Xxx. 00-x
XXXXXXXXXX XXXXXXXX AGREEMENT
This AGREEMENT is made on March 13, 2006 by and among CENTRAL AMERICAN
EQUITIES CORP., a Florida corporation ("CAE"), and XXXXXXX XX. XXXXXX, XXXXXXX
XXXXXXXX and P. XXXXX XXXXXXXX (collectively, the "Shareholders").
RECITALS
On the date hereof, CAE has entered into an agreement with Ostar
Pharmaceutical, Inc., a Delaware corporation ("Ostar") providing for the merger
of Ostar Acquisition Corp., a wholly owned subsidiary of CAE with and into
Ostar (the "Merger"). As a result of the Merger, the shareholders of Ostar will
acquire a majority of the shares of capital stock of CAE.
The Shareholders, who are current holders of common stock of CAE, wish to
acquire from CAE the right to purchase all of the subsidiaries owned by CAE
("Subsidiaries," as further defined below) on the date hereof upon the terms and
conditions set forth herein within the "Option Period" (as defined below). CAE
is willing to grant such right to the Shareholders, and, in addition, CAE wishes
to have the right to require the Shareholders to purchase the Subsidiaries
within the Option Period.
NOW, THEREFORE, it is hereby agreed, by and among the parties hereto, as
follows:
1. Subsidiaries. The "Subsidiaries" subject to this Agreement shall
include the following entities, all of which are organized under the laws of the
Republic of Costa Rica. CAE warrants that it owns all of the issued and
outstanding capital stock of each of the Subsidiaries.
Hotelera Cal Tico, S.A.
Hotelero del Xxx Xxxxxx FM, S.A.
Sociedad Protectora De La Fuana y Flora Maritima De Mal Pais, S.A.
Ecoprojecto San Xxxx, S.A.
Confluencia San Xxxx, S.A.
Corporacion Muxia, S.A.
2. Shareholders' Option. CAE hereby grant to the Shareholders an
irrevocable option (the "Shareholders' Option") to purchase all of the
shares owned by CAE in each of the Subsidiaries ("Subsidiary Shares") at any
time during the period commencing ninety (90) days after the closing of the
Merger and ending one hundred and eighty (180) days from the date of such
closing ("Option Period"). The Shareholders may exercise the Shareholders'
Option at any time during the Option Period by giving notice of exercise, in
writing, to CAE. The notice of exercise of the Shareholders' Option must be
duly executed by all of the Shareholders in order to be effective. Upon
receipt of such notice, CAE shall be bound to sell, and the Shareholders
shall be bound to purchase, all of the Subsidiary Shares for the purchase
price of $300,000 (the "Purchase Price") and upon the additional terms and
conditions set forth in this Agreement.
3. CAE's Option. The Shareholders hereby grant to CAE an irrevocable
option to require the Shareholders to purchase the Subsidiary Shares (the
"CAE Option") at any time during the Option Period. CAE may exercise the CAE
Option at any time during the Option Period by giving notice of exercise, in
writing, to the Shareholders. Upon receipt of such notice, the Shareholders
shall be bound to purchase, and CAE shall be bound to sell, all of the
Subsidiary Shares for the Purchase Price and upon the additional terms and
conditions set forth in this Agreement.
4. Closing. The closing of the sale pursuant to exercise of the
Shareholders' Option or the CAE Option (the "Closing") shall take place as
soon as reasonably possible. Unless the Closing occurs at an earlier date or
other place by agreement of the parties, the Closing will take place at the
executive offices of CAE on the fourteenth day following the exercise of the
Option. At the Closing:
(a) CAE shall deliver
(a) stock certificates representing its entire ownership interest
in each of the Subsidiaries, in each case duly endorsed for
transfer or accompanied by a duly executed stock power,
(b) the books and records of the Subsidiaries; and
(c) the resignations of the officers and directors of the
Subsidiaries.
(b) The Shareholders shall deliver
(i) the Purchase Price in cash;
(ii) an instrument satisfactory in form and substance to CAE and
its counsel providing for the assumption by the Shareholders,
jointly and severally, of all liabilities of CAE that existed
on the date of closing of the Merger or that arose thereafter
in connection with or arising out of the operation and owner-
ship of the Subsidiaries; and
(iii) written releases of CAE from liability executed by each and
every creditor of CAE as of the closing of the Merger and any
creditor of CAE whose rights arose after the closing of the
Merger by reason of CAE's operation or ownership of the
Subsidiaries.
5. CAE's' Representations. CAE represents and warrants to the
Shareholders that, as of the date hereof, and at all times until the Option
Period expires or the Closing takes place:
(a) CAE is and shall remain the sole legal and beneficial owner of the
Subsidiary Shares; and CAE has not and shall not have sold,
assigned, pledged or otherwise transferred any interest in such
Shares.
(b) The Subsidiary Shares are validly issued, fully paid, and non-
assessable, and are not and shall not be subject to pre-emptive
rights, and have been issued in compliance with all state and
federal securities laws and other applicable law.
