EXHIBIT 10.5
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JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT (the "Agreement") is made and entered into as of
this 10th day of January, 2006 (the "Effective Date"), by and between
INTERNATIONAL STAR, INC., a corporation organized and existing under the laws of
the State of Nevada ("Star"), and RESOLVE CAPITAL FUNDING CORPORATION, INC., a
corporation organized and existing under the laws of the Province of Ontario,
Canada ("Resolve"). Star and Resolve shall sometimes be referred to herein
individually as a "Party" or collectively as the "Parties."
RECITALS
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WHEREAS, Star is engaged in the acquisition and commercial exploitation of
mineral rights in the United States, and within such activities has acquired and
is seeking to exploit that certain real property situated in the County of
Mohave, State of Arizona known as the Detrital Wash Property (the "Property"),
as more particularly described in the legal description set forth on Schedule A
attached hereto; and
WHEREAS, Resolve is in the business of acquiring rights and interests in
various properties to facilitate the exploitation of mineral rights, providing
value through its industry expertise and relationships, and providing capital
resources in connection therewith; and
WHEREAS, in order to develop and commercially exploit the rights that it
has in the Property, Star is in need of capital resources, and the type of
industry background, expertise and relationships which Resolve can provide, and
Resolve desires to provide the same to Star, and to thereby acquire an interest
in the Property, in each case subject to and in accordance with the terms and
conditions contained herein; and
WHEREAS, in order to accomplish the respective desires of the Parties as
expressed above, the Parties desire to form a joint venture (the "Joint
Venture"), in the form of a new limited liability company organized under the
laws of Nevada to engage in the commercial exploitation of the Property jointly
(the "Business"), and desire to enter into this Agreement to set forth the
relative rights and obligations of the Parties with respect to such Joint
Venture. The joint venture shall be called Star-Resolve Detrital Wash, LLC (the
"Company").
NOW THEREFORE, in consideration of mutual promises, agreements,
representations, warranties, covenants and provisions herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:
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ARTICLE I
FORMATION OF JOINT VENTURE
1.1 Formation of the Company. Within thirty (30) days following the Effective
Date, the Parties shall cause their respective counsel jointly to form,
through private exemption, a limited liability company organized under the
laws of the State of Nevada (the "Company"), the purpose of which shall be
to conduct the Business as contemplated herein. The name of the Company
shall be Star-Resolve Detrital Wash, LLC. Also within such thirty (30)-day
period, the Parties shall execute and deliver to each other (a) a limited
liability company operating agreement (the "Operating Agreement")
governing the operation of the Company, designating Resolve as the
exclusive Managing Member of the Company and Tax Matters Member thereof,
and setting forth the rights and obligations of the Parties with respect
to the Company (including, without limitation, establishing capital
accounting consistent with the applicable provisions of this Agreement,
mutual restrictions on the transfers of such Parties' membership interests
except in accordance with the terms thereof, mutual rights of first
refusal to purchase the membership interests of the other Party in the
event of a desired sale, and such other provisions as are usual and
customary in such agreements); and (b) a proposed agreement (the "Services
Agreement"), pursuant to which certain geological engineering and mining
consultancy services shall be performed on behalf of the Joint Venture on
the Property, by A.C.A. Xxxx International Limited, Toronto, Ontario,
Canada, which the Parties hereby agree to designate as the exploration and
development organization for the Company with respect to the Business
("Xxxx").
1.2 Capitalization. The Parties shall be the only members of the Company, and
their respective percentage of ownership interest in the Company shall be
as follows:
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Party Percentage Ownership
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Star 50%
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Resolve 50%
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The Parties shall each receive membership interests ("Interests") in the
Company equal to their percentage of ownership as set forth above, in
consideration for their respective capital contributions described in
Sections 1.3 and 1.4 below. Once issued to each Party as set forth herein,
their outstanding membership interests shall be validly issued,
fully-paid, and non-assessable.
1.3 Contribution to Capital by Star. Upon the Company's formation, and in
consideration for the Interests issued to Star by the Company, Star shall
contribute to the Company all of its right, title and interest in and to
the Property, including without limitation all mineral leases and other
mineral rights, and all contracts, rights and privileges it may have in,
or otherwise pertaining to, the Property, it being understood that all
relevant laws, regulations or other obligations of whatsoever nature
governing the Property are and will be at closing complied with in all
material respects.
