EXHIBIT 2.1
SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement, dated as of January 26, 2005, is made by and
among Auteo Media, Inc. (the "Acquiror Company"), each of the Persons listed on
Exhibit A hereto (collectively, the "Acquiror Company Shareholders", and
individually an "Acquiror Company Shareholder"), each of the Persons listed on
Exhibit B hereto (collectively, the "Shareholders", and individually a
"Shareholder"), and WorldStar Energy Corp. (ACN 095 238 645), a company
incorporated in British Columbia (the "Company").
BACKGROUND
The Shareholders have agreed to transfer to the Acquiror Company, and the
Acquiror Company has agreed to acquire from the Shareholders, all of the Shares,
which Shares constitute 100% of the outstanding capital stock of the Company, in
exchange for 31,000,000 shares of the Acquiror Company's Common Stock to be
issued on the Closing Date (the "Acquiror Company Shares"), which Acquiror
Company Shares shall constitute approximately 99% of the issued and outstanding
shares of Acquiror Company's Common Stock immediately after the closing of the
transactions contemplated herein, in each case, on the terms and conditions as
set forth herein.
SECTION I
DEFINITIONS
Unless the context otherwise requires, the terms defined in this Section 1
will have the meanings herein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the terms herein
defined.
1.1 "Accredited Investor" has the meaning set forth in Regulation D under
the Securities Act and set forth on Exhibit C.
1.2 "Acquired Companies" means, collectively, the Company (WorldStar Energy
Corp. ) and the Company Subsidiaries, if any.
1.3 "Acquiror Company Balance Sheet" means the Acquiror Company's audited
balance sheet at December 31, 2004.
1.4 "Acquiror Company Board" means the Board of Directors of the Acquiror
Company and "Acquiror Company Shareholders" means any shareholder of the
Acquiror Company who owns beneficially or of record in excess of twenty (20%)
percent of the issued and outstanding common stock of the Acquiror Company. If
there is no Acquiror Company Shareholders, all references to such are deem to be
surplus and are of no force and effect.
1.5 "Acquiror Company Common Stock" means the Acquiror Company's common
stock, par value US $0.001 per share.
1.6 "Acquiror Company Shares" means the Acquiror Company Common Stock being
issued to the Shareholders pursuant hereto.
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1.7 "Affiliate" means any Person that directly or indirectly controls, is
controlled by or is under common control with the indicated Person.
1.8 "Agreement" means this Share Exchange Agreement, including all
Schedules and Exhibits hereto, as this Share Exchange Agreement may be from time
to time amended, modified or supplemented.
1.9 "Approved Plans" means a stock option or similar plan for the benefit
of employees or others which has been approved by the stockholders of the
Acquiror Company.
1.10 "Closing Acquiror Company Shares" means the aggregate number of
Acquiror Company Shares issuable to the Shareholders at the Closing Date.
1.11 "Closing Date" has the meaning set forth in Section 3.
1.12 "Code" means the Internal Revenue Code of 1986, as amended.
1.13 "Common Stock" means the Company's common shares, US $.001 nominal or
par value per share.
1.14 "Commission" means the Securities and Exchange Commission or any other
federal agency then administering the Securities Act.
1.15 "Company Board" means the Board of Directors of the Company.
1.16 "Company Indemnified Party" has the meaning set forth in Section 10.3.
1.17 "Company Subsidiaries" means all of the direct and indirect
Subsidiaries of the Company, including, without limitation, PT MubaStar
International (which entity is or will be an 80% subsidiary of the Company).
1.18 "Covered Persons" means all Persons, other than Acquiror Company, who
are parties to indemnification and employment agreements with Acquiror Company
existing on or before the Closing Date.
1.19 "Damages" has the meaning set forth in Section 10.3.
1.20 "Distributor" means any underwriter, dealer or other Person who
participates, pursuant to a contractual arrangement, in the distribution of the
securities offered or sold in reliance on Regulation S.
1.21 "Lurgi" means Lurgi AG, a company incorporated under the laws of the
Republic of Germany and having its principal office in Frankfurt, Germany.
1.22 "Environmental Laws" means any Law or other requirement relating to
the environment, natural resources, or public or employee health and safety.
1.23 "Environmental Permit" means all licenses, permits, authorizations,
approvals, franchises and rights required under any applicable Environmental Law
or Order.
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1.24 "Equity Security" means any stock or similar security, including,
without limitation, securities containing equity features and securities
containing profit participation features, or any security convertible into or
exchangeable for, with or without consideration, any stock or similar security,
or any security carrying any warrant, right or option to subscribe to or
purchase any shares of capital stock, or any such warrant or right.
1.25 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.26 "Exchange" has the meaning set forth in Section 2.1.
1.27 "Exchange Act" means the Securities Exchange Act of 1934 or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same will then be in effect.
1.28 "Exhibits" means the several exhibits referred to and identified in
this Agreement.
1.29 "GAAP" means, with respect to any Person, United States generally
accepted accounting principles applied on a consistent basis with such Person's
past practices.
1.30 "Governmental Authority" means any federal or national, state or
provincial, municipal or local government, governmental authority, regulatory or
administrative agency, governmental commission, department, board, bureau,
agency or instrumentality, political subdivision, commission, court, tribunal,
official, arbitrator or arbitral body, in each case whether U.S. or non-U.S.
1.31 "Indebtedness" means any obligation, contingent or otherwise. Any
obligation secured by a Lien on, or payable out of the proceeds of, or
production from, property of the relevant party will be deemed to be
Indebtedness.
1.32 "Intellectual Property" means all industrial and intellectual
property, including, without limitation, all U.S. and non-U.S. patents, patent
applications, patent rights, trademarks, trademark applications, common law
trademarks, Internet domain names, trade names, service marks, service xxxx
applications, common law service marks, and the goodwill associated therewith,
copyrights, in both published and unpublished works, whether registered or
unregistered, copyright applications, franchises, licenses, know-how, trade
secrets, technical data, designs, customer lists, confidential and proprietary
information, processes and formulae, all computer software programs or
applications, layouts, inventions, development tools and all documentation and
media constituting, describing or relating to the above, including manuals,
memoranda, and records, whether such intellectual property has been created,
applied for or obtained anywhere throughout the world.
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1.33 "Laws" means, with respect to any Person, any U.S. or non-U.S.
federal, national, state, provincial, local, municipal, international,
multinational or other law (including common law), constitution, statute, code,
ordinance, rule, regulation or treaty applicable to such Person.
1.34 "Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind, including, without limitation, any conditional sale
or other title retention agreement, any lease in the nature thereof and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction and including any lien or charge arising by
Law.
1.35 "Material Acquiror Company Contract" means any and all agreements,
contracts, arrangements, leases, commitments or otherwise, of the Acquiror
Company Companies, of the type and nature that the Acquiror Company is required
to file with the Commission.
1.36 "Material Adverse Effect" means, when used with respect to the
Acquiror Company Companies or the Acquired Company Companies, as the case may
be, any change, effect or circumstance which, individually or in the aggregate,
would reasonably be expected to (a) have a material adverse effect on the
business, assets, financial condition or results of operations of the Acquiror
Company Companies or the Acquired Companies, as the case may be, in each case
taken as a whole or (b) materially impair the ability of the Acquiror Company or
the Company, as the case may be, to perform their obligations under this
Agreement, excluding any change, effect or circumstance resulting from (i) the
announcement, pendency or consummation of the transactions contemplated by this
Agreement, (ii) changes in the United States securities markets generally, or
(iii) changes in general economic, currency exchange rate, political or
regulatory conditions in industries in which the Acquiror Company Companies or
the Acquired Companies, as the case may be, operate.
1.37 "Order" means any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any
Governmental Authority.
1.38 "Organizational Documents" means (a) the articles or certificate of
incorporation and the by-laws or code of regulations of a corporation; (b) the
partnership agreement and any statement of partnership of a general partnership;
(c) the limited partnership agreement and the certificate of limited partnership
of a limited partnership; (d) the articles or certificate of formation and
operating agreement of a limited liability company; (e) any other document
performing a similar function to the documents specified in clauses (a), (b),
(c) and (d) adopted or filed in connection with the creation, formation or
organization of a Person; and (f) any and all amendments to any of the
foregoing.
1.39 "Permitted Liens" means (a) Liens for Taxes not yet payable or in
respect of which the validity thereof is being contested in good faith by
appropriate proceedings and for the payment of which the relevant party has made
adequate reserves; (b) Liens in respect of pledges or deposits under workmen's
compensation laws or similar legislation, carriers, warehousemen, mechanics,
laborers and materialmen and similar Liens, if the obligations secured by such
Liens are not then delinquent or are being contested in good faith by
appropriate proceedings conducted and for the payment of which the relevant
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party has made adequate reserves; (c) statutory Liens incidental to the conduct
of the business of the relevant party which were not incurred in connection with
the borrowing of money or the obtaining of advances or credits and that do not
in the aggregate materially detract from the value of its property or materially
impair the use thereof in the operation of its business; and (d) Liens that
would not have a Material Adverse Effect.
1.40 "Person" means all natural persons, corporations, business trusts,
associations, companies, partnerships, limited liability companies, joint
ventures and other entities, governments, agencies and political subdivisions.
1.41 "Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative or
investigative) commenced, brought, conducted, or heard by or before, or
otherwise involving, any Governmental Authority.
1.42 "Regulation S" means Regulation S under the Securities Act, as the
same may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
1.43 "Rule 144" means Rule 144 under the Securities Act, as the same may be
amended from time to time, or any successor statute.
1.44 "Schedule 14(f) Filing" means an information statement filed by the
Acquiror Company on Schedule 14f-1 under the Exchange Act.
1.45 "Schedules" means the several schedules referred to and identified
herein, setting forth certain disclosures, exceptions and other information,
data and documents referred to at various places throughout this Agreement.
1.46 "SEC Documents" has the meaning set forth in Section 6.26.
1.47 "Section 4(2)" means Section 4(2) under the Securities Act, as the
same may be amended from time to time, or any successor statute.
1.48 "Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same will be in effect at the time.
1.49 "Shares" means the 177,084 issued and outstanding ordinary shares of
the Company.
1.50 "Subsidiary" means, with respect to any Person, any corporation,
limited liability company, joint venture or partnership of which such Person (a)
beneficially owns, either directly or indirectly, more than 50% of (i) the total
combined voting power of all classes of voting securities of such entity, (ii)
the total combined equity interests, or (iii) the capital or profit interests,
in the case of a partnership; or (b) otherwise has the power to vote or to
direct the voting of sufficient securities to elect a majority of the board of
directors or similar governing body.
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1.51 "Survival Period" has the meaning set forth in Section 10.1.
1.52 "Taxes" means all foreign, federal, state or local taxes, charges,
fees, levies, imposts, duties and other assessments, as applicable, including,
but not limited to, any income, alternative minimum or add-on, estimated, gross
income, gross receipts, sales, use, transfer, transactions, intangibles, ad
valorem, value-added, franchise, registration, title, license, capital, paid-up
capital, profits, withholding, payroll, employment, unemployment, excise,
severance, stamp, occupation, premium, real property, recording, personal
property, federal highway use, commercial rent, environmental (including, but
not limited to, taxes under Section 59A of the Code) or windfall profit tax,
custom, duty or other tax, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest, penalties or additions to
tax with respect to any of the foregoing; and "Tax" means any of the foregoing
Taxes.
