STOCK EXCHANGE AGREEMENT
AGREEMENT dated December 19, 1997 between Xanthic Enterprises,
Inc., a Colorado corporation, (hereinafter the "Buyer"), and the shareholders
whose names appear on "Exhibit A" attached hereto (hereinafter collectively,
the "Sellers") and who constitute all of the Common shareholders of Norwest,
S.A. a Brazil corporation (hereinafter referred to as "Norwest")
This Agreement sets forth the terms and conditions upon which the
Sellers agree to exchange with the Buyer Common shares of Norwest stock, par
value R$1.00 per share, representing all of the issued and outstanding shares
of stock of Norwest (hereinafter the "Shares") for twenty million shares of
common stock of Buyer.
In consideration of the mutual agreement contained herein, the parties
hereby agree as follows:
1. EXCHANGE OF SHARES
1.01 Shares Being Exchanged. Subject to the terms and conditions of this
Agreement, the Sellers are exchanging, assigning, and delivering the Shares
to the Buyer at the closing provided for in Section 1.03 hereof (the
"Closing") 121,803,670 shares of Common Stock of Norwest which constitutes
all of the issued and outstanding Common shares of Norwest, free and clear
of all liens, charges, or encumbrances.
1.02 Consideration. At the Closing, the Buyer is delivering to the
Sellers a total of 20,000,000 shares of "restricted" Common Stock of the
Buyer as that term is defined in Rule 144 of the United States Securities
Act of 1933, as amended. All stock certificates issued to Norwest
shareholders shall contain a legend substantially in the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES ACT AND MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND
APPLICABLE STATE SECURITIES ACTS; OR (B) XANTHIC ENTERPRISES, INC. HAS BEEN
FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE TO XANTHIC TO THE EFFECT THAT
NO REGISTRATION IS LEGALLY REQUIRED FOR SUCH TRANSFER; OR (C) THESE
SECURITIES ARE SOLD IN COMPLIANCE WITH RULE 144 PROMULGATED UNDER THE ACT.
1.03 Closing. The Closing of the transactions provided for herein shall
take place within 10 days of the date of the Xanthic shareholders's meeting
called in connection with this transaction.
As a condition of the closing the Buyer will provide to Seller or
Seller's counsel all corporate records of the Buyer including but not limited
to stock records, minutes and minute book, articles of incorporation,
by-laws, offering documents, legal opinions and financial reports for review
by Seller's counsel. Closing shall be subject to the opinion of Seller's
counsel that Seller's corporate records are in satisfactory condition. This
condition may be waived by the parties.
1.04 Delivery by the Sellers. At the Closing, the Sellers are delivering
to the Buyer certificates representing the Shares, endorsed in blank and
otherwise in form acceptable for transfer on the books of Norwest, with all
necessary transfer tax stamps attached.
1.05 Delivery by the Buyer. At the Closing the Buyer is delivering to
the Sellers, stock certificates in the denominations set forth in "Exhibit A".
2. RELATED TRANSACTIONS
2.01 Expenses of the Transactions. The Sellers shall be responsible for
paying all expenses of this transaction, including but not limited to filing
fees, legal fees, accounting fees, escrow agent fees, printing expenses,
certificate engraving fees and transfer fees.
2.02 No Dissent. The Sellers shall not dissent with respect to this
transaction.
2.03 Resignation. At the Closing, all of the current directors and
officers of Buyer (except ▇▇▇▇ ▇. ▇▇▇▇▇) shall deliver their resignations.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ will be elected to the Board of Directors of
Xanthic Enterprises, Inc.
3. REPRESENTATIONS AND WARRANTIES BY THE BUYER
The Buyer hereby represents and warrants as follows:
3.01 Organization, Capitalization, etc.
(a) The Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the state of Colorado, and
is qualified in no other state.
(b) The capitalization of Xanthic is comprised of one class of
stock which is designated Common stock which consists of 50,000,000 shares of
common stock $.0001 par value of which 6,484,826 shares are issued and
outstanding. All outstanding shares have been duly authorized, validly issued
and fully paid. There are no other outstanding or presently authorized
securities, warrants or options or related commitments of any nature not
disclosed herein or contemplated hereby. All of the outstanding shares are
non-assessable and free of cumulative voting or preemptive rights. Xanthic
shall effect a 1-for-2.5 reverse split of its issued and outstanding shares
prior to the date of closing and there shall not be more than 2,600,000
shares of Xanthic issued and outstanding immediately prior to the time of
closing.
