EXHIBIT 10.3
AGREEMENT OF PURCHASE AND
SALE OF ASSETS
This Agreement is made as of the____ day of April 1998, between NetRom,
Inc., ("NI"), a California corporation and Tri-National Development Corp.
("TND"), a Wyoming Corporation.
WHEREAS, "NI" has acquired by assignment all of the rights and interests of
Baja Pro Racing, S.A. de C.V. contained in an agreement with "TND" and Baja
Pro Racing, S.A. de C.V.dated April 29, 1997, pursuant to an assignment
dated April 20, 1998 and approved by "TND" and now desires to consummate
the purchase originally intended by that April 29, 1997 agreement and "TND"
desires to sell to "NI", upon the modified terms and subject to the
conditions of this Agreement, the properties of "TND" described in
Paragraph 1.01 in exchange for common stock and a participation agreement
from "NI" described in Paragraph 1.02. In consideration of the mutual
covenants, agreements, representations and warranties contained in this
Agreement, the parties agree as follows;
ARTICLE I - Purchase and Sale of Assets
1.1 Sale of Assets
The assets to be conveyed, transferred, signed, and delivered, as
provided by this Agreement, shall, without limitation, include
200 acres of the property, (see Exhibit A-Legal Description)
known as Hills of Bajamar owned by Planificacion y Desarrollo
Regional Jatay, S.A. de C.V., ("PDRJ") a Mexican Corporation, a
wholly-owned subsidiary of "TND", but does not include any other
assets of "TND" or ("PDRJ"). The 200 acres will transferred to
"NI" at a price of $21,000 per acre, for a total purchase price
of $4,200,000. These 200 acres will be contiguous with the 50
acres previously purchased pursuant to an agreement dated
December 22, 1997.
1.02 Considerations
As full payment for the transfer of the assets by "TND" to "NI",
"NI" shall deliver at the closing, the following:
(i) "NI" Common Stock: "NI" shall deliver to "TND", at
closing, shares of its common stock in the total amount of
4,200,000 based on a value of $1.00 per share. "TND"
commits to withhold these shares from sale for a period of
at least one year. "NI" in consideration for "TND" locking
up the shares for a minimum of one year agree that in the
event that the common shares identified here are not
trading at a price of at least $1.00 per share by one year
from the date herein, "NI" will issue additional shares in
an amount to then equal the difference between $1.00 and
the market price at that date. The price and terms for the
property is based on recent negotiations between the
parties and is subject to Board of Director approvals.
(ii) "NI" or its assignee will have the right to repurchase
these shares prior to fourteen months from the date of
this agreement at a price of $1.00 per share and during
the second year
prior to that anniversary at a price of $2.00. Thereafter,
"TND" will have no restrictions as to these shares.
(iii) Participation Agreement. It is agreed that "NI"' and
"TND" intend to proceed with the development of a family
destination resort, which will incorporate extreme games
facilities, as well as other family related activities, a
hotel, possible executive style golf course for teaching
kids golf, an integrated raceway, similar to plans
originally proposed by "TND". This raceway is anticipated
to accommodate both Indy Style and Formula Racing, as well
as the ability to function as a track for bike and off
road style events. In order to proceed with the plans for
the intended project, "NI" will exchange its newly
acquired 250 acres for a 50% interest in a newly formed
Nevada corporation, Baja Extreme World, Inc., ("BEW") and
"TND" will likewise exchange an additional 250 acres into
"BEW" for its 50% share of this new entity. It is agreed
that additional interests will be sold in "BEW", however
"NI" and "TND" will continue to maintain interests equal
to each other. It is understood that the main road from
the toll road to the 500 acres is to be constructed by the
"BEW" unless otherwise constructed. This provision and all
other aspects of this agreement and any amendments hereto
or modifications hereof shall be binding upon the parties
hereto and their respective heirs, successors and assigns.
The agreement will also contain language that allows
"TND" to review and pre-approve any usage for the property
other than as stated. The agreement will also provide and
acknowledge that "TND" reserves the exclusive right to
develop and manage all facilities on this site and the
adjacent land, providing the cost for same is competitive
with outside sources.
(iii) Closing: The closing is take place on or before April 30,
1998.
1.03 Taxes
"NI" and "TND" shall pay all taxes and fees, excluding their
individual income taxes, arising out of the transfer of the
assets.
ARTICLE 2 - Representations and Warranties of "TND"
2.1 Warranties-"TND" represents and warrants that:
(i) Organization. "TND" is a corporation duly organized,
validly existing, and in good standing under the laws of
Wyoming, has all necessary corporate powers to own and
sell its properties and carry on its business as now owned
and operated by it and is in good standing in the State of
Wyoming.
(ii) Title. "TND" through its wholly owned subsidiary is the
owner, beneficially and of record, of all the assets
identified or referred to in paragraph 1.01 which as of
closing shall be free and clear of all liens,
encumbrances, security agreements and any other
restrictions.
