Attached files
| file | filename |
|---|---|
| S-1 - MAINBODY - Dragon's Lair Holdings, Inc. | mainbody.htm |
| EX-5.1 - EX51 - Dragon's Lair Holdings, Inc. | ex51.htm |
| EX-3.2 - EX32 - Dragon's Lair Holdings, Inc. | ex32.htm |
| EX-3.1 - EX31 - Dragon's Lair Holdings, Inc. | ex31.htm |
| EX-4.1 - EX41 - Dragon's Lair Holdings, Inc. | ex41.htm |
| EX-21.1 - EX211 - Dragon's Lair Holdings, Inc. | ex211.htm |
| EX-23.1 - EX231 - Dragon's Lair Holdings, Inc. | ex231.htm |
| EX-10.1 - EX101 - Dragon's Lair Holdings, Inc. | ex101.htm |
| EX-23.2 - EX232 - Dragon's Lair Holdings, Inc. | ex232.htm |
AGREEMENT
AND PLAN OF STOCK EXCHANGE
This Agreement and Plan of Stock
Exchange ("Agreement"), is
made and entered into this 31st day of March 2010, by and among
FOUR STAR HOLDINGS, INC., a Florida Corporation ("FOUR
STAR HOLDINGS"), and FOUR STAR REALTY, LLC, an Alabama Limited Liability Company
("FOUR STAR REALTY”). FOUR STAR HOLDINGS, and FOUR STAR REALTY are hereinafter sometimes collectively
referred to as the "Parties."
RECITALS:
A. FOUR STAR HOLDINGS desires to
acquire all of the issued and outstanding member interests of FOUR STAR REALTY, through a
Stock Exchange with and into FOUR
STAR HOLDINGS (the "Stock
Exchange"), with FOUR STAR HOLDINGS as the surviving
corporation of the Stock Exchange.
B. It
is the intention of the parties hereto that: (i) the Stock Exchange shall
qualify as a tax free reorganization under Section 338 of the Internal Revenue
Code of 1986, as amended, and related sections thereunder; and the parties
intend this Agreement to qualify as a "plan of reorganization" within the
meaning of Treasury Regulation Sections 1.368-2(g) and 1.368-3(a), and (ii) the
Stock Exchange shall qualify as a transaction in securities exempt from
registration or qualification under the Securities Act of 1933, as amended, and
under the applicable securities laws of each state or jurisdiction where the
FOUR STAR HOLDINGS Security Holders reside.
C. The board of directors of each of
FOUR STAR HOLDINGS, and
FOUR STAR REALTY and the
FOUR STAR HOLDINGS
Security Holders each deem it to be in the best interests of FOUR STAR
HOLDINGS and FOUR STAR
REALTY and their respective
shareholders and members to consummate the Stock Exchange, as a result of which
FOUR STAR HOLDINGS shall
acquire all of the issued and outstanding membership interests of FOUR
STAR REALTY.
NOW, THEREFORE, in consideration
of the mutual covenants, agreements, representations and warranties contained in
this Agreement, the parties hereto agree as follows:
CERTAIN
DEFINITIONS
As used
in this Agreement, the following terms shall have the meanings set forth
below:
"Applicable Law" means any
domestic or foreign law, statute, regulation, rule, policy, guideline or
ordinance applicable to the businesses of the Parties, the Stock Exchange and/or
the Parties.”
"Articles of Stock Exchange"
shall mean the certificate of Stock Exchange of FOUR STAR REALTY with and
into FOUR STAR HOLDINGS.”
"Business Day" shall mean any
day, excluding Saturday or Sunday or any other day on which national banks
located in Alabama and Florida shall be closed for business.”
"dollar" and "$" means lawful money of the
United States of America.”
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"FOUR STAR HOLDINGS Common Stock"
shall mean the shares of common stock of FOUR STAR HOLDINGS, no par value
per share.”
