SHARE AND ASSET PURCHASE AGREEMENT
THIS AGREEMENT made the day of January, 2002,
BETWEEN:
WINDJAMMER BAHAMAS (1992) LIMITED, a corporation incorporated under the
laws of the Commonwealth of the Bahamas,
(hereinafter called the "Vendor"),
OF THE FIRST PART,
- and -
▇▇▇▇▇ WINDJAMMER RESORT AND SPA (BAHAMAS) LIMITED, a corporation
incorporated under the laws of the Commonwealth of the Bahamas,
(hereinafter called the "Purchaser"),
OF THE SECOND PART,
- and -
THE ▇▇▇▇▇ PARTNERSHIP, INC., a corporation incorporated under the laws of
the State of Nevada,
(hereinafter called the "Corporation"),
OF THE THIRD PART.
WHEREAS:
A. The Vendor owns all of the issued and outstanding shares in the capital of
Windjammer Holdings Limited and Elgin Holdings Limited;
B. Windjammer Holdings Limited owns all of the issued and outstanding shares
in the capital of Windjammer Landing Company St. Lucia (1992) Limited and
Windjammer Landing Company Limited, which collectively own all of the
assets and carry on the business of the Windjammer Landing Resort located
in Labrelotte Bay, St. Lucia;
C. The Vendor is owed approximately $12.0 million plus accrued interest by
Windjammer Landing Company St. Lucia (1992) Limited, $8.3 million plus
accrued interest by Windjammer Landing Company Limited and approximately
$0.8 million plus accrued interest by Elgin Holdings Limited;
D. The Vendor also owns certain assets and owes certain liabilities in
connection with the business of selling time share units at the Windjammer
Landing Resort; and
E. The Purchaser wishes to acquire from the Vendor such shares and such assets
and assume such liabilities, and, contemporaneously therewith, make
arrangements for the payment by Windjammer Landing Company St. Lucia (1992)
Limited, Windjammer Landing Company Limited and Elgin Holdings Limited to
the Vendor of all amounts owed to it, all in accordance with the terms and
conditions of this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the
respective covenants, agreements, representations, warranties and indemnities
herein contained and for other good and valuable consideration (the receipt and
sufficiency of which are acknowledged by each party), the parties covenant and
agree as follows:
ARTICLE I
INTERPRETATION
1.1 Defined Terms. For the purpose of this Agreement, unless the context
otherwise requires, the following terms shall have the respective meanings set
out below and grammatical variations of such terms shall have corresponding
meanings:
(a) "Assumed Liabilities" has the meaning set out in Section 2.2;
(b) "Audited Consolidated Financial Statements" means the audited
consolidated financial statements of WHL, WJSL and WJSL92 for the
fiscal periods ending on April 30th in each of 2000 and 2001, copies
of which have been provided to the Purchaser;
(c) "Audited WJSL Financial Statements" means the audited financial
statements of WJSL for the fiscal periods ending on April 30th in each
of 2000 and 2001, copies of which have been provided to the Purchaser;
(d) "Business" means the business currently and heretofore carried on by
the Vendor and the Windjammer Companies consisting of the operation of
the Resort, including the sale of villas and the hotel operation, and
the sale of time share units at the Resort;
(e) "Business Day" means any day (other than a Saturday or a Sunday) on
which the main branch of Canadian Imperial Bank of Commerce (Bahamas)
in Nassau, Bahamas, is open for business;
(f) "Claim" has the meaning set out in Section 9.3;
(g) "Closing Balance Sheet" has the meaning set out in Section 2.9;
(h) "Closing Date" means the date which is ninety (90) days after the date
of this Agreement, or such other date as may be mutually agreed upon
by the Vendor and the Purchaser;
(i) "Closing Financial Statements" has the meaning set out in Section 2.9;
(j) "Closing Income Statement" has the meaning set out in Section 2.9;
(k) "Contract" means any agreement, indenture, contract, lease, deed of
trust, license, option, instrument or other commitment, whether
written of oral;
(l) "Corporation" means The ▇▇▇▇▇ Partnership, Inc., a corporation
incorporated under the laws of the State of Nevada;
(m) "Debentures" means, collectively, the WJSL Debenture, the ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ and the EHL Debenture;
(n) "Direct Claim" has the meaning set out in Section 9.3;
(o) "Due Diligence Period" has the meaning set out in Section 6.1;
(p) "EHL" means Elgin Holdings Limited, a corporation incorporated under
the laws of St. Lucia;
(q) "EHL Debenture" means the debenture in the principal amount of $0.8
million granted by EHL in favour of the Vendor pursuant to which the
Vendor is owed approximately $0.8 million plus accrued interest;
(r) "EHL Financial Statements" means the internally produced unaudited
financial statements of EHL for the fiscal periods ending on February
28th in each of 2000 and 2001, copies of which have been provided to
the Purchaser;
(s) "Employee Plans" has the meaning set out in Section 3.25;
(t) "Encumbrance" means any encumbrance, lien, charge, hypothec, pledge,
mortgage, title retention agreement, security interest of any nature,
adverse claim, exception, reservation, easement, right of occupation,
any matter capable of registration against title, option, right of
pre-emption, privilege or any Contract to create any of the foregoing;
(u) "Financial Statements" means, collectively, the Audited Consolidated
Financial Statements, the Audited WJSL Financial Statements, the
WJSL92 Financial Statements, the EHL Financial Statements, the Interim
WJSL Financial Statements, the Interim EHL Financial Statements and
the Interim WJSL92 Financial Statements, a complete listing of which
is set out in Schedule 1.1(u) attached hereto;
(v) "Guarantee and Exchange Agreement" has the meaning set out in Section
2.8;
(w) "Indebtedness Documentation" has the meaning set out in Section 2.7;
(x) "Indemnified Party" has the meaning set out in Section 9.3;
(y) "Indemnifying Party" has the meaning set out in Section 9.3;
(z) "Interim EHL Financial Statements" means the interim internally
produced financial statements of EHL for the seven month period ending
on September 30th, 2001, a copy of which have been provided to the
Purchaser;
(aa) "Interim WJSL Financial Statements" means the interim internally
produced financial statements of WJSL for the six month period ending
on October 31st, 2001, a copy of which have been provided to the
Purchaser;
(bb) "Interim WJSL92 Financial Statements" means the interim internally
produced financial statements of WJSL92 for the five month period
ending on September 30th, 2001, a copy of which have been provided to
the Purchaser;
(cc) "Licenses" has the meaning set out in Section 3.17;
(dd) "Losses", in respect of any matter, means all claims, demands,
proceedings, losses, damages, liabilities, deficiencies, costs and
expenses (including, without limitation, all legal and other
professional fees and disbursements, interest, penalties and amounts
paid in settlements) arising directly or indirectly as a consequence
of such matter;
(ee) "Permitted Encumbrances" means:
(i) liens for taxes, assessments and governmental charges due and
being contested in good faith and diligently by appropriate
proceedings (and for the payment of which adequate provision has
been made);
(ii) servitudes, easements, restrictions, rights-of-way and other
similar rights in real property or any interest therein, provided
the same are not of such nature as to materially adversely affect
the use of the property subject thereto by any of the Windjammer
Companies; (iii) liens for taxes either not due and payable or due
but for which notice of assessment has not been given;
(iv) undetermined or inchoate liens, charges and privileges
incidental to current construction or current operations and
statutory liens, charges, adverse claims, security interests or
encumbrances of any nature whatsoever claimed or held by any
governmental authority that have not at the time been filed or
registered against the title to the asset or served upon any of
the Windjammer Companies pursuant to law or that relate to
obligations not due or delinquent;
(v) assignments of insurance provided to landlords (or their
mortgagees) pursuant to the terms of any lease and liens or rights
reserved in any lease for rent or for compliance with the terms of
such lease;
(vi) security given in the ordinary course of the Business to any
public utility, municipality or government or to any statutory or
public authority in connection with the operations of the
Business, other than security for borrowed money;
(vii) the reservations in any original grants from the government
of any real property or interest therein and statutory exceptions
to title that do not materially detract from the value of the real
property concerned or materially impair its use in the operation
of the Business; and
(viii) the Permitted Encumbrances described in Schedule 1.1(ee);
(ff) "Purchase Price" has the meaning set out in Section 2.3;
(gg) "Purchased Shares" has the meaning set out in Section 2.1;
(hh) "Purchaser" means ▇▇▇▇▇ Windjammer Resort & Spa (Bahamas) Limited, a
corporation incorporated under the laws of the Commonwealth of the
Bahamas;
(ii) "Real Property" has the meaning set out in Section 3.11;
(jj) "Resort" means the Windjammer Landing Resort located at Labrelotte Bay
in St. Lucia;
(kk) "Third Party" has the meaning set out in Section 9.5;
(ll) "Third Party Claim" has the meaning set out in Section 9.3;
(mm) "Time of Closing" means 10:00 a.m. (St. Lucia time) on the Closing
Date;
(nn) "Vendor" means Windjammer Bahamas (1992) Limited, a corporation
incorporated under the laws of the Commonwealth of the Bahamas;
(oo) "WHL" means Windjammer Holdings Limited, a corporation incorporated
under the laws of the Commonwealth of the Bahamas;
(pp) "Windjammer Companies" means, collectively, WHL, EHL, WJSL and WJSL92;
(qq) "WJSL" means Windjammer Landing Company Limited, a corporation
incorporated under the laws of St. Lucia;
(rr) "WJSL Debenture" means the debenture in the principal amount of $14.7
million granted by WJSL in favour of the Vendor pursuant to which the
Vendor is owed approximately $8.3 million plus accrued interest;
(ss) "WJSL92" means Windjammer Landing Company St. Lucia (1992) Limited, a
corporation incorporated under the laws of St. Lucia';
(tt) "WJSL92 Debenture" means the debenture in the principal amount of
$14.0 million granted by WJSL92 in favour of the Vendor pursuant to
which the Vendor is owed approximately $12.0 million plus accrued
interest; and
(uu) "WJSL92 Financial Statements" means the internally produced unaudited
financial statements of WJSL92 for the fiscal periods ending on April
30th in each of 2000 and 2001, copies of which have been provided to
the Purchaser.
1.2 Currency. Unless otherwise indicated, all dollar amounts referred to in
this Agreement are expressed in the currency of the United States of
America.
1.3 Sections and Headings. The division of this Agreement into sections and the
insertion of headings are for convenience of reference only and shall not
affect the interpretation of this Agreement. Unless otherwise indicated,
any reference in this Agreement to a section or a Schedule refers to the
specified section of or Schedule to this Agreement.
