AGREEMENT FOR EXCHANGE OF STOCK
This Agreement for Exchange of Stock is entered into in Dallas County,
Texas this ___ day of September, 1996, between Star Resources, Inc., a Delaware
corporation, sometimes referred to in this Agreement as "Star" or "Purchaser,"
ICA Marketing Company, L.C., a limited liability company organized under the
laws of Iowa, sometimes referred to as "Seller" or "LC", and ICA B.V., a limited
liability company organized under the laws of the Netherlands, sometimes
referred to in this Agreement as "BV" or the "Acquired Entity."
The Purchaser will acquire from Seller all of the issued and
outstanding stock of BV (the "BV Shares") and all of the existing debt of BV to
LC (the "BV Debt") in exchange solely for shares of voting stock of the
Purchaser (the "Exchange"). Under this Agreement, the Acquired Entity will
become a subsidiary of the Purchaser.
Prior to closing the Exchange, Purchaser will amend its Certificate of
Incorporation and effect a reverse stock split so that the authorized
capitalization of Star consists of 10,000,000 authorized shares of common stock,
$.0001 par value per share, of which there will be 500,000 shares issued and
outstanding and 1,000,000 authorized shares of preferred stock, par value $.01
per share, of which none will be issued and outstanding (the "Amendment").
In order to consummate the Exchange, the Purchaser, Seller and Acquired
Entity, in consideration of the mutual covenants and on the basis of the
representations and warranties set forth, agree as follows:
ARTICLE 1
EXCHANGE OF CAPITAL STOCK
TRANSFER OF ACQUIRED ENTITY'S CAPITAL STOCK
1.01. Subject to the terms and conditions of this Agreement, Seller will
transfer and deliver to Star on the Closing Date an assignment of all of its
interests in the BV Stock and BV Debt and a stock power and any notes or other
evidences of indebtedness relating to BV Debt, properly endorsed in favor of
Star.
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CONSIDERATION FOR TRANSFER
1.02. In exchange for the BV Shares and BV Debt transferred by the Seller
pursuant to Paragraph 1.01, Star will issue and cause to be delivered to Seller
on the Closing Date 4,000,000 shares of post-Amendment Common Stock of
Star("Star Shares").
CLOSING DATE
1.03. Subject to the conditions precedent set forth in this Agreement and the
other obligations of the parties set forth in this Agreement, the Exchange shall
be consummated at 0000 XXX Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, on October
21, 1996, at the hour of 9:00 a.m. or at any other place and date as the parties
fix by mutual consent. Consummation shall include the delivery by Seller of an
assignment of its BV Shares and its BV Debt, as provided in Paragraph 1.01 of
this Agreement, and the delivery by the Purchaser of certificates representing
its shares of Common Stock, as provided in Paragraph 1.02 of this Agreement. The
date of the consummation of this Agreement is referred to as the "Closing Date."
The Star Shares shall be held in escrow by Jenkens & Xxxxxxxxx, P.C. pending
registration of the transfer of BV Shares with appropriate authorities in the
Netherlands. Upon receipt of evidence of such registration of the Star Shares,
the Star Shares shall be delivered to Seller; if such registration is not
completed by December 31, 1996, either Star or ICA shall have the right to
rescind the Exchange, and the Star Shares shall be returned to Star and all
rights to the BV Shares shall belong to ICA. Star and ICA shall take actions as
are necessary to complete expeditiously such registration or rescission.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF STAR
Purchaser warrants and represents to Seller, as follows, which representations
and warranties shall survive the closing, regardless of what investigation, if
any, Seller shall have made thereof:
ORGANIZATION AND STANDING OF STAR
2.01. Star is a corporation, duly incorporated, validly existing
and in good standing under the laws of the State of Delaware.
CAPITALIZATION
2.02 Except as contemplated herein and as set forth in Annex 2.2, Star has not
undertaken to issue shares of any kind to any other parties, nor has it granted
any option and/or warrant to any party to purchase any of its shares.
Furthermore, Star has not declared or otherwise undertaken to distribute any
dividends to its shareholders which have not already been fully paid.
FINANCIAL STATEMENTS
2.03. The audited financial statements of Star for the fiscal year ending April
30, 1996, and the unaudited financial statements of Star for the three months
ending July 31, 1996 (the "Star Financial Statements"), previously provided to
Seller, are true and complete and have been prepared in accordance with
generally accepted accounting principles of the United States on a consistent
basis. Since July 31, 1996, except for transactional fees incurred in connection
with this transaction and transactions associated with the transaction described
in Annex 2.2, there has not been (i) any change in Star's financial condition,
assets, liabilities, or business, other than changes in the ordinary course of
business, none of which has been materially adverse; (ii) any damage or material
loss to Star's properties or business; (iii) any declaration, or setting aside
and/or payment of any dividend or other distribution in respect of Star's
shares.
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LITIGATION
2.04. Except as described in Annex 2.4, there is no litigation or proceeding
pending or, to its best knowledge, threatened against or relating to Star, its
subsidiaries, its properties, or business. Star has not been informed of any
action, proceeding or governmental inquiry or investigation pending or
threatened against it or any of its officers, directors or shareholders before
any court, arbitrators, board, tribunal or administrative or other governmental
agency, nor is Star aware that there are any circumstances that may lead to a
claim, demand or legal proceedings. The foregoing includes, without limiting its
generality, actions pending or threatened involving the prior employment of any
of Star's employees.
