Exhibit 10.1
SICAV ONE STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AND SUBSCRIPTION AGREEMENT (this "Agreement") is made
and entered into as of November 22, 2005, between Startech Environmental
Corporation (OTCBB: STHK) a corporation organized and existing under the laws of
the State of Colorado (the "Company"), and Mercatus & Partners, Limited (the
"Purchaser").
WHEREAS, Purchaser desires to subscribe for and purchase Shares (as
defined below) of the Company;
WHEREAS, Company desires for Purchaser to purchase Shares of the Company;
and
WHEREAS, subject to the terms and conditions set forth in this Agreement,
the Company desires to sell and the Purchaser desires to acquire from the
Company shares of the Company's common stock, no par value per share (the
"Common Stock"), for a minimum purchase price of $1.775 per share for 1,408,450
shares (the "Shares") of Common Stock for an aggregate purchase price of
$2,500,000 (the "Purchase Price"). This Agreement is binding under the
conditions and timing set below, in particular the timing of payment for the
Shares is set forth in Appendix A and below in the Introduction.
NOW, THEREFORE, for good, valuable and binding consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, now agree as follows:
ARTICLE I
INTRODUCTION AND DEFINITIONS
This Agreement is entered into by the parties for purchase of the Shares
by the Purchaser for placement into a European bank SICAV fund. This is not an
immediate funding, and the Company recognizes the Purchaser shall have up to
thirty (30) days, as set forth in this Agreement, to tender the Purchase Price
to the Company through the intermediary Custodial Bank and intermediary
Purchaser, once the valuation and repurchase of the Shares is made in accordance
with the terms of this Agreement. The Company shall have the right to contact
the Custodial Bank administrator for Purchaser account verification and for
confirmation of the status, location and control of the Shares at each step of
the process. Purchaser shall have up to thirty (30) days from the date of
delivery of the Shares to the Custodial Bank to pay the Purchase Price. The
particular expected time line and transaction sequence is set forth in Schedule
A to this Agreement.
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Certain Definitions. As used in this Agreement, the following terms have
the meanings indicated:
"Affiliate" means, with respect to any Person, any Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control with")
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
"Agreement" shall have the meaning set forth in the introductory paragraph
of this Agreement.
"Attorney-in-Fact" means the agent of the bank account holder, Banca MB,
Xxxxxx Xxxxxxxx, Esquire. This agent is available for asset verification status
by the Company and for deposit of share process verification. The
attorney-in-fact, Xxxxxx Xxxxxxxx, has full oversight authority of the Purchaser
and the receiving bank to verify share deposit, valuation process and share
transaction status, and is the point of contact for the Company.
"Business Day" means any day except Saturday, Sunday, any day which shall
be a legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other government actions to close.
"Closing" shall have the meaning set forth in Article I of this Agreement.
"Closing Date" shall have the meaning set forth in Article I of this
Agreement.
"Common Stock" shall have the meaning set forth in the recitals to this
Agreement.
"Company" shall have the meaning set forth in the introductory paragraph
of this Agreement.
"Custodial Bank" means the bank that will receive and retain the Shares of
the Company on behalf of the parties, until payment of the Purchase Price is
complete in accordance with Schedule A. In this case, the Custodial Bank is
Xxxxx Brothers Xxxxxxxx, (BBH), New York City, New York. The account holder is
Banca MB as the intermediary fund receiving bank.
"Disclosure Documents" means all of the Company's reports filed under the
Exchange Act with the SEC and the registration statement on Form S-1 filed by
the Company with the SEC on October 25, 2005 (File No. 333-129237).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Indemnified Party" shall have the meaning set forth in Section 4.9(b) of
this Agreement.
"Indemnifying Party" shall have the meaning set forth in Section 4.9(b) of
this Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"Nasdaq" shall mean the Nasdaq Stock Market, Inc. (R)
"OTCBB" shall mean the NASD over-the counter Bulletin Board(R).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Placement Agent" shall have the meaning set forth in Section 3.1(k).
