PURCHASE AGREEMENT
This Purchase Agreement (this
“Agreement”) is made and entered into as of May 28, 2009, among Xxx.xxx LLC, a
New Jersey limited liability company (the "Company"), Xxxxx Xxxxxx and Xxxxxxx
Xxxxxx (together, the “Seller”), and StarInvest Group, Inc., a Nevada
corporation (the “Buyer”).
WHEREAS, pursuant to the terms and
conditions of this Agreement, Seller desires to sell to Buyer, and Buyer desires
to purchase from Seller, all the membership interests (the “Interests”) of the
Company, representing 100% of the equity capital of the Company on a
fully-diluted basis;
WHEREAS, in consideration for the
Interests, the Buyer desires to issue to the Seller an aggregate of 82,00,000
shares of common stock of the Buyer (the “STIV Shares”) upon the terms and
conditions of this Agreement;
NOW THEREFORE, in consideration of the
above premises and the mutual representations, warranties, covenants and
agreements hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. Purchase and Sale; Purchase
Price; Closing
(a) Interests. Upon
the terms and subject to the conditions of this Agreement, at the Closing
(hereafter defined), Seller shall sell, transfer and assign to Buyer, and Buyer
shall purchase from Seller, the Interests and any and all rights in the
Interests to which Seller is entitled, and by doing so Seller shall be deemed to
have assigned all of Seller’s right, title and interest in and to the Interests
to Buyer. Such sale of the Interests shall be evidenced by stock
certificates, duly endorsed in blank or accompanied by stock powers duly
executed in blank or other instruments of transfer in form and substance
reasonably satisfactory to Buyer.
(b) STIV
Shares. The purchase price for the purchase of the Interests
shall be the issuance of the STIV Shares, which shall be allocated 41,000,000
shares of common stock of the Company to Xxxxx Xxxxxx and 41,000,000 shares to
Xxxxxxx Xxxxxx.
(c) Closing.
(i) The
consummation of the transactions contemplated under this Agreement (the
"Closing") shall take place at the offices of the Buyer, within five (5)
business days after the date on which the conditions set forth in this Agreement
shall be satisfied or duly waived, or such other place and date as the Buyer and
the Seller may agree in writing (such date and time of the Closing is referred
to herein as the "Closing Date").
(ii) The
Buyer’s obligation to purchase the Interests and to take the other actions
required to be taken by the Buyer at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived by the Buyer in whole or in part): (a) all of the Company’s and
Seller's representations and warranties in this Agreement shall have been
accurate in all respects as of the date of this Agreement and shall be accurate
in all respects as of the time of the Closing as if then made; and (b) Seller
and the Company shall have complied with all terms of this
Agreement.
(iii) At
the
Closing: (a)
Buyer shall deliver the STIV Shares to Seller, and (b) Seller shall deliver or
cause to be delivered to Buyer (i) the certificates evidencing the Interests
owned by them, duly endorsed in blank or accompanied by stock powers duly
executed in blank, in proper form for transfer; (ii) resolutions of the managers
and/or Board of Directors and members of the Company authorizing the execution
and delivery of this Agreement and the consummation of the transactions
contemplated herein; (iii) any Required Consents and (iv) any other documents
requested by Buyer to consummate the transactions contemplated by this
Agreement.
2. Representations of
Seller.
Each
Seller, jointly and severally, and the Company hereby represents and warrants to
Buyer the following:
(a) Organization. The
Company is a limited liability company duly organized, validly existing, and in
good standing under the laws of the State of Jersey. The Company has all
corporate power to own, operate and lease its business and assets and carry on
its business as the same is now being conducted. The Company does not
own, directly or indirectly, nor has entered into any agreement, arrangement or
understanding to purchase or sell any capital stock or other equity interests in
any individual, corporation, limited liability company, partnership, joint
venture, trust, association, unincorporated organization, other entity or
Governmental Body (“Person”) or is a member of or participant in any Person or
have any subsidiaries.
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(b) Authority. Each
of Seller and the Company has the absolute and unrestricted right, power, legal
capacity and authority to enter into and perform his obligations under this
Agreement, to carry out his and its obligations hereunder and to consummate the
transactions contemplated hereby. Assuming the due authorization, execution and
delivery by Buyer, this Agreement, when executed and delivered by Buyer, will be
a valid and binding obligation of Seller and the Company, enforceable against
Seller and the Company in accordance with its terms. Neither the
execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will conflict with, or (with or without notice
or lapse of time, or both) result in a termination, breach or violation of (i)
any instrument, contract or agreement to which Seller or the Company is a party
or by which he or it is bound, or (ii) any federal, state, local or foreign law,
ordinance, judgment, decree, order, statute, or regulation, or that of any other
governmental body or authority, applicable to the Company or Seller or its or
his respective assets or properties.