PROPERTY
2.05. Star has legal rights and good and marketable title to all of its assets
both real and personal, tangible and intangible, that it purports to own,
including the assets as stated in the Star Financial Statements, free and clear
of all leases, liens, security interests and encumbrances of any kind.
GUARANTEE
2.06. Star has not guaranteed and/or secured in any manner the
obligations of its shareholders or any third party.
WINDING UP
2.07. To the best of its knowledge, no action has been taken against Star for
the winding up of the company and/or in connection with the receivership of any
assets, and it is not aware of any such actions threatened against it.
ISSUANCE OF SHARES
2.08. Neither the execution and delivery of this Agreement, nor the performance
hereof by Star, will conflict with or result in any default under or violation
of any provisions of its certificate of incorporation, or any mortgage, material
agreement or other material
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instrument to which it or by which its property is bound or affected, or any
applicable statute, regulation, ordinance, judgment, order or decree affecting
Star or by which any of its property is bound or affected.
CONSENTS AND APPROVALS
2.09. Except as set forth in Annex 2.9, no consents or approvals of any
government or government agency or any other public or third party are required
by Star to execute, deliver or perform this Agreement.
SHAREHOLDERS AGREEMENTS
2.10. There are no shareholders or voting agreements between
Star and any shareholders of Star.
COMPENSATION
2.11. There are no obligations to grant bonuses or special rewards, including,
but not limited to options and/or warrants for shares of Star, to any officers
and/or directors and/or shareholders of Star.
INTERESTED PARTY TRANSACTIONS
2.12. Star is not a party to any interested party transaction involving any
director and/or shareholder except as described in its report on Form 10-KSB for
the fiscal year ended April 30, 1996. At Closing, Star will not be indebted to
any shareholder thereof or any entity controlled by such shareholder or any
affiliate thereof. All advances or loans by Star to any shareholder, officer,
director, employee, affiliate or agent of Star will be repaid in full, with
accrued interest to the date of payment.
MATERIAL AGREEMENTS
2.13. Star has in all material respects performed all
obligations to be performed by it under all contracts, agreements
and commitments to which it is a party, and there is not under any
such contracts, agreements or commitments any existing default or
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event of default or event that with notice or lapse of time or both would
constitute a default. There are no current and pending agreements,
understandings, contracts, commitments, licenses, permits, and leases (of real
or personal property), written or otherwise, between Star and any party that are
material to the business of Star, including, without limitation, any such
agreement that (i) involves, in the aggregate, the payment or receipt by Star of
more than $1,000, which cannot be canceled without penalty upon thirty (30) days
notice by Star; (ii) involve any arrangements or agreements of Star with its
competitors, or (iii) is outside the ordinary course of business of Star.
TAX MATTERS
2.14.1. Star has accurately prepared and timely submitted all tax returns and
filings that are required to be filed, and such tax returns and filings are true
and complete in all material respects. Star is registered with all tax
authorities as required by law and has timely paid any and all amounts due by it
to any tax, value added tax and national insurance authority and, to the best of
its knowledge and belief, is not in default in any tax payment due under the
law. Star is not the current beneficiary of any extension of time within which
to file any tax return. No claim has ever been made by an authority in a
jurisdiction where Star does not file tax returns that Star may be subject to
taxation by that jurisdiction. There are no security interests on any of the
assets that arose in connection with any failure (or alleged failure) to pay any
tax.
2.14.2 Star has withheld and paid all taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.
2.14.3. None of Star's tax returns have been audited or currently
are subject of audit.
2.14.4. No shareholder, director or officer of Star (or employee responsible for
tax matters for Star) expects any authority to assess any additional taxes for
any period for which tax returns have been filed. There is no dispute or claim
concerning any tax liability of Star either (A) claimed or raised by any
authority in
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writing, or (B) as to which any shareholder, director, or officer (or employee
responsible for tax matters for Star) has knowledge based upon personal contact
with any agent of such authority.
2.14.5. Star has not waived any statute of limitations in respect
of taxes or agreed to any extension of time with respect to a tax
assessment or deficiency.
2.14.6. Neither Star or any of Star's subsidiaries are subject to
any tax allocation or sharing agreement.
2.14.7. There are no unpaid taxes of Star. Star has no
subsidiaries.
EMPLOYEE LIABILITIES
2.15. As of December 31, 1995, all liabilities due on account of the employees
of Star, including all social benefits, workers' compensation and national or
state insurance payments, as required by agreement, collective or otherwise,
and/or by law, are covered by payments to appropriate insurance policies or are
set aside as stated in the Star Financial Statements. Star has no employee
benefit plans.
PERMITS AND LICENSES
2.16. Star has complied in all material respects with all laws and regulations
applicable to it. Star has all the permits, licenses, orders, consents and
approvals of all governmental and regulatory bodies material to carrying on its
business. Star is not in default under any of such permits, licenses or any
other authority. To the best of its knowledge, no suspension or the cancellation
of any such permits, licenses, or other authority is threatened nor does Star
anticipate any difficulties in their renewal.
