EXHIBIT 2.1
EXCHANGE AGREEMENT
Between
Lion Gri International, Inc., a Nevada Corporation
("Lion Gri")
and
Promotora ▇▇▇▇▇ Hermoso, Inc., a Florida Corporation
("Promotora"")
Dated: February 28, 2006
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement")
is entered into as of this ____ day of _________ 2006, by and between LION GRI
CORPORATAON, a Florida corporation (hereinafter referred to as "LION GRI") and
Promotora ▇▇▇▇▇ Hermosa, Inc. a Florida corporation (hereinafter referred to as
"PROMOTORA"), (collectively the two companies are hereinafter referred to as the
"Parties") upon the following premises:
Premises
--------
WHEREAS, LION GRI, is a publicly held corporation organized under the
laws of the State of Nevada;
WHEREAS, PROMOTORA is a privately-held corporation organized under the
laws of Florida;
WHEREAS, management of the constituent corporations have determined
that it is in the best interest of the parties that LION GRI acquire 100% of the
issued and outstanding securities of PROMOTORA in exchange for the issuance of
certain shares of LION GRI (the "Exchange") and PROMOTORA agreed to use its best
efforts to cause its shareholders (the "PROMOTORA Shareholders") to exchange
their securities of PROMOTORA on the terms described herein; and
WHEREAS, the Parties desire to set forth the terms of the Exchange,
which is intended to constitute a tax-free reorganization pursuant to the
provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended.
NOW THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the Parties to be derived here from, it is hereby agreed as follows:
Agreement
---------
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF PROMOTORA
As an inducement to, and to obtain the reliance of LION GRI except as
set forth on the PROMOTORA Schedules (as hereinafter defined), PROMOTORA
represents and warrants as follows:
Section 1.01 Organization. PROMOTORA is a corporation duly organized,
validly existing, and in good standing under the laws of Florida and has the
corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets and to carry on its business
in all material respects as it is now being conducted, including qualification
to do business as a foreign corporation in the states or countries in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification, except where failure to be so qualified
would not have a material adverse effect on its business. Included in the
PROMOTORA Schedules are complete and correct copies of the articles of
incorporation, and the bylaws of PROMOTORA as in effect on the date hereof. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of PROMOTORA's
articles of incorporation or bylaws. PROMOTORA has taken all actions required by
law, its articles of incorporation, or otherwise to authorize the execution and
delivery of this Agreement. PROMOTORA has full power, authority, and legal right
and has taken all action required by law, its articles of incorporation, and
otherwise to consummate the transactions herein contemplated.
Section 1.02 Capitalization. The authorized capitalization of PROMOTORA
consists of 1,000,000 shares of common stock, 1,000,000 shares are currently
issued and outstanding. All issued and outstanding shares are legally issued,
fully paid, and non-assessable and not issued in violation of the preemptive or
other rights of any person.
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Section 1.05 Consideration. PROMOTORA has agreed to execute a
Promissory Note in favor of LION GRI in the amount of $300,000 payable
in six consecutive monthly installments with prevailing interest, with
first payment due within 30 days after the 10-K filing. In the event of
default in any payment, and on 5 days notice from LION GRI or its
assigns, the defaulted payment may, on demand, be converted to stock in
PRMOTORA at a ratio of 1.66:1.
Section 1.06 Absence of Certain Changes or Events. Except as set forth
in this Agreement or the PROMOTORA Schedules, since December 31, 2005
there has been no material change in the business and assets of
PROMOTORA and to the best knowledge of PROMOTORA, PROMOTORA has not
become subject to any law or regulation which materially and adversely
affects, or in the future may adversely affect the business,
operations, properties, assets, or condition of PROMOTORA.
Section 1.07 Litigation and Proceedings. There are no actions, suits,
proceedings, or investigations pending or, to the knowledge of
PROMOTORA after reasonable investigation, threatened by or against
PROMOTORA or affecting PROMOTORA or its properties, at law or in
equity, before any court or other governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any
kind. PROMOTORA does not have any knowledge of any material default on
its part with respect to any judgment, order, injunction, decree,
award, rule, or regulation of any court, arbitrator, or governmental
agency or instrumentality or of any circumstances that, after
reasonable investigation, would result in the discovery of such a
default.
Section 1.08 Contracts.