"Purchase Price" shall have the meaning set forth in the recitals to this
Agreement.
"Purchaser" shall have the meaning set forth in the introductory paragraph
of this Agreement.
"Required Approvals" shall have the meaning set forth in Section 3.1(f).
"Securities" means the Common Stock and stock of any other class into
which such shares of Common Stock may hereafter have been reclassified or
changed.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" shall have the meaning set forth in the recitals to this
Agreement.
"Subsidiaries" shall have the meaning set forth in Section 3.1(a) herein.
"Transaction Documents" means this Agreement and all exhibits and
schedules hereto and all other documents, instruments and writings required
pursuant to this Agreement.
"U.S." means the United States of America.
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ARTICLE II
The PURCHASER hereby irrevocably subscribes for and agrees to purchase and
accept the Shares of the Common Stock of the Company. The Purchase Price to be
paid by the Purchaser shall be based on a discount to the market value of free
trading securities of the Company. The closing (the "Closing") of the purchase
and sale of the Shares shall take place at such time and place as the Purchaser
and the Company may agree upon, but in no event later than thirty (30) days
following the date of this Agreement (the "Closing Date").
This Agreement is binding under the conditions and timing set forth
herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations, Warranties and Agreements of the Company. The Company
hereby makes the following representations and warranties to the Purchaser,
except as set forth in the Disclosure Documents or the Company's Disclosure
Schedule delivered with this Agreement as follows, all of which shall survive
the Closing:
(a) Organization and Qualification. The Company is a
corporation, duly incorporated, validly existing and in good standing
under the laws of the State of Colorado., with the requisite corporate
power and authority to own and use its properties and assets and to carry
on its business as currently conducted. The Company has no subsidiaries
other than as set forth on Schedule 3.1(a) attached hereto (collectively,
the "Subsidiaries"). Each of the Subsidiaries is a corporation, duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with the full corporate power and
authority to own and use its properties and assets and to carry on its
business as currently conducted. Each of the Company and the Subsidiaries
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the
case may be, would not, individually or in the aggregate, have a material
adverse effect on the results of operations, assets, prospects, or
financial condition of the Company and the Subsidiaries, taken as a whole
(a "Material Adverse Effect").
(b) Authorization, Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated hereby and by each other Transaction Document
and to otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby has been duly authorized by
all necessary action on the part of the Company. Each of this Agreement
and each of the other Transaction Documents has been or will be duly
executed by the Company and when delivered in
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accordance with the terms hereof or thereof will constitute the valid and
binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or similar laws relating to, or affecting generally the enforcement of,
creditors' rights and remedies or by other equitable principles of general
application.
(c) Capitalization. The authorized, issued and outstanding
capital stock of the Company is set forth on Schedule 3.1(c). No shares of
Common Stock are entitled to preemptive or similar rights, nor is any
holder of the Common Stock entitled to preemptive or similar rights
arising out of any agreement or understanding with the Company by virtue
of this Agreement. Except as disclosed in Schedule 3.1(c), there are no
outstanding options, warrants, script, rights to subscribe to,
registration rights, calls or commitments of any character whatsoever
relating to securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or
acquire, any shares of Common Stock, or contracts, commitments,
understandings, or arrangements by which the Company or any Subsidiary is
or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common
Stock. Neither the Company nor any Subsidiary is in violation of any of
the provisions of its Articles of Incorporation, bylaws or other charter
documents.
(d) Issuance of Shares. The Shares have been duly and validly
authorized for issuance, offer and sale pursuant to this Agreement and,
when issued and delivered as provided hereunder against payment in
accordance with the terms hereof, shall be valid and binding obligations
of the Company enforceable in accordance with their respective terms.