(c) The execution, delivery, and performance of this Agreement by CAE
has been duly authorized by all necessary corporate action, and
this Agreement, upon its execution by the parties, will constitute
the valid and binding obligation of CAE enforceable against it in
accordance with its terms, except as enforceability may be affected
by bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditors' rights. The execution and
consummation of the transactions contemplated by this Agreement
and compliance with its provisions by CAE will not violate any
provision of law and will not conflict with or result in any breach
of any of the terms, conditions, or provisions of, or constitute a
default under, CAE's or any of the Subsidiary's Certificates of
Incorporation, or any of their Bylaws, in each case as amended, or,
in any material respect, any indenture, lease, loan agreement or
other agreement or instrument to which CAE or any Subsidiary is a
party or by which it or any of its properties are bound, or any
decree, judgment, order, statute, rule or regulation applicable to
CAE or any Subsidiary.
(d) No consent, waiver, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative
agency or commission or other federal, state, county, local or
other foreign governmental authority, instrumentality, agency or
commission or any third party, including a party to any agreement
with CAE or any Subsidiary, is required in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for such consents,
waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable
securities laws.
(e) Upon due endorsement and delivery of the stock certificates for the
Subsidiary Shares at the Closing, title to the Subsidiary Shares,
including all of CAE's right, title and interest therein, shall
vest in the Shareholders, free and clear of all liens, claims,
charges or encumbrances of any kind.
6. CAE's Additional Covenants. CAE agrees that it shall abide by the
following covenants at all times from the date hereof up to and including the
earlier of the expiration of the Option Period or the Closing: it will not:
(a) It will not take any action or omit to take any action that
would prevent or impair in any way its ability to perform this
Agreement or which would cause any of the representations and
warranties set forth in Section 5 hereof to be incomplete or
inaccurate.
(b) amend the Certificate of Incorporation or Bylaws or any Subsidiary;
(c) cause any Subsidiary to merge or consolidate with any other
entity or acquire or agree to acquire any other entity;
(d) sell, transfer, or otherwise dispose of any material assets
required for the operations of any Subsidiary's business
except in the ordinary course of business consistent with past
practices;
(e) cause any Subsidiary to create, incur, assume, or guarantee
any material indebtedness for money borrowed except in the
ordinary course of business, or create or suffer to exist any
mortgage, lien or other encumbrance on any of the Subsidary's
material assets, except those in existence on the date hereof
or those granted pursuant to agreements in effect on the date
of this Agreement or created for the benefit of the
Shareholders; or
(f) cause any Subsidiary to issue any additional shares of
capital stock or take any action affecting the capitalization
of the Subsidiary.
7. Management. From and after the date of closing of the Merger:
(a) CAE will elect to serve as the directors of the Subsidiaries
individuals who are also directors of CAE, and they will elect
to serve as officers of the Subsidiaries individuals who are
also officers of CAE. The directors will also appoint Xxxxxxx
Xxxxxxxx to serve as Project Manager for each of the
Subsidiaries.
(b) If requested, CAE will make available for inspection by the
Shareholders, during normal business hours and in a manner so
as not to interfere with normal business operations, all of
the Subsidiaries' records (including tax records), books of
account, premises, contracts and all other documents in CAE's
possession or control that are reasonably requested by the
Shareholders.
8. Shareholders' Covenants. From and after the date hereof, the
Shareholders will:
(a) not take any action or omit to take any action that would
prevent or impair in any way their ability to perform this
Agreement; and
(b) treat and hold as confidential any information they receive
from CAE or any Subsidiary.
9. Conditions. The obligations of the parties as provided herein
shall be subject to each of the following conditions precedent, unless waived
in writing by both CAE and the Shareholders:
(a) The Merger shall have taken place.
(b) No action or proceeding shall be threatened or pending before
any governmental entity or authority which, in the reasonable
opinion of counsel for the parties, is likely to result in a
restraint, prohibition or the obtaining of damages or other
relief in connection with this Agreement or the consummation
of the Closing.
10. Miscellaneous.
(a) This Agreement shall be binding upon and inure to the benefit of
parties hereto and their respective heirs, legal
representatives, successors and assigns.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(c) All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly
given or made as follows:
(i) If sent by reputable overnight air courier (such as Federal
Express), 2 business days after being sent;
(ii) If sent by facsimile transmission, with a copy mailed on
the same day in the manner provided in clauses (i)
above, when transmitted and receipt is confirmed by the
fax machine; or
(iii) If otherwise actually personally delivered, when delivered.
All notices and other communications under this Agreement shall
be sent or delivered as follows:
If to CAE to:
Xxxxxxx Xxxx
c/o American Union Securities, Inc.
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Shareholders, to:
Xxxxxxx Xxxxxxxx
Interlink 964
0000 X.X. 00xx Xxxxxx
Xxxxx, XX 00000
Telephone: 000-000-000-0000
Facsimile: 000-000-000-0000
Xxxxxxx Xx. Xxxxxx
0000 Xxxxxxxx Xxxx, Xxxx 000
Xxx Xxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: n/a
P. Xxxxx Xxxxxxxx
000 Xxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Each Party may change its address by written notice in
accordance with this Section.
(d) This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of
which shall be considered one and the same agreement.
(e) Nothing herein is intended to confer upon any person or entity
not a party to this Agreement any rights or remedies under or
by reason of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
CENTRAL AMERICAN EQUITIES CORP.
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx, President
/s/ Xxxxxxx Xx. Xxxxxx
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XXXXXXX XX. XXXXXX
/s/ Xxxxxxx Xxxxxxxx
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XXXXXXX XXXXXXXX
/s/ P. Xxxxx Xxxxxxxx
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P. XXXXX XXXXXXXX
