SHARE PURCHASE AGREEMENT
BANKNET KFT
AND
DYNAMIC I-T, INC.
This Agreement ("Agreement"), dated as of January 12, 2000, among
BANKNET Kft ("BKN"), an Hungarian Corporation, DYNAMIC I-T, INC. ("DYN"), a
Colorado Corporation, and the shareholder of BANKNET Kft., which is THE BKN
SHAREHOLDER, LTD. ("BKN Shareholder"), who will join this agreement by
execution.
WITNESSETH:
A. WHEREAS, BNK and DYN are corporations duly organized under the laws of
the Nation of Hungary and the State of Colorado, respectively.
B. The BKN Shareholder intends to purchase 25,000,000 shares of common
stock of DYN for $800,000.
C. The BKN Shareholder is the owner of all of the issued and outstanding
common stock of BKN. It is intended that all issued and outstanding stock of BKN
shall be purchased by DYN in consideration for 5,400,000 common shares of DYN.
D. WHEREAS, the parties hereto wish to enter into this Agreement, pursuant
to the provisions of the Colorado Statutes.
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE 1
THE CONSIDERATION
1.1
(a) Subject to the conditions set forth herein, on the "Closing Date" (as
herein defined), Shareholders of BKN shall deliver 100% of the shares of BKN for
the 5,400,000 shares of DYN. The transactions contemplated by this Agreement
shall be completed at a closing ("Closing") on a closing date ("Closing Date"),
which shall be on or before January 31, 2000.
(b) The BKN Shareholder Limited hereby agrees to pay $800,000 in cash for
25,000,000 shares of stock at $0.032 per share. $200,000 shall be paid as set
forth in Article "6.2" hereof and the balance, $600,000, shall be paid over the
course of the nine months commencing upon the Closing Date.
On the Closing Date, all of the documents to be furnished to DYN and BKN,
including the documents to be furnished pursuant to Article VII of this
Agreement, shall be delivered to M.A. ▇▇▇▇▇▇▇, to be held in escrow until
completion of all requirements of the Agreement or the date of termination of
this Agreement, whichever first occurs, and thereafter shall be promptly
distributed to the parties as their interests may appear.
1.2 At the Closing Date, BKN shall become a wholly owned subsidiary of DYN.
ARTICLE II
DELIVERY OF SHARES
2.1 All shares of outstanding capital stock of BKN shall be delivered by the BKN
Shareholder to DYN at closing. DYN shall deliver 30,400,000 shares to the BKN
Shareholder at Closing.
2.2 BKN represents that no outstanding options or warrants for its unissued
shares exist. DYN represents that 1,800,000 shares represents the total
outstanding shares now.
ARTICLE III
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF BANKNET KFT AND THE BKN SHAREHOLDER LIMITED
No representations or warranties are made by any director, officer, employee or
shareholder of BKN as individuals, except as and to the extent stated in this
Agreement or in a separate written statement (the "BKN Disclosure Statement"),
if any. BKN hereby represents, warrants and covenants to DYN, as follows:
3.1 BKN is a corporation duly organized, validly existing and in good standing
under the laws of the Hungary, and has the corporate power and authority to own
or lease its properties and to carry on its business as it is now being
conducted. The Articles of Incorporation and Bylaws of BKN are complete and
accurate, and the minute books of BKN contain a record which is complete and
accurate in all material respects, of all meetings, and all corporate actions of
the shareholders and board of directors of BKN.
3.2 The aggregate number of shares of capital stock of BKN is one (1) share of
common stock with a par value of 376,960,000 HUF.
3.3 BKN and The BKN Shareholder Limited have complete and unrestricted power to
enter into and, upon the appropriate approvals are required by law, to
consummate the transactions contemplated by this Agreement.
3.4 Neither the making of nor the compliance with the terms and provisions of
this Agreement and consummation of the transactions contemplated herein by BKN
and the BKN Shareholder Limited will conflict with or result in a breach or
violation of the Articles of Incorporation or Bylaws of BKN or the BKN
Shareholder Limited.