(e) No Conflicts. The execution, delivery and performance of
this Agreement and the other Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any provision of
its Articles of Incorporation or bylaws (each as amended through the date
hereof) or (ii) be subject to obtaining any consents except those referred
to in Section 3.1(f), conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the
Company is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company or its
Subsidiaries is subject (including, but not limited to, those of other
countries and the federal and state securities laws and regulations), or
by which any property or asset of the Company or its Subsidiaries is bound
or affected, except in the case of clause (ii), such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as
would not, individually or in the aggregate, have a Material Adverse
Effect. The business of the Company and its Subsidiaries is not being
conducted in violation of any law, ordinance or regulation of any
governmental authority.
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(f) Consents and Approvals. Except as specifically set forth
in Schedule 3.1(f), neither the Company nor any Subsidiary is required to
obtain any consent, waiver, authorization or order of, or make any filing
or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of this Agreement and each of the
other Transaction Documents (together with the consents, waivers,
authorizations, orders, notices and filings referred to in Schedule
3.1(f), the "Required Approvals").
(g) Litigation; Proceedings. Except as specifically disclosed
in Schedule 3.1(g), there is no action, suit, notice of violation,
proceeding or investigation pending or, to the best knowledge of the
Company, threatened against or affecting the Company or any of its
Subsidiaries or any of their respective properties before or by any court,
governmental or administrative agency or regulatory authority (federal,
state, county, local or foreign) which (i) relates to or challenges the
legality, validity or enforceability of any of the Transaction Documents
or the Shares, (ii) could, individually or in the aggregate, have a
Material Adverse Effect or (iii) could, individually or in the aggregate,
materially impair the ability of the Company to perform fully on a timely
basis its obligations under the Transaction Documents.
(h) No Default or Violation. Except as set forth in Schedule
3.1(h) hereto, neither the Company nor any Subsidiary (i) is in default
under or in violation of any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it or any
of its properties is bound, except such conflicts or defaults as do not
have a Material Adverse Effect, (ii) is in violation of any order of any
court, arbitrator or governmental body, except for such violations as do
not have a Material Adverse Effect, or (iii) is in violation of any
statute, rule or regulation of any governmental authority which could
(individually or in the aggregate) (iv) adversely affect the legality,
validity or enforceability of this Agreement, (v) have a Material Adverse
Effect or (vi) adversely impair the Company's ability or obligation to
fully perform its obligations under this Agreement on a timely basis.
(i) Disclosure Documents. The Disclosure Documents are
accurate in all material respects and do not contain any untrue statement
of material fact or omit to state any material fact necessary in order to
make the statements made therein, in light of the circumstances under
which they were made, not misleading.
(j) Non-Registered Offering. Neither the Company nor any
Person acting on its behalf has taken or will take any action (including,
without limitation, any offering of any securities of the Company under
circumstances which would require the integration of such offering with
the offering of the Shares under the Securities Act) which might subject
the offering, issuance or sale of the Shares to the registration
requirements of Section 5 of the Securities Act.
(k) Placement Agent. The Company accepts and agrees that
Artemis Capital (the "Placement Agent") is acting for the Purchaser and
does not
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regard any Person other than the Purchaser as its customer in relation to
this Agreement, and that it has not made any recommendation to the
Company, in relation to this Agreement and is not advising the Company
with regard to the suitability or merits of the transaction. The Placement
Agent shall be the Company contact for all information relating to the
status of funding, location of Shares, settlement of the payment of the
Purchase Price and any other information requests of the Company.
Notwithstanding the above, in the event the Purchase Price is not paid as
required herein, Company may directly contact the Attorney-in-Fact to
provide Company notice of demand for the return of the Shares.
The Purchaser acknowledges and agrees that the Company makes no representation
or warranty with respect to the transactions contemplated hereby other than
those specifically set forth in Section 3.1 hereof.
3.2 Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company as follows:
(l) Organization; Authority. The Purchaser is a corporation,
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation with the requisite power and authority
to enter into and to consummate the transactions contemplated hereby and
by the other Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The acquisition of the Shares to be
purchased by the Purchaser hereunder has been duly authorized by all
necessary action on the part of the Purchaser. This Agreement has been
duly executed and delivered by the Purchaser and constitutes the valid and
legally binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to, or affecting generally the enforcement of, creditors
rights and remedies or by other general principles of equity.