(c) Capitalization. The
Company’s authorized capital stock consists of 100% membership interests, of
which 100% are issued and outstanding. Seller is the sole record and beneficial
owner of the Interests and has good and marketable title to the Interests, free
and clear of any liens, pledges, hypothecations, charges, adverse claims,
options, preferential arrangements or restrictions of any kind, including,
without limitation, any restriction of the use, voting, transfer, receipt of
income or other exercise of any attributes of ownership (collectively,
“Encumbrances”). Upon the Closing, Buyer shall be the lawful record and
beneficial owner of the Interests, free and clear of all Encumbrances, other
than any Encumbrances expressly created by applicable federal and state
securities laws.
(d) Valid
Issuance. All of the Interests are duly authorized, validly
issued, fully paid and non-assessable, and were not issued in violation of any
preemptive or similar rights. There are no outstanding subscriptions, options,
warrants, puts, calls, agreements or other rights of any type or other
securities, including without limitation, any agreements or securities (1)
requiring the issuance, sale, transfer, repurchase, redemption or other
acquisition of any equity interests of the Company, (2) restricting the transfer
of any interests of the Company, or (3) relating to the voting rights and powers
in the Company. There are no issued or outstanding indebtedness of
the Company having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote), upon the happening of a certain event or
otherwise, on any matters on which the equity holders of the Company may
vote.
(e) Consents. No
consent, waiver, registration, certificate, approval, grant, franchise,
concession, permit, license, exception or authorization of, or declaration or
filing with, or notice or report to, (a) any United States federal, state or
local or any foreign government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal or judicial or arbitral
body or any quasi-governmental or private body exercising any regulatory or
taxing authority thereunder (“Governmental Body”) or (b) any Person is required
in connection with the execution, delivery and performance of the transactions
contemplated by this Agreement by the Seller or the Company, other than the
approvals set forth on Schedule 2(e) which
have already been obtained or will have been obtained prior to the Closing
(collectively, the "Required Consents").
(f) Liabilities. Except
(i) as set forth on the Financial Statements (as defined below), (ii) as set
forth on Schedule
2(f) and (iii) under all contracts, agreements, commitments, notes,
bonds, deeds of trust, indentures, leases, mortgages, arrangements, instruments,
documents of any nature or description that the Company is party to or obligated
by (collectively, the “Contracts”), neither Seller nor the Company has any
debts, liabilities or obligations of any nature (whether absolute, accrued,
contingent or otherwise) in connection with the Company or its
business.
(g) Litigation. Except
as set forth on Schedule 2(g), there
is no action, suit, hearing, inquiry, review, proceeding or investigation by or
before any court, arbitration or Governmental Body pending, or threatened
against or involving the Company or Seller or with respect to the activities of
any employee or agent of the Company. Neither the Company nor the
Seller have received any notice of any event or occurrence which could result in
any such action, suit, hearing, inquiry, review, proceeding or
investigation.
(h) Tax
Matters.
(i) Except
as set forth on Schedule 2(h), the
Seller and the Company have filed or caused to be filed on a timely basis all
federal, state, local or foreign return, report, information return or other
document (including any related or supporting information) (“Tax Returns”) filed
or required to be filed with any Governmental Body in connection with the
determination, assessment or collection of any Taxes (as defined below) or the
administration of any laws, regulations or administrative requirements relating
to any Taxes that are or were required to be filed by them, pursuant to all
federal, state, local, regional, municipal or foreign laws, statutes, rules,
regulations, ordinances, codes, decrees, judgments, orders or other legal
requirements (collectively, “Laws”) or administrative requirements of each
Governmental Body with taxing power over it or its assets. As of the
time of filing, all such Tax Returns correctly reflected the facts regarding the
income, business, assets, operations, activities, status, and other matters of
the Company and any other information required to be shown
thereon. An extension of time within which to file any such Tax
Return that has not been filed has not been requested or granted. The
Company has delivered to the Buyer true, complete and correct copies of all Tax
Returns filed by them for the last three years. Schedule 2(h) lists
all state, local and foreign jurisdictions in which the Company has previously
filed or currently files Tax Returns, which are all of the state, local or
foreign taxing jurisdictions in which the Company has been or are required to
file Tax Returns. There is no audit, action, suit, claim, proceeding
or any investigation or inquiry, whether formal or informal, public or private,
now pending or threatened against or with respect to the Company or either of
the Sellers in respect of any Tax. There are no Encumbrances for
Taxes upon the Company or its assets. "Taxes" shall mean all
taxes, charges, fees, imposts, levies or other assessments, including, without
limitation, all net income, gross receipts, capital, sales, use, ad valorem,
value added, transfer, franchise, profits, inventory, capital stock, license,
withholding, payroll, employment, social security, unemployment, excise,
severance, stamp, occupation, property and estimated taxes, customs duties,
fees, assessments and charges of any kind whatsoever, together with any interest
and any penalties, fines, additions to tax or additional amounts imposed by any
Governmental Body and shall include any transferee liability in respect of
Taxes.