1.4 Number, Gender and Persons. In this Agreements, words importing the
singular number only shall include the plural and vice versa, words
importing gender shall include all genders and words importing persons
shall include individuals, corporations, partnerships, associations,
trusts, unincorporated organizations, governmental bodies and other legal
or business entities.
1.5 Accounting Principles. Any reference in this Agreement to generally
accepted accounting principles refers to generally accepted accounting
principles as approved from time to time by the Canadian Institute of
Chartered Accountants or any successor institute.
1.6 Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether
written or oral. There are no conditions, covenants, agreements,
representations, warranties or other provisions, express or implied,
collateral, statutory or otherwise, relating to the subject matter hereof
except as herein provided.
1.7 Time of Essence. Time shall be of the essence of this Agreement.
1.8 Applicable Law. This Agreements shall be constructed, interpreted and
enforced in accordance with, and the respective rights and obligations of
the parties shall be governed by, the laws of the Commonwealth of the
Bahamas, and each party hereby irrevocably and unconditionally submits to
the exclusive jurisdiction of the courts of such country and all courts
competent to hear appeals therefrom. The Guarantee and Exchange Agreement
shall be constructed, interpreted and enforced in accordance with, and the
respective rights and obligations of the parties shall be governed by, the
laws of the State of New York, and the Guarantee and Exchange Agreement
shall provide that each party to it shall irrevocably and unconditionally
submit to the exclusive jurisdiction of the courts of such state and all
courts competent to hear appeals therefrom.
1.9 Severability. If any provision of this Agreement is determined by a court
of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such determination shall not impair or affect the validity,
legality or enforceability of the remaining provisions hereof, and each
provision is hereby declared to be separate, severable and distinct.
1.10 Successors and Assigns. This Agreement shall enure to the benefit of and
shall be binding on and enforceable by the parties and, where the context
so permits, their respective successors and permitted assigns. No party may
assign any of its rights or obligations hereunder without the prior written
consent of the other parties.
1.11 Amendment and Waivers. No amendment or waiver of any provision of this
Agreement shall be binding on any party unless consented to in writing by
such party. No waiver of any provision of this Agreement shall constitute a
waiver of any other provision, nor shall any waiver constitute a continuing
waiver unless otherwise expressly provided.
1.12 Schedules. The following Schedules are attached to and form part of this
Agreement:
Schedule 1.1(u) - Listing of Financial Statements
Schedule 1.1(ee) - Permitted Encumbrances
Schedule 2.2 - Purchased Assets and Assumed Liabilities
Schedule 2.8 - Matters relating to the Guarantee and Exchange
Agreement
Schedule 3.9 - Description of the Resort
Schedule 3.11 - Site Plan for the Real Property
Schedule 3.12 - Matters relating to the Real Property
Schedule 3.16 - Material Contracts
Schedule 3.17 - Licenses and Permits
Schedule 3.18 - Regulatory and Third Party Consents
Schedule 3.21(k) - Capital Expenditures
Schedule 3.23 - Legal and Regulatory Proceedings
Schedule 3.25 - Employee Plans
Schedule 3.26 - Collective Agreements
ARTICLE II
PURCHASE AND SALE OF PURCHASED SHARES AND PURCHASED ASSETS
2.1 Purchase and Sale of Purchased Shares. Subject to the terms and conditions
hereof, the Vendor covenants and agrees to sell, assign and transfer to the
Purchaser, and the Purchaser covenants and agrees to purchase from the Vendor,
all the issued and outstanding shares in the capital of WHL and all the issued
and outstanding shares in the capital of EHL (collectively, the "Purchased
Shares").
2.2. Purchase and Sale of Purchased Assets and Assumption of Assumed
Liabilities. Subject to the terms and conditions hereof, the Vendor covenants
and agrees to sell, assign and transfer to the Purchaser, and the Purchaser
covenants and agrees to purchase from the Vendor, certain assets in connection
with the business of selling time share units at the Resort, which consists of
promissory notes in the approximate amount of $2.0 million and unsold inventory
of time share units (collectively, the "Purchased Assets"), and the Purchaser
covenants and agrees to assume and be responsible for certain liabilities in
connection with the business of selling time share units at the Resort, which
consists primarily of commissions payable (collectively, the "Assumed
Liabilities"), all as more particularly set out and described in Schedule 2.2
attached hereto.
2.3 Purchase Price. The purchase price payable by the Purchaser to the Vendor
for the Purchased Shares and the Purchased Assets (the "Purchase Price") shall
be the sum of $5.1 million, subject to adjustment as provided for in Sections
2.6, 2.11 and 2.12. The Purchaser and the Vendor covenant and agree to allocate
the Purchase Price among the Purchased Shares and the Purchased Assets as
follows:
Purchased Shares
- Shares of WHL $2.5 million, subject to adjustment
- Shares of EHL $0.1 million
Purchased Assets
- Promissory Notes $2.0 million, subject to adjustment
-Unsold Time Share Inventory $0.5 million, subject to adjustment
The final allocation of the Purchase Price among the Purchased Shares and the
Purchased Assets shall be agreed by the Vendor and the Purchaser at the time
that final adjustments to the Purchase Price are made following preparation of
the Closing Financial Statements.
2.4 Deposits. Upon execution of this Agreement, the Purchaser shall pay to the
Vendor the sum of $100,000 as a non-refundable deposit. The Purchaser shall pay
an additional non-refundable deposit of $100,000 to the Vendor on the date which
is thirty (30) days after the date of this Agreement. The Purchaser agrees that
both such deposits shall be fully earned by the Vendor at the time of their
payment and shall not be refundable to the Purchaser in any event. In the event
the transactions contemplated by this Agreement are completed, such deposits
will be applied to the portion of the Purchase Price payable on closing.
2.5 Payment of Purchase Price. The Purchase Price shall be paid by the Purchaser
to the Vendor at the Time of Closing as follows:
(a) application by the Vendor of the deposits in the aggregate amount of
$200,000; and
(b) delivery to the Vendor, or in such manner as the Vendor may in writing
direct, a certified cheque or banker's draft in immediately available
funds in the amount of $4,900,000, subject to adjustment.
2.6 Repayment of Amounts Owing by the Windjammer Companies to the Vendor and
Certain Adjustments to the Purchase Price. Contemporaneously with the purchase
and sale of the Purchased Shares and the Purchased Assets, the Purchaser shall
arrange for sufficient funds to be advanced to the Windjammer Companies and
shall cause the Windjammer Companies to repay to the Vendor the amount of $12.9
million owed to it by the Windjammer Companies, subject to adjustment as
provided for herein. The Purchaser acknowledges and agrees that the total amount
to be paid to the Vendor at the Time of Closing in respect of payment of the
Purchase Price and repayment of amounts owing by the Windjammer Companies to the
Vendor shall amount to $18.0 million in the aggregate. It is intended that all
accrued interest owed to the Vendor by the Windjammer Companies, which is
estimated to be in the amount of $4.3 million, shall form part of the repayment
to occur at the Time of Closing and that a repayment of principal amounts owing
to the Vendor shall amount to approximately $9.1 million, so that the remaining
principal balance owing by the Windjammer Companies to the Vendor shall be $12.0
million. In the event that the accrued interest to be repaid on closing is
greater than $4.3 million, or the amount of principal required to be repaid in
order to reduce the principal balance outstanding to the Vendor to $12.0 million
is greater than $9.1 million, the portion of the Purchase Price allocated to the
shares of WHL shall be reduced by the aggregate of such amounts. It is also
intended that the portion of the Purchase Price allocated to the Purchased
Assets shall be an amount equal to the net book value of the Purchased Assets as
shown in the Closing Balance Sheet. If such net book value is less than $2.5
million (which is the estimated allocation in Section 2.3), the portion of the
Purchase Price allocated to the shares of WHL shall be increased by the amount
of such difference, and if such net book value is greater than $2.5 million, the
portion of the Purchase Price allocated to the shares of WHL shall be decreased
by the amount of such difference. For greater certainty, the Vendor and the
Purchaser acknowledge and agree that the total payment to be received by the
Vendor on closing from the payment of the Purchase Price and the repayment of
amounts owing by the Windjammer Companies shall amount to $18.0 million in the
aggregate.
2.7 Documentation to Confirm Indebtedness and Cross-Guarantees. As part of the
closing, each of the Windjammer Companies shall execute such documentation, (the
"Indebtedness Documentation"), as the Vendor in its discretion requires in order
to confirm and evidence that the Windjammer Companies owe to the Vendor
immediately after closing the aggregate principal amount of $12.0 million, that
interest shall accrue on such principal amount at the rate of eight percent (8%)
per annum and that the entire principal amount plus all accrued interest shall
be due and payable on the first anniversary of the Closing Date. In addition,
each of the Windjammer Companies shall provide a guarantee to the Vendor of all
amounts owed to the Vendor by the other Windjammer Companies. The Debentures
shall remain registered against the assets of the Windjammer Companies with the
intent that they act as security for all amounts owed to the Vendor by the
Windjammer Companies. However, the Vendor agrees that, if requested by the
Purchaser, it shall agree to subordinate and postpone the Debentures to the
lender providing financing to the Purchaser and/or the Windjammer Companies to
enable the Purchaser and the Windjammer Companies to make the payment of the
Purchase Price and the repayment of amounts owing by the Windjammer Companies to
the Vendor on closing, provided that the amount to which the Vendor will
postpone and subordinate does not exceed $19 million.
2.8 Guarantee and Exchange Agreement. The obligations of the Windjammer
Companies under the Indebtedness Documentation shall be guaranteed by the
Purchaser and the Corporation. The obligations of the Purchaser pursuant to such
guarantee shall be secured by all of the assets of the Purchaser, including the
Purchased Shares and the Purchased Assets, on a basis which is satisfactory to
the Vendor in its discretion. In order to provide for such guarantee, the
Vendor, the Purchaser and the Corporation shall enter into an agreement (the
"Guarantee and Exchange Agreement"), which, in addition to the aforementioned
guarantees of the Purchaser and the Corporation, shall provide:
(a) that the indebtedness owing to the Vendor pursuant to the
Indebtedness Documentation may be acquired by the Corporation in the
circumstances outlined in Section 2.2 of Schedule 2.8 hereto and exchanged into
common shares of the Corporation on the basis set out in Schedule 2.8.
(b) that the Vendor may require the Corporation to satisfy the
indebtedness and obligations owing under the Indebtedness Documentation at any
time while such indebtedness or obligations are outstanding and for any reason
in exchange for common shares of the Corporation, on the basis set out in
Section 2.1 of Schedule 2.8 hereto; and
(c) that the Purchaser and the Corporation, to the extent applicable to
each of them, covenant to abide by and agree with the matters addressed in
Article 3 of Schedule 2.8 hereto.
