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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report October 16, 1997
Date of earliest reported event April, 1997.
STERLING WORLDWIDE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
NEVADA 33-55254-29 87-0438649
(STATE OR OTHER JURISDICTION) (COMMISSION FILE NUMBER) (IRS EMPLOYER I.D. NO.)
1301 N. Congress Avenue, Suite 135,
Boynton Beach, FL 33426
(561) 732-1200
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
KOALA CAPITAL CORPORATION
2200 Boca Raton Blvd.,
Boca Raton, Florida 33431
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On August 13, 1997, 50,000,000 shares of common stock or 99% of the
issued and outstanding stock of the Company were issued and transferred to the
LaSalle Group Ltd., a Cayman Island Corporation with offices in Kent, England in
consideration of the transfer from LaSalle of 100% of the issued and outstanding
stock of LY Transportation Construction Ltd., a British Virgin Islands Company
and LaSalle's agreement to transfer four corporate entities upon formation, to
be known as Natural Park Bahamas, Ltd, Natural Park S.A., Ltd., Natural Park
Alaska, Inc. and Natural Park USA.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 2, 1997, the Company agreed to transfer the Company's entire
interests in its operating subsidiaries, Travelnet International Corp. and
Sterling AKG Corp. to Laurie Doll Gladstone as part of an agreement pursuant to
which, among other things: (i) Ms. Gladstone was granted an irrevocable
three-year put option entitling her to put shares back to the Company in
exchange for $2,000,000 of the Company's ordinary shares, registered with the
Securities and Exchange Commission, and (ii) the Company agreed to the return to
Ms. Gladstone of such number of shares of the Company which would provide her
with 80% of the outstanding securities (on a fully diluted basis) of the Company
if the Company did not provide certified financial statements for the quarter
ended September 30, 1997 to Ms. Gladstone which presented U.S. $10,000,000 in
net assets (total assets less total liabilities) on the books of the Company as
at such date (the "Condition"). Ms. Gladstone contends that the resolutions of
the August 2, 1997 meeting contained resignations of the officers and directors
of the Company effective if the Condition was not met. Ms. Gladstone further
contends that the Company did not satisfy the Condition. The Company however,
believes that it was substantially in compliance by presenting to Ms. Gladstone
a certified statement from the accountant which did state that the Company had
booked $9,545,000 in assets as of September 30, 1997 which Ms. Gladstone
contends was not certified. As a result, a dispute exists with respect to the
ownership and control of the Company. The LaSalle Group had believed that an
oral compromise had been made to settle the dispute but Ms. Gladstone has denied
that any agreement was ever reached. The Company has been informed that on
October 2, 1997 a meeting of the Board of Directors of the Company was held in
which Mark Colacurcio was reappointed President and sole director of the
Company. Management of the Company prior to September 30, 1997 believes that it
is still the authorized management of the Company on the date hereof and
believes that Ms. Gladstone's only right is to commence litigation. Management
is in negotiations with Ms. Gladstone and her representatives to resolve this
matter amicably.
On August 13, 1997, in exchange for 150,000 shares of common stock,
the Company acquired 100% of the outstanding common stock of International
Property Investments Corporation, a Florida Corporation, and licensed Florida
real estate brokerage agency engaged primarily in the brokering of commercial
real estate.
On August 13, 1997, in exchange for 150,000 shares of common stock,
the Company acquired 100% of the outstanding common stock of Resort Marketing
Group, Inc., a Florida Corporation specializing in the marketing of Resort
condominiums and resort-related properties.
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On August 19, 1997 the Company agreed, in principle, subject to
satisfactory completion of due diligence and the negotiation of certain terms,
to acquire FINdex.com, a Florida corporation offering services on the Internet.
No date has been set for the closing.
On August 15, 1997, in exchange for 10,000,000 shares of Class A
Preferred, $1.00 par value, and 50,000,000 shares of common stock, the Company
acquired, from La Salle Group, Ltd., the principal stockholder of the Company,
100% of the outstanding stock of LY Transportation Construction Ltd., a British
West Indies company and the rights to four corporate entities in formation known
as Natural Park Bahamas, Ltd, Natural Park S.A.,Ltd., Natural Park Alaska, Inc.
and Natural Park USA, it is intended that these entities will be engaged in real
estate investment and development business.
On September 8, 1997, the Company acquired four entities which own
and operate the Fort Thomas Resort in St. Christopher, British Virgin Islands,
in exchange for 513,914 shares of common stock under Regulation S of the
Securities and Exchange Act of 1933, as amended and 513,914 shares of restricted
common stock of the Company each valued at $10.00 per share. The 68 room sits
resort on 7.33 acres and operates year round to serve convention clients,
tourist and vacationers. Title to the Resort consisting of approximately 2.331
acres is vested in Fort Thomas Development Company Ltd. Title to the 6.451 acre
parcel surrounding the Resort is vested in Limekiln Development Ltd. Fort Thomas
Management Company Ltd., is the operator of the Resort. Mado Investment Company
Ltd., owns 10,000 of the issued and outstanding shares of each of the foregoing
three corporation.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not Applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
The accounting firm of Berkowits & Company, P.A. of Boca Raton,
Florida was appointed to replace Smith & Company, of Salt Lake City, Utah,
effective March 13, 1997 when the Company moved its offices to Florida.
ITEM 5. OTHER EVENTS.
On April 15, 1997 pursuant to a Majority Shareholder Consent in Lieu
of a Special Meeting of the Shareholders of the Company, pursuant to Nevada
Revised Statute 78,320(2), the majority approved
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a reverse split of the company's stock on a 1 for 4 basis. The number of shares
outstanding prior to the reverse split was 13,100,000 and subsequent to the
reverse split was 3,275,000 common shares.
On July 2, 1997 pursuant to a Majority Shareholder Consent in Lieu
of a Special Meeting of the Shareholders of the Company, pursuant to the Nevada
Revised Statute 78.320(2), the majority stockholder approved a reverse split of
the Company stock on a 1 for 200 basis. The number of shares outstanding prior
to the reverse split was 3,275,000 and subsequent to the reverse split 16,375
common shares.
On July 11, 1997, pursuant to a Majority Shareholder Consent in Lieu
of a Special Meeting of the Shareholders, the Company implemented an amendment
to the Company's Articles of Incorporation to provide for the following:
(i) authorized an increase in share capital from
100,000,000 shares of common stock to 500,000,000 shares with a par value of
$.001, per share; and
(ii) authorized 10,000,000 shares of Class A
Preferred Stock with a par value of $1.00 per share. The Class A Preferred
Shares have superpriorty voting rights of 100,000 votes per preferred share and
further the holders of the Class A preferred shares have the sole right to elect
the majority of the directors to the Board of the Company; and
(iii) authorized 490,000,000 shares of Class B
Preferred Stock having a par value of $.001 per share which shares are
non-voting and are convertible into one share of common stock at a conversion
rate of ten shares of Common Stock for each Preferred Share.
The Board of Directors on August 2, 1997 approved a stock grant,
option and award plan and set aside 1,000,000 shares of common stock for
issuance to key employees, consultants and attorneys. The Board of Directors
approved a 3-year consulting agreement which awards Richard Gladstone 50,000
shares of common stock in each year for three years. Mr. Gladstone was a key
consultant to Sterling Worldwide and its subsidiaries, Travel Net and Sterling
AKG Corporation, prior to the acquisition by the LaSalle Group Ltd.
On August 6, 1997 the Company terminated the services of National
Stock Transfer of Salt Lake City, Utah and appointed Western States Transfer &
Registrar of 4625 South 2300 East, Suite 207, Salt Lake City, Utah 84117-1374,
as transfer agent for the Company.
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ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
On August 6, 1997 Mark Colacurio, the Company's President, Corporate
Secretary and sole Director resigned and Anne M. E. Greyling was elected
President, Treasurer and sole Director. On August 14, 1997 Mary Duncan was
appointed Corporate Secretary. Anne M. E. Greyling is a British citizen residing
in Tunbridge Wells, Kent, United Kingdom. The Company intends to lease office
space in Kent or the greater London area in the United Kingdom to serve as its
European headquarters. The Company is currently occupying an office of
approximately 3,000 square feet free of rent provided by an affiliate of the
Company's principal stockholder La Salle Group, Ltd. The office is locate at
1301 N. Congress Avenue, Suite 135, Boynton Beach, Florida 33426 in the United
States.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibit A: International Property Investments
Corporation - Reorganization Agreement.
Exhibit B: Resort Marketing Group - reorganization
Agreement.
Exhibit C: Stock Purchase Agreement - LY Transportation
Construction, Ltd.
Exhibit D: Acquisition Agreement - Fort Thomas Resort.
ITEM 8. CHANGE IN FISCAL YEAR.
Not Applicable.
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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.
STERLING WORLDWIDE CORPORATION
Date: October 21, 1997 By: /s/ Anne M.E. Greyling
---------------- --------------------------------
Anne M.E. Greyling, Director and
President
By: /s/ John B. M. Frohling
--------------------------------
John B. M. Frohling*
Power of Attorney
* John B.M. Frohling by signing his name thereto signs this Form 8-K on
behalf of the persons indicated above pursuant to a power of attorney
authorizing John B.M. Frohling to sign this Form 8-K on behalf of Anne
M.E. Greyling.
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EXHIBIT A
(International Property Investments Corporation
Reorganization Agreement)
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REORGANIZATION AGREEMENT
THIS REORGANIZATION AGREEMENT (the "Agreement") is made and entered into
by and among STERLING WORLDWIDE CORPORATION, a publicly held Nevada corporation
(the "Corporation"); INTERNATIONAL PROPERTY INVESTMENTS CORPORATION, a Florida
corporation (the "Subsidiary"); and LEE SHACKELFORD (the "Subscribers"); and the
Corporation, the Subsidiary and the Subscribers being collectively referred to
as the "Parties" and each being sometimes hereinafter generically referred to as
a "Party").
P R E A M B L E:
WHEREAS, the Subscribers own all of the shares of the Subsidiary's common
stock, such securities being all of the issued and outstanding shares of the
Subsidiary's capital stock (there being no other securities; the "Subsidiary
Stock"), a corporation engaged in the business more particularly described in
exhibit 0.2 annexed hereto and made a part hereof; and
WHEREAS, the Subscribers desire to acquire 150,000 shares of the
Corporation's Common Stock, no par value per share (the "Stock"), in
consideration for their immediate conveyance of all shares of the Subsidiary
Stock which will constitute 100% of the Subsidiary's authorized, issued and
outstanding securities; provided that the transaction meets the requirements of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended:
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the Parties, intending to be legally bound, hereby agree as follows:
W I T N E S S E T H:
ARTICLE ONE
EXCHANGE PROVISIONS
1.1 EXCHANGE
(a) Subject to the hereinafter described conditions and Performance Criteria,
the Corporation hereby agrees to exchange 150,000 shares of its Common
Stock, no par value, with the Subscribers for all of the shares of the
Subsidiary Stock currently outstanding, which, upon transfer, will
constitute 100% of the Subsidiary's reserved or issued and outstanding
securities.
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
Page 1
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(b) Concurrently with the execution of this Agreement the Subscribers
guarantee delivery of the Subsidiary Stock to the Corporation, the
Corporation shall cause WESTERN STATES TRANSFER CO., of Salt Lake City,
Utah, its transfer agent, to issue 150,000 shares of the Stock to the
Subscribers, as follows:
Lee Shackelford 150,000 Shares
1.2 EXEMPTION FROM REGISTRATION
(a) The Subscribers hereby represent, warrant, covenant and acknowledge that:
(1) (a) The Stock is being issued without registration
under the provisions of Section 5 of the Securities
Act of 1933, as amended (the "Act") or under
applicable securities regulations of the State of
Florida (the "Florida Securities Act") pursuant to
exemptions provided by Section 4(2) and comparable
provisions of the Florida Securities Act;
(b) The Subscribers will assure that any filings in conjunction
with the transactions contemplated by this Agreement required
under the laws of the State of Florida are promptly complied
with;
(2) All of the Stock will bear legends restricting its transfer, sale,
conveyance or hypothecation unless such Stock is either registered
under the provisions of Section 5 of the Act and under the Florida
Securities Act, or an opinion of legal counsel, in form and
substance satisfactory to legal counsel to the Corporation is
provided by the Subscribers to the effect that such registration is
not required as a result of applicable exemptions therefrom;
(3) The Corporation's transfer agent shall be instructed not to transfer
any of the Stock unless the Corporation advises it that such
transfer is in compliance with all applicable laws;
(4) The Subscribers are acquiring the Stock for their own account, for
investment purposes only, and not with a view to further sale or
distribution; and
(5) Subscribers or their advisors have examined the Corporation's latest
reports to the Securities and Exchange Commission on Forms 10-KSB,
10-QSB and 8-K (collectively and generically hereinafter referred to
as "34 Act Reports"), have been provided with access to all of the
Corporation's books and records and have questioned the
Corporation's officers and directors as to such matters involving
the Corporation as the Subscribers deemed appropriate.
