,
execute and deliver written confirmation of the grant of the proxy for the
Shares.
7. Irrevocability. Except as herein provided, the proxy
granted hereby shall be irrevocable during the term of this Proxy.
<PAGE> 3
8. Indemnification and Compensation. The DSC agrees to
hold Bradbury harmless from and against any and all liability arising out of
any action taken by DSC (or any of its agents acting by, through or on behalf
of DSC) pursuant to the proxy granted hereby.
9. Representation and Warranty. Bradbury represents and
warrants to DSC that he has good and marketable title to and record ownership
of the Shares and that the Shares are free and clear of any security interest,
pledge, lien or other encumbrance.
10. Covenant. Bradbury hereby covenants that the Shares
shall not be transferred in any manner whatsoever during the term of this Proxy
unless agreed to in writing by DSC and hereby agrees that, during the term of
this Proxy, stop transfer instructions may be placed on the Shares with the
Company's transfer agent pursuant to the terms of this Proxy.
11. Arbitration.
(a) Referral to Arbitral Authority. Any
controversy or claim arising out of or relating to this Proxy, or the alleged
breach hereof, shall be settled by arbitration before the American Arbitration
Association ("AAA") in Miami, Florida. Arbitration under this Section shall be
final and binding on the parties The arbitration shall be heard and determined
by a panel of three arbitrators, selected in accordance with AAA procedures.
In selecting the presiding arbitrator of the panel, the party-appointed
arbitrators or the appointing authority shall not select a person who is
related to or who has had prior business dealings with either party or with
either party-appointed arbitrator.
(b) Conditions of Arbitration. Each party shall
be permitted to conduct reasonable pretrial discovery, subject to whatever
reasonable limitations the arbitrators may be requested to impose on such
discovery procedure or which the arbitrators determine will be necessary in
their discretion. Any award rendered by the arbitral tribunal shall be payable
in U.S. dollars free of any tax or any other deduction. The award shall
include: (i) interest from the date of any breach or other violation of this
contract (the arbitrators shall fix an appropriate rate of interest); and (ii)
the reasonable attorneys fees and costs incurred by the prevailing party in the
arbitration. The arbitrators shall determine all matters in dispute in
accordance with the law of Florida.
12. Notices. All notices required to be given under this
Proxy shall be in writing, sent by certified mail, return receipt requested,
postage prepaid, to the following addresses (or such other address as shall be
provided in writing from one party hereto to the other parties hereto):
If to Richard Bradbury:
c/o International Realty Group, Inc.
111 Northwest 183rd Street, Suite 350
Miami, Florida 33169
If to DSC S.A. de C.V.:
Monterrey 150,
Col. Roma Sur, C.P. 06760
Mexico, D.F.
<PAGE> 4
13. Governing Law. This Proxy shall be governed by and
construed in accordance with the laws of the State of Delaware.
14. Severability. None of the provisions of this Proxy
is dependent upon the validity of any other provisions, and the invalidity,
illegality or unenforceability, in whole or in part, of any provision shall not
affect any other provisions herein contained.
15. Waiver. The failure of any party hereto to enforce
any provision or provisions of this Proxy shall not be construed as a waiver of
any such provision or provisions as to any future violations thereof, nor
prevent that party thereafter from enforcing each and every other provision of
this Proxy. The waiver of any single remedy shall not constitute a waiver of
such party's right to assert all other legal remedies available to such party
under the circumstances.
16. Binding Effect. This Proxy shall be binding upon the
parties hereto, their heirs, personal representatives and successors. The
parties hereto hereby agree for themselves, their heirs, personal
representatives and successors to execute any instruments and to perform all
acts which may be necessary or proper to carry out the purposes of this Proxy.
17. Entire Agreement. This Proxy contains the entire
understanding of the parties and supersedes any prior written or oral agreement
or understanding among the parties hereto relating to the subject matter
hereof.
18. Captions and Paragraph Headings. Captions and
paragraph headings in this Proxy are for convenience, are not a part of this
Proxy and shall not be used in construing it.