In addition, the definitive terms of the Guarantee and Exchange Agreement must
be acceptable, in their entirety, to the Vendor, its counsel and its tax
advisors.
2.9 Closing Financial Statements. As soon as is practicable, and in any event
not later than thirty (30) calendar days following the Closing Date, the Vendor
shall deliver to the Purchaser a special purpose balance sheet which shall
consolidate the Windjammer Companies and the Purchased Assets and the Assumed
Liabilities as of the close of business on the day immediately preceding the
Closing Date (the "Closing Balance Sheet") and a special purpose income
statement which shall consolidate the Windjammer Companies and the time share
business of the Vendor for the period (the "Interim Period") from the date of
this Agreement to the day immediately preceding the Closing Date (the "Closing
Income Statement"). Except for modifications required to meet the special
purpose as contemplated herein, the Closing Balance Sheet and the Closing Income
Statement (collectively, the "Closing Financial Statements") shall be prepared
in accordance with generally accepted accounting principles applied on a basis
consistent with the Financial Statements and shall present fairly the
consolidated financial position of the Windjammer Companies and the time share
business of the Vendor as of the close of business on the day immediately
preceding the Closing Date and the consolidated sales, earnings and results of
operations of the Windjammer Companies and the time share business of the Vendor
for the Interim Period.
2.10 Disputes Concerning Closing Financial Statements. The Purchaser may dispute
any aspect of the Closing Financial Statements by notice in writing given to the
Vendor within two weeks following the delivery of the Closing Financial
Statements to the Purchaser. Unless such dispute is resolved promptly by
agreement, the Vendor and the Purchaser may request an international accounting
firm not affiliated with either the Purchaser or the Vendor, or any of their
respective affiliates, to arbitrate the dispute. The firm chosen shall designate
a partner (the "Arbitrator") to determine the matter in dispute as a single
arbitrator in accordance with arbitration legislation in the State of New York.
The cost of the arbitration shall be in the discretion of the Arbitrator. The
decision of the Arbitrator with respect to any matter in dispute (including as
to all procedural matters and decision as to costs) shall be final and binding
on the Vendor and the Purchaser and shall not be subject to appeal by either
party. The fees and expenses of the Arbitrator shall be borne equally by the
parties. Upon agreement with respect to all matters in dispute, or upon a
decision of the Arbitrator with respect to all matters in dispute, such
amendments shall be made to the Closing Financial Statements as may be necessary
to reflect such agreement or such decision, as the case may be. In such event,
references in this Agreement to the Closing Financial Statements, Closing
Balance Sheet and Closing Income Statement shall refer to the Closing Financial
Statements, as so amended.
2.11 Working Capital Adjustment. If the amount of working capital shown on the
Closing Balance Sheet is less than zero, the Purchase Price shall be decreased
by the amount by which such amount of working capital is less than zero. If the
amount of working capital shown on the Closing Balance Sheet is greater than
zero, the Purchase Price shall be increased by the amount by which such amount
of working capital is greater than zero. At closing, the Purchaser and the
Vendor shall estimate what they reasonably believe will be the amount of working
capital to be shown on the Closing Balance Sheet. If such estimated amount is
positive, it shall be paid at the Time of Closing by the Purchaser to the Vendor
by certified cheque or banker's draft, and if such estimated amount is negative,
the portion of the Purchase Price to be paid by the Purchaser at the Time of
Closing shall be reduced by such amount. Any difference between the actual
amount of working capital shown on the Closing Balance Sheet from what was
estimated at the Time of Closing shall be paid by certified cheque or banker's
draft within ten (10) days of the date on which the Closing Financial Statements
have been delivered to the Purchaser or, in the event of a dispute concerning
the Closing Financial Statements, within ten (10) days of such dispute being
resolved in accordance with Section 2.10 herein and shall be accounted for by
the Purchaser and the Vendor as an adjustment to the Purchase Price allocated to
the shares of WHL. The term "working capital" as used in this Section 2.11 shall
mean current assets minus current liabilities as shown on the Closing Balance
Sheet.
2.12 Sharing of Net Profit. The Vendor and the Purchaser covenant and agree to
share the amount of net profit shown on the Closing Income Statement on the
basis of thirty-nine percent (39%) of such net profit for the Purchaser and
sixty-one percent (61%) of such net profit for the Vendor. The Vendor agrees to
pay to the Purchaser the Purchaser's share of such net profit by certified
cheque or banker's draft within ten (10) days of the date on which the Closing
Income Statement has been delivered to the Purchaser, or in the event of a
dispute concerning the Closing Income Statement, within ten (10) days of such
dispute being resolved in accordance with Section 2.10 herein and shall be
accounted for by the Purchaser and the Vendor as an adjustment to the Purchase
Price allocated to the shares of WHL. The term "net profit" as used in this
Section 2.12 shall mean the amount of net profit (or loss) shown on the Closing
Income Statement which shall be calculated in a manner consistent with
accounting principles utilized in previous accounting periods for the Business.
For greater certainty, the Purchaser shall be entitled to a share of net profit
only in the event the transactions contemplated by this Agreement close as
provided for herein.
2.13 Adjustment Regarding Certain Time Share Units. The Vendor and the Purchaser
covenant and agree to make an adjustment at the Time of Closing with respect to
time share units at the Resort which have been sold but not yet fully
constructed at the Time of Closing. Such adjustment will be in an amount agreed
by the Vendor and the Purchaser, both acting reasonably, and will take into
account the amount of sale proceeds received by the Vendor, the amount of
marketing and commission costs incurred by the Vendor and the costs of
constructing the villa to which the time share unit relates.
2.14 Payments to Escrow Agent. Following closing, the Purchaser shall pay the
sum of $1,000,000 to an escrow agent chosen by the Vendor and the Purchaser as
follows:
(a) $250,000 payable on the 30th day after the Closing Date;
(b) $250,000 payable on the 90th day after the Closing Date;
(c) $250,000 payable on the 120th day after the Closing Date; and
(d) $250,000 payable on the 150th day after the Closing Date.
If the Indebtedness Documentation, the Guarantee and Exchange Agreement
and the Debentures are in good standing on the thirtieth (30th) day after the
first anniversary of the Closing Date, the escrow agent shall pay the monies
which it holds in escrow, together with all interest which has accrued thereon,
to the Purchaser. In the event that a periodic $250,000 payment is not made by
the Purchaser to the escrow agent as set forth above, the Purchaser shall pay a
penalty to the Vendor in the amount of $10,000 payable immediately, and such
periodic $250,000 payment shall then be due to be paid to the escrow agent no
later than thirty (30) days after the date on which it was originally due. In
the event that the Purchaser fails again to make a periodic $250,000 payment
when due, the Purchaser shall pay a penalty to the Vendor in the amount of
$25,000 payable immediately in each instance, and such periodic $250,000 shall
then be due to be paid to the escrow agent no later than thirty (30) days after
the date on which it was originally due. In the event that any failure by the
Purchaser to make any payments to the escrow agent when due results in a past
due balance of $500,000 or more, it shall constitute an event of default under
the Indebtedness Documentation and the Guarantee and Exchange Agreement. On the
occurrence of any event of default under the terms of the Indebtedness
Documentation, the Guarantee and Exchange Agreement or the Debentures, all
monies held by the escrow agent, together with all interest accrued thereon,
shall be paid to the Vendor on account of any balance outstanding under the
Indebtedness Documentation or the Guarantee and Exchange Agreement, which shall
be in addition to any other remedies available to the Vendor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE VENDOR
The Vendor represents and warrants to the Purchaser as follows and
acknowledges that the Purchaser is relying on such representations and
warranties in connection with its purchase of the Purchased Shares and the
Purchased Assets:
3.1 Organization. The Vendor is a corporation duly incorporated and organized
and validly subsisting under the laws of the Commonwealth of the Bahamas and has
the corporate power to own or lease its property, to own the Purchased Shares
and the Purchased Assets, to enter into this Agreement and to perform its
obligations hereunder. WHL is duly incorporated and organized and validly
subsisting under the laws of the Commonwealth of the Bahamas. Each of EHL, WJSL
and WJSL92 is duly incorporated and organized and validly subsisting under the
laws of St. Lucia. Collectively, the Vendor and the Windjammer Companies have
the corporate power to own and lease their property, and to carry on the
Business as now being conducted by them.
3.2 Authorization. This Agreement has been duly authorized, executed and
delivered by the Vendor and is a legal, valid and binding obligation of the
Vendor, enforceable against the Vendor, by the Purchaser in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency and other
laws affecting the rights of creditors generally and except that equitable
remedies may be granted only in the discretion of a court of competent
jurisdiction.
3.3 No Other Agreements to Purchase. No person other than the Purchaser has any
written or oral agreement or option or any right or privilege (whether by law,
pre-emptive or contractual) capable of becoming an agreement or option for the
purchase or acquisition from the Vendor of any of the Purchased Shares or the
Purchased Assets.
3.4 Authorized and Issued Capital. The authorized capital of WHL consists of
5,000 common shares, of which 100 common shares (and no more) have been duly
issued and are outstanding as fully paid and non-assessable. The authorized
capital of EHL consists of 5,000 common shares, of which 2 common shares (and no
more) have been duly issued and are outstanding as fully paid and
non-assessable. The authorized capital of WJSL92 consists of 50,000,000 common
shares, of which 5,000 common shares (and no more) have been duly issued and are
outstanding as fully paid and non-assessable. The authorized capital of WJSL
consists of 2,000,000 common shares, of which 2 common shares (and no more) have
been duly issued and are outstanding as fully paid and non-assessable.
3.5 Options. No person, firm or corporation has any agreement or option or any
right or privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement, including convertible securities, warrants or convertible
obligations of any nature, for the purchase, subscription, allotment or issuance
of any unissued shares or other securities of any of the Windjammer Companies.
3.6 Ownership of Purchased Shares. The Vendor is the beneficial owner of record
of the Purchased Shares, with good and marketable title thereto, free and clear
of all Encumbrances and, without limiting the generality of the foregoing, none
of the Purchased Shares are subject to any voting trust, shareholder agreement
of voting agreement. Upon completion of the transaction contemplated by this
Agreement, all of the Purchased Shares will be owned by the Purchaser as the
beneficial owner of record, with good and marketable title thereto (except for
such Encumbrances as may have been granted by the Purchaser).