3.5 The execution, delivery and performance of this Agreement has been duly
authorized and approved by the BKN and the BKN Shareholder Limited Board of
Directors.
3.6 BKN will deliver to DYN before the Closing, current consolidated audited
financial statements of BKN, prepared by Ernst & Young as at 31-12-98 and as at
30 June 1999 made up to I.A.S. standards. All such statements, herein sometimes
called "BKN Financial Statements", are complete and correct in all material
respects and, together with the notes to those financial statements, present
fairly the financial position and results of operations of BKN for the periods
included.
3.7 Since the dates of the BKN Financial Statements, there have not been any
material adverse changes in the business or condition, financial or otherwise,
of BKN.
3.8 There are no legal proceedings or regulatory proceedings involving material
claims pending, or to the knowledge of the officers of BKN, threatened against
BKN or affecting any of its assets or properties, and BKN is not in any material
breach or violation of or default by BKN under any contract or instrument to
which BKN is a party, and no material breach or violation of or default by BKN
under any contract or other instrument to which BKN is a party or by which it or
any of its properties may be bound or affected, or under its respective Articles
of Incorporation or Bylaws, nor is there any court or regulatory order pending,
applicable to BKN.
3.9 All liability of BKN has been properly provided for and is adequate to
comply with all regulatory requirements regarding same.
3.10 The representations and warranties of BKN shall be true and correct as of
the date hereof and as of the Closing Date.
3.11 No representation or warranty by BKN or the BKN Shareholder Limited in this
Agreement, the BKN Disclosure Statement or any certificate delivered pursuant
hereto contains any untrue statement of a material fact or omits to state any
material fact necessary to make such representation or warranty not misleading.
3.12
A. LIENS. Except as disclosed in the BKN financials, no one other than the
BankNet Shareholder has any right, title, interest, lien, claim, security
interest, restriction or encumbrance in, on or to BKN's assets.
B. NO UNDISCLOSED LIABILITIES. BKN does not have any material liabilities
or obligations, including, without limitation, contingent liabilities for the
performance of any obligation except for liabilities or obligations which are
(i) disclosed or fully provided for in BKN's Financial Statements, (ii) set
forth in this Agreement including any Exhibit or Schedule to this Agreement and
(iii) liabilities not in excess of USD $10,000 in the aggregate.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
DYNAMIC I-T, INC.
No representations or warranties are made by any director, officer, employee or
shareholder of DYN as individuals, except as and to the extent stated in this
Agreement or in a separate written statement.
DYN hereby represents, warrants and covenants to BKN, except as stated in the
DYN Disclosure Statement, as follows:
4.1 DYN is a corporation duly organized, validly existing and in good standing
under the laws of the State of Colorado, and has the corporate power and
authority to own or lease its properties and to carry on its business as it is
now being conducted. The Articles of Incorporation and Bylaws of DYN, copies of
which have been delivered to BKN, are complete and accurate, and the minute
books of DYN contain a record, which is complete and accurate in all material
respects, of all meetings, and all corporate actions of the shareholders and
Board of Directors of DYN.
4.2 The aggregate number of shares which DYN is authorized to issue is
100,000,000 shares of common stock with a par value of $.0001 per share, of
which 1,800,000 shares of such common stock will be issued and outstanding,
fully paid and non-assessable, at closing under this agreement. DYN has no
outstanding options, warrants or other rights to purchase, or subscribe to, or
securities convertible into or exchangeable for any shares of capital stock. No
preferred stock of DYN is outstanding.
4.3 DYN has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement.
4.4 Neither the making of nor the compliance with the terms and provisions of
this Agreement and consummation of the transactions contemplated herein by DYN
will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of DYN.
4.5 The execution of this Agreement has been duly authorized and approved by the
DYN's Board of Directors.
4.6 DYN has delivered to BKN financial statements of DYN dated March 31, 1998.
All such statements, herein sometimes called "DYN Financial Statements" are (and
will be) complete and correct in all material respects and, together with the
notes to these financial statements, present fairly the financial position and
results of operations of DYN of the periods indicated. All statements of DYN
will have been prepared in accordance with generally accepted accounting
principles.