1.53 "Tax Group" means any federal, state, local or foreign consolidated,
affiliated, combined, unitary or other similar group of which the Acquiror
Company is now or was formerly a member.
1.54 "Tax Return" means any return, declaration, report, claim for refund
or credit, information return, statement or other similar document filed with
any Governmental Authority with respect to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
1.55 "Transaction Documents" means, collectively, all agreements,
instruments and other documents to be executed and delivered in connection with
the transactions contemplated by this Agreement.
1.56 "U.S." means the United States of America.
1.57 "U.S. Dollars" or "US $" means the currency of the United States of
America.
1.58 "U.S. Person" has the meaning set forth in Regulation S under the
Securities Act and set forth on Exhibit D hereto.
SECTION II
EXCHANGE OF SHARES AND SHARE CONSIDERATION
2.1 SHARE EXCHANGE. At the Closing, each Shareholder shall transfer to the
Acquiror Company the number of Shares set out forth in Exhibit B, and, in
consideration therefor, subject to Section 2.2, Acquiror Company shall issue to
such Shareholder the number of shares of Acquiror Company Common Stock so set
forth (the "Exchange"). The total amount of Acquiror Company Common Stock to be
issued to the Shareholders shall be 31,000,000 shares.
2.2 WITHHOLDING. The Acquiror Company shall be entitled to deduct and
withhold from the Acquiror Company Shares otherwise payable pursuant to this
Agreement to any Shareholder such amounts as it is required to deduct and
withhold with respect to the making of such payment under the Code or any
provision of state, local, provincial or foreign tax Law. To the extent that
amounts are so withheld, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the Shareholder in respect of which
such deduction and withholding was made.
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2.3 SECTION 368 REORGANIZATION. For U.S. federal income tax purposes, the
Exchange is intended to constitute a "reorganization" within the meaning of
Section 368(a)(1)(B) of the Code. The parties to this Agreement hereby adopt
this Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.
Notwithstanding the foregoing or anything else to the contrary contained in this
Agreement, the parties acknowledge and agree that no party is making any
representation or warranty as to the qualification of the Exchange as a
reorganization under Section 368 of the Code or as to the effect, if any, that
any transaction consummated prior to the Closing Date has or may have on any
such reorganization status. The parties acknowledge and agree that each (i) has
had the opportunity to obtain independent legal and tax advice with respect to
the transaction contemplated by this Agreement, and (ii) is responsible for
paying its own Taxes, including without limitation, any adverse Tax consequences
that may result if the transaction contemplated by this Agreement is not
determined to qualify as a reorganization under Section 368 of the Code.
2.4 DIRECTORS OF ACQUIROR COMPANY AT CLOSING DATE. By the Closing Date the
current directors of the Acquiror Company shall appoint Xxxx Xxxxxxxxxx, and
Drajat Hadiwijoyoas additional members of the Acquiror Company Board.
SECTION III
CLOSING DATE
3.1 CLOSING DATE. The closing of the Exchange will occur on February 28,
2005 or at such later date as all of the closing conditions set forth in
Sections 8 and 9 have been satisfied or waived (the "Closing Date").
SECTION IV
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
4.1 GENERALLY. Each Shareholder, severally and not jointly, hereby
represents and warrants to the Acquiror Company:
4.1.1 AUTHORITY. Such Shareholder has the right, power, authority and
capacity to execute and deliver this Agreement and each of the Transaction
Documents to which such Shareholder is a party, to consummate the transactions
contemplated by this Agreement and each of the Transaction Documents to which
such Shareholder is a party, and to perform such Shareholder's obligations under
this Agreement and each of the Transaction Documents to which such Shareholder
is a party. This Agreement has been, and each of the Transaction Documents to
which such Shareholder is a party will be, duly and validly authorized and
approved, executed and delivered by such Shareholder. Assuming this Agreement
and the Transaction Documents have been duly and validly authorized, executed
and delivered by the parties thereto other than such Shareholder, this Agreement
is, and each of the Transaction Documents to which such Shareholder is a party
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have been, duly authorized, executed and delivered by such Shareholder and
constitutes the legal, valid and binding obligation of such Shareholder,
enforceable against such Shareholder in accordance with their respective terms,
except as such enforcement is limited by general equitable principles, or by
bankruptcy, insolvency and other similar Laws affecting the enforcement of
creditors rights generally.
4.1.2 NO CONFLICT. Neither the execution or delivery by such
Shareholder of this Agreement or any Transaction Document to which such
Shareholder is a party, nor the consummation or performance by such Shareholder
of the transactions contemplated hereby or thereby will, directly or indirectly,
(a) contravene, conflict with, or result in a violation of any provision of the
Organization Documents of such Shareholder (if such Shareholder is not a natural
person); (b) contravene, conflict with, constitute a default (or an event or
condition which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination or acceleration of, any agreement
or instrument to which such Shareholder is a party or by which the properties or
assets of such Shareholder are bound; or (c) contravene, conflict with, or
result in a violation of, any Law or Order to which such Shareholder, or any of
the properties or assets of such Shareholder, may be subject.
4.1.3 OWNERSHIP OF SHARES. Such Shareholder owns, of record and
beneficially, and has good, valid and indefeasible title to and the right to
transfer to the Acquiror Company pursuant to this Agreement, such Shareholder's
Shares free and clear of any and all Liens. There are no options, rights, voting
trusts, stockholder agreements or any other contracts or understandings to which
such Shareholder is a party or by which such Shareholder or such Shareholder's
Shares are bound with respect to the issuance, sale, transfer, voting or
registration of such Shareholder's Shares. At the Closing Date, the Acquiror
Company will acquire good, valid and marketable title to such Shareholder's
Shares free and clear of any and all Liens.
4.1.4 LITIGATION. There is no pending Proceeding against such
Shareholder that challenges, or may have the effect of preventing, delaying or
making illegal, or otherwise interfering with, any of the transactions
contemplated by this Agreement and, to the knowledge of such Shareholder, no
such Proceeding has been threatened, and no event or circumstance exists that is
reasonably likely to give rise to or serve as a basis for the commencement of
any such Proceeding.
4.1.5 NO BROKERS OR FINDERS. Except as disclosed in Schedule 4.1.5, no
Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against such Shareholder for any commission, fee or
other compensation as a finder or broker, or in any similar capacity, and such
Shareholder will indemnify and hold the Acquiror Company harmless against any
liability or expense arising out of, or in connection with, any such claim.
4.2 INVESTMENT REPRESENTATIONS. Each Shareholder, severally and not
jointly, hereby represents and warrants to the Acquiror Company:
4.2.1 ACKNOWLEDGMENT. Each Shareholder understands and agrees that the
Acquiror Company Shares to be issued pursuant to has not been registered under
the Securities Act or the securities laws of any state of the U.S. and that the
issuance of the Acquiror Company Shares is being effected in reliance upon an
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exemption from registration afforded either under Section 4(2) of the Securities
Act for transactions by an issuer not involving a public offering or Regulation
S for offers and sales of securities outside the U.S.
4.2.2 STATUS. By its execution of this Agreement, each Shareholder,
severally and not jointly, represents and warrants to the Acquiror Company as
indicated on its signature page to this Agreement, either that:
(a) such Shareholder is an Accredited Investor; or
(b) such Shareholder is not a U.S. Person.
Each Shareholder severally understands that the Acquiror Company
Shares are being offered and sold to such Shareholder in reliance upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments and
understandings of such Shareholder set forth in this Agreement, in order that
the Acquiror Company may determine the applicability and availability of the
exemptions from registration of the Acquiror Company Shares on which the
Acquiror Company is relying.
4.2.3 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF ACCREDITED
INVESTORS. Each Shareholder indicating that such Shareholder is an Accredited
Investor on its signature page to this Agreement, severally and not jointly,
further makes the representations and warranties to the Acquiror Company set
forth on Exhibit E.
4.2.4 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF NON-U.S. PERSONS.
Each Shareholder indicating that it is not a U.S. person on its signature page
to this Agreement, severally and not jointly, further makes the representations
and warranties to the Acquiror Company set forth on Exhibit F.
4.2.5 STOCK LEGENDS. Each Shareholder hereby agrees with the Acquiror
Company as follows:
(a) Securities Act Legend - Accredited Investors. The
certificates evidencing the Acquiror Company Shares issued to those
Shareholders who are Accredited Investors, and each certificate issued
in transfer thereof, will bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN
MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT
(1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (2) PURSUANT TO
AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION
OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO
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THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT
TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
(b) SECURITIES ACT LEGEND - NON-U.S. PERSONS. The certificates
evidencing the Acquiror Company Shares issued to those Shareholders
who are not U.S. Persons, and each certificate issued in transfer
thereof, will bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN
MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT
(1) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER
THE SECURITIES ACT, AND BASED ON AN OPINION OF COUNSEL, WHICH COUNSEL
AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT THE
PROVISIONS OF REGULATION S HAVE BEEN SATISFIED (2) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS OR (3) PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR
TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH
COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT
SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE SECURITIES ACT.
(c) OTHER LEGENDS. The certificates representing such Acquiror
Company Shares, and each certificate issued in transfer thereof, will
also bear any other legend required under any applicable Law,
including, without limitation, any U.S. state corporate and state
securities law, or contract.
(d) OPINION. No Shareholder will transfer any or all of the
Acquiror Company Shares pursuant to Regulation S or absent an
effective registration statement under the Securities Act and
applicable state securities law covering the disposition of such
Shareholder's Acquiror Company Shares, without first providing the
Acquiror Company with an opinion of counsel (which counsel and opinion
are reasonably satisfactory to the Acquiror Company) to the effect
that such transfer will be made in compliance with Regulation S or
will be exempt from the registration and the prospectus delivery
requirements of the Securities Act and the registration or
qualification requirements of any applicable U.S. state securities
laws.
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(e) CONSENT. Each Shareholder understands and acknowledges that
the Acquiror Company may refuse to transfer the Acquiror Company
Shares, unless such Shareholder complies with this Section 4.2.5 and
any other restrictions on transferability set forth in Exhibits E and
F. Each Shareholder consents to the Acquiror Company making a notation
on its records or giving instructions to any transfer agent of the
Acquiror Company's Common Stock in order to implement the restrictions
on transfer of the Acquiror Company Shares.
SECTION V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Acquiror Company as follows:
5.1 ORGANIZATION AND QUALIFICATION. The Company is duly incorporated and
validly existing under the laws of British Columbia, Canada, has all requisite
authority and power (corporate and other), governmental licenses,
authorizations, consents and approvals to carry on its business as presently
conducted and as contemplated to be conducted, to own, hold and operate its
properties and assets as now owned, held and operated by it, to enter into this
Agreement, to carry out the provisions hereof except where the failure to be so
organized, existing and in good standing or to have such authority or power will
not, in the aggregate, either (i) have a material adverse effect on the
business, assets, financial condition, or prospects of the Company, or (ii)
materially impair the ability of the Company and the Shareholders each to
perform their material obligations under this Agreement (any of such effects or
impairments, a "Material Adverse Effect"). The Company is duly qualified,
licensed or domesticated as a foreign corporation in good standing in each
jurisdiction wherein the nature of its activities or its properties owned or
leased makes such qualification, licensing or domestication necessary, except
where the failure to be so qualified, licensed or domesticated will not have a
Material Adverse Effect. Set forth on Schedule 5.1 is a list of those
jurisdictions in which the Company presently conducts its business, owns, holds
and operates its properties and assets.