3.7 Subsidiaries. Other than WJSL and WJSL92, which are wholly owned
subsidiaries of WHL, none of the Windjammer Companies owns or has any agreement
of any nature to acquire, directly or indirectly, any shares in the capital of
or other equity or propriety interest in any person, firm or corporation, and
none of the Windjammer Companies has any agreements to acquire or lease any
other business operations.
3.8 No Violation. The execution and delivery of this Agreement by the Vendor and
the consummation of the transactions herein provided for will not result in
either:
(a) the breach or violation of any of the provisions of, or constitute a
default under, or conflict with or cause the acceleration of any obligation of
the Vendor or any of the Windjammer Companies under:
(i) any Contract to which the Vendor or any of the Windjammer
Companies is a party or by which any of them is, or any of their properties
are, bound;
(ii) any provision of the articles, by-laws or resolutions of the
board of directors (or any committee thereof) or shareholders of the Vendor
or any of the Windjammer Companies;
(iii) any judgment, decree, order or award of any court, governmental
body or arbitrator having jurisdiction over the Vendor or any of the
Windjammer Companies;
(iv) any license, permit, approval, consent or authorization held by
the Vendor or any of the Windjammer Companies or necessary to the ownership
of the Purchased Shares or the Purchased Assets or the operation of the
Business; or
(v) any applicable law, statute, ordinance, regulation or rule; or
(b) the creation or imposition of any Encumbrance on any of the Purchased
Shares or the Purchased Assets or any of the property or assets of the
Windjammer Companies.
3.9 Business of the Corporation. The Business is the only business operation
carried on by the Windjammer Companies, and the property and assets owned or
leased by the Windjammer Companies, together with the Purchased Assets, are
sufficient to carry on the Business. All the tangible assets of the Corporation
are situated at the locations set out in Schedule 3.9. A summary description of
the hotel, the hotel facilities, villas and guest rooms at the Resort owned by
WJSL is set out in Schedule 3.9.
3.10 Title to Personal and Other Property. The Purchased Assets are owned by the
Vendor as the beneficial owner thereof with good and marketable title thereto,
free and clear of all Encumbrances other than the Permitted Encumbrances. The
collective property and assets of the Windjammer Companies (other than the Real
Property) are owned beneficially by the Windjammer Companies as the beneficial
owners thereof with good and marketable title thereto, free and clear of all
Encumbrances other than the Permitted Encumbrances.
3.11 Location of Real Property. All of the real property owned and utilized by
the Windjammer Companies in carrying on the Business consists of approximately
thirty (30) acres owned by WJSL92 and WJSL, as outlined in red on the site plan
attached hereto as Schedule 3.11, and approximately twenty-five (25) acres owned
by EHL, as outlined in green on the site plan attached hereto as Schedule 3.11
(collectively, the "Real Property").
3.12 Title to Real Property. None of the Windjammer Companies is the beneficial
or registered owner of, nor has any of them agreed to acquire any real property
or any interest in any real property other than, the Real Property. A part of
the Real Property, identified as such on the site plan attached hereto as
Schedule 3.11, is held by WJSL92 on an emphyteutic lease, a condition of which
is that certain improvements be carried out within a prescribed time, which
conditions are attached hereto as Schedule 3.12 and which the Vendor represents
have been completed to date on terms amended from those registered on title.
Also, certain villas erected on the Real Property belong to third parties as
full owners and Schedule 3.12 sets out the lot number of each such villa and the
owner thereof. WJSL has entered into maintenance agreements with such villa
owners providing for the maintenance by WJSL of such villas and has also entered
into rental/lease agreements with certain of such villa owners for use of their
villas by WJSL in the hotel operations conducted at the Resort as part of the
Business. Title to Lot 55 is currently registered in the name of Sargusingh.
That lot was purchased by WJSL92 and the purchase price was paid but no
conveyance of the lot was completed. The lot was purchased as an access route
into the Resort, but at the present time is not used for any purpose. There
exists on the Resort a roadway connecting the main Resort property to an area of
real estate known as "The Point". The roadway that has been constructed passes
over lands owned by Berella ▇▇▇▇▇▇, who is the owner of the land on which the
roadway is situated. ▇▇▇. ▇▇▇▇▇▇ has agreed in the past to provide a right of
way in favour of the Resort, but to this point has not executed the right of way
agreement that has been prepared. The Vendor agrees to make a best efforts
attempt to enter into a right-of-way agreement prior to closing. In addition,
certain villas located on the Real Property have been leased to third parties as
part of a time share arrangement, the particulars of which are set out on
Schedule 3.12. EHL and WJSL have entered into a joint maintenance agreement by
which third parties acquiring a serviced lot or time share unit located on the
Real Property owned by EHL would be entitled to use the facilities of the
Resort. Other than as set out in this Agreement, ▇▇▇▇▇▇, ▇▇▇▇ or EHL, as the
case may be, has the exclusive right to possess, use and occupy, and has good
and marketable title in fee simple to, all the Real Property registered in its
name, free and clear of all Encumbrances, easements or other restrictions of any
kind other than Permitted Encumbrances. The Permitted Encumbrances constitute
all of the Encumbrances, agreements, indentures and other matters that affect
the Real Property.
3.13 Real Property Leases. None of the Windjammer Companies is a party to any
lease or agreement in the nature of a lease in respect of any real property,
whether as lessor or lessee, other than the emphyteutic lease referred to in
Section 3.12 which relates to part of the Real Property and other than as
otherwise set out in Schedule 3.12 attached hereto.
3.14 Insurance. Collectively, the Windjammer Companies have all of their
respective property and assets insured against loss or damage by all insurable
hazards or risks on a replacement cost basis and such insurance coverage will be
continued in full force and effect to and including the Time of Closing. None of
the Windjammer Companies is in default with respect to any of the provisions
contained in any such insurance policy or has failed to give any notice or
present any claim under any such insurance policy in a due and timely fashion.
3.15 No Expropriation. No property or asset of any of the Windjammer Companies
has been taken or expropriated by any federal, provincial, state, municipal or
other authority nor has any notice or proceeding in respect thereof been given
or commenced nor is the Vendor or any of the Windjammer Companies aware of any
intent or proposal to give any such notice or commence any such proceeding.
3.16 Agreements and Commitments. Except as described on Schedules 3.12, 3.16 and
3.26, none of the Windjammer Companies is a party to or bound by any Contract
relating to the property, assets, Business or operations of any of the
Windjammer Companies, including, without limiting the generality of the
foregoing:
(a) any collective bargaining agreement or other Contract with any labor union;
(b) any continuing Contract for the purchase of materials, supplies, equipment
or services involving more than $50,000 in respect of all such Contracts;
(c) any employment or consulting Contract or any other written Contract with any
officer, employee or consultant other than oral Contracts of indefinite hire
terminable by the employer without cause on reasonable notice and without
additional consideration due;
(d) any profit sharing, bonus, stock option, pension, retirement, disability,
stock purchase, medical, dental, hospitalization, insurance or similar plan or
agreement providing benefits to any current or former director, officer,
employee or consultant;
(e) any trust indenture, mortgage, promissory note, loan agreement, guarantee or
other Contract for the borrowing of money or a leasing transaction of the type
required to be capitalized in accordance with generally accepted accounting
principles;
(f) any commitment for charitable contributions;
(g) any Contract for capital expenditures in excess of $50,000 in the aggregate;
(h) any Contract for the sale of any assets, other than sales of time share
inventory to customers in the ordinary course of the Business;
(i) any Contract pursuant to which any of the Windjammer Companies is a lessor
of any machinery, equipment, motor vehicles, office furniture, fixtures or other
personal property;
(j) any confidentiality, secrecy or non-disclosure Contract (whether any of the
Windjammer Companies is a beneficiary or obligor thereunder) relating to any
proprietary or confidential information or any non-competition or similar
Contract;
(k) any license, franchise or other agreement that relates in whole or in part
to any Intellectual Property;
(l) other than a guarantee given by WHL in favour of the Vendor, any agreement
of guarantee, support, indemnification, assumption or endorsement of, or any
other similar commitment with respect to, the obligations, liabilities (whether
accrued, absolute, contingent or otherwise) or indebtedness of any other person
(except for cheques endorsed for collection);
(m) any Contract that expires, or may expire if the same is not renewed or
extended at the option of any person other than any of the Windjammer Companies,
more than one (1) year after the date of this Agreement; or
(n) any Contract entered into by any of the Windjammer Companies other than in
the ordinary course of the Business.
Each of the Windjammer Companies has performed all of the obligations
required to be performed by it and is entitled to all benefits under, and is not
in default or alleged to be in default in respect of, any Contract relating to
the Business to which it is a party or by which it is bound; all such Contracts
are in good standing and in full force and effect, and no event, condition or
occurrence exists that, after notice or lapse of time or both, would constitute
a default under any of the foregoing.
3.17 Compliance with Laws; Governmental Authorization. Each of the Windjammer
Companies has complied with all laws, statutes, or ordinances regulations,
rules, judgments, decrees or orders applicable to the Business or any of the
Windjammer Companies. Schedule 3.17 sets out a complete and accurate list of all
licenses, permits, approvals, consents, certificates, registrations and
authorizations (whether governmental, regulatory or otherwise) (the "Licenses")
held by or granted to any of the Windjammer Companies, and there are no other
licenses, permits, approvals, consents, certificates, registrations or
authorizations necessary to carry on the Business or to own or lease any of the
property or assets utilized by any of the Windjammer Companies. Each License is
valid, subsisting and in good standing and none of the Windjammer Companies is
in default or breach of any License and, to the knowledge of the Vendor, no
proceeding is pending or threatened to revoke or limit any License.
3.18 Consents and Approvals. There is no requirement to make any filing with,
give any notice to or obtain any license, permit, certificate, registration,
authorization, consent or approval of, any governmental or regulatory authority
as a condition to the lawful consummation of the transactions contemplated by
this Agreement, except for the filings, notifications, licenses, permits,
certificates, registrations, consents and approvals described in Schedule 3.18
or that relate solely to the identity of the Purchaser or the nature of any
business carried on by the Purchaser. There is no requirement under any Contract
relating to the Business or any of the Windjammer Companies to which the Vendor
or any of the Windjammer Companies is a party or by which it is bound to give
any notice to, or to obtain the consent or approval of, any party to such
agreement, instrument or commitment relating to the consummation of the
transactions contemplated by this Agreement except for the notifications,
consents and approvals described in Schedule 3.18.