(a) Except as included or described in the PROMOTORA
Schedules, there are no "material" contracts, agreements, franchises,
license agreements, debt instruments or other commitments to which
PROMOTORA is a party or by which it or any of its assets, products,
technology, or properties are bound other than those incurred in the
ordinary course of business (as used in this Agreement, a "material"
contract, agreement, franchise, license agreement, debt instrument or
commitment is one which (i) will remain in effect for more than six (6)
months after the date of this Agreement or (ii) involves aggregate
obligations of at least twenty-five thousand dollars ($25,000));
(b) All contracts, agreements, franchises, license agreements,
and other commitments to which PROMOTORA is a party or by which its
properties are bound and which are material to the operations of
PROMOTORA taken as a whole are valid and enforceable by PROMOTORA in
all respects, except as limited by bankruptcy and insolvency laws and
by other laws affecting the rights of creditors generally;
(c) Except as set forth in the PROMOTORA Schedules, PROMOTORA
is not a party to or bound by, and the properties of PROMOTORA are not
subject to any contract, agreement, other commitment or instrument; any
charter or other corporate restriction; or any judgment, order, writ,
injunction, decree, or award which materially and adversely affects,
the business operations, properties, assets, or condition of PROMOTORA;
and
(d) Except as included or described in the PROMOTORA Schedules
or reflected in the most recent PROMOTORA balance sheet, PROMOTORA is
not a party to any oral or written (i) contract for the employment of
any officer or employee which is not terminable on 30 days, or less
notice; (ii) profit sharing, bonus, deferred compensation, stock
option, severance pay, pension benefit or retirement plan, (iii)
agreement, contract, or indenture relating to the borrowing of money,
(iv) guaranty of any obligation, other than one on which PROMOTORA is a
primary obligor, for the borrowing of money or otherwise, excluding
endorsements made for collection and other guaranties of obligations
which, in the aggregate do not exceed more than one year or providing
for payments in excess of $25,000 in the aggregate; (vi) collective
bargaining agreement; or (vii) agreement with any present or former
officer or director of PROMOTORA.
Section 1.09 Material Contract Defaults. PROMOTORA is not in default in
any material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets or condition of PROMOTORA and there is no event of default in
any material respect under any such contract, agreement, lease, or other
commitment in respect of which PROMOTORA has not taken adequate steps to prevent
such a default from occurring.
Section 1.10 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
an event of default under, or terminate, accelerate or modify the terms of any
material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which PROMOTORA is a party or to which any of its
properties or operations are subject.
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Section 1.11 Governmental Authorizations. Except as set forth in the
PROMOTORA Schedules, PROMOTORA has all licenses, franchises, permits, and other
governmental authorizations that are legally required to enable it to conduct
its business in all material respects as conducted on the date hereof. Except
for compliance with federal and state securities and corporation laws, as
hereinafter provided, no authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or other governmental body
is required in connection with the execution and delivery by PROMOTORA of this
Agreement and the consummation by PROMOTORA of the transactions contemplated
hereby.
Section 1.12 Compliance With Laws and Regulations. Except as set forth
in the PROMOTORA Schedules, to the best of its knowledge PROMOTORA has complied
with all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets, or condition of PROMOTORA, or except to the extent that noncompliance
would not result in the occurrence of any material liability for PROMOTORA.
Section 1.13 Approval of Agreement. The board of directors of PROMOTORA
has authorized the execution and delivery of this Agreement by PROMOTORA and has
approved this Agreement and the transactions contemplated hereby, and will
recommend to the PROMOTORA Shareholders that the Exchange be accepted by them.
Section 1.14 Material Transactions or Affiliations. Set forth in the
PROMOTORA Schedules is a description of every contract, agreement, or
arrangement between PROMOTORA and any predecessor and any person who was at the
time of such contract, agreement, or arrangement an officer, director, or person
owning of record, or known by PROMOTORA to own beneficially, 5% or more of the
issued and outstanding common stock of PROMOTORA and which is to be performed in
whole or in part after the date hereof or which was entered into not more than
three years prior to the date hereof. Except as disclosed in the PROMOTORA
Schedules or otherwise disclosed herein, no officer, director, or 5% shareholder
of PROMOTORA has, or has had since inception of PROMOTORA, any known interest,
direct or indirect, in any transaction with PROMOTORA which was material to the
business of PROMOTORA. There are no commitments by PROMOTORA, whether written or
oral, to lend any funds, or to borrow any money from, or enter into any other
transaction with, any such affiliated person.
Section 1.15 PROMOTORA Schedules. PROMOTORA has delivered to LION GRI
the following schedules, which are collectively referred to as the "PROMOTORA
Schedules" and which consist of separate schedules dated as of the date of
execution of this Agreement, all certified by the chief executive officer of
PROMOTORA as complete, true, and correct as of the date of this Agreement in all
material respects:
(a) a schedule containing complete and correct copies of the
articles of incorporation, and bylaws of PROMOTORA in effect as of the
date of this Agreement;
(b) Share Exchange agreement between Promotora ▇▇▇▇▇
Hermoso and Conjunto Habitacional ▇▇▇▇▇ ▇▇▇.
(c) Consent of the Board as to signatory Power.
(d) Schedule containing unaudited Financial Statements of
Conjunto Habitacional ▇▇▇▇▇ ▇▇▇, the wholly owned subsidiary of
Promotora ▇▇▇▇▇ Hermosa.
PROMOTORA shall cause the PROMOTORA Schedules and the instruments and
data delivered to LION GRI, hereunder to be promptly updated after the date
hereof up to and including the Closing .