(b) The Corporation hereby represents, warrants, covenants and acknowledges
that:
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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(1) The Subsidiary Stock is being transferred without registration under
the provisions of Section 5 of the Act or under the Florida
Securities Act pursuant to the exemptions provided by Section 4(2)
of the Act and comparable provisions of the Florida Securities Act;
(2) All of the Subsidiary Stock will bear legends restricting its
transfer, sale, conveyance or hypothecation unless such Subsidiary
Stock is either registered under the provisions of Section 5 of the
Act and under applicable provincial securities laws, or an opinion
of legal counsel is provided by the Corporation certifying that such
registration is not required as a result of applicable exemptions
therefrom;
(3) The Corporation shall not transfer any of the Subsidiary
Stock except in compliance with all applicable laws; and
(4) The Corporation is acquiring the Subsidiary Stock for its own
account, for investment purposes only and not with a view to further
sale or distribution.
1.3 LIABILITIES.
(a) Any liabilities in any manner encumbering or affecting the Subsidiary or
its assets are disclosed on exhibit 1.3 annexed hereto and made a part
hereof (the "Disclosed Liabilities").
(b) The Subscribers hereby covenant and agree to indemnify and hold the
Corporation harmless from any liabilities of the Subsidiary or affecting
the Subsidiary's assets other than the Disclosed Liabilities ("Undisclosed
Liabilities") and the Corporation may, in addition to all other legal or
equitable remedies that may be available, offset from any funds,
securities or other things of value due to the Subscribers or the
Subscribers' affiliates (as that term is most liberally defined for
federal securities law purposes), such sums as may be required to make the
Corporation whole as a result of the assertion of any Undisclosed
Liability against the Subsidiary or its assets.
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES
2.1 THE CORPORATION.
The Corporation hereby represents and warrants to Subscriber, as a
material inducement to his, her or its entry into this Agreement, that, except
as disclosed in exhibit 2.1 (the "Corporation's Warranty Exceptions") or in the
Corporation's 34 Act Reports filed prior
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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to the date of this Agreement, the following representations and warranties are,
to the best of the Corporation's knowledge, materially accurate:
(a) The Corporation owns or leases the assets described in the Corporation's
34 Act Reports subject to such changes in inventory and supplies as were
required in the ordinary course of business;
(b) The Corporation has 50,000,000 shares of Common Stock, no par value,
authorized, of which less than 30,000,000 shares are currently outstanding
or reserved, there being no other outstanding securities of any class or
of any kind or character of the Corporation, there being no outstanding
subscriptions, options, warrants or other agreements or commitments
obligating the Corporation to issue or sell any additional shares of the
Corporation's Stock or any options or rights with respect thereto, or any
securities convertible into any shares of Stock of any class;
(c) The Corporation is not a party to any written or oral agreement which
grants an option or right of first refusal or other arrangement to acquire
any of its securities or to any agreement that affects the voting rights
of any of its securities, nor has the Corporation made any commitment of
any kind relating to the issuance of shares of any of the Corporation's
securities, whether by subscription, right of conversion, option or
otherwise;
(d) The Corporation is not a party to any agreement or understanding for the
sale or exchange of inventory or services for consideration other than
cash or at a discount in excess of normal discount for quantity or cash
payment;
(e) There are presently no contingent liabilities, factual circumstances,
threatened or pending litigation, contractually assumed obligations or
unasserted possible claims which might result in a material adverse change
in the future financial condition or operations of the Corporation;
(f) The execution, delivery and performance of this Agreement and the
transactions contemplated hereby do not require the consent, authority or
approval of any other person or entity except such as have been obtained;
(g) No transactions have been entered into either by or on behalf of the
Corporation, other than in the ordinary course of business nor have any
acts been performed (including within the definition of the term performed
the failure to perform any required acts) which would adversely affect the
goodwill of the Corporation;
(h) The entering into of this Agreement and the performance thereof has been
duly and validly authorized by all required corporate action;
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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(i) (1) The certified, consolidated financial statements of the Corporation
and its subsidiaries, including consolidated statements of
operations, stockholders investment and cash flows and consolidated
balance sheets for its last three fiscal years, and unaudited
consolidated financial statements for the period from the last
consolidated certified financial statement until the end of the
Corporation's fiscal quarter closest to the date of this Agreement,
all prepared in accordance with generally accepted accounting
principles, consistently applied, are included in the Corporation's
34 Act Reports (the "Corporation's Financial Statements").
(2) The Corporation's Financial Statements, as contained in its 34 Act
Reports, fairly present the Corporation's financial condition as of
their respective dates and its results of operations for their
respective periods in accordance with generally accepted accounting
principles, consistently applied;
(j) (1) Except as and to the extent reflected or reserved against in the
consolidated balance sheet of the Corporation and its subsidiaries
(the "Corporation's Interim Balance Sheet), as of January 31, 1997
the Corporation and its subsidiaries had no liabilities or legal
obligations of a nature required to be reflected on a corporate
balance sheet prepared in accordance with generally accepted
accounting principles or disclosed in the notes thereto, whether
absolute, accrued, contingent, or otherwise and whether due or to
become due (including, without limitation, liabilities for taxes and
interest, penalties, and other charges payable with respect thereto
in respect of or measured by the income of the Corporation through
such date, or arising out of any transaction entered into prior
thereto).
(2) There is no material reasonable basis for the assertion against the
Corporation or any of its subsidiaries of any liability or
obligation which is not fully reflected or reserved against in the
Corporation's Interim Balance Sheet or disclosed in the notes
thereto, except liabilities or obligations incurred since January
31, 1996 in the ordinary course of the Corporation's business.
(k) Since the date of the Corporation's Financial Statements no events have
occurred nor have any facts been discovered which could have a material
adverse effect on the financial status, results of operations or prospects
of the Corporation;
(l) On the Closing Date of this Agreement, the Corporation's net liabilities,
excluding liabilities as a result of the transaction contemplated hereby,
shall not exceed those disclosed in its quarterly report on Form 10-QSB
for the six month period ended December 31, 1996, by more than $ NONE ,
and since that date and such filing, there has not been any materially
adverse change in the financial condition, operations or prospects of the
Corporation;
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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(m) The Corporation and its subsidiaries do not have any liabilities which
constitute a lien or charge on their securities or assets;
(n) The Corporation and each of its subsidiaries has good, valid and
marketable title to all of its assets, subject to no mortgage, pledge,
lien, encumbrance, security interest or charge, except as disclosed in the
Corporation's Financial Statements, and can and will retain free and clear
title thereto after Closing on this transaction, free and clear of any
claims whatsoever;
(o) There are no claims, actions, suits, proceedings or investigations pending
or threatened against the Corporation or any of its subsidiaries and the
Corporation does not know of any basis for any such claim, action, suit,
proceeding or investigation;
(p) During the past 12 months neither the Corporation nor any of its
subsidiaries have disposed of any assets or contractual rights which
disposition, in the opinion of the Corporation's management, has had or
will in the future have a materially adverse impact on the business of the
Corporation and its subsidiaries taken as a whole;
(q) (1) The Corporation has filed with the appropriate governmental agencies
all tax returns and tax reports required to be filed; all federal,
state and local income, profits, franchise, sales, use, occupation,
property or other taxes due have been fully paid, and, the
Corporation is not a party to any action or proceeding by any
governmental authority for assessment or collection of taxes, nor
has any claim for assessments been asserted against the Corporation
or its assets, nor is the Corporation aware of any facts or
circumstances which could give rise to the assertion of any viable,
material claim; and
(2) All taxes that the Corporation is or was required to withhold or
collect have been duly withheld or collected and to the extent
required have been paid to the proper governmental authority or
person;
(r) The Corporation and each of its current, material operating subsidiaries
is, as of the date of this Agreement, a validly existing corporation,
organized pursuant to the laws of the their respective jurisdictions of
incorporation and qualified to do business in each state where required to
do so, with all legal and corporate authority and power to conduct its
business and to own its properties and possesses all necessary permits and
licenses required in connection with the conduct of its business;
(s) The conduct of the Corporation's business is in material compliance with
applicable federal, state and local governmental statutes, rules,
regulations, ordinances and decrees;
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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(t) The execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and compliance with the terms of this
Agreement will not conflict with or result in a breach in any of the terms
or provisions of, or constitute a default under, the certificate of
incorporation or bylaws of the Corporation; any indenture, contract, other
material agreement or instrument to which the Corporation or any of its
subsidiaries or their respective assets are bound; or, violate any
applicable regulation, judgment, order or decree of any governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the Corporation, its securities, assets or properties;
(u) This Agreement constitutes a binding obligation of the Corporation,
enforceable against it in accordance with the terms hereof, and has been
authorized by all required corporate action;
(v) (1) The Corporation has not experienced any material difficulties with
the management or recruiting of employees for its business, nor does
the Corporation have any reason to believe that any such
difficulties will arise in the future.
(2) None of the employees of the Corporation or its subsidiaries are
represented by labor unions, nor does the Corporation have any
reason to believe that any of its employees desire to be represented
by labor unions; and
(3) The Corporation has no reason to believe that any of its employees
have any potential claims against the Corporation, its subsidiaries
or their successors in interest based on violations of equal
employment laws, occupational health and safety standards or any
other legally protected rights;
(w) (1) The Corporation has not generated any hazardous wastes or engaged in
activities which could be interpreted as potential violations of
laws, statutes, regulations ordinances or judicial decrees in any
manner regulating the generation or disposal of hazardous waste.
(2) There are no on-site or off-site locations where the Corporation or
any of its subsidiaries has stored, disposed or arranged for the
disposal of chemicals, pollutants, contaminants, wastes, toxic
substances, petroleum or petroleum products; there are no
underground storage tanks located on property owned or leased by the
Corporation or any of its subsidiaries; and, no polychlorinated
hiphenyle are used or stored at any property owned or leased by the
Corporation or any subsidiary;
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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(x) (1) The Corporation currently has in full force and effect insurance
policies of the kind and in coverage amounts adequate to meet its
current insurance requirements; and
(2) There are no impediments to obtaining hazard and liability insurance
covering all of the Corporation's assets and operations, at
commercially reasonable insurance rates, nor does the Corporation
have any basis for believing that such insurance, at such rates,
will not be obtainable by the Corporation in the future;
(y) All of the information reflected in the foregoing representations and
warranties is complete and accurate, and does not omit any information
required to make the information provided non-misleading, accurate and
meaningful, in light of the nature of this transaction; and
(z) There is no material fact, development or threatened development that
materially adversely affects, or is likely to materially adversely affect
the business of the Corporation, which the Corporation has not publicly
disclosed or privately disclosed, either expressly or by reasonable
implication, to the Subscriber.
2.2 THE SUBSIDIARY.
The Subsidiary and each of the Subscriber, jointly and severally, hereby
represent and warrant to the Corporation, as a material inducement to the
Corporation's entry into this Agreement, that, except as specified on exhibit
2.2 annexed hereto and made a part hereof (the "Subsidiary's Warranty
exceptions"), the following representations and warranties are, to the best of
their knowledge, materially accurate:
(a) (1) Exhibit 2.2(a) contains a complete and accurate list of all real and
all personal property owned by the Subsidiary, tangible, intangible
and inchoate (the term Subsidiary in the context of this Article
being deemed to include all subsidiaries of the Subsidiary and
sibling corporation's of the Subsidiary, the assets and operations
of which are to be included among the subjects of this Agreement),
and the principal terms of all patents, trademarks, copyrights,
trade names, service marks, other intellectual property, franchises
and licenses held by the Subsidiary for use in manufacture and sale
of sporting goods or apparel, including identification of the
licensor, the formulae for royalty or other payments thereunder, the
expiration dates, and other terms of any extensions or renewals
permitted thereunder;
(2) The operations of the several affiliated entities which comprise the
total business of which the Subsidiary has been a part since its
inception have been consolidated as to ownership and control under
the Subsidiary, in a manner resulting in the control and ownership
thereof by the Subsidiary, and, as a
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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consequence of the transactions contemplated by this Agreement, all
such assets and operations shall become the indirect property
(through ownership of the Subsidiary's capital stock) of the
Corporation.
(b) (1) The Subsidiary has _____________ shares of Common Stock, $0.001 par
value, authorized, ________________ shares of which are currently
issued and outstanding, there being no other authorized or
outstanding securities of any class or of any kind or character of
the Subsidiary.
(2) There are no outstanding subscriptions, options, warrants or other
agreements or commitments obligating the Subsidiary or any
Subscribers to issue or sell any additional shares of Subsidiary
Stock or any options or rights with respect thereto, or any
securities convertible into any shares of Subsidiary Stock of any
class;
(c) Upon conveyance of the Subsidiary Stock by the Subscriber, the Corporation
will become the owner of all of the Subsidiary's authorized, issued and
outstanding equity securities;
(d) As of the Closing Date on this Agreement, the Subsidiary will not be a
party to any written or oral agreement which grants any option or right of
first refusal or other arrangement to acquire any of its securities or to
any agreement that will affect the voting rights of any of its securities,
nor have the Subscribers or the Subsidiary made any commitment of any kind
relating to the issuance of shares of any of the Subsidiary's equity
securities, whether by subscription, right of conversion, option or
otherwise;
(e) The Subsidiary is not a party to any agreement or understanding for the
sale or exchange of inventory or services for consideration other than
cash or at a discount in excess of normal discounts for quantity or cash
payment;
(f) There are presently no contingent liabilities, factual circumstances,
threatened or pending litigation, contractually assumed obligations or
unasserted possible claims known to the Subsidiary which might result in a
material adverse change in the future financial condition or operations of
the Subsidiary;
(g) The execution, delivery and performance of this Agreement and the
transactions contemplated hereby do not require the consent, authority or
approval of any other person or entity, except such as have been obtained;
(h) No transactions have been entered into either by or on behalf of the
Subsidiary, other than in the ordinary course of business nor have any
acts been performed (including
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within the definition of the term performed the failure to perform any
required acts) which would materially adversely affect the goodwill of the
Subsidiary;
(i) The entering into of this Agreement and the performance required hereunder
has been duly and validly authorized by all required corporate action;
(j) (1) Annexed hereto and made a part hereof as composite exhibit 2.2(j)
are: (a) an unaudited balance sheet of the Subsidiary as of December
31, 1996 with the related statement of operations and accumulated
deficit and unaudited statements of cash flows for the Corporation
from inception to December 31, 1996 (such balance sheets, statements
of operations and other statements are referred to herein as the
"Subsidiary's Financial Statements").