LABOR RELATIONS
2.17. Star has not been the subject of any union activity or
labor dispute, and there have not been any strikes of any kind
called or threatened to be called against Star. Star has not
violated any applicable federal or state law or regulation relating
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to labor practices. Save as disclosed in Star's Financial Statements, Star has
no liability to any of its employees, agents or consultants in connection with
grievances arising from the termination of such employees, agents or
consultants.
CORRUPT PRACTICES
2.18. Since the inception of Star, there have been no violations of the Foreign
Corrupt Practices Act or of any similar state or federal statutes relating to
bribery by Star or any of its agents.
ENFORCEABILITY
2.19. The execution, delivery and performance of this Agreement, by and on
behalf of Star will be duly authorized by the Board of Directors of Star, and
subject to Board approval this Agreement has been duly executed and delivered by
and on behalf of Star by its authorized officers. Subject to Board approval,
this Agreement and all documents executed by Star in connection herewith are
valid and binding obligations of Star and are enforceable against it in
accordance with their respective terms.
SEC
2.20. Star has filed all reports, filings, schedules, and forms ("SEC Filings")
to the SEC that are required to be filed by Star, and such SEC Filings are true
and complete in all material respects. No claim is being made that Star has not
completely and accurately made all SEC Filings as required nor has any inquiry,
investigation or proceeding of any kind been conducted by the SEC with respect
to Star.
2.21. Star is acquiring the BV Shares for its own account for investment and not
for the purpose of distribution of the BV Shares as the them "distribution" is
used in connection with Section 2(11) of the Securities Act of 1933, as amended
(the "Securities Act").
DISCLOSURE
2.22. No representation or warranty by Star in this Agreement,
nor any statement or certificate furnished or to be furnished by
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Star pursuant hereto, or in connection with the transaction contemplated herein
contains any untrue statement of a material fact, or omits, or will omit, to
state a material fact necessary to make the statements contained herein or
therein not misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LC AND BV
LC and BV warrant and represent to Star, as follows, which representations and
warranties shall survive the closing, regardless of what investigation, if any,
Star shall have made thereof:
ORGANIZATION AND STANDING OF LC AND BV
3.01.1. BV is a limited liability company, duly registered,
validly existing and in good standing under the laws of the
Netherlands.
3.01.2 LC is a limited liability company, validly existing and in
good standing under the laws of Iowa.
CAPITALIZATION
3.02. The authorized capitalization of BV consists of 1,500,000 guilders divided
into 15,000 shares of capital stock, 100 guilders par value per share, of which
there are 10,400 shares issued and outstanding, all of which are owned by Seller
(the "BV Shares").
BV has not undertaken to issue shares of any kind to any other parties, nor has
it granted any option and/or warrant to any party to purchase any of its shares.
Furthermore, BV has not declared or otherwise undertaken to distribute any
dividends to its shareholders that have not already been fully paid.
FINANCIAL STATEMENTS
3.03. The preliminary audited financial statements of BV for the period
beginning December 13, 1995 and ending June 24, 1996, previously provided to
Star (the "ICA Financial Statements"), are true and complete and have been
prepared in accordance with
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generally accepted accounting principles of the Netherlands on a consistent
basis. Except as set forth in Annex 3.3, since June 24, 1996, there has not been
(i) any change in BV's financial condition, assets, liabilities, or business,
other than changes in the ordinary course of business, none of which has been
materially adverse; (ii) any damage or material loss to ICA's properties or
business; (iii) any declaration, or setting aside and/or payment of any dividend
or other distribution in respect of BV's shares.
LITIGATION
3.04. There is no litigation or proceeding pending or, to the best of their
knowledge, threatened against or relating to LC, BV, their subsidiaries, their
properties, or business. Neither LC nor BV has been informed of any action,
proceeding or governmental inquiry or investigation pending or threatened
against either of them or any of their officers, directors or shareholders
before any court, arbitrators, board, tribunal or administrative or other
governmental agency, nor is BV or LC aware that there are any circumstances that
may lead to a claim, demand or legal proceedings. The foregoing includes,
without limiting its generality, actions pending or threatened involving the
prior employment of any of BV's employees.
PROPERTY
3.05.1. BV has legal rights and good and marketable title to all of its assets,
both real and personal, tangible and intangible, that it purports to own,
including the assets as stated in the ICA Financial Statements, free and clear
of all leases, liens, security interests and encumbrances of any kind, except
for those liens and pledges listed in Annex 3.5 attached hereto. All buildings,
structures and improvements owned or leased by BV and all equipment located
therein, conform in all material respects with all building, zoning and other
applicable laws and regulations. All buildings, machinery and equipment used by
BV are in good operating condition and reasonable state of repair, subject only
to ordinary wear and tear.
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3.05.2. LC has legal rights and good and marketable title to the BV Shares and
BV Debt free and clear of all leases, liens, security interests and encumbrances
of any kind.
GUARANTEE
3.06. BV has not guaranteed and/or secured in any manner the
obligations of its shareholders or any third party.
WINDING UP
3.07. To the best of its knowledge, no action has been taken against BV for the
winding up of the company and/or in connection with the receivership of any
assets, and it is not aware of any such actions threatened against it.