"FOUR STAR HOLDINGS Fully-Diluted Common Stock" means, as at the time in
question, the maximum number shares of FOUR STAR HOLDINGS Common Stock that are
issued and outstanding, after
giving effect to: (a) the issuance of all of the Stock Exchange Shares;
and (b) the issuance of any other shares of FOUR STAR HOLDINGS Common Stock that
are issuable upon conversion of any FOUR STAR HOLDINGS notes or shares of FOUR
STAR HOLDINGS Preferred Stock, or upon the exercise of options, warrants or
other rights to purchase shares of FOUR STAR HOLDINGS capital stock, but only to
the extent that such securities are (i) outstanding as at the Effective Time of
the Stock Exchange, or (ii) issued subsequent to the Effective Time of the Stock
Exchange.”
"Effective
Time" shall mean the date upon which the Stock Exchange of FOUR STAR HOLDINGS
into FOUR STAR REALTY shall be consummated pursuant to the filing of the
Articles of Stock Exchange with the Secretary of State of Florida.”
"Exchange
Act" means the Securities Exchange Act of 1934, as amended.”
"GAAP"
means generally accepted accounting principles in the United States of America
as promulgated by the American Institute of Certified Public Accountants and the
Financial Accounting Standards Board or any successor Institutes concerning the
treatment of any accounting matter.”
"Knowledge"
means the knowledge after reasonable inquiry.”
"Lien"
means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, encumbrance or other adverse claim of any kind in
respect of such property or asset.”
"Material
Adverse Effect" with respect to any entity or group of entities means any event,
change or effect that has or would have a materially adverse effect on the
financial condition, business or results of operations of such entity or group
of entities, taken as a consolidated whole.”
"Stock
Exchange Shares" shall mean that number of shares of FOUR STAR HOLDINGS Common
Stock or Preferred Stock to be issued to the FOUR STAR REALTY Membership Holders
on the Closing Date and at the Effective Time of the Stock
Exchange.”
"Person"
means any individual, corporation, partnership, trust or unincorporated
organization or a government or any agency or political subdivision
thereof.”
"FOUR
STAR REALTY Membership Interests" shall mean the Membership Interests of FOUR
STAR REALTY.”
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"FOUR
STAR REALTY Managing Member" shall mean the Managing Member of FOUR STAR
REALTY.”
"FOUR
STAR REALTY Membership Interests" means, as at the date in question, all of the
issued and outstanding Member Interests of FOUR STAR REALTY.”
"FOUR
STAR REALTY Membership Holders" means the collective reference to all of the
record holders of the FOUR STAR REALTY Membership Interests at the Effective
Time of the Stock Exchange, including the FOUR STAR REALTY Managing
Members.”
"Stock
Subscription Agreement" means that certain agreement by and between FOUR STAR
HOLDINGS and the FOUR STAR REALTY Membership Holders providing for the
acquisition by the FOUR STAR HOLDINGS Security Holders of the FOUR STAR REALTY
Membership Interests.”
"Surviving
Entity" shall mean FOUR STAR HOLDINGS as the surviving entity in the Stock
Exchange as provided in Section 1.1.”
"Tax"
(and, with correlative meaning, "Taxes" and "Taxable") means:
(i) any
income, alternative or add-on minimum tax, gross receipts tax, sales tax, use
tax, ad valorem tax, transfer tax, franchise tax, profits tax, license tax,
withholding tax, payroll tax, employment tax, excise tax, severance tax, stamp
tax, occupation tax, property tax, environmental or windfall profit tax, custom,
duty or other tax, impost, levy, governmental fee or other like assessment or
charge of any kind whatsoever together with any interest or any penalty,
addition to tax or additional amount imposed with respect thereto by any
governmental or Tax authority responsible for the imposition of any such tax
(domestic or foreign), and
(ii) any responsibility for the payment
of any amounts of the type described in clause (i) above as a
result of being a member of an affiliated, consolidated, combined or unitary
group for any Taxable period, and
(iii) any
responsibility for the payment of any amounts of the type described in clauses
(i) or (ii) above as a result of any express or implied obligation to indemnify
any other person.”
"Tax
Return" means any return, declaration,· form, claim for refund or information
return or statement relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.”
THE STOCK
EXCHANGE
SECTION 1. THE STOCK
EXCHANGE: EFFECTIVE TIME.