5.2 SUBSIDIARIES. Except as set forth on Schedule 5.2, the Company does not
own directly or indirectly, any equity or other ownership interest in any
corporation, partnership, joint venture or other entity or enterprise. Said
Schedule 5.2 contains a detailed description of the interest of the Company in
the methonal project (sometimes "Venture") located in Indonesia, as described
therein. Except for the finanancing referred to in Section 9.1.1 and 9.1.2
below, the the Venture has all requisite authority and power (corporate and
other), governmental licenses, authorizations, consents and approvals to carry
on its business as presently conducted and as contemplated to be conducted, and
to own, hold and operate its properties and assets as now owned, held and
operated by it, or to be owned, held and operated upon payment pursuant to
5.3 ARTICLES OF ASSOCIATION AND GOVERNING RULES. The Company does not have
any Memorandum and Articles of Association and is governed by the replaceable
rules under the Corporations Act. The Company is not in violation or breach of
any of the provisions of the replaceable rules, except for such violations or
breaches as, in the aggregate, will not have a Material Adverse Effect.
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5.4 AUTHORIZATION AND VALIDITY OF THIS AGREEMENT. The recording of the
transfer of the Shares and the delivery of new certificates representing the
Shares registered in the name of Acquiror Company are within the Company's
corporate powers, have been duly authorized by all necessary corporate action,
do not require from the Board or Shareholders of the Company any consent or
approval that has not been validly and lawfully obtained, require no
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality of government that has not been validly and
lawfully obtained, filed or registered, as the case may be, except for those
that, if not obtained or made would not have a Material Adverse Effect.
5.5 NO VIOLATION. None of the execution, delivery or performance by the
Company of this Agreement or any Transaction Document to which the Company is a
party, nor the consummation by the Company of the transactions contemplated
hereby violates any provision of its Organizational Documents, or violates or
conflicts with, or constitute a default (or an event or condition which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination or acceleration of, or result in the creation of imposition of
any Lien under, any agreement or instrument to which the Company is a party or
by which the Company is or will be bound or subject, or violate any laws.
5.6 BINDING OBLIGATIONS. Assuming this Agreement has been duly and validly
authorized, executed and delivered by the Acquiror Company, the Acquiror Company
Shareholders and the Shareholders of the Company, this Agreement is and all
agreements or instruments contemplated hereby to which the Company is a party,
have been duly authorized, executed and delivered by the Company and are the
legal, valid and binding Agreement of the Company and is enforceable against the
Company in accordance with its terms, except as such enforcement is limited by
general equitable principles, or by bankruptcy, insolvency and other similar
laws affecting the enforcement of creditors rights generally.
5.7 CAPITALIZATION AND RELATED MATTERS.
5.7.1 CAPITALIZATION. The issued capital stock of the Company consists
of _____ ordinary fully paid shares. Except as set forth in Schedule 5.7.1,
there are no outstanding or authorized options, warrants, calls, subscriptions,
rights (including any preemptive rights or rights of first refusal), agreements
or commitments of any character obligating the Company to issue any ordinary
shares or any other capital stock of the Company. All issued and outstanding
shares of the Company's capital stock are duly authorized, validly issued, fully
paid and nonassessable and have not been issued in violation of any preemptive
or similar rights.
5.7.2 NO REDEMPTION REQUIREMENTS. Except as set forth in Schedule
5.7.2, there are no outstanding contractual obligations (contingent or
otherwise) of the Company to retire, repurchase, redeem or otherwise acquire any
outstanding shares of capital stock of, or other ownership interests in, the
Company or to provide funds to or make any investment (in the form of a loan,
capital contribution or otherwise) in any other entity.
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5.7.3 DULY AUTHORIZED. The exchange of the Shares has been duly
authorized, and the Shares have been validly issued and are fully paid and
nonassessable.
5.8 SHAREHOLDERS. Exhibit B contains a true and complete list of the names
and addresses of the record and beneficial holders of all of the outstanding
capital stock of the Company. Except as expressly provided in this Agreement, no
holder of Shares or any other security of the Company or any other Person is
entitled to any preemptive right, right of first refusal or similar right as a
result of the issuance of the shares or otherwise. There is no voting trust,
agreement or arrangement among any of the Shareholders of any capital stock of
the Company affecting the exercise of the voting rights of any such capital
stock.
5.9 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS. Except as would not have a
Material Adverse Effect, the business and operations of the Company have been
and are being conducted in accordance with all applicable foreign, federal,
state and local laws, rules and regulations and all applicable orders,
injunctions, decrees, writs, judgments, determinations and awards of all courts
and governmental agencies and instrumentalities. Except as would not have a
Material Adverse Effect, the Company is not, and is not alleged to be, in
violation of, or (with or without notice or lapse of time or both) in default
under, or in breach of, any term or provision of its Organizational Documents or
of any indenture, loan or credit agreement, note, deed of trust, mortgage,
security agreement or other material agreement, lease, license or other
instrument, commitment, obligation or arrangement to which the Company is a
party or by which any of the Company's properties, assets or rights are bound or
affected. To the knowledge of the Company, no other party to any material
contract, agreement, lease, license, commitment, instrument or other obligation
to which the Company is a party is. The Company is not subject to any obligation
or restriction of any kind or character, nor is there, to the knowledge of the
Company, any event or circumstance relating to the Company that materially and
adversely affects in any way its business, properties, assets or prospects or
that would prevent or make burdensome its performance of or compliance with all
or any part of this Agreement or the consummation of the transactions
contemplated hereby or thereby.
5.10 CERTAIN PROCEEDINGS. There is no pending Proceeding that has been
commenced against the Company and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated in this Agreement. To the Company's knowledge, no such
Proceeding has been threatened.
5.11 NO BROKERS OR FINDERS. No person has, or as a result of the
transactions contemplated herein will have, any right or valid claim against the
Company for any commission, fee or other compensation as a finder or broker, or
in any similar capacity, and the Company will indemnify and hold the Acquiror
Company harmless against any liability or expense arising out of, or in
connection with, any such claim.
5.12 TITLE TO AND CONDITION OF PROPERTIES. The Company owns or holds under
valid leases or other rights to use all real property, plants, machinery and
equipment necessary for the conduct of the business of the Company as presently
conducted, except where the failure to own or hold such property, plants,
machinery and equipment would not have a Material Adverse Effect on the Company.
13
5.13 BOARD RECOMMENDATION. The Board has, by unanimous written consent,
determined that this Agreement and the transactions contemplated by this
Agreement, are advisable and in the best interests of the Shareholders.
SECTION VI
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR COMPANY AND
THE ACQUIROR COMPANY SHAREHOLDERS
The Acquiror Company and the Acquiror Company Shareholders, jointly and
severally, represent and warrant to the Shareholders and the Company as follows:
6.1 ORGANIZATION AND QUALIFICATION. The Acquiror Company is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, has all requisite authority and power (corporate and other),
governmental licenses, authorizations, consents and approvals to carry on its
business as presently conducted and to own, hold and operate its properties and
assets as now owned, held and operated by it, except where the failure to be so
organized, existing and in good standing, or to have such authority and power,
governmental licenses, authorizations, consents or approvals would not have a
Material Adverse Effect. The Acquiror Company is duly qualified, licensed or
domesticated as a foreign corporation in good standing in each jurisdiction
wherein the nature of its activities or its properties owned, held or operated
makes such qualification, licensing or domestication necessary, except where the
failure to be so duly qualified, licensed or domesticated and in good standing
would not have a Material Adverse Effect. The SEC Documents set forth a true,
correct and complete list of the Acquiror Company's jurisdiction of organization
and each other jurisdiction in which the Acquiror Company presently conducts its
business or owns, holds and operates its properties and assets.
6.2 SUBSIDIARIES. The Acquiror Company does not own, directly or
indirectly, any equity or other ownership interest in any corporation,
partnership, joint venture or other entity or enterprise.
6.3 ORGANIZATIONAL DOCUMENTS. True, correct and complete copies of the
Organizational Documents of the Acquiror Company have been delivered to the
Company prior to the execution of this Agreement, and no action has been taken
to amend or repeal such Organizational Documents. The Acquiror Company is not in
violation or breach of any of the provisions of its Organizational Documents,
except for such violations or breaches as would not have a Material Adverse
Effect.
6.4 AUTHORIZATION. The Acquiror Company has all requisite authority and
power (corporate and other), governmental licenses, authorizations, consents and
approvals to enter into this Agreement and each of the Transaction Documents to
which the Acquiror Company is a party, to consummate the transactions
contemplated by this Agreement and each of the Transaction Documents to which
the Acquiror Company is a party and to perform its obligations under this
Agreement and each of the Transaction Documents to which the Acquiror Company is
a party. The execution, delivery and performance by the Acquiror Company of this
Agreement and each of the Transaction Documents to which the Acquiror Company is
a party have been duly authorized by all necessary corporate action and do not
14
require from the Acquiror Company Board or the stockholders of the Acquiror
Company any consent or approval that has not been validly and lawfully obtained.
The execution, delivery and performance by the Acquiror Company of this
Agreement and each of the Transaction Documents to which the Acquiror Company is
a party requires no authorization, consent, approval, license, exemption of or
filing or registration with any Governmental Authority or other Person other
than (a) the Schedule 14(f) Filing, and (b) such other customary filings with
the Commission for transactions of the type contemplated by this Agreement.
6.5 NO VIOLATION. Neither the execution nor the delivery by the Acquiror
Company of this Agreement or any Transaction Document to which the Acquiror
Company is a party, nor the consummation or performance by the Acquiror Company
of the transactions contemplated hereby or thereby will, directly or indirectly,
(a) contravene, conflict with, or result in a violation of any provision of the
Organizational Documents of the Acquiror Company; (b) contravene, conflict with,
constitute a default (or an event or condition which, with notice or lapse of
time or both, would constitute a default) under, or result in the termination or
acceleration of, or result in the imposition or creation of any Lien under, any
agreement or instrument to which the Acquiror Company is a party or by which the
properties or assets of the Acquiror Company are bound; (c) contravene, conflict
with, or result in a violation of, any Law or Order to which the Acquiror
Company, or any of the properties or assets owned or used by the Acquiror
Company, may be subject; or (d) contravene, conflict with, or result in a
violation of, the terms or requirements of, or give any Governmental Authority
the right to revoke, withdraw, suspend, cancel, terminate or modify, any
licenses, permits, authorizations, approvals, franchises or other rights held by
the Acquiror Company or that otherwise relate to the business of, or any of the
properties or assets owned or used by, the Acquiror Company, except, in the case
of clause (b), (c), or (d), for any such contraventions, conflicts, violations,
or other occurrences as would not have a Material Adverse Effect.
6.6 BINDING OBLIGATIONS. Assuming this Agreement and the Transaction
Documents have been duly and validly authorized, executed and delivered by the
parties thereto other than the Acquiror Company, this Agreement and each of the
Transaction Documents to which the Acquiror Company is a party are duly
authorized, executed and delivered by the Acquiror Company and constitutes the
legal, valid and binding obligations of the Acquiror Company, enforceable
against the Acquiror Company in accordance with their respective terms, except
as such enforcement is limited by general equitable principles, or by
bankruptcy, insolvency and other similar Laws affecting the enforcement of
creditors rights generally.