(c) The Buyer has the corporate power and authority to carry
on its business as presently conducted.
3.02 Non Violation. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will constitute
a violation or default under any term or provision of the Certificate of
Incorporation or bylaws of the Buyer, or of any contract, commitment,
indenture, other agreement or restriction of any kind or character to which
the Buyer is a party or by which the Buyer is bound.
3.03 Financial Statement. The Buyer has delivered to the Seller the Form
10-K for the year ended December 31, 1996, and Form 10-Q for the nine month
period ended September 30, 1997. The financial statements contained therein
are in authorized form and are a fair and accurate presentation of the
financial condition, assets and liabilities (whether accrued, absolute,
contingent, or otherwise) of the Buyer as of the date thereof in accordance
with generally accepted principals of accounting applied on a
consistent basis.
3.04 Title to Properties; Encumbrances. The Buyer has good and
marketable title to all of its properties and assets, real and personal,
tangible and intangible, including without limitation the properties and
assets reflected in the December 31, 1996 balance sheet of the Buyer. All
such properties and assets reflected in that balance sheet have fair market
or realizable value at least equal to the value thereof as reflected upon
the balance sheet, and they are subject to no mortgage, pledge, lien,
conditional sale agreement, encumbrance, or charge of whatsoever nature.
3.05 Undisclosed Liabilities. Except to the extent reflected or reserved
against in the December 31, 1996 balance sheet of the Buyer, the Buyer has no
liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise and whether due or to become due. The Buyer has no
accounts payable except as set forth on the Schedules attached hereto.
3.06 Absence of Certain Changes. The Buyer has not since December 31,
1996:
(a) Suffered any material adverse change in financial condition, assets,
liabilities, or business;
(b) Incurred any obligation or liability (whether absolute, accrued,
contingent, or otherwise) other than in the ordinary course of business and
consistent with past practice;
(c) Paid any claim or discharged or satisfied any lien or encumbrance or
paid or satisfied any liability (whether absolute, accrued, contingent, or
otherwise) other than liabilities shown or reflected in the Buyer's December
31, 1996 balance sheet or liabilities incurred since December 31, 1996, in
the ordinary course of business and consistent with past practices;
(d) Permitted or allowed any of its assets, tangible or intangible, to
be mortgaged, pledged, or subjected to any liens or encumbrances;
(e) Written down the value of any inventory or written-off as
uncollectible any notes or accounts receivable or any portion thereof, except
for write-offs of such items in the ordinary course of business;
(f) Canceled any other debts or claims or waived any rights of
substantial value, or sold or transferred any of its assets or properties,
tangible or intangible, other than sales of Inventory or merchandise made in
the ordinary course of business and consistent with past practice;
(g) Made any capital expenditures or commitments in excess of $ 10,000
or additions to property, plant or equipment;
(h) Declared, paid or set aside for payment to its stockholders any
dividend or other distribution in respect of its common stock or redeemed or
purchased or otherwise acquired any of its common stock or any options
relating thereto or agreed to take any such action;
(i) Made any material change in any method of accounting or accounting
practice.
3.07 Litigation. There are no actions, claims, proceedings, or
investigations pending or, to the knowledge of the Buyer, threatened against
the Buyer, and the Buyer knows, nor has any reason to know of any basis for
any such action, proceeding, or investigation. There is no event or condition
of any kind or character pertaining to the business, assets, or prospects of
the buyer that may materially and adversely affect such business, assets or
prospects.
3.08 Disclosure. To the best of its knowledge the Buyer has
disclosed to the Sellers all facts material to the assets, prospects, and
business of the Buyer. No representation or warranty by the Buyer contained
in this Agreement, and no statement contained in any instrument, list,
certificate or writing furnished to the Sellers pursuant to the provisions
hereof or in connection with the transaction contemplated hereby, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not
misleading or necessary in order to provide a prospective purchaser of the
business of the Buyer with proper information as to the Buyer and its affairs.
3.09 SEC Filings. The Buyer has no outstanding obligations to
file reports with the United States Securities and Exchange Commission
(hereinafter the "SEC"). After the date of this agreement, should the Buyer
be required to file any reports with the SEC the Sellers agree to assume and
pay all costs and expenses incurred in connection therewith, including but
not limited to legal and accounting fees.