(2) The Subsidiary's Financial Statements fairly present the financial
condition of the Subsidiary as of the dates thereof, and the results
of operations of the Subsidiary for the periods indicated, in each
case in accordance with generally accepted accounting principles
applied on a consistent basis;
(3) Except as and to the extent reflected or reserved against in the
Subsidiary's Balance Sheet, the Subsidiary had no liabilities or
legal obligations of a nature required to be reflected on a
corporate balance sheet prepared in accordance with generally
accepted accounting principles or disclosed in the notes thereto,
whether absolute, accrued, contingent, or otherwise and whether due
or to become due (including, without limitation, liabilities for
taxes and interest, penalties, and other charges payable with
respect thereto (a) in respect of or measured by the income of the
Subsidiary through such date, or (b) arising out of any transaction
entered into prior thereto).
(4) There is no basis for the assertion against the Subsidiary of any
liability or obligation which is not fully reflected or reserved
against in the Subsidiary's Interim Balance Sheet or disclosed in
the notes thereto, except liabilities or obligations incurred since
December 31, 1996 in the ordinary course of the Subsidiary's
business consistent with its past practice.
(k) Except as reflected in the Subsidiary's Financial Statements, since
December 31, 1996 the Subsidiary has not suffered any material adverse
change in its financial condition, assets, liabilities or business; or
suffered any material casualty loss (whether or not insured);
(l) On the Closing Date of this Agreement, the Subsidiary's aggregate
liabilities, whether accrued or inchoate, shall not exceed $ NONE
(including liabilities owed to the Subscribers) and such liabilities shall
not require any payments, other than as specifically disclosed in exhibit
1.3;
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(m) None of the properties or assets used in the business of the Subsidiary
are subject to any mortgage, pledge, lien, security interest, conditional
sale agreement, encumbrance, or charge of any kind, except as disclosed in
exhibit 1.3;
(n) (1) There are no claims, actions, suits, proceedings or investigations
pending or threatened by or against the Subsidiary and the
Subsidiary does not know of any basis for any such claim, action,
suit, proceeding, or investigation;
(2) The Subsidiary is not subject to any liabilities or potential
liabilities that will subject the Corporation, or its affiliates,
stockholders, officers, directors, agents or advisors to any claims
or liabilities predicated or emanating from torts or violations of
law attributable to the Subsidiary or for which the Subsidiary
assumed responsibility or which can in any manner be imputed to the
Subsidiary or its assets;
(o) The Subsidiary has no liabilities involving expenses attributable
directly, indirectly or incidentally to any litigation;
(p) Except as otherwise disclosed in the Subsidiary's Financial Statements the
Subsidiary has good, valid, and marketable title to all its properties,
licenses, and assets, real, personal and mixed, tangible and intangible;
(q) (1) Since its inception the Subsidiary has not disposed of any assets or
contractual rights which disposition has had or will in the future
have a materially adverse effect on the business of the Subsidiary
and no such disposition will be made by the Subsidiary outside the
ordinary course of business during the interim between execution of
this Agreement and the Closing, unless this Agreement shall have
been terminated, without the prior written consent of the
Corporation;
(2) Neither the Subsidiary nor its subsidiaries, if any, have, during
the six months preceding the date of this Agreement, distributed any
unusual amounts of income to their stockholders, agents, employees
or any related parties.
(r) The Subsidiary has filed with the appropriate governmental agencies all
tax returns and tax reports required to be filed; all United States, state
and local income, profits, franchise, sales, use, occupation, property or
other taxes due have been fully paid, except as listed on exhibit 1.3;
and, the Subsidiary is not a party to any action or proceeding by any
governmental authority for assessment or collection of taxes, nor has any
claim for assessments been asserted against the Subsidiary or its assets;
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(s) The Subsidiary is, as of the date of this Agreement, a validly existing
corporation, organized pursuant to the laws of the State of Florida (and
its subsidiaries and sibling corporations are validly organized and in
good standing under their laws of their corporate domiciles), with all
legal and corporate authority and power to conduct its business and to own
its properties and possesses all necessary permits and licenses required
in connection with the conduct of its business;
(t) The conduct of the Subsidiary's business is in material compliance with
all applicable federal, provincial, state and local governmental statutes,
rules, regulations, ordinances and decrees;
(u) The execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and compliance with the terms of this
Agreement will not conflict with or result in a breach in any of the terms
or provisions of, or constitute a default under, the Articles of
Incorporation or By-Laws of the Subsidiary; any indenture, other material
agreement or instrument to which the Subsidiary or its stockholders are a
party or by which the Subsidiary or its assets are bound; or, any
applicable regulation, judgment, order or decree of any governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the Subsidiary, its securities or its properties;
(v) This Agreement constitutes the valid and binding agreement of the
Subsidiary and is enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is
sought by proceedings in equity or at law, no such proceeding being
anticipated or under consideration);
(w) (1) The Subsidiary has not experienced any material difficulties with
the management or recruiting of employees for its business, nor does
the Subsidiary have any reason to believe that any such difficulties
will arise in the future.
(2) None of the employees of the Subsidiary are represented by labor
unions, nor does the Subsidiary have any reason to believe that any
of its employees desire to be represented by labor unions; and
(3) The Subsidiary has no reason to believe that any of its employees
have any potential claims against the Subsidiary or its successors
in interest based on violations of equal employment laws,
occupational health and safety standards or any other legally
protected rights;
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(x) (1) The Subsidiary has no reason to believe that it has generated any
hazardous wastes or engaged in activities which violate or could be
interpreted as violating any laws, statutes, regulations ordinances
or judicial decrees in any manner regulating the generation or
disposal of hazardous waste.
(2) There are no on-site or off-site locations where the Subsidiary has
stored, disposed or arranged for the disposal of chemicals,
pollutants, contaminants, wastes, toxic substances, petroleum or
petroleum products; there are no underground storage tanks located
on property owned or leased by the Subsidiary; and, no
polychlorinated hiphenyle are used or stored at any property owned
or leased by the Subsidiary;
(y) All of the information reflected in the foregoing representations and
warranties is complete and accurate, and does not omit any information
required to make the information provided non-misleading, accurate and
meaningful, in light of the nature of this transaction.
(z) There is no material fact, development or threatened development that
materially adversely affects, or is likely to materially adversely affect
the business of the Subsidiary, which the Subscribers have not disclosed,
either expressly or by reasonable implication, to the Corporation.
2.3 THE SUBSCRIBER.
The Subscribers hereby represent and warrant to the Corporation, as a
material inducement to the Corporation's entry into this Agreement, that, except
as specified on exhibit 2.3 annexed hereto and made a part hereof (the
"Subscriber's Warranty exceptions"), the following representations and
warranties are, to the best of the Subscriber's knowledge, materially accurate;
(a) The Subscribers will, on the Closing Date, own the Subsidiary stock,
registered in their names and subject to no liens, pledges or
encumbrances, and will convey good title thereto to the Corporation, there
being no outstanding subscriptions, options, warrants or other agreements
or commitments obligating the Subscribers to sell any of their shares of
the Subsidiary's Stock or any options or rights with respect thereto;
(b) All of the information reflected in the foregoing representations and
warranties and, the representations and warranties made by the Subsidiary,
are complete and accurate, and do not omit any information required to
make the information provided non-misleading, accurate and meaningful, in
light of the nature of this transaction;
(c) (1) Annexed hereto and made a part hereof as composite exhibit 2.3(c)
are completed officers and directors questionnaires pertaining to
the Subscribers and company questionnaires pertaining to the
Subsidiary, which Subscribers
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have either completed or reviewed, on forms provided by the
Corporation's legal counsel (collectively hereinafter referred to as
the Questionnaires"); and
(2) The Questionnaires have been completed and answered in an accurate
and complete fashion, and do not fail to disclose any information
necessary to render the information provided, not misleading.
(d) Annexed hereto and made a part hereof as Exhibit 2.3(d) is a complete,
accurate and not misleading, narrative disclosure document providing the
information called for by Securities and Exchange Commission Regulation SB
with reference to the Subsidiary, its operations and background.
ARTICLE THREE
CONDITIONS
3.1 CONDITION SUBSEQUENT
(a) The obligations of the Parties are subject to the condition subsequent
that the Subsidiary's Financial Statements comply or can within the 50 day
period following the Closing on this Agreement be made to comply with the
requirements of Regulation S-B promulgated under the Securities Exchange
Act of 1934.
(b) In the event that the Securities and Exchange Commission advises the
Corporation that the financial statements of the Subsidiary (excluding pro
forma financial statements) filed with the Form 8-K of the Corporation
relating to the acquisition of the Subsidiary, or an amendment thereto,
fail to comply in a material respect with generally accepted accounting
principals or the requirements of Regulation S-B and the Securities and
Exchange Commission is unwilling to waive such deficiencies, the
Corporation and the Subsidiary will use their best efforts to correct the
subject financial statements in such manner as will satisfy the Securities
and Exchange Commission's objections thereto or cause the Securities and
Exchange Commission to withdraw its objections; provided that, if such
corrections are not affected or such objections withdrawn within three
months after any deficiencies are raised by the Securities and Exchange
Commission, the Corporation may elect to rescind this Agreement, ab
initio, unless the Parties can, at such time, agree on a restructuring of
this transaction in a manner meeting the applicable reporting requirements
imposed by applicable United States, Canadian, state and provincial
securities law requirements.
3.2 CONDITIONS TO THE CORPORATION'S OBLIGATIONS
The obligations of the Corporation under this Agreement are subject to the
Subsidiary's (the term Subsidiary in the context of this Article being deemed to
include all subsidiaries of
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the Subsidiary and sibling corporations of the Subsidiary, the assets and
operations of which are to be included among the subjects of this Agreement) and
Subscriber's satisfaction, or the written waiver by the Corporation, of the
following conditions prior to Closing (the "Conditions Precedent"):
(a) That all covenants, agreements, actions, proceedings, instruments and
documents required to be carried out or delivered by Subscribers or the
Subsidiary pursuant to this Agreement shall have been performed, complied
with or delivered to the Corporation in accordance with the terms thereof.
(b) That the warranties and representations made by the Subscribers and the
Subsidiary in this Agreement shall be true and correct in all material
respects on and as of the date of Closing and shall be deemed to be made
on and as of such date.
(c) That there are no material violations of any laws, statutes, ordinances,
orders, regulations or requirements of any governmental authority
affecting the Subsidiary or its assets, nor will there be any at the time
of Closing.
(d) There is no action, suit or proceeding pending or threatened against or
affecting the Subsidiary or its assets in any court or before or by any
federal, provincial, state, county or municipal department, commission,
board, bureau, agency or other governmental instrumentality which would
affect the Subscriber's or the Subsidiary's ability to perform hereunder
or which could affect the business of the Subsidiary in a materially
adverse manner.
(e) That the Subsidiary is in material compliance with all applicable federal,
provincial, state or local statutes, regulations, rules or ordinances
applicable to the it, its securities or assets and that the transactions
contemplated hereby will not result in any violations thereof.
(f) That the issuance of the Stock and the transfer of the Subsidiary Stock
complies with the requirements for exemption from registration under the
statutes, regulations and rules applicable thereto and of comparable
provisions of the laws of the Corporation's and the Subscriber's province
of domicile.
(g) That all licenses, patents and intellectual property rights heretofore
held or owned by the Subsidiary continue to be in good standing and not
subject to legal or other challenges, and that after Closing on this
Agreement, they will continue to remain in full force, effect and
validity.
(h) That the operations of the several affiliated entities which comprise the
total business of which the Subsidiary has been a part since its inception
have been consolidated as to ownership and control under the Subsidiary,
in a manner resulting in the control and
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ownership thereof by the Subsidiary, and, that as a consequence of the
transactions contemplated by this Agreement, all such assets and
operations shall become the indirect property (through ownership of the
Subsidiary's capital stock) of the Corporation.
3.3 CONDITIONS TO THE SUBSCRIBER'S OBLIGATIONS
The obligations of the Subscribers under this Agreement are subject to the
Corporation's satisfaction, or the written waiver thereof by the Subscriber, of
the following conditions prior to Closing (the "Subscriber's Conditions
Precedent"):
(a) That all covenants, agreements, actions, proceedings, instruments and
documents required to be carried out or delivered by the Corporation
pursuant to this Agreement shall have been performed, complied with or
delivered to the Subscribers in accordance with the terms thereof.
(b) That the warranties and representations made by the Corporation in this
Agreement shall be true and correct in all material respects on and as of
the date of Closing and shall be deemed to be made on and as of such date.