2.02 Absence of Changes. Since March 1, 1997, there has not been and
will not at closing be any changes in the financial condition or
operations of "TND", except changes in the ordinary course of
business, which changes have not in the aggregate been
materially adverse to "NI"'s interests.
2.03 Compliance With Laws
"TND" represents that, to the best of its knowledge, it has complied
with, and is not in violation of, any applicable federal, state or
local statutes, laws or regulations, affecting the assets or operation
of the business of "TND", both in Mexico and in the United States.
2.04 No Breach or Violation
The consummation of the transaction contemplated by this
Agreement shall not result in or constitute any of the following;
(i) A breach of any term or provision of this agreement;
(ii) A default or event that, upon notice or lapse of time or
both, would be a default, breach or violation of the
Articles of Incorporation or Bylaws of "TND", or any
lease, license, promissory note, contract, commitment or
other agreement, instrument or arrangement to which "TND"
is a party;
(iii) An event that would permit any party to terminate any
agreement.
2.06 Authority
"TND" has the right, power, legal capacity and authority to enter
into and perform its respective obligations under this Agreement,
subject only to Board of Director approval, which should be
secured prior to closing.
2.07 Full Disclosure
None of the representations and warranties made by "TND",
hereunder, or on its behalf, contains or shall contain any untrue
statement of material fact, or omits or shall omit any material
fact the, omission of which would be misleading.
ARTICLE 3 - "NI"'s Representations and Warranties
3.1 "NI" represents and warrants that:
(i) Organization. "NI" is a corporation duly organized,
validly existing, and in good standing under the laws of
the State of California, has all necessary corporate
powers to own and sell its properties and carry on its
business as now owned and operated by it and is in good
standing in California.
(ii) Pre-existing Relationship. "NI" has a pre-existing
business relationship with "TND" of a nature and duration
that has enabled it to evaluate the business and financial
circumstances of "TND" and the risks and merits of this
acquisition.
ARTICLE 4 - Obligations Before Closing
4.01 "TND"'s Covenants
"TND" covenants that from the date of this Agreement until the
closing:
(i) Access to Information. "NI" and its representatives shall
have, full access during all business hours to all
properties, books, accounts, records, contracts, and
documents of, or relating to the assets and property of
"TND" being sold hereunder.
(ii) Conduct of Business. "TND" shall carry on its business
and activities diligently and in substantially the same
manner as it previously has been carried on, and shall not
institute or use any unusual or novel methods of
manufacture, purchase, sale, lease, management, accounting
or operation that shall vary materially from those methods
used by "TND" as of the of this Agreement.
4.02 Warranties at Closing
All representations and warranties of "NI" and "TND" set forth in
this Agreement, shall also be true and correct as of the closing
date as if made on that date.
ARTICLE 5 - Conditions Precedent to "NI"'s Performance
5.01 Conditions
The obligations of "NI" to purchase the assets under this
agreement are subject to the satisfaction, at or before the
closing, of all the conditions set out below in this Article 5.
"TND" may waive any or all of these conditions in whole or in
part without prior notice.
5.2 Accuracy of Representations
Except as otherwise set forth in this Agreement, all
representations and warranties by "TND" in this Agreement shall
be true on and as of the closing date as though made at that
time.
5.03 Performance of "TND"
"TND" shall have performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement
to be performed or complied with by it on or before the closing
date. During the period from execution of this Agreement by both
parties to the closing date, there shall not have been any
material adverse change in the financial condition or the results
of operations of "TND" and "TND" shall not have sustained any
material loss or damage to its assets, whether or not insured,
that materially affects its ability to conduct a material part of
its business.
5.04 Absence of Litigation
No action, suit or proceeding before any court or any
governmental body or authority, pertaining to the transaction
contemplated by this Agreement, shall have been instituted or
threatened on or before the closing date,
5.05 Consents
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All necessary agreements and consents to the consummation of the
transaction contemplated by this Agreement, if any, shall have
been obtained by "TND" and delivered to "NI" at or before
closing.
ARTICLE 6 - Conditions Precedent to "TND"'s Performance
6.01 Conditions.
The obligations of "TND" to sell and transfer the assets under this
Agreement are subject to the satisfaction, at or before the closing,
of all the following conditions in this Article 6.
6.02 Accuracy of Representations.
Except as otherwise set forth in this Agreement, all representations
and warranties by "NI" in this Agreement shall be true on and as of
the closing date as though made at that time.
6.3 "NI"'s Warranties.
All representations and warranties by "NI" contained in this Agreement
shall be true on and as of the closing date as though such
representations and warranties were made on and as of that date.
6.4 Absence of Litigation.
No action, suit or proceeding before or any governmental body or
authority, pertaining to the transaction contemplated by this
Agreement, shall have been instituted or threatened on or before the
closing date.