(m) Investment Intent. The Purchaser is acquiring the Shares
to be purchased by it hereunder, for its own account for investment
purposes only and not with a view to or for distributing or reselling such
Shares, or any part thereof or interest therein, without prejudice,
however, to such Purchaser's right, subject to the provisions of this
Agreement, at all times to sell or otherwise dispose of all or any part of
such Shares in compliance with applicable federal and state securities
laws.
(n) Experience of Purchaser. The Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of
evaluating the merits and risks of an investment in the Shares to be
acquired by it hereunder, and has so evaluated the merits and risks of
such investment.
(o) Ability of Purchaser to Bear Risk of Investment. The
Purchaser is able to bear the economic risk of an investment in the Shares
to be acquired by it hereunder and, at the present time, is able to afford
a complete loss of such investment.
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(p) Access to Information. The Purchaser acknowledges that it
has been afforded (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives of the
Company concerning the terms and conditions of the Shares offered
hereunder and the merits and risks of investing in such securities; (ii)
access to information about the Company and the Company's financial
condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment in the
Shares; and (iii) the opportunity to obtain such additional information
which the Company possesses or can acquire without unreasonable effort or
expense that is necessary to make an informed investment decision with
respect to the investment and to verify the accuracy and completeness of
the information that it has received about the Company.
(q) Reliance. The Purchaser understands and acknowledges that
(i) the Shares being offered and sold to it hereunder are being offered
and sold without registration under the Securities Act in a private
placement that is exempt from the registration provisions of the
Securities Act under Section 4(2) of the Securities Act and (ii) the
availability of such exemption depends in part on, and that the Company
will rely upon the accuracy and truthfulness of, the foregoing
representations and such Purchaser hereby consents to such reliance.
(r) Status of Purchaser. The Purchaser is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act.
The Purchaser is not required to be registered as a broker-dealer under
Section 15 of the Exchange Act and the Purchaser is not a broker-dealer.
(s) Regulation S. Purchaser understands and acknowledges that
(A) the Shares have not been registered under the Securities Act, are
being sold in reliance upon an exemption from registration afforded by
Regulation S; and that such Shares have not been registered with any state
securities commission or authority; (B) pursuant to the requirements of
Regulation S, the Shares may not be transferred, sold or otherwise
exchanged unless in compliance with the provisions of Regulation S and/or
pursuant to registration under the Securities Act, or pursuant to an
available exemption hereunder; and (C) Purchaser is under no obligation to
register the Shares under the Securities Act or any state securities law,
or to take any action to make any exemption from any such registration
provisions available.
Purchaser is not a U.S. person and is not acquiring the Shares for the
account of any U.S. person; (B) no director or executive officer of Purchaser is
a national or citizen of the United States; and (C) it is not otherwise deemed
to be a "U.S. Person" within the meaning of Regulation S.
Purchaser was not formed specifically for the purpose of acquiring the
Shares purchased pursuant to this Agreement.
Purchaser is purchasing the Shares for its own account and risk and not
for the account or benefit of a U.S. Person as defined in Regulation S and no
other Person has any interest in or participation in the Shares or any right,
option, security interest, pledge
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or other interest in or to the Shares. Purchaser understands, acknowledges and
agrees that it must bear the economic risk of its investment in the Shares for
an indefinite period of time and that prior to any such offer or sale, the
Company may require, as a condition to effecting a transfer of the Shares, an
opinion of counsel, acceptable to the Company, as to the registration or
exemption therefrom under the Securities Act and any state securities laws, if
applicable.
Purchaser will, after the expiration of the Restricted Period, as set
forth under Regulation S Rule 903(b)(3)(iii)(A), offer, sell, pledge or
otherwise transfer the Shares only in accordance with Regulation S, or pursuant
to an available exemption under the Securities Act and, in any case, in
accordance with applicable state securities laws. The transactions contemplated
by this Agreement have neither been pre-arranged with a purchaser who is in the
U.S. or who is a U.S. Person, nor are they part of a plan or scheme to evade the
registration provisions of the United States federal securities laws.