Section 1.16 Payroll Taxes and Corporate Taxes. All of the payroll
taxes and corporate taxes owed by PROMOTORA up to the date of Closing shall
remain the responsibility of PROMOTORA.
Section 1.17 Valid Obligation. This Agreement and all agreements and
other documents executed by PROMOTORA in connection herewith constitute the
valid and binding obligation of PROMOTORA, enforceable in accordance with its or
their terms, except as may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefore may
be brought.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF LION GRI
As an inducement to, and to obtain the reliance of PROMOTORA and the
PROMOTORA Shareholders, except as set forth in the LION GRI Schedules (as
hereinafter defined), LION GRI represents and warrants as follows:
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Section 2.01 Organization. LION GRI is a corporation duly organized,
validly existing, and in good standing under the laws of Colorado and has the
corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets, to carry on its business in
all material respects as it is now being conducted, and except where failure to
be so qualified would not have a material adverse effect on its business, there
is no jurisdiction in which it is not qualified in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the LION GRI Schedules are complete and
correct copies of the Memorandum and Articles of Association of Holdings as in
effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of PROMOTORA Memorandum and Articles of Association. LION
GRI has taken all action required by law, its Articles of Incorporation, or
otherwise to authorize the execution and delivery of this Agreement, and LION
GRI has full power, authority, and legal right and has taken all action required
by law, its Articles of Incorporation, or otherwise to consummate the
transactions herein contemplated.
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Section 2.02 Capitalization. LION GRI's authorized capitalization
consists of 100,000,000 shares of common stock, $.001par value of which
46,650,000 is currently outstanding and 2,332,500 shares will be issued and
outstanding after the reverse split contemplated herein. All issued and
outstanding shares are legally issued, fully paid, and non-assessable and not
issued in violation of the preemptive or other rights of any person.
Section 2.03 Subsidiaries and Predecessor Corporations. LION GRI does
not have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation, except as
disclosed in Schedule 2.03.
Section 2.04 Securities Filings; Financial Statements.
(a) Included in the LION GRI Schedules is (i) an audited
balance sheet of LION GRI as of December 31, 2004.
(b) LION GRI has no liabilities with respect to the payment of
any federal, state, county, local or other taxes (including any
deficiencies, interest or penalties), except for taxes accrued but not
yet due and payable.
(c) LION GRI has timely filed all state, federal or local
income and/or franchise tax returns required to be filed by it from
inception to the date hereof. Each of such income tax returns reflects
the taxes due for the period covered thereby, except for amounts that,
in the aggregate, are immaterial.
(d) The books and records, financial and otherwise, of LION
GRI are in all material aspects complete and correct and have been
maintained in accordance with good business and accounting practices.
(e) All of LION GRI's assets are reflected on its financial
statements, and, except as set forth in the LION GRI Schedules or the
financial statements of LION GRI or the notes thereto, LION GRI has no
material liabilities, direct or indirect, matured or unmatured,
contingent or otherwise.
Section 2.05 Filings: Books and Records. The books and records,
financial and otherwise, of LION GRI are in all material aspects complete and
correct and have been maintained in accordance with good business and accounting
practices.
Section 2.06 Intentionally Omitted.
Section 2.07 Options or Warrants. There are no existing options,
warrants, calls, or commitments of any character relating to the authorized and
unissued stock of LION GRI, except as described in Schedule 2.06 (the "Existing
Rights").
Section 2.08 Absence of Certain Changes or Events. Except as disclosed
in the LION GRI Schedules, or otherwise disclosed in writing to PROMOTORA, since
the date of the most recent LION GRI balance sheet:;
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets or condition of LION GRI or
(ii) any damage, destruction or loss to LION GRI (whether or not
covered by insurance) materially and adversely affecting the business,
operations, properties, assets or condition of LION GRI;
(b) LION GRI has not (i) amended its certificate of
incorporation or bylaws; (ii) declared or made, or agreed to declare or
make any payment of dividends or distributions of any assets of any
kind whatsoever to stockholders or purchased or redeemed, or agreed to
purchase or redeem, any of its capital stock; (iii) waived any rights
of value which in the aggregate are outside of the ordinary course of
business or material considering the business of LION GRI; (iv) made
any material change in its method of management, operation, or
accounting; (v) entered into any transactions or agreements other than
in the ordinary course of business; (vi) made any accrual or
arrangement for or payment of bonuses or special compensation of any
kind or any severance or termination pay to any present or former
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officer or employee; (vii) increased the rate of compensation payable
or to become payable by it to any of its officers or directors or any
of its salaried employees whose monthly compensation exceed $1,000; or
(viii) made any increase in any profit sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit
plan, payment, or arrangement, made to, for or with its officers,
directors, or employees;
(c) LION GRI has not (i) granted or agreed to grant any
options, warrants, or other rights for its stock, bonds, or other
corporate securities calling for the issuance thereof; (ii) borrowed or
agreed to borrow any funds or incurred, or become subject to, any
material obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of business; (iii) paid or
agreed to pay any material obligations or liabilities (absolute or
contingent) other than current liabilities reflected in or shown on the
most recent LION GRI balance sheet and current liabilities incurred
since that date in the ordinary course of business and professional and
other fees and expenses in connection with the preparation of this
Agreement and the consummation of the transaction contemplated hereby;
(iv) sold or transferred, or agreed to sell or transfer, any of its
assets, properties, or rights (except assets, properties, or rights not
used or useful in its business which, in the aggregate have a value of
less than $1000), or canceled, or agreed to cancel, any debts or claims
(except debts or claims which in the aggregate are of a value less than
$1000); (v) made or permitted any amendment or termination of any
contract, agreement, or license to which it is a party if such
amendment or termination is material, considering the business of LION
GRI; or (vi) issued, delivered or agreed to issue or deliver, any
stock, bonds, or other corporate securities including debentures
(whether authorized and unissued or held as treasury stock), except in
connection with this Agreement; and
(d) to the best knowledge of LION GRI, it has not become
subject to any law or regulation which materially and adversely
affects, or in the future, may adversely affect, the business,
operations, properties, assets or condition of LION GRI.