4.7 Since the dates of the DYN Financial Statements, there have not been any
material adverse changes in the business or condition, financial or otherwise,
of DYN. DYN does not have any material liabilities or obligations, secured or
unsecured except as shown on updated financials (whether accrued, absolute,
contingent or otherwise).
4.8 There are no pending legal proceedings involving DYN, there are no legal
proceedings or regulatory proceedings involving material claims pending, or, to
the knowledge of the officers of DYN, threatened against DYN or affecting any of
its assets or properties, and DYN is not in any material breach or violation of
or default under any contract or instrument to which DYN is a party, and no
event has occurred which with the lapse of time or action by a third party could
result in a material breach or violation of or default by DYN under any contract
or other instrument to which DYN is a party or by which they or any of their
respective properties may be bound or affected, or under their respective
Articles of Incorporation or Bylaws, nor is there any court or regulatory order
pending, applicable to DYN.
4.9
a. DYN does not have any material liabilities or obligations, including,
without limitation, contingent liabilities for the performance of any
obligation, except for (i) liabilities or obligations which are disclosed or
fully provided for in DYN's Financial Statements, (ii) liabilities or
obligations disclosed in this Agreement or in any Exhibit or Schedule to this
Agreement, and (iii) liabilities not in excess of $10,000 in the aggregate. DYN
agrees to request that the relevant State and Federal environmental authorities
confirm that no action has been taken or contemplated against DYN.
b. DYN has not received notice of any violation of or investigation
relating to any environmental or pollution law, regulation, or ordinance with
respect to assets now or previously owned or operated by DYN that has not been
fully and finally resolved; (ii) all permits, licenses and other authorizations
which are required under United States, federal, state, provincial and local
laws with respect to pollution or protection of the environment ("Environmental
Laws") relating to assets now owned or operated by DYN, including Environmental
Laws relating to actual or threatened emissions, discharges or releases of
pollutants, contaminants or hazardous or toxic materials or wastes
("Pollutants"), have been obtained and are effective, and, with respect to
assets previously owned or operated by DYN or any third-party properties to
which any Pollutants generated by DYN were sent or released that could give rise
on the part of DYN to liability under any Environmental Laws, claims by third
parties under Environmental Laws or under common law or the occurrence of costs
to avoid any such liability or claim; and (iv) to the knowledge of DYN, all
operators of DYN's assets are in compliance with all terms and conditions of
such Environmental Laws, permits, licenses and authorizations, and are also in
compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
such laws or contained in any regulation, code, plan, order, decree, judgment,
notice or demand letter issued, entered, promulgated, or approved thereunder,
relating to DYN's assets.
4.10 DYN is not a party to any contract performable in the future.
4.11 The representations and warranties of DYN shall be true and correct as of
the date hereof and as of the Closing Date.
4.12 DYN has made available at its office, to BKN, all of its corporate books
and records for review. DYN will also deliver to BKN on or before the Closing
Date any reports relating to the financial and business condition of DYN which
occur after the date of this Agreement and any other reports sent generally to
its shareholders after the date of this Agreement.
4.13 DYN has no employee benefit plan in effect at this time.
4.14 No representation or warranty by DYN in this Agreement, the DYN
Disclosure Statement or any certificate delivered pursuant hereto contains any
untrue statement of a material fact or omits to state any material fact
necessary to make such representation or warranty not misleading.
4.15 DYN agrees that all rights to indemnification now existing in
favor of the employees, agents, directors or officers of BKN and its
subsidiaries, as provided in the Articles of Incorporation or Bylaws or
otherwise in effect on the date hereof shall survive the transactions
contemplated hereby in accordance with their terms, and DYN expressly assumes
such indemnification obligations of BKN.