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(ii) With
respect to all Taxes imposed on the Company and the Sellers or for which they
are or could be reasonably liable under Law for all taxable periods or portions
of periods since inception of the Company through the Closing, (y) all
applicable tax Laws have been complied with and (z) all such amounts required to
be paid by the Company or the Seller to Governmental Bodies or others on or
before the Closing Date have been paid in full.
(iii) As
of the Closing Date, neither the Company nor the Seller have requested, executed
or filed with the Internal Revenue Service or any other Governmental Body any
agreement or other document extending or having the effect of extending the
period for assessment or collection of any Taxes for which the Company or the
Seller could be liable and which still is in effect.
(iv) There
exists no tax assessment, proposed or otherwise, against the Company or the
Seller nor any Encumbrance for Taxes against any assets or property of the
Company or the Seller.
(v) All
Taxes that the Company or the Seller are or were required by Law to withhold or
collect have been duly withheld or collected and, to the extent required, have
been paid to the proper Governmental Body or other Person.
(vi) Neither
the Company nor the Seller is a party to, bound by or subject to any obligation
under any tax sharing, tax indemnity, tax allocation or similar
agreement.
(vii) There
is no claim, audit, action, suit, proceeding, or investigation with respect to
Taxes due or claimed to be due from the Company or the Seller or of any Tax
Return filed or required to be filed by the Company or the Seller pending or
threatened against or with respect to the Company or the Seller.
(i) No Brokers or
Finders. Neither the Company nor the Seller has not, nor have
any of its affiliates or employees on their behalf, employed any broker or
finder or incurred any liability for any brokerage or finder's fee or
commissions or similar payment in connection with this Agreement and the
Closing, and no Person has or will have any right, interest or valid claim
against or upon the Company or its affiliates for any such fee or commission.,
other than Strasbourger Xxxxxxx Tulcin Xxxxx Inc. (“SPTW”). SPTW
shall be compensated pursuant to a separate agreement between SPTW and the
Company in connection with the transactions contemplated by this Agreement, and
Company and Seller agree and acknowledge that they shall be solely responsible
for any fees due to SPTW.
(j) Financial
Statements. The
financial statements of the Company as of and for the years ended 2007 and 2008
(collectively, the " Financial Statements"), were compiled on the cash basis of
accounting, upon which basis the Company files its federal income tax return; in
accordance with Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants. Since December 31, 2008,
there has been no material adverse change in the business, operations or
financial condition of the Company or any event, condition or contingency that
could reasonably be expected to result in such a material adverse effect with
respect to the Company or its business.
(k) Compliance with
Law. The operations of the Company have been conducted in all
respects in accordance with all applicable Laws. Neither the Company
nor the Seller has received any notification of any asserted present or past
failure to comply with any such Laws, and the Company is in compliance with all
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any such Laws. All licenses,
franchises, grants, easements, exceptions, certificates, consents, permits,
approvals, orders and other authorizations of any Governmental Body relating to
the Company and its business, all of which have been identified on Schedule 2(k) (the
“Licenses”) constitute all licenses, permits, orders, certificates,
authorizations or other approvals of Governmental Bodies required for the
conduct of its business under applicable Laws. The Company is not in violation
of any such License. All such Licenses are in full force and effect and no
suspension or cancellation thereof has been threatened.
(l) Title to Property;
Sufficiency; Encumbrances.Except as disclosed on Schedule 2(l), the
Company leases or owns all the properties and assets used by it in the conduct
of its business, and with respect to contract rights, is a party to and enjoys
the right to the benefits of all Contracts used in or relating to the conduct of
its business. The Company has good and marketable title to, or, in
the case of leased assets, valid and subsisting leasehold interests in, all of
its assets and properties, free and clear of all Encumbrances.
(m) Intellectual
Property. For
the purposes of this Agreement, the following terms have the following
definitions:
“Intellectual
Property” shall mean any or all of the following and all rights in,
arising out of, or associated therewith: (i) all patents and applications
therefor throughout the world, and all reissues, divisions, renewals,
extensions, provisionals, continuations and continuations-in-part thereof; (ii)
all inventions (whether patentable or not), invention disclosures, improvements,
trade secrets, proprietary information, know how, technology, technical data and
customer lists, and all documentation relating to any of the foregoing; (iii)
all copyrights, copyrights registrations and applications therefor, and all
other rights corresponding thereto throughout the world; (iv) all industrial
designs and any registrations and applications therefor throughout the world,
(v) all trade names, logos, URLs, common law trademarks and service marks,
trademark and service xxxx registrations and applications therefor throughout
the world; (vi) all databases and data collections and all rights therein
throughout the world; (vii) all moral and economic rights of authors and
inventors, however denominated, throughout the world, and (viii) any similar or
equivalent rights to any of the foregoing anywhere in the world.
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“Registered Intellectual
Property” means all: (i) registered patents and applications for patent
registration (including provisional applications); (ii) registered trademarks,
applications to register trademarks, intent-to-use applications, or other
registrations or applications related to trademarks; (iii) registered copyrights
and applications for copyright registration; and (iv) any other Intellectual
Property that is the subject of an application, certificate, filing,
registration or other document issued, filed with, or recorded by any state,
government or other public legal authority.