(c) That the issuance of the Stock and the transfer of the Subsidiary Stock
complies with the requirements for exemption from registration under the
statutes, regulations and rules applicable thereto, including, without
limitation, the provisions of Sections 4(1), 4(2) or 4(6) of the
Securities Act of 1933, as amended, of Regulation D promulgated
thereunder, and of comparable provisions of the laws of the Corporation's
and the Subscriber's province of domicile.
ARTICLE FOUR
CLOSING
4.1 CLOSING DATE.
The Closing on this transaction will take place within 36 hours following
the execution of this Agreement, with all documents to be pre-cleared and
exchanged by overnight post. Closing will be held by telephone conference
arranged by the Corporation at a mutually agreeable time but may be adjourned
and reconvened at a physical location, if required, at the request of either
Party. If Closing at a physical location is required, it shall take place at the
Subscriber's offices in Boynton Beach, Florida, during normal business hours, at
a mutually convenient time within ten business days following the adjourned
teleconference closing session.
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4.2 ITEMS DELIVERED AT CLOSING BY THE SUBSIDIARY AND THE SUBSCRIBER.
Prior to the Closing, the Subscribers will deliver the following items to
the Corporation, which shall be held in escrow until completion of the Closing:
(a) Certificates for all of the Subsidiary Stock, duly endorsed or with stock
power attached with appropriate signature guarantees, in form and
substance adequate to permit immediate transfer thereof to the
Corporation;
(b) A certification from an officer of the Subsidiary to the effect that after
consulting with counsel to the Subsidiary or other legal counsel
acceptable to the Corporation, he or they reasonably believe that:
(1) The issuance of the Stock to the Subscribers will not require any
actions in the Subscribers' province of domicile, other than such
actions as have been taken no later than the fifth day prior to
Closing, in order to comply with such province's laws, regulations
and rules governing private placements, and that such issuance will
not violate any such laws, regulations or rules; and
(2) The transfer of the Subsidiary Stock as contemplated by this
Agreement meets the requirements of the exemption from registration
requirements provided by Sections 4(1), 4(2) or 4(6) of the
Securities Act of 1933, as amended.
(c) A certification from the Subsidiary's chief financial officer indicating
that, after a review of the Subsidiary's books and records from the date
of the Subsidiary's latest financial statements annexed hereto until the
fifth day prior to Closing, such review did not give such officer cause to
believe that any materially detrimental matters have occurred, or that
there have been any materially detrimental changes in the financial
condition of the Subsidiary, other than as disclosed in this Agreement.
(d) An investment letter, in the form annexed hereto as exhibit 4.2(d).
4.3 ITEMS DELIVERED AT CLOSING BY THE CORPORATION.
Prior to the Closing, the Corporation will deliver the following to the
Subscriber, which shall be held in escrow until completion of the Closing:
(a) Certificates for the Stock, in denominations as directed by Subscriber.
(b) An opinion from the Corporation's legal counsel that the issuance of the
Stock as contemplated by this Agreement will meet the requirements of the
exemption from registration requirements provided by Section 4.2 of the
Securities Act of 1933, as amended.
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(c) A certification from the Corporation's chief financial officer indicating
that, after a review of the Corporation's books and records from the date
of the Corporation's latest financial statements annexed hereto until the
fifth day prior to Closing, such review did not give such officer cause to
believe that any materially detrimental matters have occurred, or that
there have been any materially detrimental changes in the financial
condition of the Corporation, other than as disclosed in this Agreement.
4.4 CLOSING COSTS.
Except as expressly provided in this Agreement, each Party shall pay their
own Closing costs.
ARTICLE FIVE
BROKER
5.1 THE SUBSCRIBER.
The Subscribers and the Subsidiary represent and warrant to the
Corporation that it will not be subject to and will indemnify and hold it
harmless against any claims of brokers for commissions or other compensation in
connection with this Agreement and the consummation of the transactions
contemplated hereby.
5.2 THE CORPORATION.
The Corporation hereby represents and warrants to the Subsidiary that it
will not be subject to and will indemnify and hold it harmless against any
claims of brokers for commissions or other compensation in connection with this
Agreement and the consummation of the transactions contemplated hereby.
ARTICLE SIX
COVENANTS
6.1 MAINTENANCE OF SUBSIDIARY:
Except as approved by the Corporation's Chief Executive Officer:
(a) The Subsidiary shall not sell or transfer any of the its material assets,
real, personal, tangible or intangible, other than in the ordinary course
of business, without the Corporation's explicit prior written consent.
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(b) The Subsidiary will keep all of its material assets in good standing,
order and repair and shall cause any and all necessary remedies and
repairs thereto to be made on or before the Closing.
(c) The Subsidiary shall preserve all of its contractual rights in good
standing.
(d) The operations of the several affiliated entities which comprise the total
business of which the Subsidiary has been a part since its inception will
be consolidated as to ownership and control under the Subsidiary, in a
manner resulting in the control and ownership thereof by the Subsidiary,
and, as a consequence of the transactions contemplated by this Agreement,
all such assets and operations shall become the indirect property (through
ownership of the Subsidiary's capital stock) of the Corporation.
6.2 COOPERATION.
The Corporation and the Subsidiary and their agents shall have reasonable
access to the premises and assets of the other for the purpose of familiarizing
themselves with the operations of each others business. The Subsidiary and the
Corporation agree to cooperate with each other and to render a reasonable amount
of assistance in the orderly integration of the business of the Subsidiary into
the Corporation's operations and the familiarization of the Parties therewith.
6.3 POST CLOSING LEGAL ACTIVITIES
(a) Jay C. Salyer, Jr. P.A., which serves as an attorney to the Subscribers
have been asked to assist the Corporation's general counsel to prepare and
file all required reports of the transactions contemplated by this
Agreement with the Securities and Exchange Commission, such reports to
include a detailed report of special event on Form 8-K, any required proxy
materials, and such other matters as, in the opinion of management, may be
required.
(b) The Parties hereby covenant and agree to fully cooperate with Jay C.
Salyer, Jr. P.A. in the timely preparation and filing of all such
materials and reports, which are due on or before the tenth day following
Closing.
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ARTICLE SEVEN
MISCELLANEOUS
7.1 AMENDMENT.
No modification, waiver, amendment, discharge or change of this Agreement
shall be valid unless the same is evinced by a written instrument, subscribed by
the Party against which such modification, waiver, amendment, discharge or
change is sought.
7.2 NOTICE.
All notices, demands or other communications given hereunder shall be in
writing and shall be deemed to have been duly given on the first business day
after mailing by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
TO THE CORPORATION: Anne M. E. Greyling, President
Sterling Worldwide Corporation
1301 N. Congress Avenue, Suite 135
Boynton Beach, Florida 33426
TO THE SUBSCRIBER: Lee Shackelford
190 Golden Beach Drive
North Miami Beach, Florida 33160
TO THE SUBSIDIARY: Lee Shackelford, President
International Property Investments Corporation
190 Golden Beach Drive
North Miami Beach, Florida 33160
or such other address or to such other person as any Party shall designate to
the other for such purpose in the manner hereinafter set forth. Copies of any
notice shall also be sent to Jay C. Salyer, Jr., P.A., General Counsel to the
Subscriber, by facsimile transmission to (561) 732-3830.
7.3 MERGER.
This instrument, together with the instruments referred to herein,
contains all of the understandings and agreements of the Parties with respect to
the subject matter discussed herein. All prior agreements whether written or
oral are merged herein and shall be of no force or effect.
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7.4 SURVIVAL.
The several representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and Closing hereon and shall
be effective regardless of any investigation that may have been made or may be
made by or on be half of any Party.
7.5 SEVERABILITY.
If any provision or any portion of any provision of this Agreement, other
than one of the conditions precedent or subsequent, or the application of such
provision or any portion thereof to any person or circumstance shall be held
invalid or unenforceable, the remaining portions of such provision and the
remaining provisions of this Agreement or the application of such provision or
portion of such provision as is held invalid or unenforceable to persons or
circumstances other than those to which it is held invalid or unenforceable,
shall not be affected thereby.
7.6 GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the State
of Florida and any proceedings pertaining directly or indirectly to the rights
or obligations of the Parties hereunder shall, to the extent legally permitted,
be held in Palm Beach County, Florida.
7.7 INDEMNIFICATION.
Each Party hereby irrevocably agrees to indemnify and hold the other
Parties harmless from any and all liabilities and damages (including legal or
other expenses incidental thereto), contingent, current, or inchoate to which
they or any one of them may become subject as a direct, indirect or incidental
consequence of any action by the indemnifying Party or as a consequence of the
failure of the indemnifying Party to act, whether pursuant to requirements of
this Agreement or otherwise. In the event it be comes necessary to enforce this
indemnity through an attorney, with or without litigation, the successful Party
shall be entitled to recover from the indemnifying Party, all costs incurred
including reasonable attorneys' fees throughout any negotiations, trials or
appeals, whether or not any suit is instituted.
7.8 LITIGATION.
(a) In any action between the Parties to enforce any of the terms of this
Agreement or any other matter arising from this Agreement, the prevailing
Party shall be entitled to recover its costs and expenses, including
reasonable attorneys' fees up to and including all negotiations, trials
and appeals, whether or not litigation is initiated.
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(b) In the event of any dispute arising under this Agreement, or the
negotiation thereof or inducements to enter into the Agreement, the
dispute shall, at the request of any Party, be exclusively resolved
through the following procedures:
(1) First, the issue shall be submitted to mediation before a mediation
service in West Palm Beach, Florida to be selected by lot from six
alternatives to be provided, two by each Party. The mediation
efforts shall be concluded within ten business days after their
initiation unless the Parties unanimously agree to an extended
mediation period;
(2) In the event that mediation does not lead to a resolution of the
dispute then at the instigation of any Party, lawsuit may be
commenced.
(3) Expenses of mediation shall be borne by the Subsidiary, if
successful. Expenses of mediation, if unsuccessful and of
arbitration shall be borne by the Party or Parties against whom the
arbitration decision is rendered. If the terms of the arbitral award
do not establish a prevailing Party, then the expenses of
unsuccessful mediation and arbitration shall be borne equally by the
Parties.
7.9 BENEFIT OF AGREEMENT.
The terms and provisions of this Agreement shall be binding upon and inure
to the benefit of the Parties, their successors, assigns, personal
representatives, estate, heirs and legatees.
7.10 CAPTIONS.
The captions in this Agreement are for convenience and reference only and
in no way define, describe, extend or limit the scope of this Agreement or the
intent of any provisions hereof.
7.11 NUMBER AND GENDER.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the Party or
Parties, or their personal representatives, successors and assigns may require.
7.12 FURTHER ASSURANCES.
The Parties agree to do, execute, acknowledge and deliver or cause to be
done, executed, acknowledged or delivered and to perform all such acts and
deliver all such deeds, assignments, transfers, conveyances, powers of attorney,
assurances, stock certificates and
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other documents, as may, from time to time, be required herein to effect the
intent and purpose of this Agreement.
7.13 STATUS.
Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, employer-employee relationship, lessor-lessee
relationship, or principal-agent relationship, rather, the relationships
established hereby are those of purchaser and seller.
7.14 COUNTERPARTS.
This Agreement may be executed in any number of counterparts. All executed
counterparts shall constitute one Agreement notwithstanding that all signatories
are not signatories to the original or the same counterpart. Execution by
exchange of facsimile transmission shall be deemed legally sufficient to bind
the signatory; however, the Parties shall, for aesthetic purposes, prepare a
fully executed original version of this Agreement, which shall be the document
filed with the Securities and Exchange Commission.
7.15 EXHIBIT INDEX.
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
0.2 Description of the Subsidiary's Business
1.3 Subsidiary's Liabilities
2.1 Corporation's Warranty Exceptions
2.2 Subsidiary's Warranty Exceptions
2.2(a) List of Assets Owned or Leased by the
Subsidiary and its Affiliates.
2.2(j) Subsidiary's Financial Statements
2.2(y) Subsidiary's Insurance Policies or Binders
2.3 Subscriber's Warranty Exceptions
2.3(c) Questionnaires
2.3(d) Regulation SB Disclosure Narrative
4.2(d) Investment Letter
</TABLE>
* * *
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
effective as of the 13th day of August, 1997.
Witnesses: STERLING WORLDWIDE CORPORATION
By: /s/ Anne M. E. Greyling
- - ------------------------------------- ------------------------------------
Anne M. E. Greyling, President
Attest: /s/ Anne M. E. Greyling
- - ------------------------------------- -------------------------------
(CORPORATE SEAL) Anne M. E. Greyling, Corporate
Secretary
INTERNATIONAL PROPERTY
INVESTMENTS CORPORATION
/s/ Susan G. Howerton By: /s/ Lee Shackelford
- - ------------------------------------- -----------------------------------
Lee Shackelford, President
/s/ Susan G. Howerton Attest: /s/ Lee Shackelford
- - ------------------------------------- -------------------------------
(CORPORATE SEAL) Lee Shackelford, Secretary
SUBSCRIBERS
/s/ Susan G. Howerton /s/ Lee Shackelford
- - ------------------------------------- ----------------------------------------
LEE SHACKELFORD
- - -------------------------------------
Please Initial: Corporation: ______ Subsidiary: LS Subscribers: LS
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<PAGE> 1
EXHIBIT B
(Resort Marketing Group
Reorganization Agreement)
<PAGE> 2
REORGANIZATION AGREEMENT
THIS REORGANIZATION AGREEMENT (the "Agreement") is made and entered into
by and among STERLING WORLDWIDE CORPORATION, a publicly held Nevada corporation
(the "Corporation"); RESORT MARKETING GROUP, INC., a Florida corporation (the
"Subsidiary"); and LEE SHACKELFORD and PETER G. SCHUSTER, (the "Subscribers");
and the Corporation, the Subsidiary and the Subscribers being collectively
referred to as the "Parties" and each being sometimes hereinafter generically
referred to as a "Party").