1.1 The Stock Exchange.
At the Effective Time and subject to and upon the terms and conditions of
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this
Agreement, FOUR STAR REALTY shall merge with and into FOUR STAR HOLDINGS, the
separate corporate existence of FOUR STAR REALTY shall cease and FOUR STAR
HOLDINGS shall continue as the Surviving Entity, with FOUR STAR REALTY as a
fully owned subsidiary of FOUR STAR HOLDINGS. The Effective Time of the Stock
Exchange shall occur upon the filing of the Articles of Stock Exchange executed
in accordance with the applicable provisions of the Corporate Law
and the Secretary of State of Florida, or at such later time as may
be agreed to by FOUR STAR HOLDINGS and FOUR STAR REALTY and specified in the
Certificate of Stock Exchange subject to the satisfaction or waiver of each of
the conditions set forth in Section 4. The date on which the Effective Time
occurs is referred to as the "Effective Date." Provided that this Agreement has
not been terminated, the Parties will cause the Articles of Stock Exchange to be
filed on the Closing Date, as hereafter defined in Section 1.3.
(a) Upon
the terms and subject to the conditions set forth in this Agreement, at the
Effective Time, all FOUR STAR REALTY Membership Interests shall be converted
into the right to receive the Stock Exchange Shares existing and to be issued by
FOUR STAR HOLDINGS.
(b) Exchange Agent. ,
Joseph L. Pittera, Esq. shall act as the exchange agent
(the
"Exchange Agent") for the purpose of exchanging FOUR STAR REALTY Membership
Interests for the Stock Exchange Shares. At or within thirty (30) days after the
Effective Date, FOUR STAR HOLDINGS shall deliver to the Exchange Agent
certificates evidencing the Stock Exchange Shares. The Stock Exchange Shares
issued at the Effective Time of the Stock Exchange shall be registered in the
names of the FOUR STAR REALTY Membership Holders.
1.2 Conversion of
Securities.
(a) Conversion of FOUR STAR
REALTY Membership Interests. At the Effective Time, by virtue of the
Stock Exchange and without any action on the part of FOUR STAR HOLDINGS, FOUR
STAR REALTY or the holders of any of their respective securities:
(i) Each one
of the Membership Interests of FOUR STAR REALTY issued and outstanding
immediately prior to the Effective Time shall be converted into a total of
38,000 common shares of FOUR STAR HOLDINGS to be distributed among the FOUR STAR
REALTY Membership Holders according to the list attached hereto as Exhibit
“A.”
(ii)
All FOUR STAR REALTY Membership Interests shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and each
holder of a certificate representing any such FOUR STAR REALTY Membership
Interests shall cease to have any rights with respect thereto, except the right
to receive the Stock Exchange Shares to be issued pursuant to this Section
1.2(a) (fractional shares may be issued rounded to the hundredth decimal point)
upon the surrender of such certificate in accordance with Section 1.8, without
interest.
(iii) Each
FOUR STAR REALTY Membership Interest that immediately prior to the Effective
Time is held by FOUR STAR REALTY as a treasury share shall be cancelled and
retired without payment of any consideration therefore and without any
conversion thereof into a right to receive the Stock Exchange
Shares.
1.3 Closing.
The
closing of the Stock Exchange (the "Closing") will take place at the offices of
Joseph L. Pittera Esq., counsel to FOUR STAR REALTY, at their office in
Torrance, California, within one (1) Business Day following the satisfaction or
waiver of the conditions precedent set forth in Section 4 or at such other date
as FOUR STAR HOLDINGS, and FOUR STAR REALTY shall agree (the "Closing Date"),
but in no event shall the Closing Date occur later than March 31,
2010.
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1.4 Effect Of The Stock
Exchange.
At the Effective Time, all the properties, rights, privileges, powers and
franchises of FOUR STAR REALTY shall vest in FOUR STAR HOLDINGS, and all debts,
liabilities and duties of FOUR STAR REALTY shall become the debts, liabilities
and duties of FOUR STAR HOLDINGS.