“Company Intellectual
Property” shall mean any Intellectual Property or Registered Intellectual
Property that is owned by, or licensed to the Company.
(i) No
Company Intellectual Property or product or service of the Company is subject to
any administrative, regulatory, judicial or other proceeding by or before any
Governmental Body or arbitrator or claim, agreement, or stipulation restricting
in any manner the use, transfer, or licensing thereof by the Company, or which
may affect the validity, use or enforceability of such Company Intellectual
Property.
(ii) Schedule 2(m) is a
complete and accurate list of all the Company Intellectual Property and
specifies, where applicable, the jurisdictions in which each such item of the
Registered Intellectual Property has been issued or registered or in which an
application for such issuance and registration have been filed, including the
respective registration or application numbers. Each item of the Company
Intellectual Property is valid and subsisting, and to the extent registration of
Company Intellectual Property has been sought, all necessary registration,
maintenance and renewal fees currently due in connection with such Intellectual
Property have been made and all necessary documents, recordations and
certificates in connection with such Company Intellectual Property have been
filed with the relevant patent, copyright, trademark or other authorities in the
United States or foreign jurisdictions, as the case may be, for the purposes of
maintaining such Company Intellectual Property.
(iii) The
Company owns and has good and exclusive title to each item of the Company
Intellectual Property free and clear of any Encumbrances except for Company
Intellectual Property for which the Company has a license for which each such
license is sufficient for the conduct of its business as currently
conducted.
(iv) Schedule 2(m) lists
all Contracts to which the Company is a party (i) with respect to the Company
Intellectual Property licensed or transferred to any Person or (ii) pursuant to
which a Person has licensed or transferred any Intellectual Property to Company.
All Contracts listed relating to the Company Intellectual Property are in full
force and effect. The consummation of the transactions contemplated by this
Agreement will neither violate nor result in the breach, modification,
cancellation, termination, or suspension of such Contracts. The Company is in
compliance with, and has not breached any term of such Contracts and all other
parties to such Contracts are in compliance with, and have not breached any term
of, such Contracts. Following the Closing, the Company will be
permitted to exercise all the rights under such Contracts to the same extent
Company would have been able to had the transactions contemplated by this
Agreement not occurred and without the payment of any additional amounts or
consideration other than ongoing fees, royalties or payments.
(v) The
Company possesses all the Intellectual Property rights necessary to effectuate
its business and operations, as currently conducted. The Company has
not infringed or misappropriated any Intellectual Property of any third Person
or engaged in unfair competition or any unlawful trade practice. The Company has
not received notice from any third party that the operation of its business, or
any act, product or service of the Company, infringes or misappropriates the
Intellectual Property of any third party or constitutes unfair competition or
trade practices under the laws of any jurisdiction. No Person has infringed or
misappropriated or is infringing or misappropriating any of the Company
Intellectual Property.
(vi) The
Company has taken reasonable steps to protect the rights of the Company in its
confidential information and trade secrets that it wishes to protect or any
trade secrets or confidential information of third parties provided to the
Company.
(n) Contracts.
(i) Schedule 2(n)
contains a true, complete and accurate list of each contract, agreement,
indenture, deed of trust, license, note, bond, mortgage, lease, guarantee and
any similar understanding or arrangement, whether written or oral
(collectively, the “Contracts”) to which the Company is a party or by
which any of its assets are bound. The Company has no obligations under, and is
not a party to any other Contract with independent agents, sales representatives
or other Persons which are not listed on such schedule nor does the Company
derive any revenue from any Contract which is not listed. There is no Contract
as to which the Company or the Seller has been advised that the Contract will be
terminated or that by its terms is subject to renegotiation. The Company is not
obligated under any loan agreement, promissory note or other evidence of
indebtedness as a signatory, guarantor or otherwise and has not otherwise
guaranteed the performance by any Person of the obligations of such Person under
any agreement.
(ii) Except
as set forth on Schedule 2(e), no
consent of any party to any Contract is required in connection with the
execution, delivery and performance of this Agreement.
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(iii) The
Company is not in default under any Contract, nor has any event occurred, which
through the passage of time or the giving of notice, or both, would constitute a
default by the Company, would cause the acceleration of any of the Company’s
obligations thereunder, would result in the creation of any Encumbrance or
restriction on any of its assets or business. No third party is in
default under any lease or contract to which the Company is a party, nor has any
event occurred that, through the passage of time or the giving of notice, or
both, would constitute a default thereunder.
(iv) Neither
the Seller nor the Company is a party to or bound by any Contract which (i)
limits the Company or the Seller from competing in any line of business or with
any Person or in any geographic area or during any time period or (ii) grants
any Person any preferential right to purchase from the Company any properties or
assets of the Company or of any capital stock, or securities convertible into,
any capital stock of the Company.
(o) Ordinary Course.