ARTICLE V
OBLIGATIONS OF THE PARTIES PENDING THE CLOSING DATE
5.1 At all times prior to the Closing Date during regular business hours, each
party will permit the other to examine its books and records and the books and
records of its subsidiaries and will furnish copies thereof on request. It is
recognized that, during the performance of this Agreement, each party may
provide the other parties with information which is confidential or proprietary
information. During the term of this Agreement, and for four years following the
termination of this Agreement, the recipient of such information shall protect
such information from disclosure to persons, other than members of its own or
affiliated organizations and its professional advisers, in the same manner as it
protects its own confidential or proprietary information from unauthorized
disclosure, and not use such information to the competitive detriment of the
disclosing party. In addition, if this Agreement is terminated for any reason,
each party shall promptly return or cause to be returned all documents or other
written records of such confidential or proprietary information, together with
all copies of such writings and, in addition, shall either furnish or cause to
be furnished, or shall destroy, or shall maintain with such standard of care as
is exercised with respect to its own confidential or proprietary information,
all copies of all documents or other written records developed or prepared by
such party on the basis of such confidential or proprietary information. No
information shall be considered confidential or proprietary if it is (a)
information already in the possession of the party to whom disclosure is made,
(b) information acquired by the party to whom the disclosure is made from other
sources, or (c) information in the public domain or generally available to
interested persons or which at a later date passes into the public domain or
becomes available to the party to whom disclosure is made without any wrongdoing
by the party to whom the disclosure is made.
5.2 DYN and BKN shall promptly provide each other with information as to any
significant developments in the performance of this Agreement, and shall
promptly notify the other if it discovers that any of its representations,
warranties and covenants contained in this Agreement or in any document
delivered in connection with this Agreement was not true and correct in all
material respects or became untrue or incorrect in any material respect.
5.3 All parties to this Agreement shall take all such action as may be
reasonably necessary and appropriate and shall use their best efforts in order
to consummate the transactions contemplated hereby as promptly as practicable.
ARTICLE VI
PROCEDURE FOR CLOSING
6.1 At the Closing Date, delivery shall be effected with common stock
certificates of BKN being delivered to DYN for 100% of the BKN capital stock and
delivery of the 30,400,000 common shares of DYN paid for and subscribed.
6.2 At Closing, $200,000 shall be disbursed to the Creditors listed in Exhibit A
hereto in full and final settlement of all DYN's financial liabilities.
ARTICLE VII
CONDITIONS PRECEDENT TO THE
CONSUMMATION OF THE EXCHANGE
The following are conditions precedent to the consummation of the Agreement on
or before the Closing Date:
7.1 Each Party shall have performed and complied with all of its respective
obligations hereunder which are to be complied with or performed on or before
the Closing Date and each Party shall provide the other at the Closing with a
certificate to the effect that such party has performed each of the acts and
undertakings required to be performed by it on or before the Closing Date
pursuant to the terms of this Agreement.
7.2 This Agreement and the transactions contemplated herein shall have been duly
and validly authorized, approved and adopted, at a meeting of the Board of
Directors of each Party hereto duly and properly called for such purpose in
accordance with the applicable laws.
7.3 No action, suit or proceeding shall have been instituted or shall have been
threatened before any court or other governmental body or by any public
authority to restrain, enjoin or prohibit the transactions contemplated herein,
or which might subject any of the parties hereto or their directors or officers
to any material liability, fine, forfeiture or penalty on the grounds that the
transactions contemplated hereby, the parties hereto or their directors or
officers, have violated any applicable law or regulation or have otherwise acted
improperly in connection with the transactions contemplated hereby, and the
parties hereto have been advised by counsel that, in the opinion of such
counsel, such action, suit or proceeding raises substantial questions of law or
fact which could reasonably be decided adversely to any party hereto or its
directors or officers.
7.4 All actions, proceedings, instruments and documents required to carry out
this Agreement and the transactions contemplated hereby and the form and
substance of all legal proceedings and related matters shall have been approved
by counsel for BKN and DYN.
7.5 The representations and warranties made by BKN and DYN in this Agreement
shall be true as though such representations and warranties had been made or
given on and as of the Closing Date, except to the extent that such
representations and warranties may be untrue on and as of the Closing Date
because of (1) changes caused by transactions suggested or approved in writing
by all Parties or (2) events or changes (which shall not, in the aggregate, have
materially and adversely affected the business, assets, or financial condition
of DYN or BKN during or arising after the date of this Agreement) if approved by
the parties to this Agreement.