3.10 Legend. The Certificates representing the Shares delivered
pursuant to this agreement shall bear a legend indicating that said shares
have not been registered under the Securities Act of 1933 and that sale of
said shares may only be made by complying with Rule 144 under the Securities
Act of 1933.
4. REPRESENTATIONS AND WARRANTIES BY THE SELLERS AND NORWEST
The Sellers and Norwest hereby represent and warrant as follows:
4.01 Organization. Norwest is a corporation duly organized,
validly existing and in good standing under the laws of Brazil and has all
requisite licenses, business permits, governmental permits, qualifications,
corporate power and authority to own, lease and operate its assets and to
carry on the business of harvesting and exporting tropical hardwoods now and
in the future and is in good standing and duly qualified to do business in
Brazil and each and every state and jurisdiction where the failure to so
qualify would have a material adverse affect on the business or property
of Norwest. Norwest has 121,803,670 shares of common stock issued and
outstanding.
4.02 Authority. The execution and delivery of this Agreement by
the Sellers has been duly approved by all of the shareholders of Norwest who
are parties hereto. Said parties have the ability to enter into this
Agreement on their own behalf. Sellers are the owners of all of the issued
and outstanding shares of common stock of Norwest (the "Norwest Shares"). The
Norwest Shares are free from claims, liens or other encumbrances and subject
to compliance with applicable Securities law, sellers have the unqualified
right to sell, transfer and dispose of the Norwest Shares. Sellers represent
and warrant that in regard to their shares they have the full right and
authority to execute this Agreement and to transfer their Norwest Shares
to Buyer.
4.03 No Violation. Neither the execution nor the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will constitute a violation or default under any term or prevision of the
certificate of incorporation of bylaws of Norwest, or of any contract,
commitment, indenture, or other agreement or restriction of any kind or
character to which the Norwest is a party or by which the Seller is bound.
4.04 Representations Regarding the Acquisition of the Norwest Shares.
Sellers jointly and severally represent and warrant to Buyer as follows:
(a) The undersigned, Norwest and Sellers understand that the
issuance of the Buyer shares HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION.
(b) The Sellers are not underwriters and are acquiring the Buyer's
shares solely for investment, solely for his or her own account and not with a
view to, or for, resale in connection with any distribution within the meaning
of the United States Securities Laws or state securities acts or any other
applicable state securities acts.
(c) The Sellers understand the speculative nature and risks of
investments associated with the Buyer and confirm that the Buyer's shares are
suitable and consistent with his or her investment program and that his
or her financial position enables him or her to bear the risks of this
investment and that there may not be a public market for the shares
subscribed for herein.
(d) The shares subscribed for herein may not be transferred,
encumbered, sold, hypothecated, or otherwise disposed of to any person,
without the express prior written consent of the Buyer and the prior
opinion of counsel for the Buyer that such disposition will not violate
United States Securities Laws or state securities laws. Disposition shall
include, but is not limited to acts of selling, assigning, transferring
pledging, encumbering, hypothecating, or any other form of conveyance,
whether voluntary or not.
(e) To the extent that any United States or state securities law
shall require, the Sellers hereby agree that any shares acquired pursuant to
this Agreement shall be without preference as to assets.
(f) The Buyer is under no obligation to register or seek an
exemption under any United States or state securities acts for any stock
of the Buyer or to cause or permit such stock to be transferred in the
absence of any such registration or exemption and that the Sellers
herein must hold such stock indefinitely unless such stock is
subsequently registered under any United States or state securities act
or any exemption from registration is available.
(g) The Sellers have had the opportunity to ask questions of
the Buyer and receive additional information from the Buyer
to the extent that the Buyer possessed such information, or could acquire
it without unreasonable effort or expense necessary to evaluate the
merits and risks of any investment in the Buyer. Further, the Sellers have
been given: (1) All material books and records of the Buyer, (2) all material
contracts and documents relating to the proposed transaction, and,
(3) an opportunity to question the Buyer and the appropriate
executive officers.
(h) The Sellers have satisfied the suitability standards imposed
by their respective state securities laws. The shares being acquired from
the Buyer have not been registered under United States or state
securities laws. The Sellers acknowledge that the Buyer has not complied
with any state securities laws in seeking an exemption from the
transactions contemplated by this agreement.