ISSUANCE OF SHARES
3.08. The Exchange in accordance with the terms of this Agreement will not
constitute a violation of any of BV's licenses, leases or contracts and all of
the foregoing will remain in full force and effect without acceleration as a
result of the transaction contemplated herein. Neither the execution and
delivery of this Agreement, nor the performance hereof by the Seller will
conflict with or result in any default under or violation of any provisions of
BV's or LC's corporate charter, or any mortgage, material agreement or other
material instrument to which LC or BV or by which BV's or LC's property is bound
or affected, or any applicable statute, regulation, ordinance, judgment, order
or decree affecting BV or LC or by which any of BV's or LC's property is bound
or affected.
CONSENTS AND APPROVALS
3.09. Except as set forth in Annex 3.9, no consents or approvals of any
government or government agency or any other public or third party are required
by BV or LC to execute, deliver or perform this Agreement.
SHAREHOLDERS AGREEMENTS
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3.10. There are no shareholders or voting agreements between BV
and any shareholders of BV or LC.
COMPENSATION
3.11. There are no obligations to grant bonuses or special rewards, including,
but not limited to options and/or warrants for shares of BV, to any officers
and/or directors and/or shareholders of BV or LC, except as set forth in Annex
3.11.
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INTERESTED PARTY TRANSACTIONS
3.12. BV is a party to the interested party transactions involving any director
and/or shareholder of LC or BV as described in Annex 3.12. Except as set forth
in Annex 3.12, BV is not indebted to Seller or any entity controlled by any
Seller or any affiliate thereof. Except for the BV Debt being assigned to Star,
all advances or loans by BV to any shareholder, officer, director, employee,
affiliate or agent of BV or Seller will be repaid in full, with accrued interest
to the date of payment.
MATERIAL AGREEMENTS
3.13. BV has in all material respects performed all obligations to be performed
by it under all contracts, agreements and commitments to which it is a party,
and there is not under any such contracts, agreements or commitments any
existing default or event of default or event that with notice or lapse of time
or both would constitute a default. Annex 3.13 contains a true and complete list
or brief description of all current and pending agreements, understandings,
contracts, commitments, licenses, permits, and leases (of real or personal
property), written or otherwise, between BV and any party that are material to
the business of BV. Annex 3.13 includes any agreement of the type referred to
above that (i) involves, in the aggregate, the payment or receipt by BV of more
than $1,000, which cannot be canceled without penalty upon thirty (30) days
notice by BV or which otherwise is material to BV, (ii) involves any
arrangements or agreements of BV with its competitors, and (iii) is outside the
ordinary course of business of BV. Such agreements are in full force and effect.
TAX MATTERS
3.14.1. BV has accurately prepared and timely submitted all tax returns and
filings that are required to be filed, and such tax returns and filings are true
and complete in all material respects. BV is registered with all tax authorities
as required by law and has timely paid any and all amounts due by it to any tax,
value added tax and national insurance authority and, to the best of its
knowledge and belief, is not in default in any tax payment due under the law. BV
is not the current beneficiary of any extension of time
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within which to file any tax return. No claim has ever been made by an authority
in a jurisdiction where BV does not file tax returns that BV may be subject to
taxation by that jurisdiction. There are no security interests on any of the
assets that arose in connection with any failure (or alleged failure) to pay any
tax.
3.14.2 BV has withheld and paid all taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.
3.14.3. Annex 3.14.3 lists all tax returns filed with respect to BV for taxable
periods ended on or after January 1, 1995, indicates those tax returns that have
been audited, and indicates those tax returns that currently are subject of
audit.
3.14.4. No shareholder, director or officer of BV (or employee responsible for
tax matters for BV) expects any authority to assess any additional taxes for any
period for which tax returns have been filed. There is no dispute or claim
concerning any tax liability of BV either (A) claimed or raised by any authority
in writing, or (B) as to which any shareholder, director, or officer (or
employee responsible for tax matters for BV) has knowledge based upon personal
contact with any agent of such authority.
3.14.5. BV has not waived any statute of limitation in respect of
taxes or agreed to any extension of time with respect to a tax
assessment or deficiency.
3.14.6. Neither BV or any of BV's subsidiaries are subject to any
tax allocation or sharing agreement.
3.14.7. The unpaid taxes of BV and its subsidiaries do not exceed
the reserve for tax liability.
EMPLOYEE LIABILITIES
3.15. As of June 24, 1996, all liabilities due on account of the employees of
BV, including all social benefits, workers' compensation and national or state
insurance payments, as required by agreement, collective or otherwise, and/or by
law, are covered by
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payments to appropriate insurance policies or are set aside as stated in the ICA
Financial Statements. Annex 3.15 sets forth all employee benefit plans of BV.
PERMITS AND LICENSES
3.16. BV has complied in all material respects with all laws and regulations
applicable to it. BV has all the permits, licenses, orders, consents and
approvals of all governmental and regulatory bodies material to carrying on its
business. BV is not in default under any of such permits, licenses or any other
authority. To the best of its knowledge, no suspension or the cancellation of
any such permits, licenses, or other authority is threatened nor does BV
anticipate any difficulties in their renewal. LC has complied in all material
respects with all laws and regulations applicable to it, including in connection
with the offer and issuance of membership interests to its members.
ACCOUNTS RECEIVABLE
3.17. BV's accounts receivable reflected on its balance sheet at June 24, 1996,
and all of BV's accounts receivable since the date thereof have arisen in the
ordinary course of business for goods delivered or services rendered.