P R E A M B L E:
WHEREAS, the Subscribers own all of the shares of the Subsidiary's common
stock, such securities being all of the issued and outstanding shares of the
Subsidiary's capital stock (there being no other securities; the "Subsidiary
Stock"), a corporation engaged in the business more particularly described in
exhibit 0.2 annexed hereto and made a part hereof; and
WHEREAS, the Subscribers desire to acquire 150,000 shares of the
Corporation's Common Stock, no par value per share (the "Stock"), in
consideration for their immediate conveyance of all shares of the Subsidiary
Stock which will constitute 100% of the Subsidiary's authorized, issued and
outstanding securities; provided that the transaction meets the requirements of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended:
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the Parties, intending to be legally bound, hereby agree as follows:
W I T N E S S E T H:
ARTICLE ONE
EXCHANGE PROVISIONS
1.1 EXCHANGE
(a) Subject to the hereinafter described conditions and Performance Criteria,
the Corporation hereby agrees to exchange 150,000 shares of its Common
Stock, no par value, with the Subscribers for all of the shares of the
Subsidiary Stock currently outstanding, which, upon transfer, will
constitute 100% of the Subsidiary's reserved or issued and outstanding
securities.
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(b) Concurrently with the execution of this Agreement the Subscribers
guarantee delivery of the Subsidiary Stock to the Corporation, the
Corporation shall cause WESTERN STATES TRANSFER CO., of Salt Lake City,
Utah, its transfer agent, to issue 150,000 shares of the Stock to the
Subscribers, as follows:
Lee Shackelford 100,000 Shares
Peter G. Schuster 50,000 Shares
1.2 EXEMPTION FROM REGISTRATION
(a) The Subscribers hereby represent, warrant, covenant and
acknowledge that:
(1) (a) The Stock is being issued without registration under the
provisions of Section 5 of the Securities Act of 1933, as
amended (the "Act") or under applicable securities regulations
of the State of Florida (the "Florida Securities Act")
pursuant to exemptions provided by Section 4(2) and comparable
provisions of the Florida Securities Act;
(b) The Subscribers will assure that any filings in conjunction
with the transactions contemplated by this Agreement required
under the laws of the State of Florida are promptly complied
with;
(2) All of the Stock will bear legends restricting its transfer, sale,
conveyance or hypothecation unless such Stock is either registered
under the provisions of Section 5 of the Act and under the Florida
Securities Act, or an opinion of legal counsel, in form and
substance satisfactory to legal counsel to the Corporation is
provided by the Subscribers to the effect that such registration is
not required as a result of applicable exemptions therefrom;
(3) The Corporation's transfer agent shall be instructed not to transfer
any of the Stock unless the Corporation advises it that such
transfer is in compliance with all applicable laws;
(4) The Subscribers are acquiring the Stock for their own account, for
investment purposes only, and not with a view to further sale or
distribution; and
(5) Subscribers or their advisors have examined the Corporation's latest
reports to the Securities and Exchange Commission on Forms 10-KSB,
10-QSB and 8-K (collectively and generically hereinafter referred to
as "34 Act Reports"), have been provided with access to all of the
Corporation's books and records and have questioned the
Corporation's officers and directors as to such matters involving
the Corporation as the Subscribers deemed appropriate.
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(b) The Corporation hereby represents, warrants, covenants and acknowledges
that:
(1) The Subsidiary Stock is being transferred without registration under
the provisions of Section 5 of the Act or under the Florida
Securities Act pursuant to the exemptions provided by Section 4(2)
of the Act and comparable provisions of the Florida Securities Act;
(2) All of the Subsidiary Stock will bear legends restricting its
transfer, sale, conveyance or hypothecation unless such Subsidiary
Stock is either registered under the provisions of Section 5 of the
Act and under applicable provincial securities laws, or an opinion
of legal counsel is provided by the Corporation certifying that such
registration is not required as a result of applicable exemptions
therefrom;
(3) The Corporation shall not transfer any of the Subsidiary Stock
except in compliance with all applicable laws; and
(4) The Corporation is acquiring the Subsidiary Stock for its own
account, for investment purposes only and not with a view to further
sale or distribution.
1.3 LIABILITIES.
(a) Any liabilities in any manner encumbering or affecting the Subsidiary or
its assets are disclosed on exhibit 1.3 annexed hereto and made a part
hereof (the "Disclosed Liabilities").
(b) The Subscribers hereby covenant and agree to indemnify and hold the
Corporation harmless from any liabilities of the Subsidiary or affecting
the Subsidiary's assets other than the Disclosed Liabilities ("Undisclosed
Liabilities") and the Corporation may, in addition to all other legal or
equitable remedies that may be available, offset from any funds,
securities or other things of value due to the Subscribers or the
Subscribers' affiliates (as that term is most liberally defined for
federal securities law purposes), such sums as may be required to make the
Corporation whole as a result of the assertion of any Undisclosed
Liability against the Subsidiary or its assets.
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES
2.1 THE CORPORATION.
The Corporation hereby represents and warrants to Subscriber, as a
material inducement to his, her or its entry into this Agreement, that, except
as disclosed in exhibit 2.1
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(the "Corporation's Warranty Exceptions") or in the Corporation's 34 Act Reports
filed prior to the date of this Agreement, the following representations and
warranties are, to the best of the Corporation's knowledge, materially accurate:
(a) The Corporation owns or leases the assets described in the Corporation's
34 Act Reports subject to such changes in inventory and supplies as were
required in the ordinary course of business;
(b) The Corporation has 50,000,000 shares of Common Stock, no par value,
authorized, of which less than 30,000,000 shares are currently outstanding
or reserved, there being no other outstanding securities of any class or
of any kind or character of the Corporation, there being no outstanding
subscriptions, options, warrants or other agreements or commitments
obligating the Corporation to issue or sell any additional shares of the
Corporation's Stock or any options or rights with respect thereto, or any
securities convertible into any shares of Stock of any class;
(c) The Corporation is not a party to any written or oral agreement which
grants an option or right of first refusal or other arrangement to acquire
any of its securities or to any agreement that affects the voting rights
of any of its securities, nor has the Corporation made any commitment of
any kind relating to the issuance of shares of any of the Corporation's
securities, whether by subscription, right of conversion, option or
otherwise;
(d) The Corporation is not a party to any agreement or understanding for the
sale or exchange of inventory or services for consideration other than
cash or at a discount in excess of normal discount for quantity or cash
payment;
(e) There are presently no contingent liabilities, factual circumstances,
threatened or pending litigation, contractually assumed obligations or
unasserted possible claims which might result in a material adverse change
in the future financial condition or operations of the Corporation;
(f) The execution, delivery and performance of this Agreement and the
transactions contemplated hereby do not require the consent, authority or
approval of any other person or entity except such as have been obtained;
(g) No transactions have been entered into either by or on behalf of the
Corporation, other than in the ordinary course of business nor have any
acts been performed (including within the definition of the term performed
the failure to perform any required acts) which would adversely affect the
goodwill of the Corporation;
(h) The entering into of this Agreement and the performance thereof has been
duly and validly authorized by all required corporate action;
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(i) (1) The certified, consolidated financial statements of the Corporation
and its subsidiaries, including consolidated statements of
operations, stockholders investment and cash flows and consolidated
balance sheets for its last three fiscal years, and unaudited
consolidated financial statements for the period from the last
consolidated certified financial statement until the end of the
Corporation's fiscal quarter closest to the date of this Agreement,
all prepared in accordance with generally accepted accounting
principles, consistently applied, are included in the Corporation's
34 Act Reports (the "Corporation's Financial Statements").
(2) The Corporation's Financial Statements, as contained in its 34 Act
Reports, fairly present the Corporation's financial condition as of
their respective dates and its results of operations for their
respective periods in accordance with generally accepted accounting
principles, consistently applied;
(j) (1) Except as and to the extent reflected or reserved against in the
consolidated balance sheet of the Corporation and its subsidiaries
(the "Corporation's Interim Balance Sheet), as of January 31, 1997
the Corporation and its subsidiaries had no liabilities or legal
obligations of a nature required to be reflected on a corporate
balance sheet prepared in accordance with generally accepted
accounting principles or disclosed in the notes thereto, whether
absolute, accrued, contingent, or otherwise and whether due or to
become due (including, without limitation, liabilities for taxes and
interest, penalties, and other charges payable with respect thereto
in respect of or measured by the income of the Corporation through
such date, or arising out of any transaction entered into prior
thereto).
(2) There is no material reasonable basis for the assertion against the
Corporation or any of its subsidiaries of any liability or
obligation which is not fully reflected or reserved against in the
Corporation's Interim Balance Sheet or disclosed in the notes
thereto, except liabilities or obligations incurred since January
31, 1996 in the ordinary course of the Corporation's business.
(k) Since the date of the Corporation's Financial Statements no events have
occurred nor have any facts been discovered which could have a material
adverse effect on the financial status, results of operations or prospects
of the Corporation;
(l) On the Closing Date of this Agreement, the Corporation's net liabilities,
excluding liabilities as a result of the transaction contemplated hereby,
shall not exceed those disclosed in its quarterly report on Form 10-QSB
for the six month period ended December 31, 1996, by more than $ NONE ,
and since that date and such filing,
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<PAGE> 7
there has not been any materially adverse change in the financial
condition, operations or prospects of the Corporation;
(m) The Corporation and its subsidiaries do not have any liabilities which
constitute a lien or charge on their securities or assets;
(n) The Corporation and each of its subsidiaries has good, valid and
marketable title to all of its assets, subject to no mortgage, pledge,
lien, encumbrance, security interest or charge, except as disclosed in the
Corporation's Financial Statements, and can and will retain free and clear
title thereto after Closing on this transaction, free and clear of any
claims whatsoever;
(o) There are no claims, actions, suits, proceedings or investigations pending
or threatened against the Corporation or any of its subsidiaries and the
Corporation does not know of any basis for any such claim, action, suit,
proceeding or investigation;
(p) During the past 12 months neither the Corporation nor any of its
subsidiaries have disposed of any assets or contractual rights which
disposition, in the opinion of the Corporation's management, has had or
will in the future have a materially adverse impact on the business of the
Corporation and its subsidiaries taken as a whole;
(q) (1) The Corporation has filed with the appropriate governmental agencies
all tax returns and tax reports required to be filed; all federal,
state and local income, profits, franchise, sales, use, occupation,
property or other taxes due have been fully paid, and, the
Corporation is not a party to any action or proceeding by any
governmental authority for assessment or collection of taxes, nor
has any claim for assessments been asserted against the Corporation
or its assets, nor is the Corporation aware of any facts or
circumstances which could give rise to the assertion of any viable,
material claim; and
(2) All taxes that the Corporation is or was required to withhold or
collect have been duly withheld or collected and to the extent
required have been paid to the proper governmental authority or
person;
(r) The Corporation and each of its current, material operating subsidiaries
is, as of the date of this Agreement, a validly existing corporation,
organized pursuant to the laws of the their respective jurisdictions of
incorporation and qualified to do business in each state where required to
do so, with all legal and corporate authority and power to conduct its
business and to own its properties and possesses all necessary permits and
licenses required in connection with the conduct of its business;
necessary permits and licenses required in connection with the conduct of
its business;
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(s) The conduct of the Corporation's business is in material compliance with
applicable federal, state and local governmental statutes, rules,
regulations, ordinances and decrees;
(t) The execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and compliance with the terms of this
Agreement will not conflict with or result in a breach in any of the terms
or provisions of, or constitute a default under, the certificate of
incorporation or bylaws of the Corporation; any indenture, contract, other
material agreement or instrument to which the Corporation or any of its
subsidiaries or their respective assets are bound; or, violate any
applicable regulation, judgment, order or decree of any governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the Corporation, its securities, assets or properties;
(u) This Agreement constitutes a binding obligation of the Corporation,
enforceable against it in accordance with the terms hereof, and has been
authorized by all required corporate action;
(v) (1) The Corporation has not experienced any material difficulties with
the management or recruiting of employees for its business, nor does
the Corporation have any reason to believe that any such
difficulties will arise in the future.
(2) None of the employees of the Corporation or its subsidiaries are
represented by labor unions, nor does the Corporation have any
reason to believe that any of its employees desire to be represented
by labor unions; and
(3) The Corporation has no reason to believe that any of its employees
have any potential claims against the Corporation, its subsidiaries
or their successors in interest based on violations of equal
employment laws, occupational health and safety standards or any
other legally protected rights;
(w) (1) The Corporation has not generated any hazardous wastes or engaged in
activities which could be interpreted as potential violations of
laws, statutes, regulations ordinances or judicial decrees in any
manner regulating the generation or disposal of hazardous waste.