(i) Sellers have the right, power, legal capacity and authority
to enter into, and perform their obligations under this Agreement, and no
approvals or consents of any persons other than Seller is necessary or
required.
4.05 Financial Statements. Norwest has delivered to the Buyer
the audited balance sheet of Norwest as of October 31, 1997. Norwest
represents the balance sheet and income statements are true and
correct and a fair and accurate presentation of the financial condition
and assets and liabilities (whether accrued, absolute, contingent,
or otherwise) of Norwest as of the date thereof in accordance with
generally accepted principals of accounting applied on a consistent
basis, and such financial statements and accounting information have not
misstated or otherwise misrepresented the financial condition of Norwest.
4.06 Tax Returns. Norwest has duly filed all tax reports and
returns required to be filed by it and has fully paid all taxes and other
charges claimed to be due from it by federal, state or local taxing
authorities including without limitation those due in respect to its
properties, income, franchise, licenses, sales and payrolls; there are no
liens upon any of Norwest's property or assets; there is not pending
questions relating to, or claims asserted for taxes or assessments
asserted against Norwest. Since the date of the Norwest balance sheet
Norwest has not incurred any tax liabilities other than in the ordinary
course of business. Norwest shall remain liable for the filing of all tax
returns and reports and for the payment of all federal, state and local taxes
of Seller relating to the Seller's business for any period ending on or prior
to the Closing Date and Seller shall remain so liable for the payment of
their taxes attributable to or relating to the consummation of the
transactions contemplated herein, and shall indemnify, defend and hold
Buyer harmless from and against all liability in connection therewith.
4.07 Title to Properties; Encumbrances. Norwest has good and
marketable title to all of its properties and assets, real and personal,
tangible and intangible including without limitation the properties and
assets reflected in the audited October 31, 1997 balance sheet of Norwest
or acquired thereafter. All such properties and assets reflected in
that audited balance sheet have a fair market or realizable value at
least equal to the value thereof as reflected upon the balance sheet, and
they are subject to no mortgage, lien, conditional sales agreement,
encumbrance, or charge of whatsoever nature, except as shown in said
audited statement.
4.08 Undisclosed Liabilities. Norwest is not subject to any
liability of any kind whatsoever (whether accrued, absolute, contingent
or otherwise) that are individually or in the aggregate material to
Norwest taken as a whole other than: (a) liabilities disclosed or
provided for in the Norwest financial statements, (b) liabilities
incurred in the ordinary course of business since the date of Norwest's
financial statements consistent with past practice.
4.09 Absence of Certain Items. Norwest has not since the date
of its last Balance Sheet:
(a) Suffered any material adverse change in financial condition,
assets, liabilities, business, or prospects;
(b) Incurred any obligation or liability (whether absolute, accrued,
contingent or otherwise) other than in the ordinary course of business and
consistent with past practice;
(c) Paid any claim or discharged or satisfied any lien or
encumbrances or paid or satisfied any liability (whether absolute, accrued,
contingent, or otherwise) other than liabilities shown or reflected on
Norwest's balance sheet dated October 31, 1997 or liabilities incurred since
in the ordinary course of business and consistent with past practices.
(d) Permitted or allowed any of its assets, tangible or intangible,
to be mortgaged, pledged or subjected to any liens or encumbrances;
(e) Written down the value of any inventory or written-off as
uncollectible any notes or accounts receivable or any portion thereof, except
for write-offs of such items in the ordinary course of business;
(f) Canceled any other debts or claims or waived any rights of
substantial value, or sold or transferred any of its assets or properties,
tangible or intangible, other than sales of inventory or merchandise made in
the ordinary course of business and consistent with past practice;
(g) Made any capital expenditures or commitments in excess of
$ 25,000 for additions to property, plant or equipment;
(h) Declared, paid, or set aside for payment to its stockholders any
dividend or other distribution in respect of its capital stock or any options
relating thereto or agreed to take any such options relating thereto or
agreed to take any such action;
(i) Made any material change in any method of accounting or
accounting practice.
4.10. Litigation. No claim, investigation, proceeding or
litigation shall be pending or threatened against Sellers for the purpose of
enjoining or preventing the consummation of the transaction contemplated by
this Agreement or otherwise claiming that this Agreement or such transactions
are improper, or which might adversely affect the right of Seller to own and
use its assets; and there shall not have been enacted or proposed by any
governmental body or agency any law or regulation that may or will adversely
affect the harvesting and exporting of timber by Norwest.