Purchaser represents that the offer leading to the sale of the Shares
evidenced hereby was made in an "offshore transaction." For purposes of
Regulation S, Purchaser understands that an "offshore transaction" as defined
under Regulation S is any offer or sale not made to a person in the United
States and either (A) at the time the buy order is originated, the Purchaser is
outside the United States, or the seller or any person acting on his behalf
reasonably believes that the Purchaser is outside the United States; or (B) for
purposes of (1) Rule 903 of Regulation S, the transaction is executed in, or on
or through a physical trading floor of an established foreign exchange that is
located outside the United States or (2) Rule 904 of Regulation S, the
transaction is executed in, on or through the facilities of a designated
offshore securities market, and neither the seller nor any person acting on its
behalf knows that the transaction has been prearranged with a buyer in the U.S.
Neither the Purchaser nor any affiliate or any Person acting on the
Purchaser's behalf, has made or is aware of any "directed selling efforts" in
the United States, which is defined in Regulation S to be any activity
undertaken for the purpose of, or that could reasonably be expected to have the
effect of, conditioning the market in the United States for any of the Shares
being purchased hereby.
Purchaser understands that the Company is the seller of the Shares which
are the subject of this Agreement, and that, for purpose of Regulation S, a
"distributor" is any underwriter, dealer or other person who participates,
pursuant to a contractual arrangement, in the distribution of securities offered
or sold in reliance on Regulation S and that an "affiliate" is any partner,
officer, director or any person directly or indirectly controlling, controlled
by or under common control with any person in question. Purchaser agrees that it
will not, during the Restricted Period set forth under Rule 903(b)(iii)(A), act
as a distributor, either directly or though any affiliate, nor shall it sell,
transfer, hypothecate or otherwise convey the Shares other than to a non-U.S.
Person.
Purchaser acknowledges that the Shares will bear a legend in substantially
the following form:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN AN
"OFFSHORE TRANSACTION" IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT") AND MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS CERTIFICATE
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
The Company acknowledges and agrees that the Purchaser makes no representations
or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in this Section 3.2.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Manner of Offering. The Shares are being issued pursuant to Section
4(2) of the Securities Act, and Rule 506 of Regulation D and Regulation S
thereunder.
4.2 Notice of Certain Events. The Company shall, on a continuing basis,
(i) advise the Purchaser promptly after obtaining knowledge of, and, if
requested by the Purchaser, confirm such advice in writing, of (A) the issuance
by any state securities commission of any stop order suspending the
qualification or exemption from qualification of the Shares, for offering or
sale in any jurisdiction, or the initiation of any proceeding for such purpose
by any state securities commission or other regulatory authority, or (B) any
event that makes any statement of a material fact made by the Company in Section
3.1 or in the Disclosure Documents untrue or that requires the making of any
additions to or changes in Section 3.1 or in the Disclosure Documents in order
to make the statements therein, in the light of the circumstances under which
they are made, not misleading, (ii) use its best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption from
qualification of the Shares under any state securities or Blue Sky laws, and
(iii) if at any time any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Shares under any such laws, and use its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible time.
4.3 Blue Sky Laws. The Company shall cooperate with the Purchaser in
connection with the exemption from registration of the Shares under the
securities or Blue Sky laws of such jurisdictions as the Purchaser may request;
provided, however, that neither the Company nor its Subsidiaries shall be
required in connection therewith to qualify as a foreign corporation where they
are not now so qualified. The Company
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agrees that it will execute all necessary documents and pay all necessary state
filing or notice fees to enable the Company to sell the Shares to the
Purchasers.