1.5 Certificate Of Incorporation
and Bylaws; Directors And Officers. Prior to the Effective Time of the
Stock Exchange:
(a) The
Certificate of Incorporation of FOUR STAR HOLDINGS are made a part hereof shall
be the Certificate of Incorporation of FOUR STAR HOLDINGS following the Stock
Exchange. The Bylaws of FOUR STAR HOLDINGS are made a part hereof shall be the
Bylaws of FOUR STAR HOLDINGS following the Stock Exchange.
(b) The
initial board of directors of FOUR STAR REALTY subsequent to the Stock Exchange
shall consist of Bobby R. Smith, Jr. and Fran Mize. The officers of FOUR STAR
HOLDINGS prior to the Stock Exchange shall be the current officers of FOUR STAR
HOLDINGS.
1.6 Further
Actions.
(a) After
closing and upon issuance of FOUR STAR HOLDINGS Common Stock to Security Holders
FOUR STAR REALTY shall transfer its outstanding member interests to FOUR STAR
HOLDINGS.
(b) If,
at any time after the Effective Time, FOUR STAR HOLDINGS considers or
is
advised
that any deeds, bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to vest, perfect or confirm (of record or
otherwise) in FOUR STAR HOLDINGS its right, title or interest in, to or under
any of the rights, properties, or assets of FOUR STAR REALTY, or otherwise to
carry out the intent and purposes of this Agreement, the officers and directors
of FOUR STAR HOLDINGS will be authorized to execute and deliver, in the name and
on behalf of each of FOUR STAR REALTY and FOUR STAR HOLDINGS, all such deeds,
bills of sale, assignments and assurances and to take and do, in the name and on
behalf of each of FOUR STAR REALTY and FOUR STAR HOLDINGS, all such other
actions and things as the Board of Directors of FOUR STAR HOLDINGS may determine
to be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties or assets in FOUR
STAR HOLDINGS or otherwise to carry out the intent and purposes of this
Agreement.
1.7 Restrictions On
Resale
(
a) The Stock Exchange
Shares. The Stock Exchange Shares will not be registered under the
Securities Act, or the securities laws of any state, and cannot be transferred,
hypothecated, sold or otherwise disposed of until: (i) a registration statement
with respect to such securities is declared effective under the Securities Act,
or (ii) FOUR STAR HOLDINGS receives an opinion of counsel for the stockholder,
reasonably satisfactory to counsel for FOUR STAR HOLDINGS, that an exemption
from the registration requirements of the Securities Act is
available.
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The
certificates representing the Stock Exchange Shares to be issued on the
Effective Date pursuant to this Agreement shall contain a legend substantially
as follows:
"THE
SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT."
1.8 Exchange of
Certificates.
(a) After
the Effective Time and pursuant to a customary letter of transmittal or
other
instructional
form provided by the Exchange Agent to the FOUR STAR REALTY Member Holders, the
FOUR STAR REALTY Member Holders shall be required to surrender all their FOUR
STAR REALTY Membership Interests to the Exchange Agent, and the FOUR STAR REALTY
Member Holders shall be entitled upon such surrender to receive in exchange
therefor certificates representing the number of Stock Exchange Shares into
which the FOUR STAR REALTY Membership Interests theretofore represented by the
stock transfer forms so surrendered shall have been exchanged pursuant to this
Agreement. Until so surrendered, each outstanding certificate, which, prior to
the Effective Time, represented FOUR STAR REALTY Membership Interests, shall be
deemed for all corporate purpose, subject to the further provisions of this
Article I, to evidence the ownership of the number of whole Stock Exchange
Shares for which such FOUR STAR REALTY Membership Interests have been so
exchanged. No dividend payable to holders of Stock Exchange Shares of record as
of any Date subsequent to the Effective Time shall be paid to the owner of any
certificate which, prior to the Effective Time, represented FOUR STAR REALTY
Membership Interests, until such certificate or certificates representing all
the relevant FOUR STAR REALTY Membership Interests, together with a stock
transfer form, are surrendered as provided in this Article I or pursuant to
letters of transmittal or other instructions with respect to lost certificates
provided by the Exchange Agent.
(b) All
Stock Exchange Shares for which the FOUR STAR REALTY Member Interests shall have
been exchanged pursuant to this Article I shall be deemed to have been issued in
full satisfaction of all rights pertaining to the FOUR STAR REALTY Member
Interests.