4.11 No Employee Benefit Plans. Norwest has no stock option
plans, pension plans, profit sharing plans or employee benefit plans of any
type or kind.
4.12 Disclosure. Norwest has disclosed to the Buyer all facts
material to the assets, prospects, and business of Norwest. No representation
or warranty by Norwest contained in this agreement, and no statement
contained in any instrument, list, certificate or writing furnished by Norwest
pursuant to any provision hereof or in connection with the transaction
contemplated hereby, contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
herein not misleading or necessary in order to provide a prospective purchaser
of the business of Norwest with proper information as to its affairs.
5. CONDITIONS OF NORWEST AND SELLERS
The obligations of Norwest and Sellers to consummate the Acquisition is
subject to the fulfillment by Xanthic, prior to or as of the effective time
of each of the following considerations, any of which may at the option of
Norwest or Sellers be waived:
5.01 Representations. The representations and warranties by or
on behalf of Xanthic contained in this Agreement or in any certificate or
documents delivered to Norwest pursuant to the provisions hereof shall be
true in all material respects at the Closing as though such representations
and warranties were made at and as of such time.
5.02 Compliance. Xanthic shall have performed and complied with
all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing at the Effective
Time.
5.03 No Material Adverse Change. Except for costs related to
this Acquisition, there shall not have occurred (i) any material adverse
change since December 31, 1996 in the business, properties, results of
operations or financial condition of Xanthic; or (ii) any loss or damage to
any of the properties of or assets of Xanthic which will materially affect or
impair its ability to conduct after the Merger the business now being
conducted by it.
5.04 Xanthic Shareholders' Meeting. As a condition to the Closing of
the Acquisition, Xanthic shall obtain its shareholders' approval of the
following proposals:
(a) the adoption and approval of this Stock Exchange Agreement;
(b) the election of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇
as director of Xanthic.
(c) a 1 for 2.5 reverse split of Xanthic's outstanding common stock;
(d) a change of Xanthic's name to International Wood Corporation;
(e) a change in domicile of Xanthic from Colorado to Nevada.
5.05 Absence of Litigation. There shall be no litigation,
proceeding or government investigation pending, threatened or reasonably
believed by Xanthic to be in prospect pertaining to Xanthic.
5.06 Good Standing. Xanthic will be in good standing in the
State of Colorado at the Closing and shall deliver a Certificate of Good
Standing to Norwest at or near the Closing date.
5.07. Appointment of Officers. At the Closing, Xanthic shall
appoint the following as officers:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ President
▇▇▇▇▇▇ ▇▇▇▇▇ Vice President
▇▇▇▇ ▇. ▇▇▇▇▇ Secretary
6. CONDITIONS OF XANTHIC
The obligations of Xanthic to consummate the Acquisition is subject to
the fulfillment by Norwest and Sellers, prior to or as of the Closing, of
each of the following conditions, any of which may, at the option of
Xanthic, be waived.
6.01 Representations. The representations and warranties on
behalf of Norwest and Sellers contained in this Agreement or in any
certificate or documents delivered by Norwest pursuant to the provisions
hereof shall be true in all material respects at the Closing as though such
representations and warranties were made at and as of such time.
6.02 Compliance. Norwest and Sellers shall have performed and
complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by them prior to or at the Closing.
6.03 No Material Adverse Change. There shall not have occurred (i)
any material adverse change since of the date of Norwest Financial
Statements; or (ii) any loss or damage to any of the properties or assets of
Norwest which may materially affect or impair its ability to conduct after
the Acquisition the business now being conducted by it.
6.04 Absence of Litigation. There shall not be any litigation,
proceeding or governmental investigation pending, threatened or reasonably
believed by Xanthic to be possibly in existence pertaining to Norwest or this
Acquisition.
6.05 Good Standing. Norwest will be in good standing in Brazil
at the Closing and shall deliver a Certificate of Good Standing to Xanthic as
of the Closing.