Since December 31, 2008, the business has been conducted only in the ordinary
and usual course of business consistent with past practice. Without
limiting the generality of the foregoing, the Company has not since December 31,
2008: (i) suffered any adverse change in its financial condition, the
business or operations or (ii) sold, transferred, or otherwise disposed of any
material portion of its properties or assets.
(p) Employee Matters. The Company is
not (a) a party to any union, collective bargaining or similar agreement; (b)
providing or obligated to provide any profit sharing, deferred compensation,
bonus, savings, stock option, stock purchase, pension, consulting, retirement,
welfare or other incentive plan or agreement; (c) except as disclosed on Schedule 2(p),
providing or obligated to provide “fringe benefits” or any employee perquisites
to employees, including, without limitation, vacation, sick leave, medical,
hospitalization, insurance and related benefits; or (d) a party to any
employment or consulting agreement not terminable upon notice without
penalty. No present or former employee of the Company has any claim
on account of or for bonuses, vacation, time off earned or otherwise. On or
before the Closing Date all accrued wages, salary, bonus, commissions, vacation
and sick pay and Taxes relating thereto shall be paid by the Company to the
officers, directors, and employees of Company.
(q) Records. Prior
to the Closing, the Company will have delivered to Buyer all documents and
records relating to the Company and its operations (including without
limitation, all employment and personnel records, technical design and know-how,
sales data, customer lists, and all other information relating to customers,
representatives, distributors and suppliers and other information including
advertising materials) and copies of all accounting books, records, ledgers and
electronic data processing materials. Such information reflects the true books
and records of the business of the Company and truly and accurately reflect the
underlying facts and transactions. The documents and records and the
Intellectual Property contain all the documentation required to operate the
business after the Closing Date as presently operated and no other records or
documents exist which are necessary to operate the business.
(r) Accuracy. All
representations, warranties and certifications contained in this Agreement,
including any schedules delivered herewith, and all the other documents
delivered in connection with this Agreement delivered directly or indirectly by
the Seller or the Company are true, correct and complete, do not contain any
statement which is false or misleading with respect to a material fact and do
not omit to state a material fact necessary in order to make the statements
herein and therein not false or misleading.
3. Sellers’
Representations.
Each
Seller hereby represents and warrants to Buyer the following:
(a) Investment Purpose.
Seller is acquiring the STIV Shares for his own account, for investment purposes
only and not with a view to the resale or distribution of any part
thereof. Each Seller understands that the STIV Shares are restricted
securities and can not be offered for sale, sold, transferred or otherwise
disposed of without an effective registration statement pursuant to the
Securities Act of 1933, as amended (the “Securities Act”), or an applicable
exemption therefrom.
(b) Accredited
Investor. Seller is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D promulgated under the Securities
Act.
(c) Exemption from
Registration. Seller understands that the STIV Shares are
being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities
laws.
(d) Economic
Considerations. Seller is not relying on the Company, or its
affiliates or agents with respect to economic considerations involved in this
transaction. The Seller has relied solely on its own
advisors.
(e) No
Reliance. The Seller is not relying upon any other
information, representation or warranty by the Company or any officer, director,
stockholder, agent or representative of the Company in determining to invest in
the STIV Shares. The Seller has consulted, to the extent deemed appropriate by
the undersigned, with the Seller’s own advisers as to the financial, tax, legal
and related matters concerning an exchange of the Interests for the STIV Shares
and on that basis believes that his investment in the STIV Shares is suitable
and appropriate.
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(f) Restrictive
Legends. Each certificate representing the STIV Shares shall
be endorsed with the following legend, in addition to any other legend required
to be placed thereon by applicable federal or state securities
laws:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS TRANSFERRED PURSUANT TO
ANY VALID EXEMPTION FROM REGISTRATION AVAILABLE UNDER SUCH ACT.”
The
Seller consents to the Company making a notation on its records or giving
instructions to any transfer agent of the Company in order to implement the
restrictions on transfer of the STIV Shares.
(g) Potential Loss of
Investment. The Seller understands that an investment in the
STIV Shares is a speculative investment which involves a high degree of risk and
the potential loss of his entire investment.
(h) Investment
Commitment. The Seller's overall commitment to investments
which are not readily marketable is not disproportionate to the undersigned's
net worth, and an investment in the STIV Shares will not cause such overall
commitment to become excessive.
(i) Receipt of
Information. The Seller has had an opportunity to receive and
review all documents filed by the Company with the Securities and Exchange
Commission (the “SEC”), including without limitation, the Risk Factors contained
in the Company’s Annual Report on Form 10-K filed by the Company on March 9,
2009
(j) Further
Dilution. The Seller understands that there is a substantial
risk of further dilution on his investment in the Company.
4. Buyer
Representations.
Buyer
hereby represents and warrants to each Seller the following:
(a) Organization. Buyer
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Nevada. Buyer has all corporate power to own, operate
and lease its business and assets and carry on its business as the same is now
being conducted.