7.6 BKN and The BKN Shareholder Limited shall have furnished DYN with a
certified copy of a resolution or resolutions duly adopted by the shareholders
and Board of Directors of The BKN Shareholder Limited approving this Agreement
and the transactions contemplated by it;
7.7 DYN shall furnish The BKN Shareholder Limited with a certified copy
of a resolution or resolutions duly adopted by the Board of Directors of DYN,
approving this Agreement and the transactions contemplated by it.
7.8 At closing, the Shareholder of BKN will produce the Audited
Accounts of BKN as at 30 June, 1999, audited by Ernst & Young showing a net
asset value of (U.S.) $3,114,054.
ARTICLE VIII
TERMINATION AND ABANDONMENT
8.1 Anything contained in this Agreement to the contrary notwithstanding, the
Agreement may be terminated and abandoned at any time (whether before or after
the approval and adoption thereof by the shareholders of BKN) prior to the
Closing Date:
(a) By mutual consent of the Parties;
(b) By either Party, if any condition set forth in Article VII relating to
the other party has not been met or has not been waived;
(c) By either Party, if any suit, action or other proceeding shall be
pending or threatened by the federal or a state government before any court or
governmental agency, in which it is sought to restrain, prohibit or otherwise
affect the consummation of the transactions contemplated hereby;
(d) By any party, if there is discovered any material error, misstatement
or omission in the representations and warranties of another party;
(e) By any party if the Agreement Closing Date is not within 30 days from
the date hereof; or
8.2 Any of the terms or conditions of this Agreement may be waived at any time
by the party which is entitled to the benefit thereof, by action taken by its
Board of Directors provided; however, that such action shall be taken only if,
in the judgment of the Board of Directors taking the action, such waiver will
not have a materially adverse effect on the benefits intended under this
Agreement to the party waiving such term or condition.
ARTICLE IX
TERMINATION OF REPRESENTATION AND
WARRANTIES AND CERTAIN AGREEMENTS
9.1 The respective representations and warranties of the parties hereto
shall expire with, and be terminated and extinguished by consummation of the
Agreement; provided, however, that the covenants and agreements of the parties
hereto shall survive in accordance with their terms.
ARTICLE X
MISCELLANEOUS
10.1 This Agreement embodies the entire agreement between the parties, and there
have been and are no agreements, representations or warranties among the parties
other than those set forth herein or those provided for herein.
10.2 To facilitate the execution of this Agreement, any number of counterparts
hereof may be executed, and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
instrument. Counterparts shall include the execution of the Agreement by The BKN
Shareholder, Ltd.
10.3 All parties to this Agreement agree that if it becomes necessary or
desirable to execute further instruments or to make such other assurances as are
deemed necessary, the party requested to do so will use its best efforts to
provide such executed instruments or do all things necessary or proper to carry
out the purpose of this Agreement.
10.4 This Agreement may be amended upon approval of the Board of Directors of
each party provided that the shares issuable hereunder shall not be amended
without approval of the requisite shareholders of BKN.
10.5 Any notices, requests, or other communications required or
permitted hereunder shall be delivered personally or sent by overnight courier
service, fees prepaid,
To Banknet Kft:
▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
To The BKN Shareholder Limited:
c/o Complex Holdings, Ltd.
▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
To Dynamic I-T, Inc.
C/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇. ▇▇▇▇▇
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.
10.6 No press release or public statement will be issued relating to the
transactions contemplated by this Agreement without prior approval of the
Parties, except for 8K's required by SEC Regulations. However, DYN may issue at
any time any press release or other public statement it believes on the advice
of its counsel it is obligated to issue to avoid liability under the law
relating to disclosures, but the party issuing such press release or public
statement shall make a reasonable effort to give the other party prior notice of
and opportunity to participate in such release or statement.
IN WITNESS WHEREOF, the parties have set their hands and seals this _____ day of
January, 2000.
BANKNET KFT
By:_________________________
Its:________________________
DYNAMIC I-T, INC.
BY:_________________________
Its:________________________
THE BKN SHAREHOLDER LIMITED
By:_________________________
Its:________________________