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