3.19 Financial Statements. The Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with prior periods, are correct and complete and present fairly the
assets, liabilities (whether accrued, absolute, contingent or otherwise) and
financial condition of each of the Vendor and the Windjammer Companies as at the
respective dates, for the respective periods and for the respective entity or
entities covered by each of the respective Financial Statements. When prepared,
the Closing Financial Statements will be prepared in accordance with generally
accepted accounting principles applied on a basis consistent with those used in
the preparation of the Financial Statements and will present fairly the
financial position and results of operations of the Vendor and the Windjammer
Companies on a consolidated basis as at the close of business on the Closing
Date.
3.20 Books and Records. The books and records of each of the Windjammer
Companies fairly and correctly set out and disclose in accordance with generally
accepted accounting principles the financial position of each of the Windjammer
Companies as at the date hereof and all financial transactions of each of the
Windjammer Companies have been accurately recorded in such books and records.
3.21 Absence of Changes. Since February 28, 2001, the Vendor and the Windjammer
Companies have carried on the Business and conducted their operations and
affairs only in the ordinary and normal course consistent with past practice and
there has not been:
(a) any material adverse change in the condition (financial or otherwise),
assets, liabilities, operations, earnings, business or prospects of any of the
Vendor and the Windjammer Companies;
(b) any damage, destruction or loss (whether or not covered by insurance)
affecting the property or assets of the Windjammer Companies;
(c) any obligation or liability (whether absolute, accrued, contingent or
otherwise, and whether due or to become due) incurred by any of the Windjammer
Companies, other than those incurred in the ordinary and normal course and
consistent with past practice;
(d) any payment, discharge or satisfaction of any Encumbrance, liability or
obligation of any of the Windjammer Companies (whether absolute, accrued,
contingent or otherwise, and whether due or to become due) other than payment of
accounts payable and tax liabilities incurred in the ordinary course of business
consistent with past practice;
(e) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares in the capital of any of the Windjammer
Companies or any direct or indirect redemption, purchase or other acquisition of
any such shares;
(f) any issuance or sale by any of the Windjammer Companies, or any
Contract entered into by any of the Windjammer Companies, for the issuance or
sale by any of the Windjammer Companies, of any shares in the capital of or
securities convertible into or exercisable for shares in the capital of any of
the Windjammer Companies;
(g) any labor trouble adversely affecting any of the Windjammer Companies;
(h) any license, sale, assignment, transfer, disposition, pledge, mortgage
or granting of a security interest or other Encumbrance on or over any property
or assets of the Vendor or any of the Windjammer Companies, other than sales of
time share inventory to customers in the ordinary and normal course of the
Business;
(i) any cancellation of any debts or claims or any amendment, termination
or waiver of any rights of value to any of the Windjammer Companies in amounts
exceeding $50,000 in each instance or $250,000 in the aggregate;
(j) any general increase in the compensation of employees of any of the
Windjammer Companies (including, without limitation, any increase pursuant to
any Employee Plan or commitment), or any increase in any such compensation or
bonus payable to any officer, employee, consultant or agent thereof (having an
annual salary or remuneration in excess of $50,000) or the execution of any
employment contract with any officer or employee (having an annual salary or
remuneration in excess of $50,000), or the making of any loan to, or engagement
in any transaction with, any employee, officer or director of any of the
Windjammer Companies;
(k) except as set out in Schedule 3.21(k), any capital expenditures or
commitments of any of the Windjammer Companies in excess of $50,000 in the
aggregate;
(l) any forward purchase commitments in excess of the requirements of any
of the Windjammer Companies for normal operating inventories or at prices higher
than the current market prices;
(m) any forward sales commitments other than in the ordinary and normal
course of the Business or any failure to satisfy any accepted order for goods or
services;
(n) any change in the accounting or tax practices followed by the Vendor
and the Windjammer Companies;
(o) any change adopted by any of the Windjammer Companies in its
depreciation or amortization policies or rates; or
(p) any change in the credit terms offered to customers of, or by suppliers
to, any of the Windjammer Companies.
3.22 Taxes. Each of the Windjammer Companies has duly filed on a timely basis
all tax returns required to be filed by it and has paid all taxes that are due
and payable, and all assessments, governmental charges, penalties, interest and
fines due and payable by it. Each of the Windjammer Companies has made adequate
provision for taxes payable by it for the current period and any previous period
for which tax returns are not yet required to be filed. There are no actions,
suits, proceedings, investigations or claims pending or, to the knowledge of the
Vendor, threatened against, the Windjammer Companies in respect of taxes,
governmental charges or assessments, nor are any material matters under
discussion with any governmental authority relating to taxes, governmental
charges or assessments asserted by any such authority. Notwithstanding the
foregoing, the Vendor makes no representation or warranty with respect to any
tax concessions granted by the Government of St. Lucia to any of the Windjammer
Companies relating in any way to the Business or the Resort.
3.23 Litigation. Except as described in Schedule 3.23, there are no actions,
suits or proceedings (whether or not purportedly on behalf of any of the
Windjammer Companies) pending or, to the knowledge of the Vendor, after due
inquiry, threatened against or affecting, any of the Windjammer Companies at law
or in equity, or before or by any governmental department, court, commission,
board, bureau, agency or instrumentality, domestic or foreign, or by or before
an arbitrator or arbitration board.
3.24 Dividends. Since February 28, 2001, none of the Windjammer Companies has,
directly or indirectly, declared or paid any dividends or declared or made any
other distribution on any of its shares of any class and has not, directly or
indirectly, redeemed, purchased or otherwise acquired any of its outstanding
shares of any class or agreed to do so.
3.25 Employee Plans. Schedule 3.25 identifies each retirement, pension, bonus,
stock purchase, profit sharing, stock option, deferred compensation, severance
or termination pay, insurance, medical, hospital, dental, vision care, drug,
sick leave, disability, salary continuation, legal benefits, unemployment
benefits, vacation, incentive or other compensation plan or arrangement or other
employee benefit that is maintained or otherwise contributed to, or required to
be contributed to, by any of the Windjammer Companies for the benefit of
employees or former employees (the "Employee Plans").
3.26 Collective Agreements. Except as described in Schedule 3.26, none of the
Windjammer Companies has made any Contracts with any labor union or employee
association nor made commitments to or conducted negotiations with any labor
union or employee association with respect to any future agreements and, except
as set out in Schedule 3.26, the Vendor is not aware of any current attempts to
organize or establish any labor union or employee association with respect to
any employees of any of the Windjammer Companies, nor is there any certification
of any such union with regard to a bargaining unit.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND THE CORPORATION
The Purchaser and the Corporation jointly and severally represent and
warrant to the Vendor as follows and acknowledge and confirm that the Vendor is
relying on such representations and warranties in connection with the sale by
the Vendor of the Purchased Shares and the Purchased Assets:
4.1 Organization. The Purchaser is a corporation validly subsisting under the
laws of the Commonwealth of the Bahamas and it has the corporate power to enter
into and perform its obligations pursuant to this Agreement. The Corporation is
a corporation validly subsisting under the laws of the State of Nevada and it
has the corporate power to enter into and perform its obligations pursuant to
this Agreement.
4.2 Authorized and Issued Capital. The authorized capital of the Corporation
consists of 200 million shares of common stock with a par value of $0.001 of
which 40,091,727 shares (and no more) have been duly issued and are outstanding
as fully paid and non-assessable, and 25 million shares of preferred stock with
a par value of $0.001, none of which are outstanding. .
4.3 Compliance with Securities Legislation. The Corporation is in material
compliance with all applicable securities legislation in all jurisdictions where
such compliance is required. The Corporation is in material compliance with all
requirements of the National Association of Security Dealers Automated
Securities System in respect of the shares of the Corporation which are posted
for trading on such system.
4.4 No Violation. The execution and delivery of this Agreement by the Purchaser
and the Corporation and the consummation of the transactions provided for herein
will not result in the violation of, or constitute a default under, or conflict
with or cause the acceleration of any obligation of either of the Purchaser or
the Corporation under:
(a) any Contract to which either the Purchaser or the Corporation is a
party or by which either of them is bound;
(b) any provision of the articles or by-laws or resolutions of the board of
directors (or any committee thereof) or shareholders of either of the Purchaser
or the Corporation;
(c) any judgment, decree, order or award of any court, governmental body or
arbitrator having jurisdiction over the Purchaser or the Corporation; or
(d) any applicable, law, statute, ordinance, regulation or rule.
4.5 Authorization. This Agreement has been duly authorized, executed and
delivered by each of the Purchaser and the Corporation and is a legal, valid and
binding obligation of each of the Purchaser and the Corporation, enforceable
against the Purchaser and the Corporation by the Vendor in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency and other
laws affecting the enforcement of rights of creditors generally and except that
equitable remedies may only be granted in the discretion of a court of competent
jurisdiction.
4.6 Consents and Approvals. There is no requirement for either the Purchaser or
the Corporation to make any filing with, give any notice to or obtain any
license, permit, certificate, registration, authorization, consent or approval
of, any government or regulatory authority as a condition to the lawful
consummation of the transactions contemplated by this Agreement.
4.7 Relationship of the Purchaser and the Corporation. The Purchaser is a
wholly-owned subsidiary of the Corporation.
ARTICLE V
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
5.1 Survival of Representations and Warranties of the Vendor. To the extent that
they have not been fully performed at or prior to the Time of Closing, the
covenants, representations and warranties of the Vendor contained in this
Agreement and any agreement, instrument, certificate or other document executed
or delivered pursuant hereto shall survive the closing of the transactions
contemplated hereby until the second (2nd) anniversary of the Closing Date and,
notwithstanding such closing, shall continue in full force and effect for the
benefit of the Purchaser during such period.
5.2 Survival of Representations and Warranties of the Purchaser and the
Corporation. To the extent that they have not been fully performed at or prior
to the Time of Closing, the covenants, representations and warranties of the
Purchaser and the Corporation contained in this Agreement and any agreement,
instrument, certificate or other document executed or delivered pursuant hereto
shall survive the closing of the transactions contemplated hereby until the
second (2nd) anniversary of the Closing Date and, notwithstanding such closing,
shall continue in full force and effect for the benefit of the Vendor during
such period.