LABOR RELATIONS
3.18. BV has not been the subject of any union activity or labor dispute, and
there have not been any strikes of any kind called or threatened to be called
against BV. BV has not violated any applicable federal or state law or
regulation relating to labor practices. Save as disclosed in the ICA Financial
Statements, BV has no liability to any of its employees, agents or consultants
in connection with grievances arising from the termination of such employees,
agents or consultants.
INSURANCE
3.19. All of the insurable properties of BV are insured for its
benefit under valid and enforceable policies, issued by insurers of
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recognized responsibility in amounts and against such risks and
losses as is customary in the industry.
CORRUPT PRACTICES
3.20. Since the inception of BV and LC, there have been no violations of the
Foreign Corrupt Practices Act or of any similar state or federal statutes
relating to bribery by BV and LC or any of their agents.
ENFORCEABILITY
3.21. The execution, delivery and performance of this Agreement, by and on
behalf of BV and LC have been duly authorized by the Board of Directors of BV
and LC, respectively, and this Agreement has been duly executed and delivered by
and on behalf of BV and LC by their authorized officers. This Agreement and all
documents executed by BV and LC in connection herewith are valid and binding
obligations of BV and LC and are enforceable against BV and LC in accordance
with their respective terms.
NO DISTRIBUTION
3.22. LC is acquiring the Star Shares for its own account for investment and not
for the purpose of distribution of the Star Shares, as the term "distribution"
is used in connection with Section 2(11) of the Securities Act.
DISCLOSURE
3.22. No representation or warranty by BV or LC in this Agreement, nor any
statement or certificate furnished or to be furnished by BV or LC pursuant
hereto, or in connection with the transaction contemplated herein contains any
untrue statement of a material fact, or omits, or will omit, to state a material
fact necessary to make the statements contained herein or therein not
misleading.
RECEIPT OF FINANCIAL REPORTS
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3.23. LC and BV acknowledge receipt of copies of Star's reports on Form 10-KSB
for Star's fiscal year ended April 30, 1996 and on Form 10-QSB for Star's fiscal
quarter ended July 31, 1996.
ARTICLE 4
CONDUCT OF BUSINESS OF ACQUIRED
CORPORATION PENDING CLOSING
DATE
CONDUCT OF BUSINESS IN ITS ORDINARY
COURSE
4.01. BV will carry on its business in substantially the same manner as previous
to the date of execution of this Agreement, and will:
(a) Continue in full force the amount and scope of insurance coverage carried
prior to that date;
(b) Maintain its business organization and keep it intact, to retain its present
employees, and to maintain its goodwill with suppliers, customers, and others
having business relationships with it;
(c) Exercise due diligence in safeguarding and maintaining confidential reports
and data used in its business;
(d) Maintain its assets and properties in good condition and repair, and not
sell or otherwise dispose of any of its assets or properties, except sales of
inventory in the ordinary course of business.
SATISFY CONDITIONS PRECEDENT
4.02. LC and BV will use their best efforts to satisfy all
conditions precedent contained in this Agreement.
ACCESS TO INFORMATION AND DOCUMENTS
4.03. (a) LC and BV will afford the officers and representatives of Star, from
the date of this Agreement until consummation of the Exchange, full access
during normal business hours to all properties, books, accounts, contracts,
commitments, and any other records of any kind of LC or BV. Sufficient access
shall be allowed to provide Star with full opportunity to make any investigation
it desires to make of LC and BV, and to keep itself fully informed of the
affairs of LC and BV.
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(b) In addition, LC and BV will permit Star to make extracts or copies of all
such books, accounts, contracts, commitments, and records, and to furnish to
Star, within 10 days after demand, any further financial and operating data of
the company as Star reasonably requests.
(c) Star will use any information obtained under this Paragraph only for its
own purposes in connection with the consummation of the transaction
contemplated by this Agreement, and will not divulge the information to any
other person.
NEGATIVE COVENANTS
4.04. Except with the prior written consent of Star, BV will not:
(a) Incur any liabilities other than BV Debt that will be assigned to Star at
closing and current liabilities incurred in the ordinary course of business;
(b) Incur any mortgage, lien, pledge, hypothecation, charge, encumbrance, or
restriction of any kind;
(c) Become a party to any contract, or renew, extend, or modify any existing
contract, except in the ordinary course of business;
(d) Make any capital expenditures, except for ordinary repairs, maintenance, and
replacement;
(e) Declare or pay any dividend on or make any other distribution to
Shareholders;
(f) Purchase, retire, or redeem any shares of common stock;
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(g) Issue or sell additional shares of stock, whether or not such stock has been
previously authorized or issued;
(h) Issue or sell any warrants, rights, or options to acquire any shares of its
capital stock;
(i) Amend its Articles of Organization or Bylaws;
(j) Pay or agree to pay any bonus, increase in compensation, pension, or
severance pay to any director, stockholder, officer, consultant, agent, or
employee;
(k) Discharge or satisfy any lien or encumbrance, nor pay any obligation or
liability, except current liabilities incurred in the ordinary course of
business since that date;
(l) Merge or consolidate with any other entity;
(m) Enter into any transactions or take any acts that would constitute a
breach of the representations, and warranties contained in this Agreement; or
(n) Institute, settle, or agree to settle any action or proceeding before
any court or governmental body.