(b) Authority. Buyer
has the absolute and unrestricted right, power, legal capacity and authority to
enter into and perform its obligations under this Agreement, to carry out its
obligations hereunder and to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Buyer. No
filing with, authorization from or consent or approval of any governmental body,
agency, official or authority or any other third party is necessary or required
to be made or obtained to enable Buyer to enter into, and to perform its
obligations under, this Agreement. Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will conflict with, or (with or without notice or lapse of time, or both) result
in a termination, breach or violation of (i) any instrument, contract or
agreement to which either Buyer is a party or by which he is bound, or (ii) any
federal, state, local or foreign law, ordinance, judgment, decree, order,
statute, or regulation, or that of any other governmental body or authority,
applicable to Buyer or its assets or properties.
(c) Valid
Issuance. The STIV Shares are duly authorized, validly issued,
fully paid and non-assessable, and were not issued in violation of any
preemptive or similar rights.
(d) Investment Purpose.
Buyer is acquiring the Interests for its own account, for investment purposes
only and not with a view to the resale or distribution of any part
thereof. Buyer understands that the Interests are restricted
securities and can not be offered for sale, sold, transferred or otherwise
disposed of without an effective registration statement pursuant to the
Securities Act, or an applicable exemption therefrom.
5. Indemnification.
(a) Each
Seller shall indemnify and hold harmless Buyer and its officers, directors,
employees, trustees, agents, beneficiaries, affiliates, representatives and
their successors and assigns from and against any and all damages, losses,
liabilities, taxes and costs and expenses (including, without limitation,
attorneys’ fees and costs) (“Losses”) resulting directly or indirectly from any
misrepresentation, breach of warranty or nonfulfillment of any covenant or
agreement on the part of Seller and the Company.
(b) Buyer
shall indemnify and hold harmless each Seller and his respective employees,
trustees, agents, beneficiaries, affiliates, representatives and their
successors and assigns from and against any and all Losses resulting directly or
indirectly from any misrepresentation, breach of warranty or nonfulfillment of
any covenant or agreement on the part of the Buyer.
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6. Access Prior to the
Closing. Between the date of this Agreement and the Closing,
the Seller and the Company shall (i) give the Buyer and its representatives and
agents full and complete access to all properties, personnel, facilities
and offices of the Company and to all the Records of the Company (and permit the
Buyer to make copies thereof), (ii) permit the Buyer and its representative and
agents to make inspections thereof, and (iii) cause the officers and employees
of, and consultants to, the Company to furnish the Buyer with all financial
information and operating data and other information with respect to the
business and properties of the Company and to discuss with the Buyer and
its representatives the affairs of the Company.
7. Publicity. Neither
the Seller nor the Company shall, and none of them shall permit any other Person
to, issue any press release or make any other statement or disclosure with
respect to this Agreement or the transactions contemplated hereby without the
prior written approval of the Buyer.
8. Conduct of
Business. Except as expressly consented to in writing by the
Buyer, between the date of this Agreement and until the earlier of the
termination of this Agreement in accordance with the terms hereof or the
Closing, the Company shall conduct its business diligently, in good faith and
only in the ordinary course of business consistent with past practice and use
all its reasonable efforts to preserve intact its present business organization
and employees and to preserve the goodwill of Persons having business relations
with it. Without limiting the generality of the foregoing, the Company and the
Seller shall not, directly or indirectly:
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(a)
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amend
its Certificate of Incorporation or
Bylaws;
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(b)
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acquire
any capital stock or other equity securities of any Person or any equity
or ownership interest in any
business;
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(c)
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incur
or guarantee any debt or liabilities of any kind or make any loans of any
kind;
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(d)
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(i)
split, combine or reclassify its outstanding capital stock or declare, set
aside or pay any dividend or distribution payable in cash, stock, property
or otherwise, (ii) spin-off any assets or businesses, sell any assets or
businesses or effect any extraordinary corporate transaction, (iii) engage
in any transaction for the purpose of effecting a recapitalization, or
(iv) engage in any transaction or series of related transactions which has
a similar effect to any of the
foregoing;
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(e)
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issue
or sell, transfer, pledge or otherwise dispose of, or agree to issue,
sell, pledge or otherwise dispose of, any additional shares of, or any
options, warrants or rights of any kind to acquire any shares of its
capital stock of any class, or any debt or equity securities convertible
into or exchangeable for such capital
stock;
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(f)
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redeem,
purchase, acquire or offer to purchase or acquire any shares of its
capital stock;
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(g)
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enter
into any Contract (written or oral) or transaction (A) not in the ordinary
course of business, (B) involving consideration in excess of $10,000 or
(C) for the sale, acquisition or lease of any assets or business,
including without limitation directly or indirectly sell, lease, mortgage
or otherwise Encumber any of its properties or
assets;
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(h)
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modify
the terms of, terminate or fail in any respect to comply with the terms of
any Contract, or enter into or amend any employment, consulting, severance
or similar Contract;
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(i)
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grant
or agree to grant any employee or agent of the Company any increase in
wages or bonus, severance, profit sharing, retirement, deferred
compensation or other compensation or
benefit;
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(j)
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fail
to promptly advise the Buyer in writing of any condition or event which
may have a material adverse effect on the Company or the business;
or
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(k)
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agree
or otherwise commit, whether in writing or otherwise, to do, or take any
action or omit to take any action that would result in, any of the
foregoing.