ARTICLE VI
COVENANTS
6.1 Access to the Windjammer Companies For a period of sixty (60) days
commencing on the date of this Agreement (the "Due Diligence Period"), the
Vendor shall make available to the Purchaser and its authorized representatives
and, if requested by the Purchaser, provide a copy to the Purchaser of, all
title documents, Contracts, financial statements, minute books, share
certificates books, share registers, plans, reports, licenses, orders, permits,
books of account, accounting records, constating documents and all other
documents, information or data relating to the Windjammer Companies and the
Business. During the Due Diligence Period, the Vendor and the Windjammer
Companies shall afford the Purchaser and its authorized representatives every
reasonable opportunity to have free and unrestricted access to the Business and
the property, assets, undertaking, records and documents of the Windjammer
Companies. At the request of the Purchaser, the Vendor shall execute or cause to
be executed such consents, authorizations and directions as may be necessary to
permit any inspection of the Business and any property of the Windjammer
Companies or to enable the Purchaser or its authorized representatives to obtain
full access to all files and records relating to any of the assets of the
Windjammer Companies maintained by governmental or other public authorities
during the Due Diligence Period.
In particular but without limitation, during the Due Diligence Period,
the Vendor shall permit the Purchaser's representatives or consultants to
conduct such all testing and inspection in respect of environmental matters at
such locations of the Business as the Purchaser may determine, in its sole
discretion, as may be required to satisfy the Purchaser in respect of such
matters.
Notwithstanding any of the foregoing, the Purchaser shall not be
permitted access to the Resort nor access to operational personnel of the Resort
unless written authorization is provided by ▇▇▇▇▇ ▇▇▇▇, Executive Vice-President
of the Vendor and any representative of the Purchaser must be accompanied at all
times by a representative of the Vendor.
6.2 Delivery of Books and Records. At the Time of Closing there shall be
delivered to the Purchaser, by the Vendor, all of the books and records of and
relating to the Windjammer Companies and the Business. The Purchaser agrees that
it will preserve the books and records so delivered to it for a period of six
years from the Closing Date, or for such longer period as is required by any
applicable law, and will permit the Vendor or its authorized representatives
reasonable access thereto in connection with the affairs of the Vendor relating
to its matters, but the Purchaser shall not be responsible or liable to the
Vendor for or as a result of any accidental loss or destruction of or damage to
any such books or records.
6.3 Conduct Prior to Closing. Without in any way limiting any other obligations
of the Vendor hereunder, during the period from the date hereof to the Time of
Closing:
(a) Conduct Business in the Ordinary Course. The Vendor shall, and shall
cause the Windjammer Companies to, conduct the Business and the operations and
affairs of the Vendor and the Windjammer Companies only in the ordinary and
normal course of business consistent with past practice and in accordance with
existing operating budgets, and the Windjammer Companies shall not, without the
prior written consent of the Purchaser, enter into any transaction or refrain
from doing any action that, if effected before the date of this Agreement, would
constitute a breach of any representation, warranty, covenant or other
obligation of the Vendor contained herein, and provided further that none of the
Vendor or the Windjammer Companies shall enter into any material Contracts with
respect to any of the Windjammer Companies or the Business or spend in excess of
$50,000 on any single expense item without the consent of the Purchaser, which
consent shall not be unreasonably withheld. Notwithstanding the foregoing, the
Purchaser acknowledges and agrees that the Vendor and its affiliated companies
are in the process of arranging alternate financing to which is currently in
place and such financing may involve some or all of the Windjammer Companies
incurring additional debt, or amending the terms of existing indebtedness, and
either providing additional security in respect thereof or amending the terms of
existing security, including, without limitation, an assignment of existing
security. Provided that any such indebtedness is repaid as part of the
transactions contemplated by this Agreement and any additional security provided
in respect thereof is discharged, the consent of the Purchaser shall not be
required with respect to any aspect of such financing;
(b) Continue Insurance. The Vendor shall cause the Windjammer Companies to
continue to maintain in full force and effect all policies of insurance or
renewals thereof now in effect, shall take out, at the expense of the Purchaser,
such additional insurance as may be reasonably requested by the Purchaser and
shall give all notices and present all claims under all policies of insurance in
a due and timely fashion;
(c) Regulatory Consents. The Vendor shall use its best efforts to obtain or
cause the Windjammer Companies to obtain at or prior to the Time of Closing,
from all appropriate governmental or regulatory bodies, the licenses, permits,
consents, approvals, certificates, registrations and authorizations described in
Schedule 3.21. The Purchaser acknowledges, however, that the Vendor makes no
representation or warranty with respect to any tax concessions granted by the
Government of St. Lucia relating in any way to the Business or the Resort,
whether to the Vendor or to any of the Windjammer Companies, and it shall be the
sole responsibility and obligation of the Purchaser to satisfy itself with
respect to any such tax concessions.
(d) Contractual Consents. The Vendor shall use its best efforts to give or
obtain or cause the Windjammer Companies to give or obtain the notices, consents
and approvals described in Schedule 3.21;
(e) Preserve Goodwill. The Vendor shall use its best efforts to preserve,
and cause the Windjammer Companies to preserve, intact the Business and the
property, assets, operations and affairs of the Windjammer Companies and to
carry on the Business and the affairs of the Windjammer Companies as currently
conducted, and to promote and preserve for the Purchaser the goodwill of
suppliers, customers and others having business relations with the Vendor and
the Windjammer Companies;
(f) Discharge Liabilities. The Vendor shall cause the Windjammer Companies
to pay and discharge the liabilities of the Windjammer Companies in the ordinary
course in accordance and consistent with the previous practice of the Windjammer
Companies, except those contested in good faith by the Windjammer Companies. To
the knowledge of the Vendor, as at the date of this Agreement, the aggregate
amount of any contested liabilities of the Windjammer Companies does not exceed
$25,000. The Purchaser acknowledges and agrees that all liabilities of the
Windjammer Companies to EllisDon Construction Ltd. or its affiliates (other than
the Vendor) shall be paid and satisfied prior to closing;
(g) Corporate Action. The Vendor shall use its best efforts to take and
cause the Windjammer Companies to take all necessary corporate action, steps and
proceedings to approve or authorize, validly and effectively, the execution and
delivery of this Agreement and the other agreements and documents contemplated
hereby and to complete the transfer of the Purchased Shares and the Purchased
Assets to the Purchaser and to cause all necessary meetings of directors and
shareholders of the Vendor and the Windjammer Companies to be held for such
purpose; and
(h) Best Efforts. The Vendor shall use its best efforts to satisfy the
conditions contained in Section 7.1.
6.4 Delivery of Documents. The Vendor shall deliver to the Purchaser all
necessary transfers, assignments and other documentation reasonably required to
transfer the Purchased Shares and the Purchased Assets to the Purchaser with a
good and marketable title, free and clear of all Encumbrances, except for
Permitted Encumbrances.
6.5 Delivery of Vendor's and the Windjammer Companies' Corporate and Closing
Documentation. The Vendor shall execute and deliver or cause to be executed and
delivered to the Purchaser copies of such documents relevant to corporate
matters relating to the Vendor and the Windjammer Companies and to the closing
of the transactions contemplated hereby as the Purchaser, acting reasonably, may
request
6.6 Delivery of Purchaser's and Corporation's Corporate and Closing
Documentation. The Purchaser and the Corporation shall execute and deliver or
cause to be executed and delivered copies of such other documents relevant to
corporate matters relating to the Purchaser the closing of the transaction
contemplated hereby as the Vendor, acting reasonably, may request.
ARTICLE VII
CONDITIONS OF CLOSING
7.1 Conditions of Closing in Favor of the Purchaser. The sale and purchase of
the Purchased Shares and the Purchased Assets is subject to the following terms
and conditions for the exclusive benefit of the Purchaser, to be fulfilled or
performed at or prior to the Time of Closing, other than with respect to the
financing condition set out in Section 7.1(h) which must be fulfilled or waived
within ninety (90) days of the date of this Agreement:
(a) Representations and Warranties. The representations and warranties of
the Vendor contained in this Agreement shall be true and correct in all material
respects at the Time of Closing, with the same force and effect as if such
representations and warranties were made at and as of such time, and a
certificate of an officer of the Vendor dated the Closing Date to that effect
shall have been delivered to the Purchaser, such certificate to be in form and
substance satisfactory to the Purchaser, acting reasonably;
(b) Covenants. All of the terms, covenants and conditions of this Agreement
to be complied with or performed by the Vendor and the Windjammer Companies at
or before the Time of Closing shall have been complied with or performed in all
material respects and a certificate of an officer of the Vendor dated the
Closing Date to that effect shall have been delivered to the Purchaser, such
certificate to be in form and substance satisfactory to the Purchaser, acting
reasonably;
(c) Regulatory Consents. There shall have been obtained, from all
appropriate governmental or administrative bodies, such licenses, permits,
consents, approvals, certificates, registrations and authorizations as are
required to be obtained by the Vendor to permit the change of ownership of the
Purchased Shares and the Purchased Assets contemplated hereby including, without
limitation, those described in Schedule 3.18.
(d) Contractual Consents. The Vendor shall have given or obtained the
notices, consents and approvals described in Schedule 3.18, in each case in form
and substance satisfactory to the Purchaser, acting reasonably;
(e) Material Adverse Change. There shall have been no material adverse
changes in the condition (financial or otherwise), assets, liabilities,
operations, earnings, business or prospects of the Windjammer Companies on a
collective basis since February 28, 2001;
(f) No Action or Proceeding. No legal or regulatory action or proceeding
shall be pending or threatened by any person to enjoin, restrict or prohibit the
purchase and sale of the Purchased Shares and the Purchased Assets contemplated
hereby;
(g) No Material Damage. No material damage by fire or other hazard to the
whole or any material part of the property or assets of the Windjammer Companies
shall have occurred from the date hereof to the Time of Closing;
(h) Financing. Within ninety (90) days of the date of this Agreement, the
Purchaser shall have obtained the financing necessary for it and the Windjammer
Companies to make the payments to the Vendor due on the Closing Date in the
aggregate amount of $18.0 million as contemplated by this Agreement, on terms
and conditions acceptable to the Purchaser, acting reasonably;
(i) Legal Matters. All actions, proceedings, instruments and documents
required to implement this Agreement, or instrumental thereto, and all legal
matters relating to the purchase of the Purchased Shares and the Purchased
Assets, including title of the Vendor to the Purchased Shares and the Purchased
Assets, shall have been approved as to form and legality by Vanderkam & ▇▇▇▇▇▇▇,
counsel for the Purchaser, acting reasonably;
(j) Legal Opinion. The Vendor shall have delivered to the Purchaser a
favorable opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, counsel to the Vendor, which shall
include and incorporate favourable opinions from local counsel to the Vendor in
the Bahamas and in St. Lucia, all in forms mutually acceptable to the Vendor and
the Purchaser, both acting reasonably;
(k) Resignation of Directors and Officers. Such directors and officers of
the Windjammer Companies as the Purchaser may specify shall have resigned in
favor of nominees of the Purchaser effective as of the Time of Closing; and
(l) Release by Vendor, Directors and Officers. The Vendor and such
directors and officers of the Windjammer Companies as the Purchaser may specify
shall have executed and delivered, at the Time of Closing, releases in favor of
the Windjammer Companies and the Purchaser in forms mutually acceptable to the
Vendor and the Purchaser, both acting reasonably.