4.05 Except with the prior written consent of Star, LC will not:
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(a) Incur any mortgage, lien, pledge, hypothecation, charge, encumbrance,
or restriction of any kind with respect to the BV Shares; or
(b) Enter into any transactions or take any acts that would constitute a
breach of the representations, and warranties contained in this Agreement.
ARTICLE 5
CONDUCT OF BUSINESS OF PURCHASER PENDING
CLOSING DATE
CONDUCT OF BUSINESS IN ITS ORDINARY COURSE
5.01. Star will carry on its business in substantially the same
manner as before the date of execution of this Agreement.
SATISFY CONDITIONS PRECEDENT
5.02. Star will use its best efforts to satisfy all conditions
precedent contained in this Agreement.
ACCESS TO INFORMATION AND DOCUMENTS
5.03. (a) Star will provide LC from the date of this Agreement until the Closing
Date full access during normal business hours to all properties, books,
accounts, contracts, commitments, and records of Star. Sufficient access shall
be allowed to provide LC the full opportunity to make any investigation it
desires to make of Star, and to keep itself fully informed of the affairs of
Star.
(b) Star will permit LC to make extracts or copies of all books, accounts,
contracts, commitments, and records. Additionally, Star will furnish to LC,
within 10 days after demand, any further financial and operating data and other
information concerning its business and assets that LC reasonably requests.
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(c) LC may use any information secured pursuant to this Paragraph only for
its own purposes in connection with the consummation of the
transaction contemplated by this Agreement and may not divulge the
information to any other persons.
NEGATIVE COVENANTS
5.04. Except as contemplated by this Agreement or with the prior written consent
of LC, Star will not:
(a) Incur any liabilities other than current liabilities incurred in
the ordinary course of business;
(b) Incur any mortgage, lien, pledge, hypothecation, charge,
encumbrance, or restriction of any kind;
(c) Become a party to any contract, or renew, extend, or modify any
existing contract, except in the ordinary course of business;
(d) Make any capital expenditures, except for ordinary repairs,
maintenance, and replacement;
(e) Declare or pay any dividend on or make any other distribution to
Shareholders;
(f) Purchase, retire, or redeem any shares of capital stock;
(g) Issue or sell additional shares of stock, whether or not such
stock has been previously authorized or issued;
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(h) Issue or sell any warrants, rights, or options to acquire any
shares of its capital stock;
(i) Amend its Certificate of Incorporation or Bylaws;
(j) Pay or agree to pay any bonus, increase in compensation, pension,
or severance pay to any director, stockholder, officer,
consultant, agent, or employee;
(k) Discharge or satisfy any lien or encumbrance, nor pay any
obligation or liability, except current liabilities incurred in
the ordinary course of business since that date;
(l) Merge or consolidate with any other entity;
(m) Enter into any transactions or take any acts that would
constitute a breach of the representations, and warranties
contained in this Agreement; and
(n) Institute, settle, or agree to settle any action or
proceeding before any court or governmental body.
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ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF
ACQUIRED ENTITY
CONDITIONS PRECEDENT TO CLOSING
6.01. The obligations of Seller to consummate the Exchange shall be subject
to the conditions precedent specified in this Article 6.
EFFECTIVENESS OF AMENDMENT
6.02. Star shall have taken all actions required so that the Amendment is
effective.
TRUTH OF REPRESENTATIONS AND WARRANTIES
and Compliance With Covenants
6.03. The representations and warranties of Star contained in this Agreement
shall be true as of the Closing Date with the same effect as though made on the
Closing Date. Star shall have performed all obligations and comply with all
covenants required by this Agreement to be performed or complied with by it
prior to the Closing Date.
NO RESTRICTIONS
6.04. No action or proceeding by any governmental body or agency shall have
been threatened, asserted, or instituted to prohibit the consummation of the
transactions contemplated by this Agreement.
BOARD OF DIRECTORS
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6.05. Star shall elect three nominees of LC to the Board of Directors, and
all directors and officers of Star other than Xxxxxxx X. Xxxxxxxx shall have
resigned.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF
PURCHASER
CONDITIONS PRECEDENT TO CLOSING
7.01. The obligations of Star to consummate the Exchange shall
be subject to the conditions precedent specified in this Article 7.
Audited and Updated Financial Statements
7.02. BV will have provided audited financial statements for the period
covered by the ICA Financial Statements that substantially conform to the
preliminary ICA Financial Statements and unaudited financial statements for the
period beginning June 24, 1996, and ending September 30, 1996, that have been
informally reviewed by BDO Xxxxxxx, and will be prepared in accordance with
generally accepted accounting principles of the Netherlands and on a consistent
basis and accurately represent the condition of BV for the period covered
thereby.
TRUTH OF REPRESENTATIONSAND WARRANTIES
and Compliance With Covenants
7.03. The representations and warranties of LC and BV contained in this
Agreement shall be true as of the Closing Date, with the same effect as though
made on the Closing
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Date. LC and BV shall perform all obligations and comply with all covenants
required by this Agreement to be performed or complied with by them prior to the
closing date.
ACCEPTABILITY OF PAPERS AND PROCEEDINGS
7.04. To the extent requested by Star, the form and substance of all papers
and proceedings under this Agreement shall be acceptable to counsel for Star.