6.06 Investment Letters. Sellers shall deliver to Xanthic
letters commonly known as "investment letters" agreeing that the shares of
stock of Xanthic are being acquired for investment purposes, and not with a
view to public resale, and that the materials, including current financial
statements and other documents provided to Sellers, have been read and
understood by Sellers, that Sellers are acquiring the Xanthic shares under
Section 4(2) of the United States Securities Act of 1933 and that the shares
are restricted and may not be resold, except in reliance of an exemption
under the Act.
7. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.01 Survival of Representations. All representations,
warranties, and agreements made by the Sellers as part of the due diligence
inquiries, in this Agreement, or pursuant hereto shall survive the execution
and delivery hereof and any investigation at any time made by or on behalf of
any party.
7.02 Indemnification by Sellers Sellers agree to indemnify,
defend and hold harmless Buyer from and against any losses, costs, damages
and expenses (including, without limitation, attorneys' fees and costs)
incurred by Buyer and resulting from any breach by Sellers of any of Seller's
representations, warranties and covenants set forth in this Agreement, in
furtherance, and not in limitation, of the foregoing indemnity, sellers shall
indemnify, defend and hold Buyer harmless from and against all claims
asserted against, and all losses, costs, damages and expense incurred by
Buyer arising from either the business conducted by Sellers prior to the
Closing, and the violation of any local, state or United States law relating
to hazardous substances or toxic wastes by reason of the presence of hazardous
substances or toxic waste, which substances or waste were present prior to
the Closing, provided that the presence of such hazardous substances or toxic
waste was caused by the Sellers.
Buyer shall promptly notify Sellers of the existence of any claim,
demand or other matter to which Seller's indemnification obligations would
apply and shall give Sellers reasonable opportunity to defend the same at
their own expense and with counsel of their own choosing; provided,
however, that Buyer shall at all times also have the right to fully
participate in the defense of at its own expense. If Sellers shall, within
a reasonable time after this notice, fail to defend, Buyer shall have the
right but not obligation to undertake the defense of and to compromise or
settle (exercising reasonable business judgement) the claim or other matter
on behalf of Sellers. If the claim is one that cannot by its nature be
defended solely by Sellers, Buyer shall make available all information and
assistance that Sellers may reasonably request.
At any time after the Closing Date, but not later than one year after
the Closing Date, Buyer shall inform Sellers by written notification ("Claim
Notice") of any claim for indemnification under this Section. Sellers shall
have ten days from the date of delivery of the Claim Notice in which to
dispute any such claim. In the event that all or any portion of a claim
remains unresolved twenty days after the date of Seller's notice after good
faith efforts to resolve the claim, Buyer and Sellers shall attempt to
resolve such claim through mediation, and then, if necessary, by arbitration
in accordance with the procedures described in Sections 9.09 and 9.10, hereof.
8. CONDUCT PRIOR TO CLOSING.
8.01 Conduct of Business. Prior to the Closing, Norwest and
Xanthic shall conduct their business in the ordinary course consistent with
past practice.
8.02 Additional Covenants by Norwest and Sellers. Between the
date hereof and the Closing, except in the ordinary course of business or
with prior written consent of Xanthic, which consent shall not unreasonably
be withheld, Norwest shall not:
(a) make any change in Norwest's Certificate of Incorporation or
Bylaws;
(b) make any change in the authorized or issued shares of Norwest
without the prior approval of Xanthic;
(c) make any payment or distribution to its shareholders or purchase
or redeem any shares or capital stock;
(d) mortgage, pledge, or subject to lien or encumbrance any of its
assets, tangible or intangible;
(e) cancel any debts or claims or waive any rights of value;
(f) incur any indebtedness or guarantees or enter into any
commitment or make any material capital expenditures or investments;
(g) make any loan, accrual or arrangement for or payment of bonuses
or special compensation of any kind or any severance or termination pay to
any of its present or former officers or employees;
(h) make any material change in its method of management, operation,
or accounting;
(i) except in the ordinary course of business, enter into any other
material transactions;
(j) hire any person as an employee except in the ordinary course of
business;
(k) adopt 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;
(l) grant or agree to grant any options, warrants, or other rights
for its stocks, bonds, or other corporate securities calling for the issuance
thereof;
(m) sell or transfer, or agree to sell or transfer, any of its
assets, property, or rights or cancel or agreed to cancel, any debts or
claims;
(n) make or permit any amendment or termination of any material
contract, agreement or license to which it is a party except with prior
approval of Xanthic.