1.4 Contribution to Capital by Resolve. Within 60-90 days of the Company's
formation, and in consideration for the Interests issued to Resolve by the
Company, Resolve shall provide (a) cash proceeds in the amount of Six
Hundred Thousand Canadian Dollars ($600,000); (b) the benefit of its best
efforts to professionally and exclusively manage the Company for the
mutual economic benefit of both Parties, including without limitation
providing the Company with access to its industry-related contacts (to
include Xxxx), and its expertise in the commercial exploitation of mineral
rights.
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ARTICLE II
OPERATION OF THE BUSINESS
2.1 Operation of the Business. The Company shall own, operate and exploit the
Property, and shall otherwise conduct the Business for the benefit of, and
to maximize the value of the Interests owned by, each Party. The Company
shall retain such employees, consultants and advisors as may be necessary
or desirable to conduct the Business in an optimal manner for the benefit
of the Parties, commencing with Xxxx pursuant to the Services Agreement.
2.2 Management of the Business. Resolve shall be the exclusive Managing Member
of the Company, and shall conduct the Business in its exclusive and
unfettered discretion, from its inception until such time as a change of
Managing Member shall be made in accordance with the relevant provisions
of the Operating Agreement. The Parties hereby agree that the Operating
shall provide that no Member shall be entitled to call for a change of
Managing Member throughout the entire period that the Company is
implementing its use of proceeds of the CDN $600,000 being contributed by
Resolve hereunder, except with the prior written consent of both Parties
(which consent may be given or withheld in such Parties' sole discretion).
During the period of its management as set forth herein, Resolve shall use
its best efforts to operate and manage the Business in a professional and
responsible manner for the mutual benefit of both Parties. The Operating
Agreement shall detail the complete responsibilities of the Managing
Member to the Company and to the other members of the Company, and shall
permit the Managing Member to delegate such of its management duties and
other obligations to such professionals as it may in good xxxxx xxxx
reasonably necessary or desirable to maximize the value of the Company for
the members. The Operating Agreement shall further provide that, in the
event Resolve shall ever become unwilling or unable to serve in the
capacity of Managing Member or Tax Matters Partner, then it shall notify
Star to such effect, and thereafter Star shall serve in such capacities
for and on behalf of the Company.
2.3 Rights of First Refusal; Restrictions on Sale.
(a) The Operating Agreement shall contain specific provisions granting
to the Parties rights of first refusal in the event that the other
Party wishes to sell or otherwise dispose of its interest in the
Company it being understood that the remaining shareholder's consent
is required for the sale of its shares to a third party under the
Operating Agreement, subject to the relevant provisions thereof.
These provisions are necessary to protect the interests of the
Parties in the Company and the Property, as well as to provide a
mechanism for breaking any deadlock which may occur as a result of
the Parties' equal ownership interests in the Company.
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(b) As further consideration to Resolve for entering into this Agreement
with Star, Star further agrees that it shall grant to Resolve a
right of first refusal with respect to any transaction with a third
party whereby Star agrees to (i) explore or exploit, jointly with
such third party; or (b) sell or otherwise dispose of, any other
parcels owned by it and located within the Detrital Wash region. The
specific mechanics of this right of first refusal shall be included
within the Operating Agreement.
ARTICLE III
TERM
3.1 Term. This Agreement shall commence as of the Effective Date and shall
continue in full force and effect until the earlier to occur of (a) the
date that the formation of the Company has been completed, the Operating
Agreement and the Services Agreement have been fully-executed and
delivered, and all other obligations herein have been fully performed; and
(b) the date that each Party agrees to terminate this Agreement. It is
understood that the closing date hereof shall be the Effective Date.