4.4 Integration. The Company shall not and shall use its best efforts to
ensure that no Affiliate shall sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in Section 2 of the
Securities Act) that would be integrated with the offer or sale of the Shares in
a manner that would require the registration under the Securities Act of the
sale of the Shares to the Purchaser.
4.5 Furnishing of Rule 144(c) Materials. The Company shall, for so long as
any of the Securities remain outstanding and during any period in which the
Company is not subject to Section 13 or 15(d) of the Exchange Act, make
available to any registered holder of the Securities in connection with any sale
thereof and any prospective purchaser of such Securities from such Person, such
information in accordance with Rule 144(c) promulgated under the Securities Act
as is required to sell the Securities under Rule 144 promulgated under the
Securities Act.
4.6 Solicitation Materials. The Company shall not (i) distribute any
offering materials in connection with the offering and sale of the Shares other
than the Disclosure Documents and any amendments and supplements thereto
prepared in compliance herewith and federal securities laws or (ii) solicit any
offer to buy or sell the Shares by means of any form of general solicitation or
advertising.
4.7 Listing of Common Stock. If the Common Stock is or shall become listed
on the OTCBB or on another exchange, the Company shall (a) use its best efforts
to maintain the listing of its Common Stock on the OTCBB or such other exchange
on which the Common Stock is then listed until two years from the date hereof,
and (b) shall provide to the Purchaser evidence of such listing upon the
Purchaser's request.
4.8 Use of Proceeds. The proceeds from the sale of the Shares will be used
by the Company to repay the outstanding principal and interest under the Amended
and Restated Secured Convertible Debenture issued on October 18, 2005 to Cornell
Capital Partners, LP. The balance of the proceeds, if any, will be used by the
Company for working capital and general corporate purposes.
4.9 Indemnification.
(a) Indemnification
(i) The Company shall, notwithstanding termination of this
Agreement and without limitation as to time, indemnify and hold harmless
the Purchaser and its officers, directors, agents, employees and
affiliates, each Person who controls or the Purchaser (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act)
(each such Person, a "Control Person") and the officers, directors,
agents, employees and affiliates of each such Control Person, to the
fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without
limitation, costs of preparation and attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of, or relating to, a
breach or breaches of any representation,
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warranty, covenant or agreement by the Company under this Agreement or any
other Transaction Document.
(ii) The Purchaser shall, notwithstanding termination of this
Agreement and without limitation as to time, indemnify and hold harmless
the Company, its officers, directors, agents and employees, each Control
Person and the officers, directors, agents and employees of each Control
Person, to the fullest extent permitted by application law, from and
against any and all Losses, as incurred, arising out of, or relating to, a
breach or breaches of any representation, warranty, covenant or agreement
by the Purchaser under this Agreement or the other Transaction Documents.
(b) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to
indemnity hereunder (an "Indemnified Party"), such Indemnified
Party promptly shall notify the Person from whom indemnity is
sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses
incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to
the extent that it shall be finally determined by a court of
competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the
Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense of the
claim against the Indemnified Party but will retain the right to control the
overall Proceedings out of which the claim arose and such counsel employed by
the Indemnified Party shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional
12
release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.
All fees and expenses of the Indemnified Party to which the Indemnified
Party is entitled hereunder (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten (10) Business Days of written notice
thereof to the Indemnifying Party.
No right of indemnification under this Section shall be available as to a
particular Indemnified Party if there is a non-appealable final judicial
determination that such Losses arise solely out of the negligence or bad faith
of such Indemnified Party in performing the obligations of such Indemnified
Party under this Agreement or a breach by such Indemnified Party of its
obligations under this Agreement.