(c) On
the Effective Date, the stock transfer book of FOUR STAR REALTY shall be deemed
to be closed and no transfer of FOUR STAR REALTY Membership Interests shall
thereafter be recorded thereon.
SECTION 2. REPRESENTATIONS
AND WARRANTIES OF FOUR STAR REALTY
FOUR STAR
REALTY hereby represents and warrants as follows:
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2.1 Organization and Good
Standing: Ownership of Shares. FOUR STAR REALTY is a limited liability
corporation duly organized and validly existing under the laws of the State of
Alabama. There are no outstanding subscriptions, rights, options, warrants or
other agreements obligating FOUR STAR REALTY to issue, sell or transfer any
Membership Interests of FOUR STAR REALTY other than those represented in
Schedule A.
2.2 Corporate Authority.
FOUR STAR REALTY has the corporate power to enter into this Agreement and to
perform its respective obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transaction contemplated hereby have been
duly authorized by the Board of Directors of FOUR STAR REALTY. The execution and
performance of this Agreement will not constitute a material breach of any
agreement, indenture, mortgage, license or other instrument or document to which
FOUR STAR REALTY is a party and will not violate any judgment, decree, order,
writ, rule, statute, or regulation applicable to FOUR STAR REALTY or its
properties. The execution and performance of this Agreement will not violate or
conflict with any provision of the respective Articles of Incorporation or
bylaws of FOUR STAR REALTY.
2.3 Ownership of Shares.
The FOUR STAR REALTY Member Holders are the owners of record and
beneficially of all of the issued and outstanding Membership Interests of FOUR
STAR REALTY Member Interests, which FOUR STAR REALTY Membership Interests, to
the best of FOUR STAR REALTY's knowledge, are owned free and clear of all
rights, claims, liens and encumbrances, and have not been sold, pledged,
assigned or otherwise transferred except pursuant to this
Agreement.
2.4 Financial Statements, Books
and Records. Will consist of the unaudited financial
Statements (balance sheet, income Statement, notes) of FOUR STAR REALTY as of
the Closing Date (the "Financial Statements"). The Financial Statements fairly
represent the financial position of FOUR STAR REALTY as at such Dates and the
results of their operations for the periods then ended. The books of account and
other financial records of FOUR STAR REALTY are in all respects complete and
correct in all material respects and are maintained in accordance with good
business and accountings practices, and are capable of being
audited.
2.5 Access to Records.
The corporate financial records, minute books and other documents and
records
of FOUR STAR REALTY have been made available to FOUR STAR HOLDINGS prior to the
Closing hereof.
2.6 No Material Adverse Changes.
Between the execution and Closing of this Agreement, there
shall not have been:
(a) any
material adverse change in the financial position of FOUR STAR REALTY except
changes arising in the ordinary course of business, which changes will in no
event materially and adversely affect the financial position of FOUR STAR
REALTY;
(b) any
damage, destruction or loss materially affecting the assets, prospective
business,
operations or condition (financial or otherwise) of FOUR STAR REALTY whether or
not covered by insurance;
(c) any
declaration, setting aside or payment of any dividend or distribution with
respect
to any redemption or repurchase of FOUR STAR REALTY capital stock;
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(d) any
sale of an asset (other than in the ordinary course of business) or any
mortgage
or pledge by FOUR STAR REALTY of any properties or assets, other than as set
forth in Sections 2.13 or 2.14 below; or
(e) adoption
of any pension, profit sharing, retirement, stock bonus, stock option
or
similar plan or arrangement.
2.7
Taxes.
FOUR STAR REALTY as of the Closing Date, has filed all material tax,
governmental and/or related forms and reports (or extensions thereof) due or
required to be filed and has (or will have) paid or made adequate provisions for
all taxes or assessments which had become due as of the Closing Date and there
are no deficiency notices outstanding.
2.8 Compliance with Laws.
FOUR STAR REALTY has complied with all federal, State, county and local
laws, ordinances, regulations, inspections, orders, judgments, injunctions,
awards or decrees applicable to it or its business which, if not complied with,
would materially and adversely affect the business of FOUR STAR
REALTY.