Section 2.09 Litigation and Proceedings. There are no actions, suits,
proceedings or investigations pending or, to the knowledge LION GRI after
reasonable investigation, threatened by or against LION GRI or affecting LION
GRI or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind except as disclosed in LION GRI Schedules. LION GRI
Limited has no knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, award, rule or regulation of any
court, arbitrator, or governmental agency or instrumentality or any circumstance
that after reasonable investigation would result in the discovery of such
default.
Section 2.10 Contracts.
(a) LION GRI is not a party to, and its assets, are not bound
by, any material contract, franchise, license agreement, agreement,
debt instrument or other commitments whether such agreement is in
writing or oral, except as disclosed in LION GRI Schedules .
(b) LION GRI is not a party to or bound by, and the properties
of LION GRI are not subject to any contract, agreement, other
commitment or instrument; any charter or other corporate restriction;
or any judgment, order, writ, injunction, decree, or award which
materially and adversely affects, the business operations, properties,
assets, or condition of PROMOTORA.
(c) All contracts, agreements, franchises, license agreements,
and other commitments to which LION GRI is a party or by which its
properties are bound and which are material to the operations of LION
GRI taken as a whole are valid and enforceable by LION GRI in all
respects, except as limited by bankruptcy and insolvency laws and by
other laws affecting the rights of creditors generally;
(d) Except as included or described in the LION GRI Schedules
or reflected in the most recent LION GRI balance sheet, LION GRI is not
a party to any oral or written (i) contract for the employment of any
officer or employee which is not terminable on 30 days, or less notice;
(ii) profit sharing, bonus, deferred compensation, stock option,
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severance pay, pension benefit or retirement plan, (iii) agreement,
contract, or indenture relating to the borrowing of money, (iv)
guaranty of any obligation, other than one on which LION GRI is a
primary obligor, for the borrowing of money or otherwise, excluding
endorsements made for collection and other guaranties of obligations
which, in the aggregate do not exceed more than one year or providing
for payments in excess of $25,000 in the aggregate; (vi) collective
bargaining agreement; or (vii) agreement with any present or former
officer or director of LION GRI.
Section 2.11 Material Contract Defaults. LION GRI is not in default in
any material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets or condition of LION GRI and there is no event of default in
any material respect under any such contract, agreement, lease, or other
commitment in respect of which LION GRI has not taken adequate steps to prevent
such a default from occurring.
Section 2.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
a default under, or terminate, accelerate or modify the terms of, any indenture,
mortgage, deed of trust, or other material agreement or instrument to which
PROMOTORA is a party or to which any of its assets or operations are subject.
Section 2.13 Governmental Authorizations. LION GRI has all licenses,
franchises, permits, and other governmental authorizations, that are legally
required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal and
state securities or corporation laws, as hereinafter provided, no authorization,
approval, consent or order of, of registration, declaration or filing with, any
court or other governmental body is required in connection with the execution
and delivery by LION GRI of this Agreement and the consummation by TELELON of
the transactions contemplated hereby.
Section 2.14 Compliance With Laws and Regulations. To the best of its
knowledge, LION GRI has complied with all applicable statutes and regulations of
any federal, state, or other applicable governmental entity or agency thereof,
except to the extent that noncompliance would not materially and adversely
affect the business, operations, properties, assets or condition of PROMOTORA or
except to the extent that noncompliance would not result in the occurrence of
any material liability. This compliance includes, but is not limited to, the
filing of all reports to date with federal and state securities authorities.