(2) There are no on-site or off-site locations where the Corporation or
any of its subsidiaries has stored, disposed or arranged for the
disposal of chemicals, pollutants, contaminants, wastes, toxic
substances, petroleum or petroleum products; there are no
underground storage tanks located on property owned or leased by the
Corporation or any of its subsidiaries; and, no polychlorinated
hiphenyle are
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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<PAGE> 9
used or stored at any property owned or leased by the Corporation or any
subsidiary;
(x) (1) The Corporation currently has in full force and effect insurance
policies of the kind and in coverage amounts adequate to meet its
current insurance requirements; and
(2) There are no impediments to obtaining hazard and liability insurance
covering all of the Corporation's assets and operations, at
commercially reasonable insurance rates, nor does the Corporation
have any basis for believing that such insurance, at such rates,
will not be obtainable by the Corporation in the future;
(y) All of the information reflected in the foregoing representations and
warranties is complete and accurate, and does not omit any information
required to make the information provided non-misleading, accurate and
meaningful, in light of the nature of this transaction; and
(z) There is no material fact, development or threatened development that
materially adversely affects, or is likely to materially adversely affect
the business of the Corporation, which the Corporation has not publicly
disclosed or privately disclosed, either expressly or by reasonable
implication, to the Subscriber.
2.2 THE SUBSIDIARY.
The Subsidiary and each of the Subscriber, jointly and severally, hereby
represent and warrant to the Corporation, as a material inducement to the
Corporation's entry into this Agreement, that, except as specified on exhibit
2.2 annexed hereto and made a part hereof (the "Subsidiary's Warranty
exceptions"), the following representations and warranties are, to the best of
their knowledge, materially accurate:
(a) (1) Exhibit 2.2(a) contains a complete and accurate list of all real and
all personal property owned by the Subsidiary, tangible, intangible
and inchoate (the term Subsidiary in the context of this Article
being deemed to include all subsidiaries of the Subsidiary and
sibling corporation's of the Subsidiary, the assets and operations
of which are to be included among the subjects of this Agreement),
and the principal terms of all patents, trademarks, copyrights,
trade names, service marks, other intellectual property, franchises
and licenses held by the Subsidiary for use in manufacture and sale
of sporting goods or apparel, including identification of the
licensor, the formulae for royalty or other payments thereunder, the
expiration dates, and other terms of any extensions or renewals
permitted thereunder;
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(2) The operations of the several affiliated entities which comprise the
total business of which the Subsidiary has been a part since its
inception have been consolidated as to ownership and control under
the Subsidiary, in a manner resulting in the control and ownership
thereof by the Subsidiary, and, as a consequence of the transactions
contemplated by this Agreement, all such assets and operations shall
become the indirect property (through ownership of the Subsidiary's
capital stock) of the Corporation.
(b) (1) The Subsidiary has 7,500 shares of Common Stock, $0.001 par value,
authorized, 7,500 shares of which are currently issued and
outstanding, there being no other authorized or outstanding
securities of any class or of any kind or character of the
Subsidiary, 5,000 being held by Lee Shackelford and 2,500 being held
by Peter G. Schuster.
(2) There are no outstanding subscriptions, options, warrants or other
agreements or commitments obligating the Subsidiary or any
Subscribers to issue or sell any additional shares of Subsidiary
Stock or any options or rights with respect thereto, or any
securities convertible into any shares of Subsidiary Stock of any
class;
(c) Upon conveyance of the Subsidiary Stock by the Subscriber, the Corporation
will become the owner of all of the Subsidiary's authorized, issued and
outstanding equity securities;
(d) As of the Closing Date on this Agreement, the Subsidiary will not be a
party to any written or oral agreement which grants any option or right of
first refusal or other arrangement to acquire any of its securities or to
any agreement that will affect the voting rights of any of its securities,
nor have the Subscribers or the Subsidiary made any commitment of any kind
relating to the issuance of shares of any of the Subsidiary's equity
securities, whether by subscription, right of conversion, option or
otherwise;
(e) The Subsidiary is not a party to any agreement or understanding for the
sale or exchange of inventory or services for consideration other than
cash or at a discount in excess of normal discounts for quantity or cash
payment;
(f) There are presently no contingent liabilities, factual circumstances,
threatened or pending litigation, contractually assumed obligations or
unasserted possible claims known to the Subsidiary which might result in a
material adverse change in the future financial condition or operations of
the Subsidiary;
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(g) The execution, delivery and performance of this Agreement and the
transactions contemplated hereby do not require the consent, authority or
approval of any other person or entity, except such as have been obtained;
(h) No transactions have been entered into either by or on behalf of the
Subsidiary, other than in the ordinary course of business nor have any
acts been performed (including within the definition of the term performed
the failure to perform any required acts) which would materially adversely
affect the goodwill of the Subsidiary;
(i) The entering into of this Agreement and the performance required hereunder
has been duly and validly authorized by all required corporate action;
(j) (1) Annexed hereto and made a part hereof as composite exhibit 2.2(j)
are: (a) an unaudited balance sheet of the Subsidiary as of December
31, 1996 with the related statement of operations and accumulated
deficit and unaudited statements of cash flows for the Corporation
from inception to December 31, 1996 (such balance sheets, statements
of operations and other statements are referred to herein as the
"Subsidiary's Financial Statements").
(2) The Subsidiary's Financial Statements fairly present the financial
condition of the Subsidiary as of the dates thereof, and the results
of operations of the Subsidiary for the periods indicated, in each
case in accordance with generally accepted accounting principles
applied on a consistent basis;
(3) Except as and to the extent reflected or reserved against in the
Subsidiary's Balance Sheet, the Subsidiary had no liabilities or
legal obligations of a nature required to be reflected on a
corporate balance sheet prepared in accordance with generally
accepted accounting principles or disclosed in the notes thereto,
whether absolute, accrued, contingent, or otherwise and whether due
or to become due (including, without limitation, liabilities for
taxes and interest, penalties, and other charges payable with
respect thereto (a) in respect of or measured by the income of the
Subsidiary through such date, or (b) arising out of any transaction
entered into prior thereto).
(4) There is no basis for the assertion against the Subsidiary of any
liability or obligation which is not fully reflected or reserved
against in the Subsidiary's Interim Balance Sheet or disclosed in
the notes thereto, except liabilities or obligations incurred since
December 31, 1996 in the ordinary course of the Subsidiary's
business consistent with its past practice.
(k) Except as reflected in the Subsidiary's Financial Statements, since
December 31, 1996 the Subsidiary has not suffered any material adverse
change in its financial condition,
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assets, liabilities or business; or suffered any material casualty loss
(whether or not insured);
(l) On the Closing Date of this Agreement, the Subsidiary's aggregate
liabilities, whether accrued or inchoate, shall not exceed $ NONE
(including liabilities owed to the Subscribers) and such liabilities shall
not require any payments, other than as specifically disclosed in exhibit
1.3;
(m) None of the properties or assets used in the business of the Subsidiary
are subject to any mortgage, pledge, lien, security interest, conditional
sale agreement, encumbrance, or charge of any kind, except as disclosed in
exhibit 1.3;
(n) (1) There are no claims, actions, suits, proceedings or investigations
pending or threatened by or against the Subsidiary and the
Subsidiary does not know of any basis for any such claim, action,
suit, proceeding, or investigation;
(2) The Subsidiary is not subject to any liabilities or potential
liabilities that will subject the Corporation, or its affiliates,
stockholders, officers, directors, agents or advisors to any claims
or liabilities predicated or emanating from torts or violations of
law attributable to the Subsidiary or for which the Subsidiary
assumed responsibility or which can in any manner be imputed to the
Subsidiary or its assets;
(o) The Subsidiary has no liabilities involving expenses attributable
directly, indirectly or incidentally to any litigation;
(p) Except as otherwise disclosed in the Subsidiary's Financial Statements the
Subsidiary has good, valid, and marketable title to all its properties,
licenses, and assets, real, personal and mixed, tangible and intangible;
(q) (1) Since its inception the Subsidiary has not disposed of any assets or
contractual rights which disposition has had or will in the future
have a materially adverse effect on the business of the Subsidiary
and no such disposition will be made by the Subsidiary outside the
ordinary course of business during the interim between execution of
this Agreement and the Closing, unless this Agreement shall have
been terminated, without the prior written consent of the
Corporation;
(2) Neither the Subsidiary nor its subsidiaries, if any, have, during
the six months preceding the date of this Agreement, distributed any
unusual amounts of income to their stockholders, agents, employees
or any related parties.
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(r) The Subsidiary has filed with the appropriate governmental agencies all
tax returns and tax reports required to be filed; all United States, state
and local income, profits, franchise, sales, use, occupation, property or
other taxes due have been fully paid, except as listed on exhibit 1.3;
and, the Subsidiary is not a party to any action or proceeding by any
governmental authority for assessment or collection of taxes, nor has any
claim for assessments been asserted against the Subsidiary or its assets;
(s) The Subsidiary is, as of the date of this Agreement, a validly existing
corporation, organized pursuant to the laws of the State of Florida (and
its subsidiaries and sibling corporations are validly organized and in
good standing under their laws of their corporate domiciles), with all
legal and corporate authority and power to conduct its business and to own
its properties and possesses all necessary permits and licenses required
in connection with the conduct of its business;
(t) The conduct of the Subsidiary's business is in material compliance with
all applicable federal, provincial, state and local governmental statutes,
rules, regulations, ordinances and decrees;
(u) The execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and compliance with the terms of this
Agreement will not conflict with or result in a breach in any of the terms
or provisions of, or constitute a default under, the Articles of
Incorporation or By-Laws of the Subsidiary; any indenture, other material
agreement or instrument to which the Subsidiary or its stockholders are a
party or by which the Subsidiary or its assets are bound; or, any
applicable regulation, judgment, order or decree of any governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the Subsidiary, its securities or its properties;
(v) This Agreement constitutes the valid and binding agreement of the
Subsidiary and is enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is
sought by proceedings in equity or at law, no such proceeding being
anticipated or under consideration);
(w) (1) The Subsidiary has not experienced any material difficulties with
the management or recruiting of employees for its business, nor does
the Subsidiary have any reason to believe that any such difficulties
will arise in the future.
(2) None of the employees of the Subsidiary are represented by labor
unions, nor does the Subsidiary have any reason to believe that any
of its employees desire to be represented by labor unions; and
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(3) The Subsidiary has no reason to believe that any of its employees
have any potential claims against the Subsidiary or its successors
in interest based on violations of equal employment laws,
occupational health and safety standards or any other legally
protected rights;
(x) (1) The Subsidiary has no reason to believe that it has generated any
hazardous wastes or engaged in activities which violate or could be
interpreted as violating any laws, statutes, regulations ordinances
or judicial decrees in any manner regulating the generation or
disposal of hazardous waste.
(2) There are no on-site or off-site locations where the Subsidiary has
stored, disposed or arranged for the disposal of chemicals,
pollutants, contaminants, wastes, toxic substances, petroleum or
petroleum products; there are no underground storage tanks located
on property owned or leased by the Subsidiary; and, no
polychlorinated hiphenyle are used or stored at any property owned
or leased by the Subsidiary;
(y) All of the information reflected in the foregoing representations and
warranties is complete and accurate, and does not omit any information
required to make the information provided non-misleading, accurate and
meaningful, in light of the nature of this transaction.
(z) There is no material fact, development or threatened development that
materially adversely affects, or is likely to materially adversely affect
the business of the Subsidiary, which the Subscribers have not disclosed,
either expressly or by reasonable implication, to the Corporation.
2.3 THE SUBSCRIBER.
The Subscribers hereby represent and warrant to the Corporation, as a
material inducement to the Corporation's entry into this Agreement, that, except
as specified on exhibit 2.3 annexed hereto and made a part hereof (the
"Subscriber's Warranty exceptions"), the following representations and
warranties are, to the best of the Subscriber's knowledge, materially accurate;
(a) The Subscribers will, on the Closing Date, own the Subsidiary stock,
registered in their names and subject to no liens, pledges or
encumbrances, and will convey good title thereto to the Corporation, there
being no outstanding subscriptions, options, warrants or other agreements
or commitments obligating the Subscribers to sell any of their shares of
the Subsidiary's Stock or any options or rights with respect thereto;
(b) All of the information reflected in the foregoing representations and
warranties and, the representations and warranties made by the Subsidiary,
are complete and accurate,
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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<PAGE> 15
and do not omit any information required to make the information provided
non-misleading, accurate and meaningful, in light of the nature of this
transaction;
(c) (1) Annexed hereto and made a part hereof as composite exhibit 2.3(c)
are completed officers and directors questionnaires pertaining to
the Subscribers and company questionnaires pertaining to the
Subsidiary, which Subscribers have either completed or reviewed, on
forms provided by the Corporation's legal counsel (collectively
hereinafter referred to as the Questionnaires"); and
(2) The Questionnaires have been completed and answered in an accurate
and complete fashion, and do not fail to disclose any information
necessary to render the information provided, not misleading.
(d) Annexed hereto and made a part hereof as Exhibit 2.3(d) is a complete,
accurate and not misleading, narrative disclosure document providing the
information called for by Securities and Exchange Commission Regulation SB
with reference to the Subsidiary, its operations and background.
ARTICLE THREE
CONDITIONS
3.1 CONDITION SUBSEQUENT
(a) The obligations of the Parties are subject to the condition subsequent
that the Subsidiary's Financial Statements comply or can within the 50 day
period following the Closing on this Agreement be made to comply with the
requirements of Regulation S-B promulgated under the Securities Exchange
Act of 1934.