6.7 SECURITIES LAWS. Assuming the accuracy of the representations and
warranties of the Shareholders contained in Section 4 and Exhibits E and F, the
issuance of the Acquiror Company Shares pursuant to this Agreement are (a)
exempt from the registration and prospectus delivery requirements of the
Securities Act, (b) have been registered or qualified (or are exempt from
registration and qualification) under the registration permit or qualification
requirements of all applicable state securities laws, and (c) accomplished in
conformity with all other applicable federal and state securities laws.
6.8 CAPITALIZATION AND RELATED MATTERS.
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6.8.1 CAPITALIZATION. The authorized capital stock of the Acquiror
Company consists of 25,000,000 shares of the Acquiror Company's Common Stock, of
which 177,084 shares are issued and outstanding. All issued and outstanding
shares of the Acquiror Company's Common Stock are duly authorized, validly
issued, fully paid and nonassessable, and have not been issued in violation of
any preemptive or similar rights. At the Closing Date, the Acquiror Company will
have sufficient authorized and unissued Acquiror Company's Common Stock to
consummate the transactions contemplated hereby. Except as disclosed in the SEC
Documents, there are no outstanding options, warrants, purchase agreements,
participation agreements, subscription rights, conversion rights, exchange
rights or other securities or contracts that could require the Acquiror Company
to issue, sell or otherwise cause to become outstanding any of its authorized
but unissued shares of capital stock or any securities convertible into,
exchangeable for or carrying a right or option to purchase shares of capital
stock or to create, authorize, issue, sell or otherwise cause to become
outstanding any new class of capital stock. There are no outstanding
stockholders' agreements, voting trusts or arrangements, registration rights
agreements, rights of first refusal or other contracts pertaining to the capital
stock of the Acquiror Company. The issuance of all of the shares of Acquiror
Company's Common Stock described in this Section 6.8.1 have been in compliance
with U.S. federal and state securities laws.
6.8.2 NO REDEMPTION REQUIREMENTS. Except as set forth in the SEC
Documents, there are no outstanding contractual obligations (contingent or
otherwise) of the Acquiror Company to retire, repurchase, redeem or otherwise
acquire any outstanding shares of capital stock of, or other ownership interests
in, the Acquiror Company or to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in any other Person.
6.8.3 DULY AUTHORIZED. The issuance of the Acquiror Company Shares has
been duly authorized and, upon delivery to the Shareholders of certificates
therefor in accordance with the terms of this Agreement, the Acquiror Company
Shares will have been validly issued and fully paid, and will be nonassessable,
have the rights, preferences and privileges specified, will be free of
preemptive rights and will be free and clear of all Liens and restrictions,
other than Liens created by the Shareholders and restrictions on transfer
imposed by this Agreement and the Securities Act.
6.9 COMPLIANCE WITH LAWS. Except as would not have a Material Adverse
Effect, the business and operations of the Acquiror Company have been and are
being conducted in accordance with all applicable Laws and Orders. Except as
would not have a Material Adverse Effect, the Acquiror Company has not received
notice of any violation (or any Proceeding involving an allegation of any
violation) of any applicable Law or Order by or affecting such Acquiror Company
and, to the knowledge of the Acquiror Company, no Proceeding involving an
allegation of violation of any applicable Law or Order is threatened or
contemplated. Except as would not have a Material Adverse Effect, the Acquiror
Company is not subject to any obligation or restriction of any kind or
character, nor is there, to the knowledge of the Acquiror Company, any event or
circumstance relating to the Acquiror Company that materially and adversely
affects in any way its business, properties, assets or prospects or that
prohibits the Acquiror Company from entering into this Agreement or would
prevent or make burdensome its performance of or compliance with all or any part
of this Agreement or the consummation of the transactions contemplated hereby.
16
6.10 CERTAIN PROCEEDINGS. There is no pending Proceeding that has been
commenced against the Acquiror Company and that challenges, or may have the
effect of preventing, delaying, making illegal, or otherwise interfering with,
any of the transactions contemplated by this Agreement. To the knowledge of the
Acquiror Company, no such Proceeding has been threatened.
6.11 NO BROKERS OR FINDERS. No Person has, or as a result of the
transactions contemplated herein will have, any right or valid claim against the
Acquiror Company for any commission, fee or other compensation as a finder or
broker, or in any similar capacity, and the Acquiror Company will indemnify and
hold the Company harmless against any liability or expense arising out of, or in
connection with, any such claim.
6.12 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in the SEC
Documents, the Acquiror Company has no debt, obligation or liability (whether
accrued, absolute, contingent, liquidated or otherwise, whether due or to become
due, whether or not known to the Acquiror Company) arising out of any
transaction entered into at or prior to the Closing Date or any act or omission
at or prior to the Closing Date, except to the extent set forth on or reserved
against on the Acquiror Company Balance Sheet. All debts, obligations or
liabilities with respect to directors and officers will be cancelled prior to
the Closing. The Acquiror Company has not incurred any liabilities or
obligations under agreements entered into, in the usual and ordinary course of
business since January 1, 2004. The Acquiror Company Balance Sheet provides a
true and fair view of the assets and liabilities (whether accrued, absolute,
contingent, liquidated or otherwise, whether due or to become due, whether or
not known to Acquiror Company) as at December 31, 2003.
6.13 CHANGES. Except as set forth in the SEC Documents, the Acquiror
Company has, since January 1, 2005:
6.13.1 ORDINARY COURSE OF BUSINESS. Conducted its business or entered
into any transaction other than in the usual and ordinary course of business,
except for this Agreement.
6.13.2 ADVERSE CHANGES. Suffered or experienced any change in, or
affecting, its condition (financial or otherwise), properties, assets,
liabilities, business, operations, results of operations or prospects other than
changes, events or conditions in the usual and ordinary course of its business,
none of which would have a Material Adverse Effect;
6.13.3 LOANS. Made any loans or advances to any Person;
6.13.4 LIENS. Created or permitted to exist any Lien on any material
property or asset of the Acquiror Company, other than Permitted Liens;
6.13.5 CAPITAL STOCK. Issued, sold, disposed of or encumbered, or
authorized the issuance, sale, disposition or encumbrance of, or granted or
issued any option to acquire any shares of its capital stock or any other of its
securities or any Equity Security, or altered the term of any of its outstanding
securities or made any change in its outstanding shares of capital stock or its
capitalization, whether by reason of reclassification, recapitalization, stock
split, combination, exchange or readjustment of shares, stock dividend or
otherwise;
17
6.13.6 DIVIDENDS. Declared, set aside, made or paid any dividend or
other distribution to any of its stockholders;
6.13.7 MATERIAL ACQUIROR COMPANY CONTRACTS. Terminated or modified any
Material Acquiror Company Contract, except for termination upon expiration in
accordance with the terms thereof;
6.13.8 CLAIMS. Released, waived or cancelled any claims or rights
relating to or affecting the Acquiror Company in excess of US $10,000 in the
aggregate or instituted or settled any Proceeding involving in excess of US
$10,000 in the aggregate;
6.13.9 DISCHARGED LIABILITIES. Paid, discharged or satisfied any
claim, obligation or liability in excess of US $10,000 in the aggregate, except
for liabilities incurred prior to the date of this Agreement in the ordinary
course of business;
6.13.10 INDEBTEDNESS. Created, incurred, assumed or otherwise become
liable for any Indebtedness in excess of US $10,000 in the aggregate, other than
professional fees;
6.13.11 GUARANTEES. Guaranteed or endorsed in a material amount any
obligation or net worth of any Person;
6.13.12 ACQUISITIONS. Acquired the capital stock or other securities
or any ownership interest in, or substantially all of the assets of, any other
Person;
6.13.13 ACCOUNTING. Changed its method of accounting or the accounting
principles or practices utilized in the preparation of its financial statements,
other than as required by GAAP;
6.13.14 AGREEMENTS. Except as set forth in the SEC Documents, entered
into any agreement, or otherwise obligated itself, to do any of the foregoing.
6.14 MATERIAL ACQUIROR COMPANY CONTRACTS. Except to the extent filed with
the SEC Documents, the Acquiror Company has made available to the Company, prior
to the date of this Agreement, true, correct and complete copies of each written
Material Acquiror Company Contract, including each amendment, supplement and
modification thereto.
6.14.1 NO DEFAULTS. Each Material Acquiror Company Contract is a valid
and binding agreement of the Acquiror Company that is party thereto, and is in
full force and effect. Except as would not have a Material Adverse Effect, the
Acquiror Company is not in breach or default of any Material Acquiror Company
Contract to which it is a party and, to the knowledge of the Acquiror Company,
no other party to any Material Acquiror Company Contract is in breach or default
thereof. Except as would not have a Material Adverse Effect, no event has
occurred or circumstance exists that (with or without notice or lapse of time)
would (a) contravene, conflict with or result in a violation or breach of, or
become a default or event of default under, any provision of any Material
Acquiror Company Contract or (b) permit the Acquiror Company or any other Person
the right to declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate or modify any Material
Acquiror Company Contract. The Acquiror Company has not received notice
of the pending or threatened cancellation, revocation or termination of any
Material Acquiror Company Contract to which it is a party. There are no
renegotiations of, or attempts to renegotiate, or outstanding rights to
renegotiate any material terms of any Material Acquiror Company Contract.
6.15 EMPLOYEES.
6.15.1 The Acquiror Company has no employees, independent contractors
or other Persons providing research or other services to them. Except as would
not have a Material Adverse Effect, the Acquiror Company is in full compliance
with all Laws regarding employment, wages, hours, benefits, equal opportunity,
collective bargaining, the payment of Social Security and other taxes,
occupational safety and health and plant closing. The Acquiror Company is not
liable for the payment of any compensation, damages, taxes, fines, penalties or
other amounts, however designated, for failure to comply with any of the
foregoing Laws.
6.15.2 No director, officer or employee of the Acquiror Company is a
party to, or is otherwise bound by, any contract (including any confidentiality,
noncompetition or proprietary rights agreement) with any other Person that in
any way adversely affects or will materially affect (a) the performance of his
or her duties as a director, officer or employee of the Acquiror Company or (b)
the ability of the Acquiror Company to conduct its business. Except as set forth
in the SEC Documents, each employee of the Acquiror Company is employed on an
at-will basis and the Acquiror Company has no contract with any of its employees
which would interfere with the Acquiror Company's ability to discharge its
employees.
6.16 TAX RETURNS AND AUDITS.
6.16.1 TAX RETURNS. The Acquiror Company has filed all material Tax
Returns required to be filed by or on behalf of the Acquiror Company and have
paid all material Taxes of the Acquiror Company required to have been paid
(whether or not reflected on any Tax Return). Except as set forth in the SEC
Documents, (a) no Governmental Authority in any jurisdiction has made a claim,
assertion or threat to the Acquiror Company that the Acquiror Company is or may
be subject to taxation by such jurisdiction; (b) there are no Liens with respect
to Taxes on the Acquiror Company's property or assets other than Permitted
Liens; and (c) there are no Tax rulings, requests for rulings, or closing
agreements relating to the Acquiror Company for any period (or portion of a
period) that would affect any period after the date hereof.