Section 2.15 Material Transactions or Affiliations. Except as disclosed
herein and in the LION GRI Schedules, there exists no contract, agreement or
arrangement between LION GRI and any predecessor and any person who was at the
time of such contract, agreement or arrangement an officer, director, or person
owning of record or known by LION GRI to own beneficially, 5% or more of the
issued and outstanding common stock of LION GRI and which is to be performed in
whole or in part after the date hereof or was entered into not more than three
years prior to the date hereof. Neither any officer, director, nor 5%
shareholder of LION GRI has, or has had since inception of LION GRI, any known
interest, direct or indirect, in any such transaction with LION GRI which was
material to the business of LION GRI. LION GRI has no commitment, whether
written or oral, to lend any funds to, borrow any money from, or enter into any
other transaction with, any such affiliated person.
Section 2.16 Approval of Agreement. The board of directors and the
shareholders of LION GRI have authorized the execution and delivery of this
Agreement and has approved this Agreement and the transactions contemplated
hereby.
Section 2.17 Sale of Business Enterprises. LION GRI has agreed to
liquidate LION GRI and sell a material portion of LION GRI'S business or assets
following the consummation of the transactions contemplated hereby.
Section 2.18 LION GRI Schedules. LION GRI has delivered to PROMOTORA
the following schedules, which are collectively referred to as the "LION GRI
Schedules" and which consist of separate schedules, which are dated the date of
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this Agreement, all certified by the chief executive officer of LION GRI to be
complete, true, and accurate in all material respects as of the date of this
Agreement:
(a) a schedule containing complete and accurate copies of the
certificate of incorporation and bylaws of LION GRI as in effect as of
the date of this Agreement;
(b) a schedule containing the financial statements of LION GRI
identified in paragraph 2.04(a);
(c) Resolution of the Board of Directors to issue 4,000,000
shares post- split to the owners of Promotora ▇▇▇▇▇ Hermoso;
(d) Resolution of the Board of Directors by which all
directors of Lion Gri resign, and all the members of the Board of
Directors of Promotora are appointed to the board of Lion Gri.
(e) Intentionally Omitted
(f) Intentionally Omitted
(g) Intentionally Omitted
(h) Intentionally Omitted
(i) a schedule setting forth any other information, together
with any required copies of documents, required to be disclosed in the
LION GRI Schedules by Sections 2.01 through 2.19.
LION GRI shall cause the LION GRI Schedules and the instruments and data
delivered to PROMOTORA hereunder to be promptly updated after the date hereof up
to and including the Closing Date.
Section 2.19 Intentionally Omitted
Section 2.20 Valid Obligation. This Agreement and all agreements and
other documents executed by LION GRI in connection herewith constitute the valid
and binding obligation of LION GRI, enforceable in accordance with its or their
terms, except as may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought.
ARTICLE III
PLAN OF EXCHANGE
Section 3.01 The Exchange. On the terms and subject to the conditions set forth
in this Agreement, on the Closing Date (as defined in Section 3.03), each
PROMOTORA Shareholder the "Exchanging Shareholders"), shall assign, transfer and
deliver, free and clear of all liens, pledges, encumbrances, charges,
restrictions or known claims of any kind, nature, or description, the number of
shares of common stock of PROMOTORA set forth on Schedule 1.19(c) attached
hereto, in the aggregate constituting 100% of the issued and outstanding shares
of common stock of PROMOTORA; the objective of such Exchange being the
acquisition by LION GRI of 100% of the issued and outstanding common stock of
PROMOTORA. In exchange for the transfer of such securities by the PROMOTORA
Shareholders, LION GRI cause the delivery to counsel of LION GRI 34,474,511
pre-split shares equivalent to 1,723,725 shares post-split that are over two
years old ( the "Initial Shares"), to be held and subject to a trust agreement,
and issue and deliver to Promotora an additional 4,000,000 post-split shares.
All shares are to be accompanied by a stock power and legal opinion by the
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present Lion Gri International corporate attorney. At the Closing, each
PROMOTORA Shareholder shall, on surrender of his certificate or certificates
representing such PROMOTORA shares to LION GRI or its registrar or transfer
agent, be entitled to receive a certificate or certificates evidencing his
proportionate interest in the Initial Shares. Upon consummation of the
transaction contemplated herein all of the shares of capital stock of PROMOTORA
shall be held by LION GRI. Subsequent to Closing, PROMOTORA and LION GRI have
agreed to liquidate LION GRI and sell a material portion of LION GRI'S business
and/or assets to LION GRI's present management or an entity designated by them,
subject to all liabilities other than those PROMOTORA has expressly agreed to
assume herein.
Section 3.02 Upon execution of this agreement and for consideration
thereof, PROMOTORA agrees to pay any amounts due for audit as previously
disclosed.
Section 3.03 Reverse Stock Split. LION GRI shall effect, as a condition
prior to the execution of this Agreement. a 1 for 20 reverse split of its
outstanding common stock, while maintaining the authorized shares and present
par value and making appropriate adjustments in the capital accounts. The Share
Exchange contemplated by this Agreement shall take place on condition of the
effectiveness of such reverse stock split by LION GRI.