19. Counterparts. This Proxy may be executed in any
number of counterparts, all of which shall together constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Proxy the
day and year first above written.
/s/ Richard Bradbury
------------------------------------------
Richard Bradbury
DSC S.A. de C.V.
/s/ Bernardo Dominguez C.
------------------------------------------
By:
Its:
<PAGE> 1
EXHIBIT 99.9
ASSIGNMENT AGREEMENT ENTERED INTO THIS 15TH DAY OF AUGUST, 1996, BY AND BETWEEN
DSC, SA DE C.V., HEREIN REPRESENTED BY MESSRS. BERNARDO DOMINGUEZ CERECERES AND
JORGE LOPEZ NUNEZ (HEREINAFTER REFERRED TO AS "DSC"), AS ASSIGNOR, AND
INTERNATIONAL REALTY GROUP, INC., HEREIN REPRESENTED BY MR. RICHARD BRADBURY
(HEREINAFTER REFERRED TO AS "IRG"), AS ASSIGNEE, WITH THE CONSENT OF CLUSTER
INMOBILIARIA DE IXTAPA, S.A. DE C.V., HEREIN REPRESENTED BY MESSRS. BERNARDO
DOMINGUEZ CERECERES AND JORGE LOPEZ NUNEZ (HEREINAFTER REFERRED TO AS "DEBTOR")
UNDER THE FOLLOWING STATEMENTS AND CLAUSES:
STATEMENTS
I.- DSC states that:
a) It is a Mexican corporation duly incorporated and validly existing under
Mexican law.
b) After closing certain negotiations with Nacional Financiera ("NAFIN"), a
Mexican governmental development bank, DSC acquired secured indebtedness
enforceable against DEBTOR, for an amount of U.S. $5,628,426.00 dollars, as of
June 30, 1996 or the amount of Max $42,671,349.00 pesos (hereinafter the
"Indebtedness").
c) As a consequence of certain corporate and financial transactions (the
"Transaction") between DSC and IRG, IRG will acquire the ownership of DEBTOR,
and therefore, it is the will of DSC to assign the Indebtedness to IRG
hereunder.
II.- IRG states that:
a) It is an American corporation duly incorporated and validly existing
under the laws of Delaware.
b) It is acquainted with transaction by means of which DSC acquired the
Indebtedness from NAFIN.
c) As a consequence of the Transaction, it is the will of IRG to acquire the
Indebtedness from DSC hereunder.
CLAUSES
FIRST.- DSC hereby assigns to IRG the Indebtedness, free of any lien or
encumbrance, as a consequence of the agreements undertaken by the parties under
the Transaction.
SECOND.- DEBTOR hereby grants its consent for the assignment referred to
in the above clause.
<PAGE> 2
THIRD.- IRG hereby acknowledges it is acquainted with the terms and
conditions agreed between DSC and DEBTOR in regard with the Indebtedness, and
hereby undertakes them.
FOURTH.- The parties hereto agree that the assignment of the Indebtedness
shall be effective as of August 19, 1996. This document should be superseded
with a more detailed description of all rights and obligations derived from the
document evidencing the Indebtedness.
FIFTH.- For any communications the parties wish or have to give each
other in connection herewith, they designate the following as their addresses:
DSC and DEBTOR IRG
Monterrey 150 111 Northwest 183 Street, Suite 350
Cel. Roma Miami, Florida 33169
Mexico City 06700 Att'n: Mr. Richard Bradbury
Att'n: Mr. Pablo Macedo
SIXTH.- For any controversy that may arise between the parties hereto, in
connection herewith, they expressly submit themselves to the laws and courts of
Mexico City, waiving to any other jurisdiction they may be entitled to for any
reason.
This agreement is entered into by and between the parties in Mexico City.
DSC., S.A. DE. C.V., INTERNATIONAL REALTY GROUP, INC.
/s/ Bernardo Dominguez C. /s/ Richard Bradbury
- - ------------------------- --------------------------------
CLUSTER INMOBILIARIA DE IXTAPA, SA. DE C.V.
/s/ Bernardo Dominguez C.
-------------------------