(c) Contribution. If a claim for indemnification under this
Section is unavailable to an Indemnified Party or is
insufficient to hold such Indemnified Party harmless for any
Losses in respect of which this Section would apply by its
terms (other than by reason of exceptions provided in this
Section), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result
of such Losses in such proportion as is appropriate to reflect
the relative benefits received by the Indemnifying Party on
the one hand and the Indemnified Party on the other and the
relative fault of the Indemnifying Party and Indemnified Party
in connection with the actions or omissions that resulted in
such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to,
among other things, whether there was a judicial determination
that such Losses arise in part out of the negligence or bad
faith of the Indemnified Party in performing the obligations
of such Indemnified Party under this Agreement or the
Indemnified Party's breach of its obligations under this
Agreement. The amount paid or payable by a party as a result
of any Losses shall be deemed to include any attorneys' or
other fees or expenses incurred by such party in connection
with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification
provided for in this Section was available to such party.
(d) Non-Exclusivity. The indemnity and contribution agreements
contained in this Section are in addition to any obligation or
liability that the Indemnifying Parties may have to the
Indemnified Parties.
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ARTICLE V
MISCELLANEOUS
5.1 Fees and Expenses. Except as set forth in this Agreement, each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
The Company shall pay all stamp and other taxes and duties levied in connection
with the issuance of the Shares pursuant hereto. The Purchaser shall pay the
Placement Agent. The Purchaser shall be responsible for any taxes payable by the
Purchaser that may arise as a result of the investment hereunder or the
transactions contemplated by this Agreement or any other Transaction Document.
The Company shall pay all costs, expenses, fees and all taxes incident to and in
connection with: (A) the issuance and delivery of the Shares, (B) the exemption
from registration of the Shares for offer and sale to the Purchaser under the
securities or Blue Sky laws of the applicable jurisdictions, (C) the preparation
of certificates for the Shares (including, without limitation, printing and
engraving thereof), and (D) all fees and expenses of counsel and accountants of
the Company.
5.2 Entire Agreement This Agreement, together with all of the Exhibits and
Schedules annexed hereto, and any other Transaction Document contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, with
respect to such matters. This Agreement shall be deemed to have been drafted and
negotiated by both parties hereto and no presumptions as to interpretation,
construction or enforceability shall be made by or against either party in such
regard.
5.3 Notices. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly given
upon facsimile transmission (with written transmission confirmation report) at
the number designated below (if delivered on a Business Day during normal
business hours where such notice is to be received), or the first Business Day
following such delivery (if delivered other than on a Business Day during normal
business hours where such notice is to be received) whichever shall first occur.
The addresses for such communications shall be:
If to the Company: Startech Environmental Corporation
00 Xxx Xxxxxxx Xxxx - Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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With copies to: Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Purchaser: Mercatus & Partners, Limited
0000 XXXX XXXXXXXXX XXXXX
XXXXXXXXXX, XXXXXXX 00000
Attn: Xxxx Xxxx, Director
Phone: (000) 000-0000
With copies to: Tel: ( )
Fax: ( )
5.4 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
both the Company and the Purchaser, or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.
5.5 Headings. The headings herein are for convenience only, do not
constitute part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.6 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and permitted
assigns. The assignment by a party of this Agreement or any rights hereunder
shall not affect the obligations of such party under this Agreement.
5.7 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
5.8 Governing Law; Venue; Service of Process. The parties hereto
acknowledge that the transactions contemplated by this Agreement and the
exhibits hereto bear a reasonable relation to the State of New York. The parties
hereto agree that the internal laws of the State of New York shall govern this
Agreement and the exhibits hereto, including, but not limited to, all issues
related to usury, without regard to any conflict of law provisions that may
result in the application of the substantive laws of another jurisdiction. Any
action to enforce the terms of this Agreement or any of its exhibits, or any
other Transaction Document shall be brought exclusively in the state and/or
federal courts situated in the County and State of New York. Service of process
in any action by the Purchaser to enforce the terms of this Agreement may be
made by
15
serving a copy of the summons and complaint, in addition to any other relevant
documents, by commercial overnight courier to the Company at its principal
address set forth in this Agreement.
5.9 Survival. The representations and warranties of the Company and the
Purchaser contained in this Agreement shall survive the Closing for a period of
two (2) years following the Closing.