NO RESTRICTIONS
7.05. No action or proceeding by any governmental body shall be threatened,
asserted, or instituted that the consummation of the transactions contemplated
by this Agreement.
ARTICLE 8
EXPENSES
8.01. LC shall pay the expenses incurred by both of the parties to this
Agreement arising out of this Agreement and the transactions contemplated in
this Agreement, including but not limited to all fees and expenses of their
counsel and accountants.
ARTICLE 9
COMPLIANCE WITH SECURITIES LAWS
LIMITATION ON DISTRIBUTION
9.01. Any distribution or other transfer of the Star Shares to any member
of LC or to any third party shall comply with all applicable laws, including
applicable federal and state securities laws.
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9.02. At Closing, LC shall deliver to Star an executed written statement or
investment letter in form and substance acceptable to counsel for Star
containing the acknowledgments, representations, covenants and agreements
contained in paragraph 9.03 of this Agreement.
9.03 Prior to any distribution or other transfer of the Star Shares to any
member of LC or to any third party, LC shall deliver to Star information
concerning such distribution or other transfer and the distributees or other
transferees, as the case may be, as requested by Star, including, but not
limited to, the name, state of residence and number of LC units owned by such
person and the distributee ("Shareholder") shall deliver to Star an executed
written statement or investment letter in form and substance acceptable to
counsel for Star containing the acknowledgments, representations, covenants and
agreements contained in paragraph 9.04 of this Agreement.
UNREGISTERED STOCK UNDER FEDERAL SECURITIES ACT
9.04.
(a) "Shareholder acknowledges that the Star Shares have not
been registered under the Federal Securities Act of 1933, as
amended, referred to in this Agreement as the "1933 Act," or
under any state securities laws and that, therefore, the
stock is not fully transferable except as permitted under
various exemptions contained in the 1933 Act and the rules of
the Securities and Exchange Commission interpreting the Act
and applicable state securities laws. The provisions
contained in this Paragraph 9.04 are intended to ensure
compliance with the 1933 Act and applicable state securities
laws.
THE NATURE OF THE SHAREHOLDER
(b) "Shareholder represents and warrants to Star as follows:
"(i) The Shareholder is knowledgeable in and experienced with
respect to stock investments in general and with respect to
investments of a nature similar to an investment in Star. By
reason of such knowledge and experience, the undersigned is
capable of evaluating the merits and risks of, and making an
informed business decision with regard to, an investment in
Star.
"(ii) Shareholder (x) has received Star's Form 10-KSB
for the fiscal year ended April 30, 1996 and the Form 10-QSB
for the quarter ended July 31, 1996; (y) has received all
other information he has deemed necessary to make an informed
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investment decision with respect to Star; and (z) has had the opportunity to ask
questions concerning Star.
NO DISTRIBUTION OF STOCK TO PUBLIC
(c) "Shareholder represents and warrants to Star that the Shareholder is
acquiring the Star Shares for the Shareholder's own account for investment, and
not for the purpose of resale or any other distribution of the shares. Each
Shareholder also represents and warrants that the Shareholder has no present
intention of disposing of all or any part of such shares at any particular time,
for any particular price, or on the happening of any particular circumstances.
Each Shareholder acknowledges that Star is relying on the truth and accuracy of
the warranties and representations set forth in this Paragraph in issuing the
shares without first registering the shares under the 1933 Act and applicable
state securities laws.
NO TRANSFERS IN VIOLATION OF THE 1933 ACT
(d) "Shareholder covenants and represents that none of the Star Shares will be
offered, sold, assigned, pledged, transferred, or otherwise disposed of except
after full compliance with all of the applicable provisions of the 1933 Act and
the rules and regulations of the Securities and Exchange Commission under the
1933 Act and applicable state securities laws. Therefore, each Shareholder
agrees not to sell or otherwise dispose of any of the Star Shares unless the
Shareholder:
(i) "Has delivered to Star a written legal opinion in form and substance
satisfactory to counsel for Star to the effect that the disposition is exempt
from registration under the 1933 Act and regulations interpreting the Act; or
(ii) "Has complied with the registration and prospectus requirements of the
1933 Act relating to such a disposition.
Star shall place a stop transfer order against transfer of shares until one of
the conditions set forth in this subparagraph has been met.
INVESTMENT LEGEND ON CERTIFICATES
(e) "Shareholder agrees that the certificates evidencing the Star Shares
will contain the following legend:
"THE SHARES OF STOCK OF STAR RESOURCES, INC. (THE "COMPANY") REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS, AND THE HOLDER HEREOF CANNOT
MAKE ANY SALE, PLEDGE, HYPOTHECATION, ASSIGNMENT OR OTHER TRANSFER OF ANY SHARES
OF SUCH STOCK EXCEPT PURSUANT TO AN OFFERING OF SUCH STOCK DULY REGISTERED UNDER
THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR UNDER SUCH OTHER
CIRCUMSTANCES THAT IN THE OPINION OF COUNSEL FOR THE COMPANY, AT THE TIME, DOES
NOT REQUIRE REGISTRATION UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS. THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER
THE ACT AND MAY BE SUBJECT TO THE LIMITATIONS AND REPORTING REQUIREMENTS OF SAID
RULE UPON RESALE OR OTHER DISTRIBUTION THEREOF."