Section 3.04 Closing. The closing ("Closing") of the transactions
contemplated by this Agreement shall take place on April 15, 2006 or on other
such time as parties agree.
Section 3.05 The financial statements of LION GRI shall reflect all
current and total liabilities, including all trade payables and all LION GRI
assets at Closing; further that PROMOTORA shall assume the payments of all aged
payables of LION GRI, as shown on Schedule 3.05 hereof, on terms and conditions
satisfactory to the creditors listed thereon. Prior to Closing, LION GRI shall
use its best efforts to reduce and negotiate agreed reductions of the payables
to be assumed by PROMOTORA at Closing, such that the total aggregate amount of
payables to be assumed by PROMOTORA shall not exceed $150,000 at Closing.
Section 3.08 Upon signing LION GRI'S board of directors shall appoint
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (as the secretary), ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (as the President and
CEO), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (as the CFO) to fill open board of director seats of
LION GRI. LION GRI'S officers and directors, will effectively resign as such on
the Closing Date, effective at the conclusion of the Closing;
Section 3.09 Closing Events. At the Closing, PROMOTORA and each of the
Exchanging Shareholders shall execute, acknowledge, and deliver (or shall ensure
to be executed, acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings or other
instruments required by this Agreement to be so delivered at or prior to the
Closing, together with such other items as may be reasonably requested by the
parties hereto and their respective legal counsel in order to effectuate or
evidence the transactions contemplated hereby. This Agreement shall become
effective as of Closing on April 15, 2006.
Section 3.10 Termination.
(a) This Agreement may be terminated by the board of directors
of either LION GRI or PROMOTORA at any time prior to the Closing if:
(i) there shall be any actual or threatened action or
proceeding before any court or any governmental body which
shall seek to restrain, prohibit, or invalidate the
transactions contemplated by this Agreement and which, in the
judgment of such board of directors, made in good faith and
based upon the advice of its legal counsel, makes it
inadvisable to proceed with the Exchange; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is
9
required to consummate such transactions (which does not
include the Securities and Exchange Commission) or in the
judgment of such board of directors, made in good faith and
based on the advice of counsel, there is substantial
likelihood that any such approval will not be obtained or will
be obtained only on a condition or conditions which would be
unduly burdensome, making it inadvisable to proceed with the
Exchange.
In the event of termination pursuant to this paragraph (a) of Section
3.04, no obligation, right or liability shall arise hereunder, and each
party shall bear its own costs and expenses incurred by it in
connection with the negotiation, drafting, and execution of this
Agreement and the transactions herein contemplated.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records. Each of the Parties will
each afford to the officers and authorized representatives of the other Parties
full access to their properties, books and records, in order that each may have
a full opportunity to make such reasonable investigation as they shall desire to
make of the affairs of the other, and each will furnish the other with such
additional financial and operating data and other information reasonably
requested.
Section 4.02 Delivery of Books and Records. At the Closing, LION GRI
shall deliver to PROMOTORA, the copies of the corporate minute books, books of
account, contracts, records, and all other books or documents of LION GRI now in
the possession of LION GRI or its officer and director,__________________.
Section 4.03 Third Party Consents and Certificates. All Parties agree
to cooperate with each other in order to obtain any required third party
consents to this Agreement and the transactions herein contemplated.
Section 4.04 Consent of PROMOTORA Shareholders. PROMOTORA shall use its
best efforts to obtain the consent of all PROMOTORA shareholders to participate
in the Exchange.
Section 4.05 Name Change After the Closing Date, LION GRI's board of
directors shall have approve an amendment to the certificate of incorporation to
change the name of LION GRI to "Promotora ▇▇▇▇▇ Hermoso".
Section 4.06 LION GRI Shareholder Meeting. LION GRI shall call a
special shareholders meeting to be held on or prior to the Closing Date at which
meeting the shareholders of LION GRI shall be requested to approve, and LION
GRI's board of directors shall recommend approval of, the terms of this
Agreement, including the name change described in Section 4.05 and such other
matters as shall require shareholder approval hereunder
Section 4.08 Post-Exchange Sales Under Rule 144 or 145, If Applicable.
(a) LION GRI will use its best efforts to at all times comply
with the reporting requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), including timely filing of all
periodic reports required under the provisions of the Exchange Act and
the rules and regulations promulgated thereunder.
(b) Upon being informed in writing by any such person holding
restricted stock of LION GRI subsequent to the Exchange that such
person intends to sell any shares under Rule 144, Rule 145 or
Regulation S promulgated under the Securities Act (including any rule
adopted in substitution or replacement thereof), LION GRI will certify
in writing to such person that it has filed all of the reports required
to be filed by it under the Exchange Act to enable such person to sell
such person's restricted stock under Rule 144, 145 or Regulation S, as
may be applicable in the circumstances, or will inform such person in
writing that it has not filed any such report or reports.