8.03 Additional Covenants by Xanthic. Between the date
hereof and the Closing, except as contemplated in this Agreement, arising in
the ordinary course of business or with prior written consent of Norwest,
which consent shall not be unreasonably withheld, Xanthic shall not:
(a) make any change in Xanthic's Certificate of Incorporation or
Bylaws;
(b) make any change in the authorized or issued shares of Xanthic;
(c) make any payment or distribution to its shareholders or purchase
or redeem any shares or capital stock;
(d) mortgage, pledge, or subject to lien or encumbrance any of its
assets, tangible or intangible;
(e) cancel any debts or claims or waive any rights of value;
(f) incur any indebtedness or guarantees or enter into any
commitment or make any material capital expenditures or investments;
(g) make any loan, accrual or arrangement for or payment of bonuses
or special compensation of any kind or any severance or termination pay to
any of its present or former officers or employees;
(h) make any material change in its method of management, operation,
or accounting;
(i) except in the ordinary course of business, enter into any other
material transactions;
(j) hire any person as an employee except in the ordinary course of
business;
(k) adopt 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;
(l) grant or agree to grant any options, warrants, or other rights
for its stocks, bonds, or other corporate securities calling for the issuance
thereof;
(m) sell or transfer, or agree to sell or transfer, any of its
assets, property, or rights or cancel or agreed to cancel, any debts or
claims;
(n) make or permit any amendment or termination of any material
contract, agreement or license to which it is a party except with prior
approval of Norwest.
8.04 Access. Norwest shall give to Xanthic (and its auditors,
counsel and other authorized representatives), and Xanthic agrees to give
access to Norwest (and its auditors, counsel and other authorized
representatives) to each of their premises and books and records, including
minute books and stock transfer records, and all contracts, agreements and
documents whether or not listed, herein; provided, however, that any such
investigation shall not affect any of the representations and warranties
hereunder or the right of any party hereto to rely thereon; and provided
further, than any such investigation shall be conducted in such a manner as
not to interfere unreasonably with the operation of the business of Norwest
and Xanthic. Norwest and Xanthic agree to use all reasonable efforts to keep
confidential any information obtained pursuant to their respective
inspections under this Agreement unless (i) such information is ascertainable
from public sources or is or becomes public other than through the inspecting
party or its representatives, or (ii) disclosure of such information is
required by applicable securities or other laws. In the event of the
termination of this Agreement, Norwest and Xanthic agree that it will not
disclose, utilize or exploit to its advantage any information obtained from
the other pursuant to its examinations under this Agreement, unless
necessary to comply with applicable law or to enforce its rights hereunder.
8.05 Compliance with Blue Sky Law. The parties shall jointly
take such action, make such filings and pay such filing fees as may be
reasonably necessary to comply with all applicable United States, Brazil and
state blue sky laws, rules and regulations relating to the issuance of
securities. Such filings shall include, but are not limited to the filing
of a Form D with the Securities and Exchange Commission and the filing of
appropriate state Blue Sky documents.
9. COOPERATION, ARBITRATION, INTERPRETATION, MODIFICATION, ATTORNEY
FEES AND MISCELLANEOUS PROVISIONS
9.01 Cooperation of Parties. The parties further agree that they
will do all that is required and necessary to accomplish and facilitate the
purposes of this Agreement and that they will sign and execute any and all
documents necessary to bring about the purposes of this Agreement.
9.02 Interpretations of Agreement. The parties hereto agree that
should any provision of this Agreement be found to be ambiguous in any way,
such ambiguity shall not be resolved by construing such provisions or any
part of or the entire Agreement in favor of or against any party herein, but
rather by construing the terms of this Agreement fairly and reasonably in
accordance with their generally accepted meaning.
9.03 No Presumption Against Drafting Party. This Agreement and
the provisions contained herein shall not be construed or interpreted for or
against any party hereto because said party drafted or caused the party's
legal representative to draft any of its provisions.
9.04 Amendments Modifications and Waivers. No amendment,
modification or waiver of any provision of this Agreement shall in any event
be effective unless the same shall be in writing and signed by the parties
hereto. No failure or delay on the part of any party in exercising any power,
right, privilege or remedy under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right,
privilege or remedy constitute a waiver of any other further exercise of any
power, right, privilege or remedy. Any waiver of any provision of this
Agreement, and any consent to any departure by any of the parties from
the terms of any provision of this Agreement, shall be effective only in
the specific instance and for the specific purpose for which given.