6.16.2 NO ADJUSTMENTS, CHANGES. The Acquiror Company nor any other
Person on behalf of the Acquiror Company (a) has executed or entered into a
closing agreement pursuant to Section 7121 of the Code or any predecessor
provision thereof or any similar provision of state, local or foreign law; or
(b) has agreed to or is required to make any adjustments pursuant to Section
481(a) of the Code or any similar provision of state, local or foreign law.
6.16.3 NO DISPUTES. There is no pending audit, examination,
investigation, dispute, proceeding or claim with respect to any Taxes of the
Acquiror Company, nor is any such claim or dispute pending or contemplated. The
Acquiror Company has delivered to the Company true, correct and complete copies
of all Tax Returns, if any, examination reports and
19
statements of deficiencies assessed or asserted against or agreed to by the
Acquiror Company since their inception and any and all correspondence with
respect to the foregoing.
6.16.4 NOT A U.S. REAL PROPERTY HOLDING CORPORATION. The Acquiror
Company is not and has not been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code at any time
during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
6.16.5 NO TAX ALLOCATION, SHARING. The Acquiror Company is not a party
to any Tax allocation or sharing agreement. Other than with respect to the Tax
Group of which the Acquiror Company is the common parent, the Acquiror Company
(a) has been a member of a Tax Group filing a consolidated income Tax Return
under Section 1501 of the Code (or any similar provision of state, local or
foreign law), and (b) has any liability for Taxes for any Person under Treasury
Regulations Section 1.1502-6 (or any similar provision of state, local or
foreign law) as a transferee or successor, by contract or otherwise.
6.16.6 NO OTHER ARRANGEMENTS. The Acquiror Company is not a party to
any agreement, contract or arrangement for services that would result,
individually or in the aggregate, in the payment of any amount that would not be
deductible by reason of Section 162(m), 280G or 404 of the Code. The Acquiror
Company is not a "consenting corporation" within the meaning of Section 341(f)
of the Code. The Acquiror Company does not have any "tax-exempt bond financed
property" or "tax-exempt use property" within the meaning of Section 168(g) or
(h), respectively of the Code. The Acquiror Company does not have any
outstanding closing agreement, ruling request, request for consent to change a
method of accounting, subpoena or request for information to or from a
Governmental Authority in connection with any Tax matter. During the last two
years, the Acquiror Company has not engaged in any exchange with a related party
(within the meaning of Section 1031(f) of the Code) under which gain realized
was not recognized by reason of Section 1031 of the Code. The Company is not a
party to any reportable transaction within the meaning of Treasury Regulation
Section 1.6011-4.
6.17 MATERIAL ASSETS. The financial statements of the Acquiror Company set
forth in the SEC Documents reflect the material properties and assets (real and
personal) owned or leased by the Acquiror Company.
6.18 INSURANCE COVERAGE. The Acquiror Company has made available to the
Company, prior to the date of this Agreement, true, correct and complete copies
of any insurance policies maintained by the Acquiror Company on its properties
and assets. Except as would not have a Material Adverse Effect, all of such
policies (a) taken together, provide adequate insurance coverage for the
properties, assets and operations of each Acquiror Company for all risks
normally insured against by a Person carrying on the same business as such
Acquiror Company, and (b) are sufficient for compliance with all applicable Laws
and Material Acquiror Company Contracts. Except as would not have a Material
Adverse Effect, all of such policies are valid, outstanding and in full force
and effect and, by their express terms, will continue in full force and effect
following the consummation of the transactions contemplated by this Agreement.
Except as set forth in the SEC Documents, the Acquiror Company has not received
(a) any refusal of coverage or any notice that a defense will be afforded with
20
reservation of rights, or (b) any notice of cancellation or any other indication
that any insurance policy is no longer in full force or effect or will not be
renewed or that the issuer of any policy is not willing or able to perform its
obligations thereunder. All premiums due on such insurance policies on or prior
to the date hereof have been paid. There are no pending claims with respect to
the Acquiror Company or its properties or assets under any such insurance
policies, and there are no claims as to which the insurers have notified the
Acquiror Company that they intend to deny liability. There is no existing
default under any such insurance policies.
6.19 LITIGATION; ORDERS. Except as set forth in the SEC Documents, there is
no Proceeding (whether federal, state, local or foreign) pending or, to the
knowledge of the Acquiror Company, threatened against or affecting the Acquiror
Company or the Acquiror Company's properties, assets, business or employees. To
the knowledge of the Acquiror Company, there is no fact that might result in or
form the basis for any such Proceeding. The Acquiror Company is not subject to
any Orders.
6.20 LICENSES. Except as would not have a Material Adverse Effect, the
Acquiror Company possesses from the appropriate Governmental Authority all
licenses, permits, authorizations, approvals, franchises and rights that are
necessary for the Acquiror Company to engage in its business as currently
conducted and to permit the Acquiror Company to own and use its properties and
assets in the manner in which it currently owns and uses such properties and
assets (collectively, "Acquiror Company Permits"). The Acquiror Company has not
received notice from any Governmental Authority or other Person that there is
lacking any license, permit, authorization, approval, franchise or right
necessary for the Acquiror Company to engage in its business as currently
conducted and to permit the Acquiror Company to own and use its properties and
assets in the manner in which it currently owns and uses such properties and
assets. Except as would not have a Material Adverse Effect, the Acquiror Company
Permits are valid and in full force and effect. Except as would not have a
Material Adverse Effect, no event has occurred or circumstance exists that may
(with or without notice or lapse of time): (a) constitute or result, directly or
indirectly, in a violation of or a failure to comply with any Acquiror Company
Permit; or (b) result, directly or indirectly, in the revocation, withdrawal,
suspension, cancellation or termination of, or any modification to, any Acquiror
Company Permit. The Acquiror Company has not received notice from any
Governmental Authority or any other Person regarding: (a) any actual, alleged,
possible or potential contravention of any Acquiror Company Permit; or (b) any
actual, proposed, possible or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to, any Acquiror Company Permit.
All applications required to have been filed for the renewal of such Company
Permits have been duly filed on a timely basis with the appropriate Persons, and
all other filings required to have been made with respect to such Acquiror
Company Permits have been duly made on a timely basis with the appropriate
Persons. All Acquiror Company Permits are renewable by their terms or in the
ordinary course of business without the need to comply with any special
qualification procedures or to pay any amounts other than routine fees or
similar charges, all of which have, to the extent due, been duly paid.
6.21 INTERESTED PARTY TRANSACTIONS. No officer, director or stockholder of
the Acquiror Company or any Affiliate or "associate" (as such term is defined in
Rule 405 of the Commission under the Securities Act) of any such Person, has or
has had, either directly or indirectly, (1) an interest in any Person which (a)
furnishes or sells services or products which are furnished or sold or are
21
proposed to be furnished or sold by the Acquiror Company, or (b) purchases from
or sells or furnishes to, or proposes to purchase from, sell to or furnish any
Acquiror Company any goods or services; or (2) a beneficial interest in any
contract or agreement to which the Acquiror Company is a party or by which it
may be bound or affected.
6.22 GOVERNMENTAL INQUIRIES. The Acquiror Company has provided to the
Company a copy of each material written inspection report, questionnaire,
inquiry, demand or request for information received by the Acquiror Company from
any Governmental Authority, and the Acquiror Company's response thereto, and
each material written statement, report or other document filed by the Acquiror
Company with any Governmental Authority.
6.23 BANK ACCOUNTS AND SAFE DEPOSIT BOXES. The Acquiror Company does not
use a deposit or financial account, a lock box, or a safety deposit box, in its
business as presently conducted.
6.24 INTELLECTUAL PROPERTY. The Acquiror Company does not own, use or
license any Intellectual Property in its business as presently conducted, except
as set forth in the SEC Documents.
6.25 TITLE TO AND CONDITION OF PROPERTIES. Except as would not have a
Material Adverse Effect, the Acquiror Company owns (with good and marketable
title in the case of real property) or holds under valid leases or other rights
to use all real property, plants, machinery, equipment and other personal
property necessary for the conduct of its business as presently conducted, free
and clear of all Liens, except Permitted Liens. The material buildings, plants,
machinery and equipment necessary for the conduct of the business of the
Acquiror Company as presently conducted are structurally sound, are in good
operating condition and repair and are adequate for the uses to which they are
being put, and none of such buildings, plants, machinery or equipment is in need
of maintenance or repairs, except for ordinary, routine maintenance and repairs
that are not material in nature or cost.
6.26 SEC DOCUMENTS; FINANCIAL STATEMENTS. The Acquiror Company has filed
all reports required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the three (3) years preceding
the date hereof (or such shorter period as the Acquiror Company was required by
law to file such material) (the foregoing materials being collectively referred
to herein as the "SEC Documents") and, while not having filed all such SEC
Documents prior to the expiration of any extension(s), is nevertheless current
with respect to its Exchange Act filing requirements. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Documents, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statement
therein, in light of the circumstances under which they were made, not
misleading. All material agreements to which the Acquiror Company is a party or
to which the property or assets of the Acquiror Company are subject have been
appropriately filed as exhibits to the SEC Documents as and to the extent
required under the Exchange Act. The financial statements of the Acquiror
Company included in the SEC Documents comply in all material respects with
applicable accounting requirement and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing, were
22
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto, or, in the
case of unaudited statements as permitted by Form 10-Q of the Commission), and
fairly present in all material respects (subject in the case of unaudited
statements, to normal, recurring audit adjustments) the financial position of
the Acquiror Company as at the dates thereof and the results of its operations
and cash flows for the periods then ended. The Acquiror Company's Common Stock
is listed on the OTC Bulletin Board, and the Acquiror Company is not aware of
any facts which would make the Acquiror Company's Common Stock ineligible for
quotation on the OTC Bulletin Board.
6.27 STOCK OPTION PLANS; EMPLOYEE BENEFITS.
6.27.1 The Acquiror Company has no stock option plans providing for
the grant by the Acquiror Company of stock options to directors, officers or
employees.
6.27.2 The Acquiror Company has no employee benefit plans or
arrangements covering their present and former employees or providing benefits
to such persons in respect of services provided the Acquiror Company.
6.27.3 Neither the consummation of the transactions contemplated
hereby alone, nor in combination with another event, with respect to each
director, officer, employee and consultant of the Acquiror Company, will result
in (a) any payment (including, without limitation, severance, unemployment
compensation or bonus payments) becoming due from the Acquiror Company, (b) any
increase in the amount of compensation or benefits payable to any such
individual or (c) any acceleration of the vesting or timing of payment of
compensation payable to any such individual. No agreement, arrangement or other
contract of the Acquiror Company provides benefits or payments contingent upon,
triggered by, or increased as a result of a change in the ownership or effective
control of the Acquiror Company.
6.28 ENVIRONMENTAL AND SAFETY MATTERS. Except as set forth in the SEC
Documents and except as would not have a Material Adverse Effect:
6.28.1 The Acquiror Company has at all time been and is in compliance
with all Environmental Laws applicable to the Acquiror Company.
6.28.2 There are no Proceedings pending or threatened against the
Acquiror Company alleging the violation of any Environmental Law or
Environmental Permit applicable to the Acquiror Company or alleging that the
Acquiror Company is a potentially responsible party for any environmental site
contamination.
6.28.3 Neither this Agreement nor the consummation of the transactions
contemplated by this Agreement shall impose any obligations to notify or obtain
the consent of any Governmental Authority or third Persons under any
Environmental Laws applicable to the Acquiror Company.