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9. Exclusivity. Through
the earlier of the Closing or the date of termination of this Agreement, none of
the Seller or the Company shall, directly or indirectly, through any director,
officer, employee, agent, representative or otherwise (and each of said parties
shall use reasonable efforts to insure such Persons shall not directly or
indirectly) (i) solicit, initiate or encourage the submission of inquiries,
proposals or offers from any Person relating to (x) any business combination
with respect to the Company or its assets or business; or (y) the sale of any of
the assets and/or capital stock of the Company (an "Alternative Transaction"),
(ii) enter into or participate in any negotiations, or initiate any
discussions or continue any discussions initiated by others, regarding any
Alternative Transaction, or furnish to any other Person any information with
respect to the Company or the assets or business of the Company for the purposes
of pursuing a possible Alternative Transaction with any other party, or (iii)
otherwise participate in, assist, facilitate or encourage any effort or attempt
by any other Person to do any of the foregoing. The Company and/or
the Seller shall promptly notify the Buyer of any proposal or inquiry made to it
or any of its directors, officers, employees, agents, representatives, or
otherwise with respect to any of the foregoing.
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10. Amending
Schedules. From time to time prior to the Closing, the parties
shall promptly provide, supplement and/or amend the Schedules hereto with
respect to any matter arising after the date of this Agreement which, if
existing or occurring at the date of this Agreement, would have been required to
have been set forth on the Schedules to this Agreement. Such
supplement or amendment shall have the effect of curing any related
misrepresentation or breach of warranty made in connection with the transactions
contemplated by this Agreement; provided, however, that if such
misrepresentation or breach is material, each party shall have a commercially
reasonable period of time following receipt of any supplemented or amended
Schedules to elect (i) to terminate this Agreement without any further liability
to the parties or (ii) in such non-amending party’s sole discretion, to waive
such breach and consummate the transactions contemplated by this
Agreement.
11. Remedies.
In addition to any and all other remedies available at law or equity, and in
addition to the rights of Buyer set forth below in Section 15, in the event the
Seller or the Company shall breach or threaten to breach any of the provisions
of this Agreement, each of the Seller and the Company agree and acknowledge that
damages would be difficult to ascertain, the Buyer and its affiliates will
suffer immediate, irreparable harm, and the Buyer and its affiliates shall be
entitled, in addition to any and all other remedies, to an injunction issued by
a court of competent jurisdiction restraining the aforesaid violations of the
Company and/or the Seller, without the necessity of posting a bond. Nothing
contained herein is intended to limit in any way any of the rights or remedies
of any party to this Agreement in respect of any breach or threatened breach of
this or any other provision of this Agreement. The Seller and the
Company acknowledge and agree that there is no adequate remedy at law for any
such breach or threatened breach and, in the event that any action or proceeding
is brought seeking injunctive relief, said party shall not use as a defense
thereto that there is an adequate remedy at law. Furthermore, the Buyer shall be
entitled to a right of specific performance upon a breach of this Agreement by
the Company and/or the Seller.
12. Conditions to Seller’s and
Company’s Obligation to Close. All obligations of the Company
and the Seller to consummate the transactions contemplated hereunder are subject
to the fulfillment or waiver prior to or at the Closing of each of the following
conditions:
(a) All
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all respects when made and shall be deemed to have been made
again at and as of the Closing and shall then be true and correct in all
respects (except that representations and warranties made as of a specified
date, shall be true and correct only as of such specified date).
(b) Buyer
shall have performed in all material respects each obligation and agreement to
be performed by it, and shall have complied in all material respects with each
covenant required by this Agreement to be performed or complied with by it at or
prior to the Closing.
(c) Buyer
shall have delivered to the Seller the STIV Shares.
(d) The
Seller shall have completed to its reasonable satisfaction its business and
legal due diligence investigation of Buyer.
(e) Buyer
shall have completed its private placement and raised no less than $100,000.00
in gross proceeds.
(f) Buyer,
with the assistance of the Company, shall have prepared the Current Report on
Form 8-K required as a result on the consummation of the transactions
contemplated hereby.
13. Conditions to Buyer’s
Obligations to Close. All obligations of Buyer to consummate
the transactions contemplated hereunder are subject to the fulfillment or waiver
prior to or at the Closing of each of the following conditions:
(a) All
representations and warranties of the Company and Seller contained in this
Agreement shall be true and correct in all respects when made and shall be
deemed to have been made again at and as of the Closing and shall then be true
and correct in all respects (except that representations and warranties made as
of a specified date, shall be true and correct only as of such specified
date).