6.05 "NI"'s Performance
"NI" shall have performed and complied with all covenants and
agreements, satisfied all conditions required by this Agreement to
perform, comply with, or satisfy, before or after closing
6.05.1 " - "NI"s common stock shall be equal to the purchase price of
$4,200,000, based on $1.00 per share. In the event of bankruptcy,
receivership or insolvency by either party, the surviving party
shall succeed to the rights and or position in the 500 acres and or
any subsequent contracts that may have entered into for the
development of the property, subject to Bankruptcy court approval.
Neither party shall assign or sell their interest in this agreement
without the other party's consent, which shall not be unreasonably
withheld. The parties also agree to enter into a formal buy sell
agreement at the earliest possible date.
6.06 Consents
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All necessary agreements and consents to the consummation of the
transaction contemplated by this Agreement, if any, shall have been
obtained by "TND" and delivered to "NI" at or before closing.
ARTICLE 7 - The Closing
7.01 Closing
The closing of the purchase and sale described herein shall take
place on or before April 30, 1998 at 10:00 A.M. Pacific Time, at
the offices of "TND" 000 Xxxxxx xxx Xxx Xxxxx, Xxx Xxxxx,
Xxxxxxxxxx or at another time and place agreeable to the parties.
7.02 "TND"'s Obligations
At the, closing, "TND" shall deliver or cause to be delivered to
"NI":
i) Instruments of placement of all assets or other property of "TND"
being acquired hereunder by "NI" into an escrow, with title being
available subject only to receipt by "TND" of full payment pursuant to
this agreement.
7.03 "NI"'s Obligations
"NI" shall execute and deliver to "TND":
(i) Common Shares of its Stock described in paragraph 1.02(i)
in a form acceptable to "TND".
Article 8 - Costs
8.01 Expenses
Each of the parties shall pay all costs and expenses incurred or
to be incurred by it in negotiation and preparation of this
Agreement and in closing and carrying out the transactions
contemplated by this Agreement.
ARTICLE 9 - Form of Agreement
9.01 Headings
The subject Headings of the paragraphs and subparagraphs of this
Agreement are included for purposes of convenience only, and
shall not affect the construction or interpretation of any of its
provisions.
9.02 Modification and Waiver
This Agreement constitutes the agreement between the parties
pertaining to the subject matter contained in it and supersedes
all prior and contemporaneous agreements, representations, and
understandings of the parties. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in
writing by all the parties. No waiver of any of the provisions
of this Agreement shall be deemed, or shall constitute, a Waiver
of any other provisions, whether or not similar, nor shall any
Waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the
waiver.
9.03 This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
ARTICLE 10 - Parties
10.01 Rights of Parties
Nothing in this Agreement, whether express or implied, is intended to
confer any rights or remedies under or by reason of this Agreement on
any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third persons
to any party to this agreement, nor shall any provision give any third
persons any right of subrogation or action over or against any party
to this Agreement.
10.02 Assignment
This Agreement shall be binding on, and shall inure to the benefit of
the parties to it and their respective heirs, legal representatives,
successors, and assigns; provided, however, "NI" may not assign any of
its rights under it, except to a wholly owned subsidiary corporation
of the "NI". No such assignment by "NI" to its wholly owned
subsidiary shall relieve "NI" of any of its obligations or duties
under this Agreement.
ARTICLE 11 - Remedies
11.01 Arbitration
Any controversy or claim arising out of or relating to this Agreement,
or the making, performance, or interpretation thereof, shall be
settled by arbitration in San Diego, California in accordance with the
Rules of the American Arbitration Association then existing, and
judgment on the arbitration award may be entered in any court having
jurisdiction over the subject matter of the controversy.
11-02 Time is of the Essence
Time is of the essence as to this agreement.
ARTICLE 12 - Nature and Survival of Representations and Obligations
12.01 Effect of Closing
All representations, warranties, covenants, and agreements of the
parties contained in this Agreement, or in any instrument,
certificate, opinion or other writing provided for in it, shall.
survive the closing.
ARTICLE 13 - Notices
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom
notice is to be given, or on the third day after mailing if mailed to
the party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid, and properly addressed as
follows:
To "NI" at: Att: Mr. Xxxxxx Xxxxxx
NetRom, Inc.
000 Xxxxx Xxx.
Xxx Xxxxx, Xxxxxxxxxx
Xxxxxxxx, Xxxx, Xxxxxxxxxx, Xxxxxx 00000
To "TND" at: Att: Xx. Xxxxxxx Xxxxxxxx
Tri-National Development Corp.
000 Xxxxxx xxx Xxx Xxxxx #000
Xxx Xxxxx, Xxxxxxxxxx 00000
Any party may change its address for purposes of this paragraph by
giving the other party written notice of the new address in the manner
set forth above.
ARTICLE 14 - Governing Law
This Agreement shall be construed in accordance with, and governed by,
the laws of the State of California.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed
it on the day and year first above written.
"NI": "TND"
NetRom, Inc. Tri-National Development Corp.
by________________________ by ____________________________
Xxxxxx Xxxxxx, President Xxxxxxx X. Xxxxxxxx President