(b) In the event that the Securities and Exchange Commission advises the
Corporation that the financial statements of the Subsidiary (excluding pro
forma financial statements) filed with the Form 8-K of the Corporation
relating to the acquisition of the Subsidiary, or an amendment thereto,
fail to comply in a material respect with generally accepted accounting
principals or the requirements of Regulation S-B and the Securities and
Exchange Commission is unwilling to waive such deficiencies, the
Corporation and the Subsidiary will use their best efforts to correct the
subject financial statements in such manner as will satisfy the Securities
and Exchange Commission's objections thereto or cause the Securities and
Exchange Commission to withdraw its objections; provided that, if such
corrections are not affected or such objections withdrawn within three
months after any deficiencies are raised by the Securities and Exchange
Commission, the Corporation may elect to rescind this Agreement, ab
initio, unless the Parties can, at such time, agree on a restructuring of
this transaction in a manner
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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<PAGE> 16
meeting the applicable reporting requirements imposed by applicable
United States, Canadian, state and provincial securities law requirements.
3.2 CONDITIONS TO THE CORPORATION'S OBLIGATIONS
The obligations of the Corporation under this Agreement are subject to the
Subsidiary's (the term Subsidiary in the context of this Article being deemed to
include all subsidiaries of the Subsidiary and sibling corporations of the
Subsidiary, the assets and operations of which are to be included among the
subjects of this Agreement) and Subscriber's satisfaction, or the written waiver
by the Corporation, of the following conditions prior to Closing (the
"Conditions Precedent"):
(a) That all covenants, agreements, actions, proceedings, instruments and
documents required to be carried out or delivered by Subscribers or the
Subsidiary pursuant to this Agreement shall have been performed, complied
with or delivered to the Corporation in accordance with the terms thereof.
(b) That the warranties and representations made by the Subscribers and the
Subsidiary in this Agreement shall be true and correct in all material
respects on and as of the date of Closing and shall be deemed to be made
on and as of such date.
(c) That there are no material violations of any laws, statutes, ordinances,
orders, regulations or requirements of any governmental authority
affecting the Subsidiary or its assets, nor will there be any at the time
of Closing.
(d) There is no action, suit or proceeding pending or threatened against or
affecting the Subsidiary or its assets in any court or before or by any
federal, provincial, state, county or municipal department, commission,
board, bureau, agency or other governmental instrumentality which would
affect the Subscriber's or the Subsidiary's ability to perform hereunder
or which could affect the business of the Subsidiary in a materially
adverse manner.
(e) That the Subsidiary is in material compliance with all applicable federal,
provincial, state or local statutes, regulations, rules or ordinances
applicable to the it, its securities or assets and that the transactions
contemplated hereby will not result in any violations thereof.
(f) That the issuance of the Stock and the transfer of the Subsidiary Stock
complies with the requirements for exemption from registration under the
statutes, regulations and rules applicable thereto and of comparable
provisions of the laws of the Corporation's and the Subscriber's province
of domicile.
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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<PAGE> 17
(g) That all licenses, patents and intellectual property rights heretofore
held or owned by the Subsidiary continue to be in good standing and not
subject to legal or other challenges, and that after Closing on this
Agreement, they will continue to remain in full force, effect and
validity.
(h) That the operations of the several affiliated entities which comprise the
total business of which the Subsidiary has been a part since its inception
have been consolidated as to ownership and control under the Subsidiary,
in a manner resulting in the control and ownership thereof by the
Subsidiary, and, that as a consequence of the transactions contemplated by
this Agreement, all such assets and operations shall become the indirect
property (through ownership of the Subsidiary's capital stock) of the
Corporation.
3.3 CONDITIONS TO THE SUBSCRIBER'S OBLIGATIONS
The obligations of the Subscribers under this Agreement are subject to the
Corporation's satisfaction, or the written waiver thereof by the Subscriber, of
the following conditions prior to Closing (the "Subscriber's Conditions
Precedent"):
(a) That all covenants, agreements, actions, proceedings, instruments and
documents required to be carried out or delivered by the Corporation
pursuant to this Agreement shall have been performed, complied with or
delivered to the Sub scribers in accordance with the terms thereof.
(b) That the warranties and representations made by the Corporation in this
Agreement shall be true and correct in all material respects on and as of
the date of Closing and shall be deemed to be made on and as of such date.
(c) That the issuance of the Stock and the transfer of the Subsidiary Stock
complies with the requirements for exemption from registration under the
statutes, regulations and rules applicable thereto, including, without
limitation, the provisions of Sections 4(1), 4(2) or 4(6) of the
Securities Act of 1933, as amended, of Regulation D promulgated
thereunder, and of comparable provisions of the laws of the Corporation's
and the Subscriber's province of domicile.
ARTICLE FOUR
CLOSING
4.1 CLOSING DATE.
The Closing on this transaction will take place within 36 hours following
the execution of this Agreement, with all documents to be pre-cleared and
exchanged by overnight post.
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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<PAGE> 18
Closing will be held by telephone conference arranged by the Corporation at a
mutually agreeable time but may be adjourned and reconvened at a physical
location, if required, at the request of either Party. If Closing at a physical
location is required, it shall take place at the Subscriber's offices in Boynton
Beach, Florida, during normal business hours, at a mutually convenient time
within ten business days following the adjourned teleconference closing session.
4.2 ITEMS DELIVERED AT CLOSING BY THE SUBSIDIARY AND THE SUBSCRIBER.
Prior to the Closing, the Subscribers will deliver the following items to
the Corporation, which shall be held in escrow until completion of the Closing:
(a) Certificates for all of the Subsidiary Stock, duly endorsed or with stock
power attached with appropriate signature guarantees, in form and
substance adequate to permit immediate transfer thereof to the
Corporation;
(b) A certification from an officer of the Subsidiary to the effect that after
consulting with counsel to the Subsidiary or other legal counsel
acceptable to the Corporation, he or they reasonably believe that:
(1) The issuance of the Stock to the Subscribers will not require any
actions in the Subscribers' province of domicile, other than such
actions as have been taken no later than the fifth day prior to
Closing, in order to comply with such province's laws, regulations
and rules governing private placements, and that such issuance will
not violate any such laws, regulations or rules; and
(2) The transfer of the Subsidiary Stock as contemplated by this
Agreement meets the requirements of the exemption from registration
requirements provided by Sections 4(1), 4(2) or 4(6) of the
Securities Act of 1933, as amended.
(c) A certification from the Subsidiary's chief financial officer indicating
that, after a review of the Subsidiary's books and records from the date
of the Subsidiary's latest financial statements annexed hereto until the
fifth day prior to Closing, such review did not give such officer cause to
believe that any materially detrimental matters have occurred, or that
there have been any materially detrimental changes in the financial
condition of the Subsidiary, other than as disclosed in this Agreement.
(d) An investment letter, in the form annexed hereto as exhibit 4.2(d).
4.3 ITEMS DELIVERED AT CLOSING BY THE CORPORATION.
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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<PAGE> 19
Prior to the Closing, the Corporation will deliver the following to the
Subscriber, which shall be held in escrow until completion of the Closing:
(a) Certificates for the Stock, in denominations as directed by Subscriber.
(b) An opinion from the Corporation's legal counsel that the issuance of the
Stock as contemplated by this Agreement will meet the requirements of the
exemption from registration requirements provided by Section 4.2 of the
Securities Act of 1933, as amended.
(c) A certification from the Corporation's chief financial officer indicating
that, after a review of the Corporation's books and records from the date
of the Corporation's latest financial statements annexed hereto until the
fifth day prior to Closing, such review did not give such officer cause to
believe that any materially detrimental matters have occurred, or that
there have been any materially detrimental changes in the financial
condition of the Corporation, other than as disclosed in this Agreement.
4.4 CLOSING COSTS.
Except as expressly provided in this Agreement, each Party shall pay their
own Closing costs.
ARTICLE FIVE
BROKER
5.1 THE SUBSCRIBER.
The Subscribers and the Subsidiary represent and warrant to the
Corporation that it will not be subject to and will indemnify and hold it
harmless against any claims of brokers for commissions or other compensation in
connection with this Agreement and the consummation of the transactions
contemplated hereby.
5.2 THE CORPORATION.
The Corporation hereby represents and warrants to the Subsidiary that it
will not be subject to and will indemnify and hold it harmless against any
claims of brokers for commissions or other compensation in connection with this
Agreement and the consummation of the transactions contemplated hereby.
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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<PAGE> 20
ARTICLE SIX
COVENANTS
6.1 MAINTENANCE OF SUBSIDIARY:
Except as approved by the Corporation's Chief Executive Officer:
(a) The Subsidiary shall not sell or transfer any of the its material assets,
real, personal, tangible or intangible, other than in the ordinary course
of business, without the Corporation's explicit prior written consent.
(b) The Subsidiary will keep all of its material assets in good standing,
order and repair and shall cause any and all necessary remedies and
repairs thereto to be made on or before the Closing.
(c) The Subsidiary shall preserve all of its contractual rights in good
standing.
(d) The operations of the several affiliated entities which comprise the total
business of which the Subsidiary has been a part since its inception will
be consolidated as to ownership and control under the Subsidiary, in a
manner resulting in the control and ownership thereof by the Subsidiary,
and, as a consequence of the transactions contemplated by this Agreement,
all such assets and operations shall become the indirect property (through
ownership of the Subsidiary's capital stock) of the Corporation.
6.2 COOPERATION.
The Corporation and the Subsidiary and their agents shall have reasonable
access to the premises and assets of the other for the purpose of familiarizing
themselves with the operations of each others business. The Subsidiary and the
Corporation agree to cooperate with each other and to render a reasonable amount
of assistance in the orderly integration of the business of the Subsidiary into
the Corporation's operations and the familiarization of the Parties therewith.
6.3 POST CLOSING LEGAL ACTIVITIES
(a) Jay C. Salyer, Jr. P.A., which serves as an attorney to the Subscribers
have been asked to assist the Corporation's general counsel to prepare and
file all required reports of the transactions contemplated by this
Agreement with the Securities and Exchange Commission, such reports to
include a detailed report of special event on Form 8-K, any required proxy
materials, and such other matters as, in the opinion of management, may be
required.
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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<PAGE> 21
(b) The Parties hereby covenant and agree to fully cooperate with Jay C.
Salyer, Jr. P.A. in the timely preparation and filing of all such
materials and reports, which are due on or before the tenth day following
Closing.
ARTICLE SEVEN
MISCELLANEOUS
7.1 AMENDMENT.
No modification, waiver, amendment, discharge or change of this Agreement
shall be valid unless the same is evinced by a written instrument, subscribed by
the Party against which such modification, waiver, amendment, discharge or
change is sought.
7.2 NOTICE.
All notices, demands or other communications given hereunder shall be in
writing and shall be deemed to have been duly given on the first business day
after mailing by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
TO THE CORPORATION: Joe Logan, Jr., President
Wasatch International Corporation
1301 N. Congress Avenue, Suite 135
Boynton Beach, Florida 33426
TO THE SUBSCRIBERS: Lee Shackelford
190 Golden Beach Drive
North Miami Beach, Florida 33160
Peter G. Schuster
1485 S.W. 5 Court
Boca Raton, Florida 33432
TO THE SUBSIDIARY: Lee Shackelford, President
Resort Marketing Group, Inc.
190 Golden Beach Drive
North Miami Beach, Florida 33160
or such other address or to such other person as any Party shall designate to
the other for such purpose in the manner hereinafter set forth. Copies of any
notice shall also be sent to Jay C. Salyer, Jr., P.A., General Counsel to the
Subscriber, by facsimile transmission to (561) 732-3830.
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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<PAGE> 22
7.3 MERGER.
This instrument, together with the instruments referred to herein,
contains all of the understandings and agreements of the Parties with respect to
the subject matter discussed herein. All prior agreements whether written or
oral are merged herein and shall be of no force or effect.
7.4 SURVIVAL.
The several representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and Closing hereon and shall
be effective regardless of any investigation that may have been made or may be
made by or on be half of any Party.
7.5 SEVERABILITY.
If any provision or any portion of any provision of this Agreement, other
than one of the conditions precedent or subsequent, or the application of such
provision or any portion thereof to any person or circumstance shall be held
invalid or unenforceable, the remaining portions of such provision and the
remaining provisions of this Agreement or the application of such provision or
portion of such provision as is held invalid or unenforceable to persons or
circumstances other than those to which it is held invalid or unenforceable,
shall not be affected thereby.
7.6 GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the State
of Florida and any proceedings pertaining directly or indirectly to the rights
or obligations of the Parties hereunder shall, to the extent legally permitted,
be held in Palm Beach County, Florida.
7.7 INDEMNIFICATION.
Each Party hereby irrevocably agrees to indemnify and hold the other
Parties harmless from any and all liabilities and damages (including legal or
other expenses incidental thereto), contingent, current, or inchoate to which
they or any one of them may become subject as a direct, indirect or incidental
consequence of any action by the indemnifying Party or as a consequence of the
failure of the indemnifying Party to act, whether pursuant to requirements of
this Agreement or otherwise. In the event it be comes necessary to enforce this
indemnity through an attorney, with or without litigation, the successful Party
shall be entitled to recover from the indemnifying Party, all costs incurred
including reasonable attorneys' fees throughout any negotiations, trials or
appeals, whether or not any suit is instituted.
