Stock Exchange Agreement

EXHIBIT 1


STOCK EXCHANGE AGREEMENT


By and Among


BUFFTON CORPORATION,


and


ALAN TREMAIN


and


JEAN-CLAUDE MATHOT


and


HOTELS OF DISTINCTION, INC.


Dated as of April 11, 1997


TABLE OF CONTENTS


PAGE
---- TABLE OF CONTENTS........................................................... i


TABLE OF DEFINED TERMS...................................................... iii


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TABLE OF CONTENTS
=================


1. Exchange of Stock...................................................................... 1
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2. Closing........................................................................... 1
-------

3. Certain Definitions............................................................... 1
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4. Representations and Warranties of Buffton......................................... 3
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a. Organization................................................................. 3
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b. Capitalization............................................................... 3
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c. Authorization and Validity of Agreement...................................... 3
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d. No Approvals or Notices Required; No Conflict with Instruments to which Buffton
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is a Party.................................................................. 4
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e. SEC Filings; Financial Statements........................................... 4
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f. Litigation.................................................................. 4
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g. Voting Requirements......................................................... 5
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i


5. Representations and Warranties of Tremain and Mathot................................ 5
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a. Organization and Compliance with Law........................................... 5
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b. Capitalization................................................................. 5
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c. Authorization and Validity of Agreement........................................ 5
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d. No Approvals or Notices Required; No Conflict with Instruments to which Hotels
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is a Party..................................................................... 6
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e. Financial Statements; Material Contracts; Liabilities.......................... 6
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f. Conduct of Business in the Ordinary Course; Absence of Certain Changes and
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Events......................................................................... 6
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g. Certain Fees................................................................... 7
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h. Litigation..................................................................... 7
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i. Employee Liabilities........................................................... 7
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j. Taxes.......................................................................... 7
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k. Environmental.................................................................. 7
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l. No Severance Payments.......................................................... 8
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m. Insurance..................................................................... 8
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n. Title to Property............................................................. 8
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6. Investment and Other Representations by Tremain and Mathot......................... 8
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7. Tax Treatment...................................................................... 10
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8. Registration Rights................................................................ 10
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a. Demand Registration Right (Registration of Buffton Common Stock on Request)
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.............................................................................. 10


ii


b. Piggyback Registration Rights................................................. 12
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c. Registration Procedures....................................................... 12
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d. Seller's Information.......................................................... 13
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e. Preparation; Reasonable Investigation......................................... 13
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9. Release of Claims by Tremain and Mathot............................................ 13
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10. Sale of Current Technology; Buffton Name Change.................................... 13
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11. Purchase of Buffton Common Stock by Tremain and Mathot............................. 13
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12. Cooperation in Litigation.......................................................... 13
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13. Expenses........................................................................... 13
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14. Further Assurances................................................................. 14
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15. Public Announcements............................................................... 14
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16. Survival of Representations and Warranties......................................... 14
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17. Amendments......................................................................... 14
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18. Entire Agreement................................................................... 14
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19. Notices............................................................................ 14
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20. Counterparts....................................................................... 15
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21. Governing Law...................................................................... 15
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22. Severability....................................................................... 15
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23. Headings 15
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24. Entire Agreement; Third Party Beneficiaries........................................ 15
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SIGNATURE PAGE.......................................................................... 16


iii


TABLE OF DEFINED TERMS
----------------------


DEFINED TERM PAGE - ------------ ---- Agreement................................................................ 1