6.29 MONEY LAUNDERING LAWS. The operations of the Acquiror Company is and
has been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
23
all U.S. and non-U.S. jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or
enforced by any Governmental Authority (collectively, the "Money Laundering
Laws") and no Proceeding involving the Acquiror Company with respect to the
Money Laundering Laws is pending or, to the knowledge of the Acquiror Company,
threatened.
6.30 BOARD RECOMMENDATION. The Acquiror Company Board, at a meeting duly
called and held, has determined that this Agreement and the transactions
contemplated by this Agreement are advisable and in the best interests of the
Acquiror Company's stockholders and has duly authorized this Agreement and the
transactions contemplated by this Agreement.
SECTION VII
COVENANTS OF THE ACQUIROR COMPANY
7.1 RULE 144 REPORTING. Subject to the Acquiror Company Shareholders not
being in material breach of the warranties and representations in Section 6,
with a view to making available to the Acquiror Company's stockholders the
benefit of certain rules and regulations of the Commission which may permit the
sale of the Acquiror Company Common Stock to the public without registration,
from and after the Closing Date, the Acquiror Company agrees to:
7.1.1 Make and keep public information available, as those terms are
understood and defined in Rule 144; and
7.1.2 File with the Commission, in a timely manner, all reports and
other documents required of the Acquiror Company under the Exchange Act.
7.2 SEC DOCUMENTS. From and after the Closing Date, in the event the
Commission notifies the Acquiror Company of its intent to review any SEC
Document filed prior to the Closing Date or the Acquiror Company receives any
oral or written comments from the Commission with respect to any SEC Document
filed prior to the Closing Date, the Acquiror Company shall promptly notify the
Acquiror Company Shareholders and the Acquiror Company Shareholders shall fully
cooperate with the Acquiror Company.
SECTION VIII
CONDITIONS PRECEDENT OF THE ACQUIROR COMPANY
The Acquiror Company's obligation to acquire the Shares and to take the
other actions required to be taken by the Acquiror Company at the Closing Date
is subject to the satisfaction, at or prior to the Closing Date, of each of the
following conditions (any of which may be waived by the Acquiror Company, in
whole or in part):
8.1 ACCURACY OF REPRESENTATIONS. The representations and warranties of the
Company and the Shareholders set forth in this Agreement or in any Schedule or
certificate delivered pursuant hereto that are not qualified as to materiality
shall be true and correct in all material respects as of the date of this
Agreement except to the extent a representation or warranty is expressly limited
by its terms to another date and without giving effect to any supplemental
24
Schedule. The representations and warranties of the Company and the Shareholders
set forth in this Agreement or in any Schedule or certificate delivered pursuant
hereto that are qualified as to materiality shall be true and correct in all
respects as of the date of this Agreement, except to the extent a representation
or warranty is expressly limited by its terms to another date and without giving
effect to any supplemental Schedule.
8.2 PERFORMANCE BY THE COMPANY AND SHAREHOLDERS.
8.2.1 All of the covenants and obligations that the Company and
Shareholders are required to perform or to comply with pursuant to this
Agreement (considered collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and complied with in
all material respects.
8.2.2 Each document required to be delivered by the Company and the
Shareholders pursuant to this Agreement must have been delivered.
8.3 NO FORCE MAJEURE EVENT. There shall not have been any delay, error,
failure or interruption in the conduct of the business of any Acquired Company,
or any loss, injury, delay, damage, distress, or other casualty, due to force
majeure including but not limited to (a) acts of God; (b) fire or explosion; (c)
war, acts of terrorism or other civil unrest; or (d) national emergency.
8.4 CERTIFICATE OF OFFICER. The Company will have delivered to the Acquiror
Company a certificate executed by an officer of the Company, certifying the
satisfaction of the conditions specified in Sections 8.1, 8.2, and 8.3.
8.5 CERTIFICATE OF SHAREHOLDERS. Each Shareholder will have delivered to
the Acquiror Company a certificate executed by such Shareholder, if a natural
person, or an authorized officer of the Shareholder, if an entity, certifying
the satisfaction of the conditions specified in Sections 8.1 and 8.2.
8.6 CONSENTS.
8.6.1 All material consents, waivers, approvals, authorizations or
orders required to be obtained, and all filings required to be made, by the
Company and/or the Shareholders for the authorization, execution and delivery of
this Agreement and the consummation by them of the transactions contemplated by
this Agreement, shall have been obtained and made by the Company or the
Shareholders, as the case may be, except where the failure to receive such
consents, waivers, approvals, authorizations or orders or to make such filings
would not have a Material Adverse Effect on the Company or the Acquiror Company.
8.6.2 Without limiting the foregoing, the Schedule 14(f) Filing shall
have been mailed to the stockholders of the Acquiror Company not less than ten
(10) days prior to the Closing Date. No Proceeding occasioned by the Section
14(f) Filing shall have been initiated or threatened by the Commission (which
Proceeding remains unresolved as of the Closing Date).
8.7 DOCUMENTS. The Company and the Shareholders must deliver to the
Acquiror Company at the Closing (i) share certificates evidencing the number of
Shares held by each Shareholder (as set forth in Exhibit A), along with executed
25
share transfer forms transferring such Shares to the Acquiror Company together
with a certified copy of a board resolution of the Company approving the
registration of the transfer of such shares to Acquiror Company (subject to
Closing and payment of stamp duty), (ii) each of the Transaction Documents to
which the Company and/or the Shareholders is a party, duly executed, (iii) and
such other documents as the Acquiror Company may reasonably request for the
purpose of (A) evidencing the accuracy of any of the representations and
warranties of the Company and the Shareholders pursuant to Section 8.1, (B)
evidencing the performance of, or compliance by the Company and the Shareholders
with, any covenant or obligation required to be performed or complied with by
the Company or the Shareholders, as the case may be, (C) evidencing the
satisfaction of any condition referred to in this Section, or (D) otherwise
facilitating the consummation or performance of any of the transactions
contemplated by this Agreement.
8.8 NO PROCEEDINGS. There must not have been commenced or threatened
against the Acquiror Company, the Company or any Shareholder, or against any
Affiliate thereof, any Proceeding (which Proceeding remains unresolved as of the
Closing Date) (a) involving any challenge to, or seeking damages or other relief
in connection with, any of the transactions contemplated by this Agreement, or
(b) that may have the effect of preventing, delaying, making illegal, or
otherwise interfering with any of the transactions contemplated by this
Agreement.
8.9 NO CLAIM REGARDING STOCK OWNERSHIP OR CONSIDERATION. There must not
have been made or threatened by any Person any claim asserting that such Person
(a) is the holder of, or has the right to acquire or to obtain beneficial
ownership of the Shares or any other stock, voting, equity, or ownership
interest in, the Company, or (b) is entitled to all or any portion of the
Acquiror Company Shares.
SECTION IX
CONDITIONS PRECEDENT OF THE COMPANY
AND THE SHAREHOLDERS
The Shareholders' obligation to transfer the Shares and the obligations of
the Company to take the other actions required to be taken by the Company in
advance of or at the Closing Date are subject to the satisfaction, at or prior
to the Closing Date, of each of the following conditions (any of which may be
waived by the Company and the Shareholders jointly, in whole or in part):
9.1 PROVISION OF FUNDING.
9.1.1 BRIDGE FINANCING. The Company or PT MubaStar International will
arrange for up to $350,000,000 bridge or construction financing prior to the
Closing Date, being 70% of the estimated construction cost.
9.1.2 PRIVATE PLACEMENT FINANCING. The Company shall arrange a private
placement financing sufficient to complete the Venture, or up to US$150,000,000
in addition to the financing referred to in 9.1.1 above. The private placement
shall close on the Closing Date and may be subject to the completion of this
Agreement.
9.2 ACCURACY OF REPRESENTATIONS. The representations and warranties of the
Acquiror Company and Acquiror Company Shareholders set forth in this Agreement
or in any Schedule or certificate delivered pursuant hereto that are not
26
qualified as to materiality shall be true and correct in all material respects
as of the date of this Agreement except to the extent a representation or
warranty is expressly limited by its terms to another date and without giving
effect to any supplemental Schedule. The representations and warranties of the
Acquiror Company and Acquiror Company Shareholders set forth in this Agreement
or in any Schedule or certificate delivered pursuant hereto that are qualified
as to materiality shall be true and correct in all respects as of the date of
this Agreement, except to the extent a representation or warranty is expressly
limited by its terms to another date and without giving effect to any
supplemental Schedule.
9.3 PERFORMANCE BY THE ACQUIROR COMPANY.
9.3.1 All of the covenants and obligations that the Acquiror Company
and Acquiror Company Shareholders are required to perform or to comply with
pursuant to this Agreement (considered collectively), and each of these
covenants and obligations (considered individually), must have been performed
and complied with in all respects.
9.3.2 Each document required to be delivered by the Acquiror Company
and Acquiror Company Shareholders pursuant to this Agreement must have been
delivered.
9.4 NO FORCE MAJEURE EVENT. There shall not have been any delay, error,
failure or interruption in the conduct of the business of the Acquiror Company,
or any loss, injury, delay, damage, distress, or other casualty, due to force
majeure including but not limited to (a) acts of God; (b) fire or explosion; (c)
war, acts of terrorism or other civil unrest; or (d) national emergency.
9.5 CERTIFICATE OF OFFICER. The Acquiror Company will have delivered to the
Company a certificate, dated the Closing Date, executed by an officer of the
Acquiror Company, certifying the satisfaction of the conditions specified in
Sections 9.2, 9.3, and 9.4.
9.6 CERTIFICATE OF ACQUIROR COMPANY SHAREHOLDERS. The Acquiror Company
Shareholders will have delivered to the Company a certificate, dated the Closing
Date, executed by such Acquiror Company Shareholder, if a natural person or an
authorized officer of the Acquiror Company Shareholder, if an entity, certifying
the satisfaction of the conditions specified in Sections 9.2 and 9.3.
9.7 CONSENTS.
9.7.1 All material consents, waivers, approvals, authorizations or
orders required to be obtained, and all filings required to be made, by the
Acquiror Company for the authorization, execution and delivery of this Agreement
and the consummation by it of the transactions contemplated by this Agreement,
shall have been obtained and made by the Acquiror Company, except where the
failure to receive such consents, waivers, approvals, authorizations or orders
or to make such filings would not have a Material Adverse Effect on the Company
or the Acquiror Company.
9.7.2 Without limiting the foregoing, the Schedule 14(f) Filing shall
have been mailed to the stockholders of the Acquiror Company not less than ten
(10) days prior to the Closing Date. No Proceeding occasioned by the Section
14(f) Filing shall have been initiated or threatened by the Commission (which
Proceeding remains unresolved as of the Closing Date).