If the financing condition contained Section 7.1(h) shall not be
fulfilled or waived within ninety (90) days of the date of this Agreement, this
Agreement shall be terminated and the obligations of the Vendor and the
Purchaser under this Agreement, other than the obligations contained in Sections
2.4, 10.3 and 10.4, shall be terminated. If any of the other conditions
contained in this Section 7.1 shall not be performed or fulfilled at or prior to
the Time of Closing to the satisfaction of the Purchaser, acting reasonably, the
Purchaser may, by notice to the Vendor, terminate this Agreement and the
obligations of the Vendor and the Purchaser under this Agreement, other than the
obligations contained in Sections 2.4, 10.3 and 10.4, shall be terminated,
provided that the Purchaser may also bring an action pursuant to Article IX
against the Vendor for damages suffered by the Purchaser where the
non-performance or non-fulfillment of the relevant condition is as a result of a
breach of covenant, representation or warranty by the Vendor. Any such condition
may be waived in whole or in part by the Purchaser without prejudice to any
claims it may have for breach of covenant, representation or warranty.
7.2 Conditions of Closing in Favor of the Vendor. The purchase and sale of the
Purchased Shares and the Purchased Assets is subject to the following terms and
conditions for the exclusive benefit of the Vendor, to be fulfilled or performed
at or prior to the Time of Closing:
(a) Representations and Warranties. The representations and warranties of the
Purchaser and the Corporation contained in this Agreement shall be true and
correct in all material respects at the Time of Closing, with the same force and
effect as if such representations and warranties were made at and as of such
time, and certificates of an officer of the Purchaser and an officer of the
Corporation dated the Closing Date to that effect shall have been delivered to
the Vendor, such certificates to be in form and substance satisfactory to the
Vendor, acting reasonably;
(b) Covenants. All of the terms, covenants and conditions of this Agreement to
be complied with or performed by the Purchaser and the Corporation at or before
the Time of Closing shall have been complied with or performed in all material
respects and certificates of an officer of the Purchaser and an officer of the
Corporation dated the Closing Date to that effect shall have been delivered to
the Vendor, such certificates to be in form and substance satisfactory to the
Vendor, acting reasonably;
(c) Regulatory Consents. There shall have been obtained, from all appropriate
federal, provincial, municipal or other governmental or administrative bodies,
such licenses, permits, consents, approvals, certificates, registrations and
authorizations as are required by law to be obtained by the Purchaser to permit
the change of ownership of the Purchased Shares and the Purchased Assets
contemplated hereby including those described in Schedule 3.21, in each case in
form and substance satisfactory to the Vendor, acting reasonably;
(d) No Action or Proceeding. No legal or regulatory action or proceeding shall
be pending or threatened by any person to enjoin, restrict or prohibit the
purchase and sale of the Purchased Shares and the Purchased Assets contemplated
hereby;
(e) Repayment of Indebtedness Owed by the Windjammer Companies to the Vendor.
All amounts contemplated in Section 2.6 to be paid by the Windjammer Companies
in respect of amounts owed to the Vendor shall have been received by the Vendor;
(f) Delivery and Registration of all Documentation in Connection with
Indebtedness Owed to the Vendor. All Indebtedness Documentation and guarantees
contemplated in Section 2.7 shall have been executed and delivered to the Vendor
and all necessary registrations required in connection therewith shall have been
made in all jurisdictions to which the Indebtedness Documentation and such
guarantees relate, all to the satisfaction of the Vendor, in its discretion;
(g) Delivery of Guarantee and Exchange Agreement and Security. The Guarantee and
Exchange Agreement and security in connection therewith shall have been executed
and delivered to the Vendor and all necessary registrations required in
connection therewith shall have been made in all jurisdictions to which the
Guarantee and Exchange Agreement and such security relate, all to the
satisfaction of the Vendor, in its discretion.
(h) Transfer of Villa 22. The transfer of Villa 22 at the Resort from EllisDon
Construction Ltd. to the Vendor shall have been completed and the purchase price
of $250,000 shall have been paid;
(i) Purchaser to be a Wholly-Owned Subsidiary of the Corporation. The Purchaser
shall be a wholly-owned subsidiary of the Corporation and the Vendor shall have
been provided with evidence of such satisfactory to it and its counsel;
(j) Registration Statement. The Corporation shall have filed, within forty-five
(45) days of the date of this Agreement, a registration statement, in a form
acceptable to the Vendor, acting reasonably, registering the shares of common
stock of the Corporation issuable pursuant to the Guarantee and Exchange
Agreement;
(k) Escrow Agent and Agreement. The Purchaser and the Vendor shall have chosen
the escrow agent as contemplated in Section 2.11 and an escrow agreement in a
form mutually acceptable to the Vendor and the Purchaser, both acting
reasonably, in connection therewith shall have been executed and delivered;
(l) Tax Matters. The Vendor shall be satisfied in its discretion with the tax
implications and effect to it and its parent company of the transactions
contemplated by this Agreement;
(m) Legal Matters. All actions, proceedings, instruments and documents required
to implement this Agreement, or instrumental thereto, shall have been approved
as to form and legality by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, counsel for the Vendor, acting
reasonably; and
(n) Legal Opinion. The Purchaser and the Corporation shall have delivered to the
Vendor a favorable opinion of Vanderkam and ▇▇▇▇▇▇▇, counsel to the Purchaser
and the Corporation, which shall include and incorporate a favourable opinion of
local counsel to the Purchaser in the Bahamas and any other necessary
jurisdiction, all in forms acceptable to the Vendor and the Purchaser, both
acting reasonably.
If any of the conditions contained in this Section 7.2 shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Vendor, acting reasonably, the Vendor may, by notice to the Purchaser,
terminate this Agreement and the obligations of the Vendor and the Purchaser
under this Agreement, other than the obligations contained in Sections 2.4, 10.3
and 10.4 shall be terminated, provided that the Vendor may also bring an action
pursuant to Article IX against the Purchaser for damages suffered by the Vendor
where the non-performance or non-fulfillment of the relevant condition is as a
result of a breach of covenant, representation or warranty by the Purchaser. Any
such condition may be waived in whole or in part by the Vendor without prejudice
to any claims it may have for breach of covenant, representation or warranty.
ARTICLE VIII
CLOSING ARRANGEMENTS
8.1 Place of Closing. The closing shall take place at the Time of Closing at the
Resort in St. Lucia.
8.2 Transfer. At the Time of Closing, upon fulfillment of all the conditions set
out in Article VII that have not been waived in writing by the Purchaser or the
Vendor, the Vendor shall deliver to the Purchaser certificates respecting all
the Purchased Shares, duly endorsed in blank for transfer, and will cause
transfers of such shares to be duly and regularly recorded in the name of the
Purchaser, or its nominee(s), and will cause a meeting of the board of directors
of each of the Windjammer Companies to be held, at which the directors and
officers of the Windjammer Companies specified by the Purchaser will resign in
favor of nominees of the Purchaser, and the Vendor shall deliver to the
Purchaser all documentation required to transfer the Purchased Assets to the
Purchaser and required for the assumption of the Assumed Liabilities by the
Purchaser, whereupon, subject to all other terms and conditions hereof being
complied with, payment of the Purchase Price and the amounts required to be paid
to the Vendor by the Windjammer Companies shall be paid and satisfied in the
manner provided in Article II.
8.3 Further Assurances. Each party to this Agreement covenants and agrees that,
from time to time subsequent to the Closing Date, it will at the request and
expense of the requesting party, execute and deliver all such documents,
including, without limitation, all such additional conveyance, transfers,
consents and other assurances and do all such other acts and things as any other
party hereto, acting reasonably, may from time to request be executed or done in
order to better evidence or perfect or effectuate any provision of this
Agreement or of any agreement or other document executed pursuant to this
Agreement or any of the respective obligations intended to be created hereby or
thereby.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by the Vendor. The Vendor agrees to indemnify and save
harmless the Purchaser from all Losses suffered or incurred by the Purchaser as
a result of or arising directly or indirectly out of or in connection with:
(a) any breach by the Vendor of or any inaccuracy of any representation
or warranty of the Vendor contained in this Agreement or in any agreement,
certificate or other document delivered pursuant hereto;
(b) any breach or non-performance by the Vendor or any of the
Windjammer Companies of any covenant to be performed by them that is contained
in this Agreement or in any agreement, certificate or other document delivered
pursuant hereto;
(c) all debts, liabilities or contracts whatsoever (whether accrued,
absolute, contingent or otherwise) of any of the Windjammer Companies existing
at the Time of Closing, and not disclosed on, provided for or included in the
balance sheets forming part of the Financial Statements, except any liabilities
related to or arising from any matter or thing:
(i) disclosed in this Agreement or any Schedule hereto;
(ii) accruing or incurred subsequent to February 28, 2001 in the
ordinary course of the Business; or
(iii) which are otherwise within the knowledge of the Purchaser;
provided that the Vendor shall not be required to indemnify or save harmless the
Purchaser in respect of any matter unless the Purchaser shall have provided
notice to the Vendor in accordance with Section 9.3 within two (2) years of the
Closing Date.
9.2 Indemnification by the Purchaser and the Corporation. The Purchaser and the
Corporation jointly and severally agree to indemnify and save harmless the
Vendor from all Losses suffered or incurred by the Vendor as a result of or
arising directly or indirectly out for or in connection with:
(a) any breach by the Purchaser or the Corporation of or any inaccuracy
of any representation or warranty contained in this Agreement or in any
agreement, instrument, certificate or other document delivered pursuant hereto;
and
(b) any breach or non-performance by the Purchaser or the Corporation
of any covenant to be performed by it that is contained in this Agreement or in
any agreement, certificate or other document delivered pursuant hereto.
9.3 Notice of Claim. In the event that a party (the "Indemnified Party") shall
become aware of any claim, proceeding or other matter (a "Claim") in respect of
which another party (the "Indemnifying Party") agreed to indemnify the
Indemnified Party pursuant to this Agreement, the Indemnified Party shall
promptly give written notice thereof to the Indemnifying Party. Such notice
shall specify whether the Claim arises as a result of a claim by a person
against the Indemnified Party (a "Third Party Claim") or whether the Claim does
not so arise (a "Direct Claim"), and shall also specify with reasonable
particularity (to the extent that the information is available) the factual
basis for the Claim and the amount of the Claim, if known.