Buffton.................................................................. 1


Buffton Common Stock..................................................... 1


Buffton SEC Filings...................................................... 4


Buffton Subsidiaries..................................................... 3


CERCLA................................................................... 2


Closing.................................................................. 1


Disadvantageous Condition................................................ 1


Hotels................................................................... 1


Entity................................................................... 1


Environmental Laws....................................................... 2


Exchange Act............................................................. 2


Existing Stockholders Agreement.......................................... 5


Governmental Authority................................................... 2


Hotels Financial Statements.............................................. 6


Hotels Disclosure Letter................................................. 5


Hotels Stock............................................................. 1


Knowledge................................................................ 2


v


Laws..................................................................... 2


Material Adverse Change.................................................. 2


Material Adverse Effect.................................................. 2


Mathot................................................................... 1


Permitted Liens.......................................................... 2


Registrable Securities................................................... 2


Registration Expenses.................................................... 2


Registration Rights Holders.............................................. 10


Requesting Holder........................................................ 10


SEC...................................................................... 4


Securities Act........................................................... 3


Stock Exchange........................................................... 1


Tax or Taxes............................................................. 3


Tax Return............................................................... 3


Tremain.................................................................. 1


vi


STOCK EXCHANGE AGREEMENT - --------------------------------------------------------------------------------


THIS STOCK EXCHANGE AGREEMENT (this "Agreement"), dated as of April 11,
--------- 1997, is entered into by and among Alan Tremain ("Tremain"), Jean-Claude Mathot
------- ("Mathot"), Hotels of Distinction, Inc., a Florida corporation ("Hotels"), and ------ ------ Buffton Corporation, a Delaware corporation ("Buffton").
-------


W I T N E S S E T H :
---------------------


WHEREAS, Tremain and Mathot own 100 shares of the Common Stock, par value $1.00 per share, of Hotels (the "Hotels Stock"), being all of the issued and
------------ outstanding capital stock of Hotels; and


WHEREAS, Buffton desires to acquire from Tremain and Mathot, all of the Hotels Stock, solely in exchange for 300,000 shares of newly issued Common Stock, par value $.05 per share, of Buffton (the "Buffton Common Stock");
--------------------


NOW, THEREFORE, in consideration of the premises and the mutual covenants, representations and warranties herein contained and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and upon the terms and subject to the conditions contained herein, the parties hereto agree as follows:


STOCK EXCHANGE AGREEMENT


1. Exchange of Stock. Upon and subject to the terms and conditions of
----------------- this Agreement, contemporaneously with the execution of this Agreement, (a) Tremain and Mathot shall assign, transfer and deliver to Buffton all of the Hotels Stock free and clear of any and all liens, equities, claims, prior assignments, mortgages, charges, security interests, pledges, restrictions or encumbrances whatsoever, and, (b) in exchange therefor, Buffton shall assign, transfer and deliver to Tremain 180,000 shares of Buffton Common Stock and to Mathot 120,000 shares of Buffton Common Stock, free and clear of any and all liens, equities, claims, prior assignments, mortgages, charges, security interests, pledges, restrictions or encumbrances whatsoever (the foregoing being herein called the "Stock Exchange").
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2. Closing. At or prior to the closing of the Stock Exchange (the
------- "Closing"): -------


a. Buffton has delivered to Tremain and Mathot the items and
documents listed on Schedule 2.a hereto, including the employment
------------
agreements and stock options described therein and certificates
representing the shares of Buffton Common Stock issued to Tremain and
Mathot.


b. Tremain, Mathot and Hotels have delivered to Buffton the items and
documents listed on Schedule 2.b hereto, including stock powers executed by
------------
Tremain and Mathot transferring to Buffton the certificates representing
all of the shares of issued and outstanding Hotels Stock, and Tremain and
Mathot will hold such certificates in trust for Buffton and will deliver
them to Buffton at or promptly after the Closing.


STOCK EXCHANGE AGREEMENT
PAGE 2


3. Certain Definitions. As used in this Agreement, the following terms
------------------- shall have the meanings ascribed to them below:


a. A "Disadvantageous Condition" shall exist for purposes of this
-------------------------
Agreement if Buffton shall furnish to the Requesting Holders a certified
resolution of Buffton's Board of Directors stating that in the good faith
judgment of such Board of Directors it would (because of the existence of,
or in anticipation of, any acquisition or financing activity, or the
inability for reasons beyond Buffton's control to provide any required
financial statements, or any other event or condition of similar
significance to Buffton) be significantly disadvantageous to Buffton for a
registration statement to be maintained effective, or to be filed and
become effective.


b. "Entity" means a corporation, limited liability company,
------
association, partnership of any kind, organization, trust, joint venture or
other legal entity.