2.9 No Breach. The
execution, delivery and performance of this Agreement and the
consummation
of the transactions contemplated hereby will not:
(a)
violate any provision of the Articles of Incorporation or Bylaws of FOUR STAR
REALTY;
(b)
violate, conflict with or result in the breach of any of the Terms of, result in
a material modification of, otherwise give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time, or both
constitute) a default under any contract or other agreement to which FOUR STAR
REALTY is a party or by or to which it or any of its assets or properties may be
bound or subject;
(c)
violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding upon, FOUR
STAR REALTY or upon the properties or business of FOUR STAR REALTY;
or
(d) violate
any statute, law or regulation of any jurisdiction applicable to the
transactions
contemplated herein which could have a materially adverse effect on the business
or operations of FOUR STAR REALTY.
2.10
Actions and
Proceedings. FOUR STAR REALTY is not a party to any material pending
litigation or, to its knowledge, any governmental investigation or proceeding
not reflected in the FOUR STAR REALTY Financial Statements, and to its best
knowledge, no material litigation, claims, assessments or non-governmental
proceedings are threatened against FOUR STAR REALTY.
2.11
Agreements.
There are no material contract or arrangement to which FOUR STAR REALTY
is a party or by or to which it or its assets, properties or business are bound
or subject, whether written or oral.
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2.12
Brokers or Finders.
No broker's or finder's fee will be payable by FOUR STAR REALTY in
connection with the transactions contemplated by this Agreement, nor will any
such fee be incurred as a result of any actions by FOUR STAR REALTY or any of
its Shareholders.
2.13
Real Estate.
FOUR STAR REALTY owns no real property.
2.14
Tangible Assets.
FOUR STAR REALTY has full title and interest in all machinery, equipment,
furniture, leasehold improvements, fixtures, projects, owned or leased by FOUR
STAR REALTY, any related capitalized items or other tangible property material
to the business of FOUR STAR REALTY (the "Tangible Assets"). FOUR STAR REALTY
holds all rights, title and interest in all the Tangible Assets owned by it on
the Balance Sheet or acquired by it after the Date on the Balance Sheet free and
clear of all liens, pledges, mortgages, security interests, conditional sales
contracts or any other encumbrances. All of the Tangible Assets are in good
operating condition and repair and are usable in the ordinary course of business
of FOUR STAR REALTY and conform to all applicable laws, ordinances and
government orders, rules and regulations relating to their construction and
operation.
2.15
Liabilities.
FOUR STAR REALTY did not have any direct or indirect indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility, known
or unknown, fixed or unfixed, liquidated or unliquidated, secured or unsecured,
accrued or absolute contingent or otherwise, including, without limitation, any
liability on account of taxes, any governmental charge or lawsuit (all of the
foregoing collectively defined to as "Liabilities"), which are not fully, fairly
and adequately reflected on the Financial Statement except for specific
Liabilities set forth in the Unaudited Financial Statements and as declared in
Schedule A. As of the Date of Closing, FOUR STAR REALTY will not have any
further Liabilities, other than Liabilities fully and adequately reflected on
the Financial Statements and as per Schedule A except for Liabilities incurred
in the ordinary course of business. There is no circumstance, condition, event
or arrangement which may hereafter give rise to any Liabilities not in the
ordinary course of business.
2.16
Operations of FOUR
STAR REALTY. Between the execution and Closing of this Agreement, FOUR
STAR REALTY shall not have:
(a) incurred
any indebtedness or borrowed money;
(b) declared
or paid any dividend or declared or made any distribution of any kind to
any
shareholder, or made any direct or indirect redemption, retirement, purchase or
other acquisition of any shares in its capital stock;
(c) made
any loan or advance to any shareholder, officer, director, employee,
consultant,
agent Of other
representative or made any other loan or advance otherwise than in the ordinary
course of business;
(d) except
in the ordinary course of business, incurred or assumed any indebtedness or
liability (whether or not currently due and payable);
(e) disposed
of any assets of FOUR STAR REALTY except in the ordinary course of
business;
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(f)
materially increased the annual level of compensation of any executive employee
of FOUR STAR
REALTY;
(g) increased,
terminated, amended or otherwise modified any plan for the benefit of employees
of FOUR STAR REALTY;
(h) issued
any member interests or rights to acquire such equity securities;
or
(i) except
in the ordinary course of business, entered into or modified any contract,
agreement
or transaction.