27
9.8 DOCUMENTS. The Acquiror Company must have caused the following
documents to be delivered to the Company and/or the Shareholders:
9.8.1 share certificates evidencing each Shareholder's pro rata share
of the Closing Acquiror Company Shares (as set forth in Exhibit B);
9.8.2 a Secretary's Certificate, dated the Closing Date certifying
attached copies of (A) the Organizational Documents of the Acquiror Company, (B)
the resolutions of the Acquiror Company Board approving this Agreement and the
transactions contemplated hereby; and (C) the incumbency of each authorized
officer of the Acquiror Company signing this Agreement and any other agreement
or instrument contemplated hereby to which the Acquiror Company is a party;
9.8.3 a Certificate of Good Standing of the Acquiror Company;
9.8.4 each of the Transaction Documents to which the Acquiror Company
is a party, duly executed; and
9.8.5 such other documents as the Company may reasonably request for
the purpose of (i) evidencing the accuracy of any representation or warranty of
the Acquiror Company pursuant to Section 9.1, (ii) evidencing the performance by
the Acquiror Company of, or the compliance by the Acquiror Company with, any
covenant or obligation required to be performed or complied with by the Acquiror
Company, (iii) evidencing the satisfaction of any condition referred to in this
Section 10, or (iv) otherwise facilitating the consummation of any of the
transactions contemplated by this Agreement.
9.9 NO PROCEEDINGS. Since the date of this Agreement, there must not have
been commenced or threatened against the Acquiror Company, the Company or any
Shareholder, or against any Affiliate thereof, any Proceeding (which Proceeding
remains unresolved as of the date of this Agreement) (a) involving any challenge
to, or seeking damages or other relief in connection with, any of the
transactions contemplated hereby, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of the transactions
contemplated hereby.
9.10 NO CLAIM REGARDING STOCK OWNERSHIP OR CONSIDERATION. There must not
have been made or threatened by any Person any claim asserting that such Person
is the holder of, or has the right to acquire or to obtain beneficial ownership
of the Acquiror Company Common Stock or any other stock, voting, equity, or
ownership interest in, the Acquiror Company.
SECTION X
INDEMNIFICATION; REMEDIES
10.1 SURVIVAL. All representations, warranties, covenants, and obligations
in this Agreement shall expire on the first (1st) anniversary of the date this
Agreement is executed (the "Survival Period"). The right to indemnification,
28
payment of Damages or other remedy based on such representations, warranties,
covenants, and obligations will not be affected by any investigation conducted
with respect to, or any knowledge acquired (or capable of being acquired) at any
time, whether before or after the execution and delivery of this Agreement, with
respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations.
10.2 INDEMNIFICATION BY THE ACQUIROR COMPANY SHAREHOLDERS. From and after
the execution of this Agreement until the expiration of the Survival Period,
each of ____________, ________ and ________ (together, the "Principal Acquiror
Company Shareholders") shall indemnify and hold harmless the Acquiror Company,
Company and the Shareholders (collectively, the "Company Indemnified Parties"),
from and against any Damages arising, directly or indirectly, from or in
connection with:
(a) any breach of any representation or warranty made by the Acquiror
Company or the Acquiror Company Shareholders in this Agreement or in any
certificate delivered by the Acquiror Company pursuant to this Agreement;
(b) any breach by the Acquiror Company or the Acquiror Company
Shareholders of any covenant or obligation of the Acquiror Company in this
Agreement required to be performed by the Acquiror Company or the Acquiror
Company Shareholders on or prior to the Closing Date; or
(c) any and all losses, claims, damages, or liabilities against the
Acquiror Company or the Acquiror Company Shareholders, occurring on or
prior to the Closing Date.
10.3 LIMITATIONS ON AMOUNT - THE ACQUIROR COMPANY. No Company Indemnified
Party shall be entitled to indemnification pursuant to Section 10.3, unless and
until the aggregate amount of Damages to all Company Indemnified Parties with
respect to such matters under Section 10.4 exceeds US $20,000, at which time,
the Company Indemnified Parties shall be entitled to indemnification for the
total amount of such Damages in excess of US $20,000.
10.4 DETERMINING DAMAGES. Materiality qualifications to the representations
and warranties of the Company and the Acquiror Company shall not be taken into
account in determining the amount of Damages occasioned by a breach of any such
representation and warranty for purposes of determining whether the baskets set
forth in Section 10.3 has been met.
SECTION XI
GENERAL PROVISIONS
11.1 EXPENSES. Except as otherwise expressly provided in this Agreement,
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated by this Agreement, including all fees and
29
expenses of agents, representatives, counsel, and accountants. In the event of
termination of this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from a breach of
this Agreement by another party.
11.2 PUBLIC ANNOUNCEMENTS. The Acquiror Company shall promptly, but no
later than three (3) days following the effective date of this Agreement, issue
a press release disclosing the transactions contemplated hereby. Prior to the
Closing Date, the Company and the Acquiror Company shall consult with each other
in issuing any other press releases or otherwise making public statements or
filings and other communications with the Commission or any regulatory agency or
stock market or trading facility with respect to the transactions contemplated
hereby and neither party shall issue any such press release or otherwise make
any such public statement, filings or other communications without the prior
written consent of the other, which consent shall not be unreasonably withheld
or delayed, except that no prior consent shall be required if such disclosure is
required by law, in which case the disclosing party shall provide the other
party with prior notice of such public statement, filing or other communication
and shall incorporate into such public statement, filing or other communication
the reasonable comments of the other party.
11.3 CONFIDENTIALITY.
11.3.1 Subsequent to the date of this Agreement, the Acquiror Company,
the Acquiror Company Shareholders the Shareholders and the Company will maintain
in confidence, and will cause their respective directors, officers, employees,
agents, and advisors to maintain in confidence, any written, oral, or other
information obtained in confidence from another party in connection with this
Agreement or the transactions contemplated by this Agreement, unless (a) such
information is already known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available through no fault
of such party, (b) the use of such information is necessary or appropriate in
making any required filing with the Commission, or obtaining any consent or
approval required for the consummation of the transactions contemplated by this
Agreement, or (c) the furnishing or use of such information is required by or
necessary or appropriate in connection with legal proceedings.
11.3.2 In the event that any party is required to disclose any
information of another party pursuant to clause (b) or (c) of Section 11.3.1,
the party requested or required to make the disclosure (the "disclosing party")
shall provide the party that provided such information (the "providing party")
with prompt notice of any such requirement so that the providing party may seek
a protective order or other appropriate remedy and/or waive compliance with the
provisions of this Section 11.3. If, in the absence of a protective order or
other remedy or the receipt of a waiver by the providing party, the disclosing
party is nonetheless, in the opinion of counsel, legally compelled to disclose
the information of the providing party, the disclosing party may, without
liability hereunder, disclose only that portion of the providing party's
information which such counsel advises is legally required to be disclosed,
provided that the disclosing party exercises its reasonable efforts to preserve
the confidentiality of the providing party's information, including, without
limitation, by cooperating with the providing party to obtain an appropriate
protective order or other relief assurance that confidential treatment will be
accorded the providing party's information.
30
11.3.3 If the transactions contemplated by this Agreement are not
consummated, each party will return or destroy as much of such written
information as the other party may reasonably request.
11.4 NOTICES. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), or (c) when received
by the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by written notice to the other parties):
If to WorldStar Energy Corp.: with a copy to
c/o WorldStar Energy Corp.
Attention: _____________, President Attention:
Telephone No.: Telephone No.:
Facsimile No.: Facsimile No.:
with an additional copy:
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
If to ________________:
with a copy to
31
11.5 ARBITRATION. Any dispute or controversy under this Agreement shall be
settled exclusively by arbitration in the City of Las Vegas, Nevada in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court having
jurisdiction.
11.6 FURTHER ASSURANCES. The parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
11.7 WAIVER. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
11.8 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all prior
agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party against whom the enforcement of such
amendment is sought.
11.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. No party may
assign any of its rights under this Agreement without the prior consent of the
other parties. Subject to the preceding sentence, this Agreement will apply to,
be binding in all respects upon, and inure to the benefit of and be enforceable
by the respective successors and permitted assigns of the parties. Except as set
forth in Section 7.1 and Section 10.3, nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns.
11.10 SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
32
11.11 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
11.12 GOVERNING LAW. This Agreement will be governed by the laws of the
State of Nevada without regard to conflicts of laws principles.
11.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
33
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed and delivered this Share
Exchange Agreement as of the date first written above.
ACQUIROR COMPANY: THE COMPANY:
AUTEO MEDIA, INC. WORLDSTAR ENERGY CORP.
Signed: Signed:
__________________________ ______________________
Printed name: Xxxxxxx X. Xxxxxx Printed name: Xxx Xxxxxxx
Title: __________________________ Title:
SHAREHOLDER: ACQUIROR COMPANY SHAREHOLDER:
_________________________________ Signed:
Signed:__________________________ Printed name:
Printed name:
ACQUIROR COMPANY SHAREHOLDER:
SHAREHOLDER:
Signed:
Printed name:
Signed:
Printed name:
Title:
34
COUNTERPART SIGNATURE PAGE
(FOR ISSUANCES PURSUANT TO REGULATION S)
IN WITNESS WHEREOF, the parties have executed and delivered this Share
Exchange Agreement as of the date first written above.
ENTITY NAME:
By:
_____________________________
Name:
Title:
OFFSHORE DELIVERY INSTRUCTIONS:
PRINT EXACT NAME IN WHICH YOU WANT
THE SECURITIES TO BE REGISTERED
Attn:
____________________________________________
Address:
____________________________________________
Phone No.
____________________________________________
Facsimile No.
____________________________________________
35
COUNTERPART SIGNATURE PAGE
(FOR ISSUANCES PURSUANT TO SECTION 4(2))
IN WITNESS WHEREOF, the parties have executed and delivered this Share
Exchange Agreement as of the date first written above.
ENTITY NAME:
By:
______________________________
Name:
Title:
Circle the category under which you are an "accredited investor" pursuant to
Exhibit C:
1 2 3 4 5 6 7 8
PRINT EXACT NAME IN WHICH YOU WANT
THE SECURITIES TO BE REGISTERED
Attn:
____________________________________________
Address:
____________________________________________
____________________________________________
____________________________________________
Phone No. ____________________________________________
Facsimile No. ____________________________________________
36
SCHEDULES
Schedule 5.1 Company Jurisdiction
Schedule 5.2 Company Subsidiaries
Schedule 5.7.1 Capitalization of the Company
Schedule 5.7.2 Company Redemption Requirements
37
EXHIBIT A
ACQUIROR COMPANY SHAREHOLDERS
________________________________________________________________________________
NAME AND ADDRESS OF ACQUIROR NUMBER OF SHARES HELD
COMPANY SHAREHOLDER BY ACQUIROR COMPANY
SHAREHOLDER
________________________________________________________________________________
Xxxxxxx X. Xxxxxx
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
38
EXHIBIT B
SHARES AND ACQUIROR COMPANY SHARES TO BE EXCHANGED
________________________________________________________________________________
NAME AND ADDRESS OF NUMBER OF SHARES TO BE NUMBER OF ACQUIROR
SHAREHOLDER DELIVERED BY SHAREHOLDER COMPANY SHARES TO BE ISSUED
TO SHAREHOLDER
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
39
EXHIBIT C
DEFINITION OF "ACCREDITED INVESTOR"
The term "accredited investor" means:
(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or
fiduciary capacity; a broker or dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934; an insurance company as
defined in Section 2(13) of the Securities Act; an investment company
registered under the Investment Company Act of 1940 (the "Investment
Company Act") or a business development company as defined in Section
2(a)(48) of the Investment Company Act; a Small Business Investment
Company licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958; a
plan established and maintained by a state, its political subdivisions
or any agency or instrumentality of a state or its political
subdivisions for the benefit of its employees, if such plan has total
assets in excess of US $5,000,000; an employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974
("ERISA"), if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of ERISA, which is either a bank, savings and
loan association, insurance company, or registered investment advisor,
or if the employee benefit plan has total assets in excess of US
$5,000,000 or, if a self-directed plan, with investment decisions made
solely by persons that are accredited investors.