c. "Environmental Laws" shall mean all Laws relating to (i) the
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control of any potential pollutant or protection of the air, water or land,
(ii) solid, gaseous or liquid waste generation, handling, treatment,
storage, disposal or transportation, and (iii) exposure to hazardous, toxic
or other substances alleged to be harmful. The term "Environmental Laws"
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shall include, but not be limited to, the Clean Air Act, 42 U.S.C. (S) 7401
et seq., the Clean Water Act, 33 U.S.C. (S) 1251 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. (S) 6901, et seq., the Toxic
Substances Control Act, 15 U.S.C. (S) 2601 et seq., the Safe Drinking Water
Act, 42 U.S.C. (S) 300f et seq. and

STOCK EXCHANGE AGREEMENT
PAGE 3


the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. (S) 9601 et seq.
------


d. "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended (the "Exchange Act").
------------


e. "Governmental Authority" means any federal, state, local or
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foreign government or governmental entity or municipality or subdivision
thereof or any authority, department, commission, panel, board, bureau,
agency, court or instrumentality.


f. "Knowledge" of any party shall mean the collective knowledge of
---------
such party's officers, directors and employees who in the normal scope of
their employment would know, or would reasonably be expected to have
knowledge of, the matters in question.


g. "Laws" means all applicable codes, statutes, laws, permits, rules,
----
regulations, ordinances, orders, policies, determinations, judgments,
writs, injunctions, decrees and common law and equitable rules, causes of
action, remedies and principles of any applicable state, commonwealth,
nation, territory, possession, province, county, parish, town, township,
village, municipality, court, judicial body, administrative agency, or
other Governmental Authority, as may be amended, modified, supplemented or
superseded from time to time.

STOCK EXCHANGE AGREEMENT
PAGE 4


h. "Material Adverse Change" with respect to any party shall mean a
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material adverse change in the business, financial condition or results of
operations of such party and its subsidiaries, taken as a whole; provided,
however, that in no event shall the term "Material Adverse Change" be
-----------------------
deemed to include (a) changes in national economic conditions or industry
conditions generally, (b) changes, or possible changes, in federal, state
or local statutes and regulations applicable to both Buffton and Hotels, or
(c) with respect to Hotels, the loss of employees, customers or suppliers
by Hotels as a direct or indirect consequence of any announcement relating
to the Stock Exchange.


i. "Material Adverse Effect" on any Entity or person shall mean any
-----------------------
material adverse effect on the business, financial condition or results of
operations of such person or Entity and its subsidiaries, taken as a whole;


j. "Permitted Liens" shall mean (A) liens for taxes not due and
---------------
payable or which are being contested in good faith, (B) mechanics',
warehousemen's and other statutory liens incurred in the ordinary course of
business, and (C) defects and irregularities in title and encumbrances
which are not substantial in character or amount and do not materially
impair the use of the property or asset in question.


k. "Registrable Securities" means the Buffton Common Stock received
----------------------
by Tremain and Mathot pursuant hereto. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when
(a) a registration statement with respect to the sale of such securities


STOCK EXCHANGE AGREEMENT
PAGE 5


shall have become effective under the Securities Act and such securities
shall have been disposed of in accordance with such registration statement,
(b) such securities have been transferred pursuant to Rule 144 or Rule 144A
(or any successor provisions) under the Securities Act, or (c) such
securities have ceased to be outstanding.


l. "Registration Expenses" means all expenses incident to Buffton's
---------------------
performance of or compliance with Section 8 including (without limitation)
---------
all registration, filing and American Stock Exchange fees, all fees and
expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and delivery
expenses, the reasonable fees and disbursements of counsel for Buffton and
of its independent public accountants, including the expenses of any
special audits or "cold comfort" letters required by or incident to such
performance and compliance, but excluding underwriting discounts and
commissions and transfer taxes, if any, relating to the Registrable
Securities being registered.


m. "Securities Act" means the Securities Act of 1933, as amended.
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n. "Tax" or "Taxes" means any and all federal, state, local or
--- -----
foreign taxes of any kind or character whatever imposed under any Law or by
any Governmental Authority, including without limitation franchise, income,
sales, withholding, property and other taxes.

STOCK EXCHANGE AGREEMENT
PAGE 6


o. "Tax Return" means a Tax return, declaration, report, claim for
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