2.17
Capitalization.
The authorized capital stock of FOUR STAR REALTY consists of ____________
of FOUR STAR REALTY of which (a) _______________ Member Interests of FOUR STAR
REALTY have been issued to Frances Mize, and Bobby R. Smith, Jr. FOUR STAR
REALTY has not granted, issued or agreed to grant, issue or make any other
commitments of any character relating to the issued or unissued Membership
Interests of capital stock of FOUR STAR REALTY, (b) and ___________ Member
Interests are issued and outstanding as of March 25, 2010.
2.18
Full Disclosure.
No representation or warranty by FOUR STAR REALTY in this Agreement or in
any document or schedule to be delivered by them pursuant hereto, and no written
Statement, certificate or instrument furnished or to be furnished by FOUR STAR
REALTY pursuant hereto or in connection with the negotiation, execution or
performance of this Agreement contains or will contain any untrue Statement of a
material fact or omits or will omit to State any fact necessary to make any
Statement herein or therein not materially misleading or necessary to a complete
and correct presentation of all material aspects of the business of FOUR STAR
REALTY.
SECTION
3. REPRESENTATIONS AND WARRANTIES OF FOUR
STAR HOLDINGS
FOUR STAR
HOLDINGS hereby represents and warrants as to itself and FOUR STAR HOLDINGS as
follows:
3.1 Organization and Good
Standing. FOUR STAR HOLDINGS is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida. Each has
the corporate power to own its own property and to carry on its business as now
being conducted and is duly qualified to do business in any jurisdiction where
so required except where the failure to so qualify would have no material
negative impact.
3.2 Corporate Authority.
Each has the corporate power to enter into this Agreement and to perform
their respective obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by the Board of Directors of FOUR STAR HOLDINGS as required by
Florida law and the directors and shareholders of FOUR STAR HOLDINGS as required
by Florida law. The execution and performance of this Agreement will not
constitute a material breach of any agreement, indenture, mortgage, license or
other instrument or document to which FOUR STAR HOLDINGS is a party and will not
violate any judgment, decree, order, writ, rule, statute, or regulation
applicable to FOUR STAR HOLDINGS or its properties. The execution and
performance of this Agreement will not violate or conflict with any provision of
the respective Articles of Incorporation or Bylaws of FOUR STAR HOLDINGS or FOUR
STAR HOLDINGS.
Page 10
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3.3 Capitalization: Purchase of
FOUR STAR HOLDINGS Shares by FOUR STAR REALTY Security Holders: Initial
Financing and Stock Exchange Shares.
(a) As
of the date of this Agreement, FOUR STAR HOLDINGS is authorized to issue
100,000,000 shares of FOUR STAR HOLDINGS Common Stock, no par value per share,
and 15,000,000 shares of FOUR STAR HOLDINGS Preferred Stock, $.001 par value per
share, of which approximately (i) 22,276,078 shares of FOUR STAR HOLDINGS Common
Stock and (ii) no shares
of FOUR STAR HOLDINGS Preferred Stock are issued and outstanding.
(b) Immediately
prior to the Effective Time of the Stock Exchange, FOUR STAR REALTY shall
provide to FOUR STAR HOLDINGS completed and executed copies of the Investor
Questionnaire and the Stock Subscription Agreement.
(c) There
are no outstanding warrants, issued stock options, stock rights or other
commitments
of any character relating to the issued or unissued shares of either Common
Stock or Preferred Stock of FOUR STAR HOLDINGS, other than those which are set
forth in Section 3.3(e) below.