INDEMNIFICATION BY SHAREHOLDERS
(f) "If at any time in the future Shareholder sells or otherwise disposes of any
Star Shares without registration under the 1933 Act or any similar federal
statute or any applicable state securities laws that may then be in effect, such
Shareholder agrees to indemnify and hold harmless Star against any claims,
liabilities, penalties, costs, and expenses that may be asserted against or
suffered by the Purchaser as a result of such disposition."
ARTICLE 10
TERMINATION
DEFAULT
10.01. (a) Star or LC may, on or at any time prior to the Closing Date,
terminate this Agreement by notice to the other party in the event:
(i) The other party has defaulted by failing to perform any of its
covenants and agreements contained in this Agreement; and
(ii)Such default has not been fully cured within 30 days after receipt of the
notice specifying particularly the nature of the default.
DELAY
10.02. If consummation of the transaction specified in this Agreement has not
occurred by 11:59 P.M. Texas time, on November 30, 1996, any party that is not
in default in the timely performance of any of its covenants and conditions may
terminate this Agreement subsequent to that time by giving written notice of
termination to the other party. The written notice of termination shall be
effective upon the delivery of the notice in person to an officer of the party
or, if served by mail, upon the receipt of the notice by such party.
ARTICLE 11
MISCELLANEOUS
AMENDMENT
11.01. This Agreement may be amended or modified at any time and in
any manner only by an instrument in writing executed by the President of Star
and the Chief Executive Officer of LC.
WAIVER
11.02. Either Star or LC may, in writing:
EXTENSION OF TIME
(a) Extend the time for the performance of any of the obligations
of any other party to the Agreement.
WAIVING INACCURACIES
(b) Waive any inaccuracies and misrepresentations contained in
this Agreement or any document delivered pursuant to the Agreement made by any
other party to the Agreement.
WAIVING COMPLIANCE WITH COVENANTS
(c) Waive compliance with any of the covenants or performance of
any obligations contained in this Agreement by any other party to the Agreement.
WAIVING SATISFACTION OF CONDITION PRECEDENT
(d) Waive the fulfillment of any condition precedent to the
performance by any other party to the Agreement.
ASSIGNMENT
11.03.
(a) Neither this entire Agreement nor any right created by the Agreement
shall be assignable by either Star or LC without the prior written consent of
the other, except by the laws of succession.
(b) Except as limited by the provisions of subparagraph (a), this Agreement
shall be binding on and inure to the benefit of the respective successors and
assigns of the parties, as well as the parties.
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(c) Nothing in this Agreement, expressed or implied, is intended to confer
upon any person, other than the parties and their successors, any rights or
remedies under this Agreement.
NOTICES
11.04. Any notice or other communication required or permitted by this Agreement
must be in writing and shall be deemed to be properly given when delivered in
person to an officer of the other party, when deposited in the United States
mails for transmittal by certified or registered mail, postage prepaid, or when
deposited with a public telegraph company for transmittal, charges prepaid,
provided that the communication is addressed:
(a) In the case of Star, to:
Star Resources, Inc.
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
with a copy to:
Xxxx X. Xxxxxx, Esq.
Jenkens & Xxxxxxxxx
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
or to such other person or address designated by Star to receive notice.
(b) In the case of LC or BV, to:
ICA Marketing Company, L.C.
000 Xxxx Xxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxx 00000
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
00000 Xxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
or to such other person or address designated by LC to receive notice.
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HEADINGS
11.05. Paragraph and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
ENTIRE AGREEMENT
11.06. This instrument and the annexes to this instrument contain the
entire Agreement between the parties with respect to the transaction
contemplated by the Agreement. It may be executed in any number of counterparts
but the aggregate of the counterparts together constitute only one and
the same instruments.
EFFECT OF PARTIAL INVALIDITY
11.07. In the event that any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect any other provisions of this Agreement, but this Agreement shall be
constructed as if it never contained any such invalid, illegal, or unenforceable
provisions.
CONTROLLING LAW
11.08. The validity, interpretation, and performance of this agreement shall be
controlled by and construed under the laws of the State of Delaware.
ATTORNEYS' FEES
11.09 If any action at law or in equity, including an action for declaratory
relief, is brought to enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to recover reasonable attorney's fees from
the other party. The attorney's fees may be ordered by the court in the trial of
any action described in this Paragraph or may be enforced in a separate action
brought for determining attorney's fees.
SPECIFIC PERFORMANCE
11.10 The parties declare that it is impossible to measure in money the damages
that will accrue to a party or its successors as a result of the other parties'
failure to perform any of the obligations under this Agreement. Therefore, if a
party or its successor institutes any action or proceeding to enforce the
provisions of this Agreement, any party opposing such action or
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proceeding agrees that specific performance may be sought and obtained for any
breach of this Agreement.
Executed on October 10, 1996.
STAR RESOURCES, INC. ICA B.V.
By: /s/ Xxxxxxxx X. Xxxxxxxxx By: /s/ Xxxxxx Gardner_______
Its: President_______________ Its: President_______________
ICA MARKETING COMPANY, L.C.
By: /s/ Xxxxxx Gardner_____
Its: President_____________
agreement for exchange of stock.ica
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