ARTICLE IV
CONFIDENTIAL INFORMATION
4.1 Confidentiality. By their execution of this Agreement, each Party
acknowledges to and agrees with the other that in the exercise of the
several rights granted to it pursuant to this Agreement they may be or
become familiar with or aware of certain Confidential Information (as such
term is hereinafter defined) disclosed by the other Party, or one or more
of its officers, directors, employees, shareholders, partners, agents or
representatives (each of such relationships being defined herein as an
"Affiliate"). Accordingly, each such Party hereby agrees that any and all
Confidential Information disclosed or furnished to it, or to any of its
Affiliates, by the other Party, or any of its Affiliates, is and shall
remain proprietary to the Party disclosing such information (the
"Disclosing Party"). Neither the non-Disclosing Party, nor any of its
Affiliates, shall have any rights to distribute or divulge any portion of
such Confidential Information to any third party without the prior,
written consent of the Disclosing Party, or to use any of such
Confidential Information in any way detrimental to the rights, privileges
or benefits of such Disclosing Party, or any of its Affiliates, or which
would otherwise in any way destroy, injure or impair any of the Disclosing
Party's (and/or its Affiliates') rights in or in respect of any such
Confidential Information including, without limitation, by using any of
such Confidential Information to establish or assist any person or entity
which is, or will be, directly or indirectly in competition with the
Disclosing Party or the Company, or which otherwise circumvents the rights
of the Disclosing Party. For purposes of this Agreement, the term
"Confidential Information" shall mean any and all proprietary information
belonging to the Disclosing Party, whether tangible or intangible, written
or oral, including, without limitation, any intellectual property rights,
books and records, computer software and files, lists of (or proprietary
information concerning) its customers, suppliers, vendors, financing
sources and other business relationships, and any other item which may
properly be classified as a protected trade secret or other protected
interest under applicable law. The Parties each expressly agree and
understand that its agreement to abide by the provisions of this Section
5.1 constitute a material part of the consideration inducing such Party to
enter into this Agreement and to participate in the Joint Venture as
contemplated herein, and that any violation of such provisions could
create immediate and irreparable harm to the Disclosing Party and/or the
Company.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties. Each Party hereby represents and warrants
to the other Party as indicated, as of the Effective Date, the following,
and covenants to notify the other Party of the occurrence of any fact or
circumstance which makes any of these representations false or misleading
during the term of this Agreement:
(a) such Party has full power and authority to enter into, execute and
perform this Agreement, and no consent, approval or action of any
other party or governmental agency is required for such Party to
enter into, execute or perform this Agreement as contemplated;
(b) the persons signing on behalf of each Party hereto is the duly
authorized representative of such Party, with full power and
authority to enter into and execute this Agreement on behalf of such
Party;
(c) this Agreement constitutes the legal and binding agreement of the
Parties, enforceable against each of such Parties in accordance with
its terms; and
(d) such Party is not bound by or subject to any contract, agreement,
court order or judgment, administrative ruling, law, regulation or
any other item which prohibits or restricts such party from entering
into and performing this Agreement in accordance with its terms, or
requiring the consent of any third party prior to the entry into or
performance of this Agreement in accordance with its terms by such
Party.
ARTICLE VI
GENERAL PROVISIONS
6.1 Notices. All notices, requests, demands and other communications required
or permitted to be given hereunder shall be in writing and shall be deemed
to have been duly given on the date of personal service or transmission by
fax if such transmission is received during the normal business hours of
the addressee, or on the first business day after sending the same by
overnight courier service or by telegram, or on the third business day
after mailing the same by first class mail, or on the day of receipt if
sent by certified or registered mail, addressed as follows:
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If to Star: International Star, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xx. Xxxxx Xxxxxxx
President
with a copy (which shall
not constitute notice) to: August Law Group, P.C.
00000 Xxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxxx X. August, Esq.
President
If to Resolve: Resolve Capital Corporation, Inc.
0 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Attn: Mr. E. L. Stone
President
Tel: (000)-000-0000
Fax: (000)-000-0000
or to such other address or addresses as such Parties may indicate by
written notice sent in accordance with this Section 6.1.
6.2 Binding Agreement. This Agreement shall constitute the binding agreement
of the Parties hereto, enforceable against each of them in accordance with
its terms. This Agreement shall inure to the benefit of each of the
Parties hereto, and their respective successors and permitted assigns.
6.3 Entire Agreement. This Agreement constitutes the entire and final
agreement and understanding between the Parties with respect to the
subject matter hereof and the transactions contemplated hereby, and
supersedes any and all oral or written agreements, statements,
representations, warranties or understandings between the Parties arising
prior to the date of this Agreement, all of which are merged herein and
superseded hereby.