(c) If any certificate representing any such restricted stock
is presented to LION GRI'S transfer agent for registration of transfer
10
in connection with any sale theretofore made under Rule 144, 145 or
Regulation S, provided such certificate is duly endorsed for transfer
by the appropriate person(s) or accompanied by a separate stock power
duly executed by the appropriate person(s) in each case with reasonable
assurances that such endorsements are genuine and effective, and is
accompanied by an opinion of counsel satisfactory to LION GRI and its
counsel that the stock transfer has complied with the requirements of
Rule 144, 145 or Regulation S, as the case may be, LION GRI will
promptly instruct its transfer agent to register transfer such shares
and to issue one or more new certificates representing such shares to
the transferee and, if appropriate under the provisions of Rule 144,
145 or Regulation S, as the case may be, free of any stop transfer
order or restrictive legend. The provisions of this Section 4.08 shall
survive the Closing and the consummation of the transactions
contemplated by this Agreement.
Section 4.09 Indemnification.
(a) PROMOTORA hereby agrees to indemnify LION GRI and each of
the officers, agents and directors of LION GRI as of the date of
execution of this Agreement against any loss, liability, claim, damage,
or expense (including, but not limited to, any and all expense
whatsoever reasonably incurred in investigating, preparing, or
defending against any litigation, commenced or threatened, or any claim
whatsoever), to which it or they may become subject arising out of or
based on any inaccuracy appearing in or misrepresentations made under
Article I of this Agreement. The indemnification provided for in this
paragraph shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement.
(b) LION GRI and its officers and directors hereby agrees to
indemnify PROMOTORA and each of the officers, agents, and directors of
PROMOTORA as of the date of execution of this Agreement against any
loss, liability, claim, damage, or expense (including, but not limited
to, any and all expense whatsoever reasonably incurred in
investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they
may become subject arising out of or based on any inaccuracy appearing
in or misrepresentation made under Article II of this Agreement. The
indemnification provided for in this paragraph shall survive the
Closing and consummation of the transactions contemplated hereby and
termination of this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF LION GRI
The obligations of LION GRI under this Agreement are subject to the
satisfaction, at or before the Closing, of the following conditions:
Section 5.01 Accuracy of Representations and Performance of Covenants.
The representations and warranties made by LION GRI in this Agreement were true
when made and shall be true at the Closing with the same force and effect as if
such representations and warranties were made at and as of the Closing (except
for changes therein permitted by this Agreement). LION GRI shall have performed
or complied with all covenants and conditions required by this Agreement to be
performed or complied with by LION GRI prior to or at the Closing.
Section 5.02 Officer's Certificate. PROMOTORA has been furnished with a
certificate dated the Closing Date and signed by a duly authorized officer of
LION GRI to the effect that no litigation, proceeding, investigation, or inquiry
is pending, or to the best knowledge of LION GRI threatened, which might result
in an action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement, or, to the extent not disclosed in the LION GRI
Schedules, by or against LION GRI, which might result in any material adverse
change in any of the assets, properties, business, or operations of LION GRI.
Section 5.03 No Material Adverse Change. Prior to the Closing , there
shall not have occurred any change in the financial condition, business, or
operations of LION GRI nor shall any event have occurred which, with the lapse
11
of time or the giving of notice, is determined to be unacceptable using the
criteria set forth in Section 2.08.
Section 5.04 Approval by Shareholders. The Exchange shall have been
approved, and shares delivered in accordance with Section 3.01, by the holders
of not less than one hundred percent (100%) of the outstanding common stock of
PROMOTORA.
Section 5.05 No Governmental Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 5.06 Consents. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of PROMOTORA after the Closing on the basis as presently operated
shall have been obtained.
Section 5.07 Other Items.
(a) LION GRI shall have received a list of PROMOTORA's
shareholders containing the name, address, and number of shares held by
each PROMOTORA shareholder as of the date of Closing, certified by an
executive officer of PROMOTORA as being true, complete and accurate;
and
(b) LION GRI shall have received such further opinions,
documents, certificates or instruments relating to the transactions
contemplated hereby as Parent may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF PROMOTORA
The obligations of PROMOTORA and the PROMOTORA Shareholders under this
Agreement are subject to the satisfaction, at or before the Closing, of the
following conditions:
Section 6.01 Accuracy of Representations and Performance of Covenants.
The representations and warranties made by PROMOTORA in this Agreement were true
when made and shall be true as of the Closing (except for changes therein
permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing. Additionally,
PROMOTORA shall have performed and complied with all covenants and conditions
required by this Agreement to be performed or complied shall have approved the
Exchange and the related transactions described herein.. LION GRI shall have
been furnished with certificates, signed by duly authorized executive officers
of PROMOTORA and dated the Closing , to the foregoing effect.
Section 6.02 Officer's Certificate. LION GRI shall have been furnished
with certificates dated the Closing Date and signed by duly authorized executive
officers of PROMOTORA, to the effect that no litigation, proceeding,
investigation or inquiry is pending, or to the best knowledge of PROMOTORA
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement or, to the
extent not disclosed in the PROMOTORA Schedules, by or against PROMOTORA, which
might result in any material adverse change in any of the assets, properties or
operations of PROMOTORA.