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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<PAGE> 23
7.8 LITIGATION.
(a) In any action between the Parties to enforce any of the terms of this
Agreement or any other matter arising from this Agreement, the prevailing
Party shall be entitled to recover its costs and expenses, including
reasonable attorneys' fees up to and including all negotiations, trials
and appeals, whether or not litigation is initiated.
(b) In the event of any dispute arising under this Agreement, or the
negotiation thereof or inducements to enter into the Agreement, the
dispute shall, at the request of any Party, be exclusively resolved
through the following procedures:
(1) First, the issue shall be submitted to mediation before a mediation
service in West Palm Beach, Florida to be selected by lot from six
alternatives to be provided, two by each Party. The mediation
efforts shall be concluded within ten business days after their
initiation unless the Parties unanimously agree to an extended
mediation period;
(2) In the event that mediation does not lead to a resolution of the
dispute then at the instigation of any Party, lawsuit may be
commenced.
(3) Expenses of mediation shall be borne by the Subsidiary, if
successful. Expenses of mediation, if unsuccessful and of
arbitration shall be borne by the Party or Parties against whom the
arbitration decision is rendered. If the terms of the arbitral award
do not establish a prevailing Party, then the expenses of
unsuccessful mediation and arbitration shall be borne equally by the
Parties.
7.9 BENEFIT OF AGREEMENT.
The terms and provisions of this Agreement shall be binding upon and inure
to the benefit of the Parties, their successors, assigns, personal
representatives, estate, heirs and legatees.
7.10 CAPTIONS.
The captions in this Agreement are for convenience and reference only and
in no way define, describe, extend or limit the scope of this Agreement or the
intent of any provisions hereof.
7.11 NUMBER AND GENDER.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the Party or
Parties, or their personal representatives, successors and assigns may require.
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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<PAGE> 24
7.12 FURTHER ASSURANCES.
The Parties agree to do, execute, acknowledge and deliver or cause to be
done, executed, acknowledged or delivered and to perform all such acts and
deliver all such deeds, assignments, transfers, conveyances, powers of attorney,
assurances, stock certificates and other documents, as may, from time to time,
be required herein to effect the intent and purpose of this Agreement.
7.13 STATUS.
Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, employer-employee relationship, lessor-lessee
relationship, or principal-agent relationship, rather, the relationships
established hereby are those of purchaser and seller.
7.14 COUNTERPARTS.
This Agreement may be executed in any number of counterparts. All executed
counterparts shall constitute one Agreement notwithstanding that all signatories
are not signatories to the original or the same counterpart. Execution by
exchange of facsimile transmission shall be deemed legally sufficient to bind
the signatory; however, the Parties shall, for aesthetic purposes, prepare a
fully executed original version of this Agreement, which shall be the document
filed with the Securities and Exchange Commission.
7.15 EXHIBIT INDEX.
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
0.2 Description of the Subsidiary's Business
1.3 Subsidiary's Liabilities
2.1 Corporation's Warranty Exceptions
2.2 Subsidiary's Warranty Exceptions
2.2(a) List of Assets Owned or Leased by the
Subsidiary and its Affiliates.
2.2(j) Subsidiary's Financial Statements
2.2(y) Subsidiary's Insurance Policies or Binders
2.3 Subscriber's Warranty Exceptions
2.3(c) Questionnaires
2.3(d) Regulation SB Disclosure Narrative
4.2(d) Investment Letter
</TABLE>
* * *
Please Initial: Corporation: ______ Subsidiary: ______ Subscribers: ______
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<PAGE> 25
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
effective as of the 13th day of August, 1997.
Witnesses: STERLING WORLDWIDE CORPORATION
By: /s/ Anne M. E. Greyling
- - ------------------------------------- ------------------------------------
Anne M. E. Greyling,President
Attest: /s/ Anne M. E. Greyling
- - ------------------------------------- -------------------------------
(CORPORATE SEAL) Anne M. E. Greyling, Corporate
Secretary
RESORT MARKETING GROUP, INC.
/s/ Susan G. Howerton By: /s/ Lee Shackelford
- - ------------------------------------- -----------------------------------
Lee Shackelford, President
/s/ Susan G. Howerton Attest: /s/ Lee Shackelford
- - ------------------------------------- -------------------------------
(CORPORATE SEAL) Lee Shackelford, Secretary
SUBSCRIBERS
/s/ Susan G. Howerton /s/ Lee Shackelford
- - ------------------------------------- ----------------------------------------
LEE SHACKELFORD
- - -------------------------------------
/s/ Susan G. Howerton /s/ PETER G. SCHUSTER
- - ------------------------------------- ----------------------------------------
PETER G. SCHUSTER
- - -------------------------------------
Please Initial: Corporation: ______ Subsidiary: LS/PS Subscribers: LS/PS
----- -----
Page 24
<PAGE> 1
EXHIBIT C
(Stock Purchase Agreement
LY Transportation Construction, Ltd.)
<PAGE> 2
STOCK PURCHASE AGREEMENT
THIS AGREEMENT made this ____ day of ____________, 1997, by and between
LA SALLE GROUP, LTD. (hereinafter called "Buyer") located at 153 St. John's
Road, Tunbridge Wells, Kent TN4 9UP, United Kingdom and L Y TRANSPORTATION
CONSTRUCTION, LTD., a British Virgin Islands international business corporation
(hereinafter called "Seller") located at P.O. Box 355, Placida, Florida
33946-0355 U.S.A.
WITNESSETH, THAT:
WHEREAS,
(A) Seller is actively conducting the business of project development
and management under the name "L Y Transportation Corporation, Ltd." and/or
HONE, LTD.; and
(B) Seller has executed three agreements for projects located in and
about Yangjiang City, Guangdong Province, Peoples' Republic of China, as
follows:
(1) A toll road using L Y Transportation Construction, Ltd. as
the foreign joint venture partner;
(2) A railroad using L Y Transportation Construction, Ltd. as
the foreign joint venture partner;
(3) A port expansion using L Y Transportation Construction,
Ltd. as the foreign joint venture partner;
NOW, THEREFORE, in consideration of Ten and No/100 Dollars, other good
and valuable considerations, and the covenants and conditions contained herein
the parties hereto hereby agree as follows:
1. Seller warrants that L Y Transportation Construction, Ltd. is duly
incorporated in Tortola, British Virgin Islands with all fees paid through
December 31, 1997 and that this is a new corporation with no debts or other
encumbrances. The officers and directors are nominee persons from the
incorporation agents who will resign when the stock is transferred to La Salle
Group, Ltd. or its assignee. Timothy L. Nesbitt shall be the President of L Y
Transportation Construction, Ltd. and shall execute the necessary joint
ventures with the proper officials of Yangjiang City and/or Guangdong Province,
as directed by La Salle Group, Ltd. Such signatures shall be affixed to these
documents only upon the written direction of La Salle Group, Ltd.
2. As partial consideration for this transaction twenty (20%) percent
of the net realized profits of the three projects listed in Paragraph B above,
shall be paid as directed by the Seller by check or wire transfer. As further
consideration, the Buyer shall obtain all construction funding.
3. Seller shall have no financial interest in any other projects
currently owned or funded by the Buyer.
EXHIBIT A
<PAGE> 3
4. Seller shall offer the right of first refusal to Buyer at terms to
be negotiated on a case by case basis, for all other projects located,
qualified, and negotiated by the Seller in the Peoples' Republic of China under
their operating name of HONE, LTD.
5. Buyer shall retain HONE, LTD. as the on-site project managers and
liaison with Buyer for the aforesaid projects at a monthly rate of $25,000
commencing October, 1997 and rising to $50,000 monthly upon the establishment
of the project office in Yangjiang City. Selection of personnel shall be the
sole responsibility of HONE, LTD. The monthly retainer shall be subject to
review and consent for the purpose of increasing or decreasing same upon
presentation of proper evidence of fund expended. Any such changes shall be the
sole right of La Salle Group, Ltd. to be exercised in their sole discretion.
6. Upon closing this transaction, Buyer shall assume all joint venture
contracts and funding agreements entered into by Seller in the course of
business which remain executory and which are described in the Schedule
attached to this Agreement and made a part hereof. Buyer will also assume all
contracts entered into by Seller after the date of this Agreement, provided
that they were entered into in the ordinary course of business and have been
previously reviewed by Buyer. Buyer shall indemnify Seller against all claims
made under the agreements and joint ventures limited to the three above
projects.
7. Buyer shall obtain construction funds not exceeding $330,000,000
U.S. Dollars for the purpose of completing construction of the above projects.
These funds may be part equity and part debt at the sole discretion of the
Buyer and upon such terms and conditions as the Buyer may determine.
8. Both parties agree to execute such documents as may be required to
implement this Agreement. Seller agrees to provide full documentation
concerning the incorporation in the British Virgin Islands.
9. This Agreement is binding upon and shall inure to the benefit of the
parties' heirs, executors, administrators, successors, and assigns.
10. Both parties shall exert their best efforts to ensure successful
completion of said projects, the administration of equity and debt funds, and
shall maintain communication between themselves and others as directed by the
Buyer.
11. This Agreement shall be construed in accordance with the laws of
the respective jurisdictions wherein the projects are located or the Buyer and
Seller shall agree.
* * * * *
EXHIBIT A
-2-
<PAGE> 4
12. This Agreement may be modified provided the same is in writing and
signed by the Buyer and Seller.
Executed at the locations shown below by the person is who represent
that they are empowered to sign on behalf of the Buyer and Seller. This
Agreement may constitute a fax copy which shall be considered an original.
SELLER: BUYER:
L Y TRANSPORTATION CONSTRUCTION,
LTD. and HONE, LTD. LA SALLE GROUP, LTD.
BY: /s/ Timothy L. Nesbitt BY: /s/ Anne M. E. Greyling
------------------------------- ------------------------------
Timothy L. Nesbitt Anne M. E. Greyling, President
Rotonda West, Florida 33947 USA Tunbridge Wells, UK
-3-
<PAGE> 1
EXHIBIT D
(Acquisition Agreement
Fort Thomas Resort)
<PAGE> 2
AGREEMENT
This Agreement is made and entered into on this date 25th day of July, 1997 by
and between Sterling World Wide (hereinafter referred to as "BUYER") and Mado
Investment Company Ltd. (hereinafter to as "SELLER") and is follows:
WHEREAS the Seller is the owner(s) of the Fort Thomas Resort located on St.
Kitts and desires to sell the same, and
WHEREAS the Buyer desires to acquire the Fort Thomas Resort under agreeable
terms and conditions as set forth herein;
NOW THEREFORE, for and in consideration of the mutual covenants and promises
herein contained the parties agree as follows:
(1) The purchase price shall be the sum of TEN MILLION DOLLARS ($10,000,000
USD) payable in shares of common stock of Sterling World Wide a NASDAQ BB
stock trading symbol (STWW).
(2) The price per share shall be determined as the closing bid price date of
closing of this contract i.e. the sum of $10,000,000 USD divided by the
closing bid price date of the closing shall equal the number of shares
delivered to the Seller. The purchase shares shall be issued in accordance
with Exhibit "A" attached hereto and made a part hereof.
(3) Buyer shall be responsible for the following outstanding obligations.
(a) $203,476 USD to vendors
(4) The sale and purchase of this property shall be considered an exchange of
real property for shares of common stock in Sterling World Wide. Said
shares are currently trading on the NASDAQ BB under the trading symbol
(STWW).
(5) Closing shall occur within ten days after the execution of this agreement
by all parties. The closing location shall be determined by all parties.
<PAGE> 3
EXHIBIT "A"
The issuance of the purchase shares shall be as follows:
Fifty percent (50%) of the purchase price shall be delivered in shares issued
pursuant to Rule 144 of the Securities Act of 1934, as amended. Shares shall be
issued in certificates of 100,000 shares each. Seller agrees that 60% of these
shall be held for a period of not less than one year. The remaining 40% of the
shares will be held in accordance with Rule 144.
Fifty percent (50%) of the purchase price shares shall be issued in accordance
with Regulation "S" of the Securities Act of 1933, as amended. Sixty percent
(60%) of these shares shall be held by the purchase for a period of one year.
The remaining forty percent (40%) shall be held in accordance with Regulation
"S".
The price per share shall be determined on the closing date and shall be the
closing bid price as reported on the NASDAQ. The purchase price of $10,000,000
USD shall be divided by the closing bid price to determine the actual number of
shares to be issued to the Seller. Purchaser warrants that at the expiration of
the term of one year if the price per share has declined in excess of 10% of
the closing bid price additional shares shall be issued to thee Seller in the
same ration as set forth above to restore the original selling price on the
closing date.
<PAGE> 4
EXHIBIT "B"
PROPERTY DESCRIPTION
Being 6.72 acres of land, more or less, and being described as the Fort Thomas
Hotel Resort located in St. Kitts and lying on the extreme southern end of
Wigley Avenue in Fortlands. This tract is somewhat rectangular in shape and is
a corner lot bounded by the sea to the south and west and by public roads to
the east and north. The property contains a three story building totaling
47,712 square feet and currently operates as the Fort Thomas Hotel and Resort
together with all property and improvements thereon.
This property is further described in an appraisal report dated June 23, 1997
issued by Quinlan, Walwyn Associates of St. Kitts.