5.10 Counterpart Signatures. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
5.11 Publicity. The Company and the Purchaser shall consult with each
other in issuing any press releases or otherwise making public statements with
respect to the transactions contemplated hereby and neither party shall issue
any such press release or otherwise make any such public statement without the
prior written consent of the other, which consent shall not be unreasonably
withheld or delayed, unless counsel for the disclosing party deems such public
statement to be required by applicable federal and/or state securities laws.
Except as otherwise required by applicable law or regulation, the Company will
not disclose to any third party (excluding its legal counsel, accountants and
representatives) the names of the Purchaser.
5.12 Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision which shall be a reasonable substitute
therefore, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.
5.13 Limitation of Remedies. With respect to claims by the Company or any
Person acting by or through the Company, or by the Purchaser or any Person
acting through the Purchaser, for remedies at law or at equity relating to or
arising out of a breach of this Agreement, liability, if any, shall, in no
event, include loss of profits or incidental, indirect, exemplary, punitive,
special or consequential damages of any kind.
5.14 Delivery of Shares. The Company shall deliver the Shares directly to
the Custodial Bank within five (5) Business Days of the execution of this
Agreement in accordance with the directions provided in Schedule A, to BBH for
deposit into the Banca MB account.
5.15 Delivery of Payment. The Purchaser shall, within thirty (30) days of
the delivery of the Shares to the Custodial Bank issue the Purchase Price to the
Company via wire transfer to the directed wire transfer bank and account as
specified below:
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Wire transfer information for: Startech Environmental Corp.
00 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xx. 00000-0000
Financial Institution: Chase Manhattan Bank
00 Xxx Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
Financial Institution Contact: Branch Manager
(000) 000-0000
FAX: (000) 000-0000
Account Number: 699500462165
ABA/Routing Number: 000000000
If the Purchase Price is not paid within thirty (30) days of the delivery of the
Shares to the Custodial Bank, the Company has the right to demand recall of the
Shares from the Custodial Bank and/or Banca MB after that time, and such Shares
shall be transmitted back to the Company by the Custodial Bank or Banca MB
within ten (10) Business Days from the date of the demand. See Appendix A for
details of timeline from deposit to payment.
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.
Company: Startech Environmental Corporation
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive Officer
Purchaser: Mercatus & Partners, Limited
Xxxx Xxxx on behalf of Purchaser
By: /s/ Xxxx Xxxx
-------------------------
Name: Xxxx Xxxx
Title: Director
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Schedule 1
----------
Mercatus & Partners, Limited
Xxx X. Xxxxxxx Xxxxxxxxxx #0
00000 Xxxx, Xxxxx
PH. +39 065 406 470
FX. x00 000 000 0000
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SICAV ONE SHARE PURCHASE ADDENDUM
---------------------------------
Startech Environmental Corporation (OTCBB: STHK), having executed the
related stock purchase agreement with Mercatus & Partners, LP (the "Purchaser"),
hereby agrees that they have the affirmative duty to act in full cooperation to
assist the Purchaser with the conversion of such shares exchanged for removal of
any and all restrictions or legends (so long as such conversion and removal of
legends complies with applicable securities laws), when the appropriate time or
conditions have passed or occurred which time period shall not exceed 12 months
from the date of issue. Such cooperation by the Company will include appropriate
instructions to their securities counsel to provide the appropriate opinion
letter, or allow another designated attorney by the Purchaser to provide such a
letter. The Company shall also issue and instruct all appropriate measures to
the share transfer agent for such legend removal. Such actions shall be required
to occur within ten (10) days of the request by the Purchaser, or their assigns
so as to secure the conversion on or before the above referred 12 month period.
Such shares are identified as 1,408,450 shares of STHK as to be purchased
under the stock purchase agreement for SICAV One.
Stock Certificate Number____________________
IN WITNESS WHEREOF, the undersigned hereby agrees on behalf of the company
to be bound.
Company:
Startech Environmental Corporation
By:_________________________________
Name:_______________________________
Title:______________________________
Date:_______________
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