Section 6.03 No Governmental Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 6.04 Consents. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
12
in connection with the transactions contemplated herein, or for the continued
operation of each party after the Closing on the basis as presently operated
shall have been obtained.
Section 6.05 Other Items PROMOTORA shall have received further
opinions, documents, certificates, or instruments relating to the transactions
contemplated hereby as LION GRI may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Brokers. The Parties agree that there were no finders or
brokers involved in bringing the parties together or who were instrumental in
the negotiation, execution or consummation of this Agreement. The Parties each
agree to indemnify the other against any claim by any third person other than
those described above for any commission, brokerage, or finder's fee arising
from the transactions contemplated hereby based on any alleged agreement or
understanding between the indemnifying party and such third person, whether
express or implied from the actions of the indemnifying party.
Section 7.02 Governing Law. This Agreement shall be governed by,
enforced, and construed under and in accordance with the laws of the United
States of America and, with respect to the matters of state law, with the laws
of the State of Florida without giving effect to principles of conflicts of law
thereunder. Each of the parties (a) irrevocably consents and agrees that any
legal or equitable action or proceedings arising under or in connection with
this Agreement shall be brought exclusively in the federal courts of the United
States,.
Section 7.03 Notices. Any notice or other communications required or
permitted hereunder shall be in writing and shall be sufficiently given if
personally delivered to it or sent by telecopy, overnight courier or registered
mail or certified mail, postage prepaid, addressed as follows:
If to LION GRI : Lion Gri Corporation
With copies to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
If to PROMOTORA:
With copies to: ▇▇▇▇▇▇▇▇ Law Group P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ , ▇▇▇▇▇ ▇
▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given (i) upon receipt, if personally delivered, (ii) on
the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.
Section 7.04 Attorney's Fees. In the event that either party institutes
any action or suit to enforce this Agreement or to secure relief from any
default hereunder or breach hereof, the prevailing party shall be reimbursed by
the losing party for all costs, including reasonable attorney's fees, incurred
in connection therewith and in enforcing or collecting any judgment rendered
therein.
13
Section 7.05 Confidentiality. Each party hereto agrees with the other
that, unless and until the transactions contemplated by this Agreement have been
consummated, it and its representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary thereof
from any representative, officer, director or employee, or from any books or
records or from personal inspection, of such other party, and shall not use such
data or information or disclose the same to others, except (i) to the extent
such data or information is published, is a matter of public knowledge, or is
required by law to be published; or (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement. In the event of the termination of this
Agreement, each party shall return to the other party all documents and other
materials obtained by it or on its behalf and shall destroy all copies, digests,
work papers, abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein.
Section 7.06 Public Announcements and Filings. Unless required by
applicable law or regulatory authority, none of the parties will issue any
report, statement or press release to the general public, to the trade, to the
general trade or trade press, or to any third party (other than its advisors and
representatives in connection with the transactions contemplated hereby) or file
any document, relating to this Agreement and the transactions contemplated
hereby, except as may be mutually agreed by the parties. Copies of any such
filings, public announcements or disclosures, including any announcements or
disclosures mandated by law or regulatory authorities, shall be delivered to
each party at least one (1) business day prior to the release thereof.
Section 7.07 Schedules; Knowledge. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 7.08 Third Party Beneficiaries. This contract is strictly
between LION GRI and PROMOTORA, and, except as specifically provided, no
director, officer, stockholder, employee, agent, independent contractor or any
other person or entity shall be deemed to be a third party beneficiary of this
Agreement.
Section 7.09 Expenses. Whether or not the Exchange is consummated, each
Party hereto will bear their own respective expenses, including legal,
accounting and professional fees, incurred in connection with the Exchange or
any of the other transactions contemplated hereby.
Section 7.10 Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter thereof and
supersedes all prior agreements, understandings and negotiations, written or
oral, with respect to such subject matter.
Section 7.11 Survival; Termination. The representations, warranties,
and covenants of the respective parties shall survive the Closing and the
consummation of the transactions herein contemplated for a period of two years.
Section 7.12 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.13 Amendment or Waiver. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing , this
Agreement may by amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
Section 7.14 Best Efforts. Subject to the terms and conditions herein
provided, each party shall use its best efforts to perform or fulfill all
conditions and obligations to be performed or fulfilled by it under this
Agreement so that the transactions contemplated hereby shall be consummated as
soon as practicable. Each party also agrees that it shall use its best efforts
14
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective this Agreement and the transactions contemplated
herein.
IN WITNESS WHEREOF, the corporate parties hereto have caused
this Agreement to be executed by their respective officers, hereunto duly
authorized, as of the date first-above written.
ATTEST: Promotora ▇▇▇▇▇ Hermoso, Inc.
BY: _______________________________
ATTEST: Lion Gri International, Inc., a Nevada Corporation
BY: _____________________________