(b) The
Company and Seller shall have performed in all respects each obligation and
agreement to be performed by it, and shall have complied in all respects with
each covenant required by this Agreement to be performed or complied with by it
at or prior to the Closing.
(c) The
Seller and the Company shall have delivered to Buyer the items to be delivered
pursuant to Section 1(c)(iii)(b).
(d) The
Seller and the Company shall have delivered to Buyer financial statements and
other information required under the rules of the SEC for purposes of inclusion
in Parent’s filing of a Current Report on Form 8-K disclosing the consummation
of the transactions contemplated by this Agreement.
(e) Buyer
shall have completed to its reasonable satisfaction its business and legal due
diligence investigation of the Company, its property, business and subsidiaries,
shall not have discovered any facts, circumstances, liabilities or conditions
that, in Buyer’s sole and absolute discretion, may adversely affect the value or
prospects of the Company or that may expose the Company to any liability not
heretofore fully disclosed to Buyer.
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14. Termination.
(a) This
Agreement may be terminated at any time prior to the Closing under the following
circumstances:
(i) by
mutual written consent of Buyer and Seller;
(ii) by
Buyer or Seller if the Closing shall not have been consummated on or before
March 31, 2010;
(iii) by
Company or Seller, if the Buyer has breached this Agreement in any respect and
such breach is not cured within ten (10) days after written notice from the
Company to the Buyer;
(iv) by
Buyer, if the Company or Seller has breached this Agreement in any respect and
such breach is not cured within ten (10) days after written notice from the
Buyer to the Company or Seller; or
(v) by
any party, if there shall be in effect a final, non-appealable order of a
Governmental Authority permanently prohibiting the consummation of the
transactions contemplated hereby.
(b) Written
notice of any termination pursuant to this Section shall be given by the party
electing termination of this Agreement to the other parties, and such notice
shall state the reason for termination.Upon termination of this Agreement prior
to the consummation of the Closing and in accordance with the terms hereof, this
Agreement shall become void and of no effect, and none of the parties shall have
any liability to the others other than as set forth herein.
15. Expenses. The
parties shall each bear their own respective expenses incurred in connection
with this Agreement and the transactions contemplated herein, provided, however, that notwithstanding
anything contained herein to the contrary, if the Company or Seller breaches
this Agreement or is unable to cure in a reasonable amount of time and such
breach prevents the occurrence of the Closing, or if the Company or Seller
decides not to close the consummation of the transactions contemplated herein,
(i) all funds funded by Buyer to the Company shall be reimbursed immediately;
and (ii) any leases executed by Buyer after the date hereof shall be assumed by
the Company.
16. Miscellaneous.
(a) This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York without regard to principles of conflicts of
laws.
(b) If
any covenant or agreement contained herein, or any part hereof, is held to be
invalid, illegal or unenforceable for any reason, such provision will be deemed
modified to the extent necessary to be valid, legal and enforceable and to give
effect of the intent of the parties hereto.
(c) This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof. This Agreement supersedes all prior
agreements between the parties with respect to the subject matter hereof or
thereof. There are no representations, warranties, covenants or
undertakings with respect to the subject matter hereof other than those
expressly set forth herein or in the other agreements referenced
herein.
(d) This
Agreement may not be amended or modified except by the express written consent
of the parties hereto. Any waiver by the parties of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach thereof or of any other provision.
(e) This
Agreement shall be binding upon, inure to the benefit of, and be enforceable by
the parties hereto and their respective successors and permitted assignees and
heirs and legal representatives.
(f) The
parties hereto intend that this Agreement shall not benefit or create any right
or cause of action in or on behalf of any person other than the parties
hereto.
(g) The
parties agree that this Agreement shall be deemed to have been jointly and
equally drafted by them, and that the provisions of this Agreement therefore
shall not be construed against a party or parties on the ground that such party
or parties drafted or was more responsible for the drafting of any such
provision(s). The parties further agree that they have each carefully read the
terms and conditions of this Agreement, that they know and understand the
contents and effect of this Agreement, and that each was represented by counsel
of its own choosing or had the opportunity to be represented by counsel of its
own choosing.
9
(h) The
parties hereto agree to execute and deliver such further documents and
instruments and to do such other acts and things any of them, as the case may
be, may reasonably request in order to effectuate the transactions contemplated
by this Agreement.
(i) This
Agreement may be executed in counterparts and by facsimile, each of which shall
be deemed an original and all of which together shall constitute one and the
same instrument.
[Remainder of Page Intentionally
Omitted; Signature Page to Follow]
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IN WITNESS WHEREOF, each of the
undersigned has caused this Agreement to be executed by its duly authorized
officer or representative as of the date first above written.
SELLER:
/s/ Xxxxx Xxxxxx
Name: Xxxxx
Xxxxxx
Address:
/s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx
Xxxxxx
Address:
BUYER:
Name: /s/
Xxxxxx X. Xxxx
Title: Chief
Executive Officer
Address: 0000
Xxxxx X Xxxxxx, Xxxxx 0-000, Xxxxxxx, XX 00000
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