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6.4 Assignment. This Agreement, nor any of the rights, privileges or
obligations of the Parties hereunder, may not be assigned, transferred or
delegated to any other Party without the prior, written consent of the
non-assigning Party, provided, however, that Resolve shall be entitled to
assign its rights and obligations hereunder to any third party which has
the ability to perform all of Resolve's obligations hereunder, and agrees
in writing to join in and be bound by this Agreement and the Operating
Agreement, which assignment need not be consented to by Star in advance.
6.5 Waiver. No waiver of any provision of this Agreement shall be deemed to be
or shall constitute a waiver of any other provision, 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.
6.6 Headings. The headings provided herein are for convenience only and shall
have no force or effect upon the construction or interpretation of any
provision hereof.
6.7 Counterparts; Facsimiles. This Agreement may be executed 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. Facsimiles
containing original signatures shall be deemed for all purposes to be
originally-signed copies of the documents which are the subject of such
facsimiles.
6.8 Further Documents and Acts. Each Party hereto agrees to execute such other
and further documents and to perform such other and further acts as may be
reasonably necessary to carry out the purposes and provisions of this
Agreement.
6.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Nevada, without giving
effect to the law of conflicts of laws applied thereby. In the event that
any dispute shall occur between the parties arising out of or resulting
from the construction, interpretation, enforcement or any other aspect of
this Agreement, the parties hereby agree to accept the exclusive
jurisdiction of the Courts of the State of Nevada sitting in and for the
County of Xxxxx. In the event either party shall be forced to bring any
legal action to protect or defend its rights hereunder, then the
prevailing party in such proceeding shall be entitled to reimbursement
from the non-prevailing party of all fees, costs and other expenses
(including, without limitation, the reasonable expenses of its attorneys)
in bringing or defending against such action.
6.10 Severable Provisions. The provisions of this Agreement are severable, and
if any one or more provisions is determined to be illegal, indefinite,
invalid or otherwise unenforceable, in whole or in part, by any court of
competent jurisdiction, then the remaining provisions of this Agreement
and any partially unenforceable provisions to the extent enforceable in
the pertinent jurisdiction, shall continue in full force and effect and
shall be binding and enforceable on the Parties.
6.11 Amendment and Modification. To the extent permitted by applicable law,
this Agreement shall be amended, modified or supplemented only by a
written agreement signed by each of the Parties to this Agreement.
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6.12 Specific Performance; Remedies Cumulative. The parties hereby agree with
each other that, in the event of any breach of this Agreement by any party
where such breach may cause irreparable harm to any other party, or where
monetary damages may not be sufficient or may not be adequately
quantified, then the affected party or parties shall be entitled to
specific performance, injunctive relief or such other equitable remedies
as may be available to it, which remedies shall be cumulative and
non-exclusive, and in addition to such other remedies as such party may
otherwise have at law or in equity.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date and year first above written.
INTERNATIONAL STAR, INC. ATTEST:
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxxx XxXxxxx
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Xxxxx Xxxxxxx Xxxxxxx Xxxxxxx XxXxxxx
President Secretary
RESOLVE CAPITAL CORPORATION, INC. ATTEST:
By: /s/ E.L. Stone By: /s/ Xxxxx XxXxxxxx
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E. L. Stone Xxxxx XxXxxxxx
President Secretary
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Schedule A
Detrital Wash Property (the "Property").
LEGAL DESCRIPTION
One Thousand, two hundred and eighty (1,280) acres of mining claim property in
Sections 23 and 00, Xxxxxxxx 00X, Xxxxx 21 W located in Mohave County, Arizona.
The Arizona State Office Bureau of Land Management, 000 X. Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx, manages the property.
Specifically, Arizona Mining Claims:
AMC 347931, AMC 347932, AMC 347933, and AMC 347934 in Section 00, Xxxxxxxx 00X,
Xxxxx 21 W located in Mohave County, Arizona and
AMC 347935, AMC 347936, AMC 347937 and, AMC 347938 in Xxxxxxx 00, Xxxxxxxx 00X,
Xx: /s/ Xxxxx Xxxxxxx
As shown in;
Example 1; Map of property
Example 2; Stamped Maintenance Fee Payment
Example 3; Quit Claim Deed