(2) A private business development company as defined in Section 202(a)
(22) of the Investment Advisers Act of 1940.
(3) An organization described in Section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of US $5,000,000.
(4) A director or executive officer of the Acquiror Company.
(5) A natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of his or her purchase exceeds US
$1,000,000.
(6) A natural person who had an individual income in excess of US $200,000
in each of the two most recent years or joint income with that person's
spouse in excess of US $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current
year.
(7) A trust, with total assets in excess of US $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) (i.e., a person who has such knowledge and experience in
financial and business matters that he is capable of evaluating the
merits and risks of the prospective investment).
(8) An entity in which all of the equity owners are accredited investors.
(If this alternative is checked, the Shareholder must identify each
equity owner and provide statements signed by each demonstrating how
each is qualified as an accredited investor.)
EXHIBIT D
DEFINITION OF "U.S. PERSON"
(1) "U.S. person" (as defined in Regulation S) means:
(i) Any natural person resident in the United States;
(ii) Any partnership or corporation organized or incorporated under the
laws of the United States;
(iii) Any estate of which any executor or administrator is a U.S. person;
(iv) Any trust of which any trustee is a U.S. person;
(v) Any agency or branch of a foreign entity located in the United States;
(vi) Any non-discretionary account or similar account (other than an estate
or trust) held by a dealer or other fiduciary for the benefit or
account of a U.S. person;
(vii)Any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated, or
(if an individual) resident in the United States; and
(viii) Any partnership or corporation if: (A) organized or incorporated
under the laws of any foreign jurisdiction; and (B) formed by a U.S.
person principally for the purpose of investing in securities not
registered under the Securities Act, unless it is organized or
incorporated, and owned, by accredited investors (as defined in Rule
501(a)) who are not natural persons, estates or trusts.
(2) Notwithstanding paragraph (1) above, any discretionary account or similar
account (other than an estate or trust) held for the benefit or account of
a non-U.S. person by a dealer or other professional fiduciary organized,
incorporated, or (if an individual) resident in the United States shall not
be deemed a "U.S. person."
(3) Notwithstanding paragraph (1), any estate of which any professional
fiduciary acting as executor or administrator is a U.S. person shall not be
deemed a U.S. person if:
(i) An executor or administrator of the estate who is not a U.S. person
has sole or shared investment discretion with respect to the assets of
the estate; and
(ii) The estate is governed by foreign law.
(4) Notwithstanding paragraph (1), any trust of which any professional
fiduciary acting as trustee is a U.S. person shall not be deemed a U.S.
person if a trustee who is not a U.S. person has sole or shared investment
discretion with respect to the trust assets, and no beneficiary of the
trust (and no settlor if the trust is revocable) is a U.S. person.
(5) Notwithstanding paragraph (1), an employee benefit plan established and
administered in accordance with the law of a country other than the United
States and customary practices and documentation of such country shall not
be deemed a U.S. person.
(6) Notwithstanding paragraph (1), any agency or branch of a U.S. person
located outside the United States shall not be deemed a "U.S. person" if:
(i) The agency or branch operates for valid business reasons; and
(ii) The agency or branch is engaged in the business of insurance or
banking and is subject to substantive insurance or banking regulation,
respectively, in the jurisdiction where located.
(7) The International Monetary Fund, the International Bank for Reconstruction
and Development, the Inter-American Development Bank, the Asian Development
Bank, the African Development Bank, the United Nations, and their agencies,
affiliates and pension plans, and any other similar international
organizations, their agencies, affiliates and pension plans shall not be
deemed "U.S. persons."
EXHIBIT E
ACCREDITED INVESTOR REPRESENTATIONS
Each Shareholder indicating that it is an Accredited Investor, severally and not
jointly, further represents and warrants to the Acquiror Company as follows:
1. Such Shareholder qualifies as an Accredited Investor on the basis set forth
on its signature page to this Agreement.
2. Such Shareholder has sufficient knowledge and experience in finance,
securities, investments and other business matters to be able to protect
such Shareholder's interests in connection with the transactions
contemplated by this Agreement.
3. Such Shareholder has consulted, to the extent that it has deemed necessary,
with its tax, legal, accounting and financial advisors concerning its
investment in the Acquiror Company Shares.
4. Such Shareholder understands the various risks of an investment in the
Acquiror Company Shares and can afford to bear such risks for an indefinite
period of time, including, without limitation, the risk of losing its
entire investment in the Acquiror Company Shares.
5. Such Shareholder has had access to the Acquiror Company's publicly filed
reports with the SEC.
6. Such Shareholder has been furnished during the course of the transactions
contemplated by this Agreement with all other public information regarding
the Acquiror Company that such Shareholder has requested and all such
public information is sufficient for such Shareholder to evaluate the risks
of investing in the Acquiror Company Shares.
7. Such Shareholder has been afforded the opportunity to ask questions of and
receive answers concerning the Acquiror Company and the terms and
conditions of the issuance of the Acquiror Company Shares.
8. Such Shareholder is not relying on any representations and warranties
concerning the Acquiror Company made by the Acquiror Company or any
officer, employee or agent of the Acquiror Company, other than those
contained in this Agreement.
9. Such Shareholder is acquiring the Acquiror Company Shares for such
Shareholder's own account, for investment and not for distribution or
resale to others.
10. Such Shareholder will not sell or otherwise transfer the Acquiror Company
Shares, unless either (a) the transfer of such securities is registered
under the Securities Act or (b) an exemption from registration of such
securities is available.
11. Such Shareholder understands and acknowledges that the Acquiror Company is
under no obligation to register the Acquiror Company Shares for sale under
the Securities Act.
12. Such Shareholder consents to the placement of a legend on any certificate
or other document evidencing the Acquiror Company Shares substantially in
the form set forth in Section 4.2.5(a).
13. Such Shareholder represents that the address furnished by such Shareholder
on its signature page to this Agreement and in Exhibit A is such
Shareholder's principal residence if he is an individual or its principal
business address if it is a corporation or other entity.
14. Such Shareholder understands and acknowledges that the Acquiror Company
Shares have not been recommended by any federal or state securities
commission or regulatory authority, that the foregoing authorities have not
confirmed the accuracy or determined the adequacy of any information
concerning the Acquiror Company that has been supplied to such Shareholder
and that any representation to the contrary is a criminal offense.
15. Such Shareholder acknowledges that the representations, warranties and
agreements made by such Shareholder herein shall survive the execution and
delivery of this Agreement and the purchase of the Acquiror Company Shares.
EXHIBIT F
NON U.S. PERSON REPRESENTATIONS
Each Shareholder indicating that it is not a U.S. person, severally and not
jointly, further represents and warrants to the Acquiror Company as follows:
1. At the time of (a) the offer by the Acquiror Company and (b) the acceptance
of the offer by such Shareholder, of the Acquiror Company Shares, such
Shareholder was outside the United States.
2. No offer to acquire the Acquiror Company Shares or otherwise to participate
in the transactions contemplated by this Agreement was made to such
Shareholder or its representatives inside the United States.
3. Such Shareholder is not purchasing the Acquiror Company Shares for the
account or benefit of any U.S. person, or with a view towards distribution
to any U.S. person, in violation of the registration requirements of the
Securities Act.
4. Such Shareholder will make all subsequent offers and sales of the Acquiror
Company Shares either (x) outside of the United States in compliance with
Regulation S; (y) pursuant to a registration under the Securities Act; or
(z) pursuant to an available exemption from registration under the
Securities Act. Specifically, such Shareholder will not resell the Acquiror
Company Shares to any U.S. person or within the United States prior to the
expiration of a period commencing on the Closing Date and ending on the
date that is one year thereafter (the "Distribution Compliance Period"),
except pursuant to registration under the Securities Act or an exemption
from registration under the Securities Act.
5. Such Shareholder is acquiring the Acquiror Company Shares for such
Shareholder's own account, for investment and not for distribution or
resale to others.
6. Such Shareholder has no present plan or intention to sell the Acquiror
Company Shares in the United States or to a U.S. person at any
predetermined time, has made no predetermined arrangements to sell the
Acquiror Company Shares and is not acting as a Distributor of such
securities.
7. Neither such Shareholder, its Affiliates nor any Person acting on such
Shareholder's behalf, has entered into, has the intention of entering into,
or will enter into any put option, short position or other similar
instrument or position in the U.S. with respect to the Acquiror Company
Shares at any time after the Closing Date through the Distribution
Compliance Period except in compliance with the Securities Act.
8. Such Shareholder consents to the placement of a legend on any certificate
or other document evidencing the Acquiror Company Shares substantially in
the form set forth in Section 4.2.5(b).
9. Such Shareholder is not acquiring the Acquiror Company Shares in a
transaction (or an element of a series of transactions) that is part of any
plan or scheme to evade the registration provisions of the Securities Act.
10. Such Shareholder has sufficient knowledge and experience in finance,
securities, investments and other business matters to be able to protect
such Shareholder's interests in connection with the transactions
contemplated by this Agreement.
11. Such Shareholder has consulted, to the extent that it has deemed necessary,
with its tax, legal, accounting and financial advisors concerning its
investment in the Acquiror Company Shares.
12. Such Shareholder understands the various risks of an investment in the
Acquiror Company Shares and can afford to bear such risks for an indefinite
period of time, including, without limitation, the risk of losing its
entire investment in the Acquiror Company Shares.
13. Such Shareholder has had access to the Acquiror Company's publicly filed
reports with the SEC. 14. Such Shareholder has been furnished during the
course of the transactions contemplated by this Agreement with all other
public information regarding the Acquiror Company that such Shareholder has
requested and all such public information is sufficient for such
Shareholder to evaluate the risks of investing in the Acquiror Company
Shares.
15. Such Shareholder has been afforded the opportunity to ask questions of and
receive answers concerning the Acquiror Company and the terms and
conditions of the issuance of the Acquiror Company Shares.
16. Such Shareholder is not relying on any representations and warranties
concerning the Acquiror Company made by the Acquiror Company or any
officer, employee or agent of the Acquiror Company, other than those
contained in this Agreement.
17. Such Shareholder will not sell or otherwise transfer the Acquiror Company
Shares, unless either (A) the transfer of such securities is registered
under the Securities Act or (B) an exemption from registration of such
securities is available.
18. Such Shareholder understands and acknowledges that the Acquiror Company is
under no obligation to register the Acquiror Company Shares for sale under
the Securities Act.
19. Such Shareholder represents that the address furnished by such Shareholder
on its signature page to this Agreement and in Exhibit A is such
Shareholder's principal residence if he is an individual or its principal
business address if it is a corporation or other entity.
20. Such Shareholder understands and acknowledges that the Acquiror Company
Shares have not been recommended by any federal or state securities
commission or regulatory authority, that the foregoing authorities have not
confirmed the accuracy or determined the adequacy of any information
concerning the Acquiror Company that has been supplied to such Shareholder
and that any representation to the contrary is a criminal offense.
21. Such Shareholder acknowledges that the representations, warranties and
agreements made by such Shareholder herein shall survive the execution and
delivery of this Agreement and the purchase of the Acquiror Company Shares.