If, through the fault of the Indemnified Party, the Indemnifying Party
does not receive notice of any Claim in time to contest effectively the
determination of any liability susceptible of being contested, the Indemnifying
Party shall be entitled to set off against the amount claimed by the Indemnified
Party the amount of any Losses incurred by the Indemnifying Party resulting from
the Indemnified Party's failure to give such notice on a timely basis.
9.4 Direct Claims. With respect to any Direct Claim, following receipt of notice
from the Indemnified Party of the Claim, the Indemnifying Party shall have
thirty (30) days to make such investigation of the Claim as is considered
necessary or desirable. For the purpose of such investigation, the Indemnified
Party shall make available to the Indemnifying Party the information relied upon
by the Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both parties
agree at or prior to the expiration of such thirty (30) day period (or any
mutually agreed upon extension thereof) to the validity and amount of such
Claim, the Indemnifying Party shall immediately pay to the Indemnified Party the
full agreed upon amount of the Claim, failing which the matter shall be referred
to binding arbitration in such manner as the parties may agree or shall be
determined by a court of competent jurisdiction.
9.5 Thirty Party Claims. With respect to any Third Party Claim, the Indemnifying
Party shall have the right, at its expense, to participate in or assume control
of the negotiation, settlement or defence of the Claim and, in such event, the
Indemnifying Party shall reimburse the Indemnified Party for all the Indemnified
Party's out-of-pocket expenses as a result of such participation or assumption.
If the Indemnifying Party elects to assume such control, the Indemnified Party
shall have the right to participate in the negotiation, settlement or defence of
such Third Party Claim and to retain counsel to act on its behalf. provided that
the fees and disbursements of such counsel shall be paid by the Indemnified
Party unless the Indemnifying Party consents to the retention of such counsel or
unless the named parties to any action or proceeding include both the
Indemnifying Party and the Indemnified Party and a representation of both the
Indemnifying Party and the Indemnified Party by the same counsel would be
inappropriate due to the actual or potential differing interests between them
(such as the availability of different defences). If the Indemnifying Party,
having elected to assume such control, thereafter fails to defend the Third
Party Claim within a reasonable time, the Indemnified Party shall be entitled to
assume such control, and the Indemnifying Party shall be bound by the results
obtained by the Indemnified Party with respect to such Third Party Claim. If any
Third Party Claim is of a nature such that the Indemnified Party is required by
applicable law to make a payment to any person (a "Third Party") with respect to
the Third Party Claim before the completion of settlement negotiations or
related legal proceedings, the Indemnified Party may make such payment and the
Indemnifying Party shall, forthwith after demand by the Indemnified Party,
reimburse the Indemnified Party for such payment. If the amount of any liability
of the Indemnified Party under the Third Party Claim in respect of which such
payment was made, as finally determined, is less than the amount that was paid
by the Indemnifying Party to the Indemnified Party, the Indemnified Party shall,
forthwith after receipt of the difference from the Third Party, pay the amount
of such difference to the Indemnifying Party.
9.6 Settlement of Third Party Claims. If the Indemnifying Party fails to assume
control of the defence of any Third Party Claim, the Indemnified Party shall
have the exclusive right to contest, settle or pay the amount claimed. Whether
or not the Indemnifying Party assumes control of the negotiation, settlement or
defence of any Third Party Claim, the Indemnifying Party shall not settle any
Third Party Claim without the written consent of the Indemnified Party, which
consent shall not be unreasonably withheld or delayed; provided, however, that
the liability of the Indemnifying Party shall be limited to the proposed
settlement amount if any such consent is not obtained for any reason.
9.7 Co-operation. The Indemnified Party and the Indemnifying Party shall
co-operate fully with each other with respect to Third Party Claims, and shall
keep each other fully advised with respect thereto (including supplying copies
of all relevant documentation promptly as it becomes available).
9.8 Limitation on Claims based on Knowledge of the Purchaser. Notwithstanding
anything hereinbefore contained, if the Purchaser, as a result of its due
diligence and investigation in connection with the transactions contemplated by
this Agreement, becomes aware of facts which are at variance with any
representations, warranties or other statements made by the Vendor in this
Agreement and such facts are not raised by the Purchaser with the Vendor prior
to the Time of Closing, such facts shall be deemed to be accepted by the
Purchaser and the Purchaser shall not be entitled to make a Claim in connection
therewith.
9.9 Limitation on Amount of Claim. The amount which may be claimed by the
Purchaser as the Indemnified Party pursuant to a Claim shall be calculated to be
the cost or loss to the Purchaser or any of the Windjammer Companies after
giving effect to:
(a) any insurance proceeds available to the Purchaser or any of the Windjammer
Companies in relation to the matter which is the subject of the Claim; and
(b) the value of any related, determinable tax benefits realized, or which will
(with reasonable certainty) be realized within a two (2) year period following
the date of incurring such costs or loss by the Purchaser or any of the
Windjammer Companies in relation to the matter which is the subject of the
Claim.
9.10 De Minimis. Notwithstanding anything hereinbefore contained, the Purchaser
as the Indemnified Party shall not be entitled to make a Claim unless:
(i) the amount of such Claim, after taking into account the
provisions of Section 9.9, exceeds $25,000 (a "De Minimis Claim"); and
(ii) the aggregate amount of all De Minimis Claims exceeds
$100,000. After the aggregate amount of all De Minimis Claims exceeds
$100,000, the Purchaser shall be entitled to make all De Minimis Claims
(ie. including those incurred or realized prior to the aggregate amount
exceeding $100,000) which it is entitled to make pursuant to this
Article IX, after taking into account the provisions of Section 9.9.
9.11 Exclusivity. The provision of this Article IX shall apply to any Claim for
breach of any covenant, representation, warranty or other provision of this
Agreement or any agreement, certificate or other document delivered pursuant
hereto (other than a claim for specific performance or injunctive relief) with
the intent that all such Claims shall be subject to the limitations and other
provisions contained in this Article IX.
9.12 Special Indemnity Relating to Matters Disclosed in Schedule 3.23.
Notwithstanding anything contained herein, but subject to Sections 9.5 and 9.6,
the Vendor agrees to indemnify and save harmless the Purchaser from all Losses
suffered or incurred by the Purchaser or the Windjammer Companies as a result of
or in connection with the matters set out and described in Schedule 3.23 hereto.
The Vendor shall retain control of all such matters and the Purchaser agrees to
cooperate, and to cause the Windjammer Companies to cooperate, with the Vendor
in connection therewith.
ARTICLE X
MISCELLANEOUS
10.1 Confidentiality of Information. In the event that the transactions
contemplated herein are not consummated for any reason, the Purchaser covenants
and agrees that, except as otherwise authorized by the Vendor, neither the
Purchaser nor its representatives, agents or employees will disclose to third
parties, directly or indirectly, any confidential information or confidential
data relating to the Vendor, the Windjammer Companies or the Business discovered
by the Purchaser or its representatives as a result of the Vendor and the
Windjammer Companies making available to the Purchaser and its representatives
the information requested by them in connection with the transactions
contemplated herein.
10.2 Notices.
(a) Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be delivered in person, transmitted by
telecopy or similar means of recorded electronic communication or sent by
registered mail, charges prepaid, addressed as follows:
(i) if to the Vendor:
c/o McKinney, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box N-3937
Nassau Bahamas
Attention: ▇▇▇▇▇ ▇▇▇▇
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice-President of Finance
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Purchaser or the Corporation:
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WIJ 5PD
Attention: *
Telecopier No.: 011 44 207-491-9586 *
with a copy to:
Vanderkam & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Any such notice or other communication shall be deemed to have
been given and received on the day on which it was delivered or transmitted (or,
if such day is not a Business Day, on the next following Business Day) or, if
mailed, on the third Business Day following the date of mailing; provided,
however, that if at the time of mailing or within three Business Days thereafter
there is or occurs a labor dispute or other event that might reasonably be
expected to disrupt the delivery of documents by mail, any notice or other
communication hereunder shall be delivered or transmitted by means of recorded
electronic communication as aforesaid.
(c) Any party may at any time change its address for service from time
to time by giving notice to the other parties in accordance with this Section
10.2.
10.3 Consultation. The parties shall consult with each other before issuing any
press release or making any other public announcement with respect to this
Agreement or the transactions contemplated hereby and, except as required by any
applicable law or regulatory requirement, neither the Vendor nor the Purchaser
shall issue any such press release or make any such public announcement without
the prior written consent of the other, which consent shall not be unreasonably
withheld or delayed.
10.4 Disclosure. Prior to any public announcement of the transaction
contemplated hereby pursuant to Section 10.3, neither party shall disclose this
Agreement or any aspect of such transaction except to its board of directors,
its senior management, its legal, accounting, financial or other professional
advisors, any financial institution contacted by it with respect to any
financing required in connection with such transaction and counsel to such
institution, or as may be required by any applicable law or any regulatory
authority or stock exchange having jurisdiction.
10.5 Public Announcements. No public announcement or press release not required
by law or by applicable stock exchange rule concerning the purchase and sale of
the Purchased Shares and the Purchased Assets shall be made by the Vendor, the
Corporation or the Purchaser without the consent and joint approval of the
Vendor, the Purchaser and the Corporation.
10.6 Best Efforts. The parties acknowledge and agree that, for all purposes of
this Agreement, an obligation on the part of any party to use its best efforts
to obtain any waiver, consent, approval, permit, license or other document shall
not require such party to make any payment to any person for the purpose of
procuring the same, other than payments for amounts due and payable to such
person, payments for incidental expenses incurred by such person and payments
required by any applicable law or regulation.
10.7 Transmission by Facsimile. The parties hereto agree that this Agreement may
be transmitted by facsimile or such similar device and that the reproduction of
signatures by facsimile or such similar device will be treated as binding as if
originals and each party hereto undertakes to provide each and every other party
hereto with a copy of the Agreement bearing original signatures forthwith upon
demand.
10.8 Counterparts. This Agreement may be executed in counterparts, each of which
shall constitute an original and all of which taken together shall constitute
one and the same instrument.
IN WITNESS WHEREOF this Agreement has been executed by the parties.
WINDJAMMER BAHAMAS (1992) LIMITED
Per:
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Duly Authorized Officer
▇▇▇▇▇ WINDJAMMER RESORT AND
SPA (BAHAMAS) LIMITED
Per:
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Duly Authorized Officer
THE ▇▇▇▇▇ PARTNERSHIP, INC.
Per:
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Duly Authorized Officer