9.05 Severability of Provisions. This Agreement shall be
performed and shall be enforceable to the full extent allowable by applicable
law. In the event that any provision to this Agreement is declared by a court
of competent jurisdiction to be illegal, invalid, or unenforceable that
provision will be severed from the Agreement and the Agreement shall be read
as if it did not contain said provision. Any such provision and its severance
shall not affect the legality, validity, applicability, enforceability or
effect of the remaining provisions of this Agreement.
9.06 Assignments. None of the parties rights, duties or
obligation under this Agreement are assignable by any of the parties hereto
without the prior written consent of the other party and any attempted
assignment without prior written consent shall be null and void.
9.07 Entire Agreement. This Agreement constitutes the entire
Agreement and understanding of the parties hereto with respect to the matters
herein set forth, and all prior negotiations, writings and understandings
relating to the subject matter of this Agreement are merged herein and are
superseded and canceled by this Agreement, except for the survival of
warranties and representations expressly provided for in Section 7.01. In
executing this Agreement, the parties have not and do not rely on any
statements, inducements, promises, or representations made by the other party
or their agents, representatives or attorneys with regard to the subject
matter, basis, or effect of this Agreement, except for those specifically
provided for in Section 7.01. The parties acknowledge that the terms of this
Agreement are contractual and not mere recital. Each party hereto further
certifies that it is fully familiar with the provisions of this Agreement.
9.08 Successors. This Agreement shall be binding upon and shall
inure to the benefit of the respective parties thereto, their parent
corporations, subsidiaries and legal representatives.
9.09 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws then prevailing in
California, United States without regard to its conflict-of-law rules.
9.10 Arbitration, Legal Proceedings and Venue. The parties will
attempt through good faith negotiation to resolve their disputes. The term
"disputes" includes, without limitation, any disagreements between the
parties concerning the existence, formation and interpretation of this
Agreement and their obligation thereunder. If the parties hereto are unable to
resolve their disputes by negotiation, they shall attempt to resolve their
disputes through a mutually acceptable mediator. If the parties can not agree
on a mediator or if mediation proves unsuccessful, then either party may
commence a legal action in the Superior Court of California or U.S. District
Court for the Central District of California.
9.11 Attorney Fees. If any legal action or any arbitration or
other proceeding is brought for the enforcement of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in connection
with any of the provisions of the Agreement, the successful or prevailing
party shall be entitled to recover reasonable attorney's fees and other costs
(PAGE>
incurred in that action or proceeding, in addition to any other relief to
which it may be entitled.
9.12 Remedies Cumulative. Except as otherwise expressly set
forth in this Agreement, the rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity.
9.13 Headings. The section and paragraph headings contained in
this Agreement are for reference and convenience only. They do not form a
part hereof, and do not in any way codify, interpret, or reflect the intent of
the parties. Said headings shall not be used to construe or interpret any
provision of this Agreement.
9.14 Notices. All notices, requests, demands, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered mailed (registered or certified mail, postage
prepaid, return receipt requested) as follows:
If to the Buyer: Xanthic Enterprises, Inc.
▇/▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇. ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
If to the Sellers: Norwest S.A. c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Rua ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ # ▇▇▇
▇.▇.▇. ▇▇▇▇▇ - 010
Sao Paulo, Sao Paulo, Brazil
9.15 Gender and Number. In this Agreement where the context so
requires, the masculine, feminine or neuter gender shall be deemed to include
each other, and the singular to include the plural.
9.16 Counterparts. This Agreement may be signed in one or more
counterparts.
9.17 Facsimile Transmission Signature. A signature received
pursuant to a facsimile transmission shall be sufficient to bind a party to
this Agreement.
9.18 English language. This agreement shall be signed and
understood in the English language and all communications concerning this
Agreement shall be in the English language. It is the responsibility of
each Party hereto to read and understand the English language as it is
used in this Agreement.
9.19 Accounting Periods. The parties agree that the transaction
set forth herein may be determined to be effective for accounting purposes as
of December 31, 1997 providing the Closing occurs on or before January 30,
1998.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first indicated below.
Xanthic Enterprises, Inc.
Dated: December 19, 1997
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, President
Shareholders of Norwest, S.A.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 120,653,620
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Shares