(d) At the
Closing, the Stock Exchange Shares to be issued and delivered to the FOUR STAR
REALTY Security Holders hereunder will when so issued and delivered, constitute
valid and legally issued shares of FOUR STAR HOLDINGS Common Stock, fully paid
and non-assessable. The Stock Exchange Shares issuable to such FOUR STAR REALTY
Security Holders shall represent approximately ___% of the FOUR STAR HOLDINGS
Fully-Diluted Common Stock as at the Effective Time of the Stock
Exchange.
3.4
Compliance with Laws.
FOUR STAR HOLDINGS has complied with all federal, State, county and local
laws, ordinances, regulations, inspections, orders, judgments, injunctions,
awards or decrees applicable to it or its business, which, if not complied with,
would materially and adversely affect the business of FOUR STAR HOLDINGS or the
trading market for the FOUR STAR HOLDINGS Shares and specifically, and FOUR STAR
HOLDINGS has complied with provisions for registration under the Securities Act
of 1933 and all applicable blue sky laws in connection with its public stock
offering and there are no outstanding, pending or threatened stop orders or
other actions or investigations relating thereto.
3.5
Actions and
Proceedings. FOUR STAR
HOLDINGS is not a party to any material pending litigation or, to its
knowledge, any governmental proceedings that are threatened against FOUR STAR HOLDINGS, except as
set forth on Schedule
3.5 attached hereto
and made a part hereof.
3.6 Access to Records.
The corporate financial records, minute books, and other documents
and
records of FOUR STAR HOLDINGS
have been made available to FOUR STAR REALTY prior to the Closing
hereof.
3.7 No Breach. The
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby will not:
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(a) violate any provision of the Articles
of Incorporation or Bylaws of FOUR STAR HOLDINGS;
(b) violate,
conflict with or result in the breach of any of the terms of, result in a
material modification of, otherwise give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time or both constitute)
a default under, any contract or other agreement to which FOUR STAR HOLDINGS is a party or
by or to which it or any of its assets or properties may be bound or
subject;
(c) violate
any order, judgment, injunction, award or decree of any court, arbitrator or
governmental
or regulatory body against, or binding upon, FOUR STAR HOLDINGS or upon the
securities, properties or business to FOUR STAR HOLDINGS;
or
(d) violate
any statute, law or regulation of any jurisdiction applicable to the
transactions
contemplated herein.
3.8
Brokers or
Finders. No broker's or
finder's fee will be payable by FOUR STAR HOLDINGS in connection with the transactions
contemplated by this Agreement, nor will any such fee be incurred as a result of
any actions of FOUR STAR HOLDINGS.
3.9
Authority to Execute
and Perform Agreements. FOUR STAR HOLDINGS has the full
legal right and power and all authority and approval required to enter into,
execute and deliver this Agreement and to perform fully its obligations
hereunder. This Agreement has been duly executed and delivered and is the valid
and binding obligation of FOUR
STAR HOLDINGS enforceable in accordance with its Terms, except as may be
limited by bankruptcy, moratorium, insolvency or other similar laws generally
affecting the enforcement of creditors' rights. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby and
the performance by FOUR STAR
HOLDINGS of this Agreement, in accordance with its respective Terms and
conditions will not:
(a) require
the approval or consent of any governmental or regulatory body or the
approval
or consent of any other person;
(b) conflict with or result in any breach
or violation of any of the Terms and conditions of, or constitute (or with any
notice or lapse of time or both would constitute) a default under, any
order, judgment or decree applicable to FOUR STAR HOLDINGS, or any
instrument, contract or other agreement to which FOUR STAR HOLDINGS is a party
or by or to which FOUR STAR HOLDINGS is bound or subject; or
(c) result
in the creation of any lien or other encumbrance on the assets or properties of
FOUR STAR HOLDINGS.
3.10
Full Disclosure.
No representation or warranty by FOUR STAR HOLDINGS in this Agreement or
in any document or schedule to be delivered by them pursuant hereto, and no
written Statement, certificate or instrument furnished or to be furnished by
FOUR STAR HOLDINGS pursuant hereto or in connection with the negotiation,
execution or performance of this Agreement contains or will contain any untrue
Statement of a material fact or omits or will omit to State any fact necessary
to make any Statement herein or therein not materially misleading or necessary
to complete and correct presentation of all material aspects of the business of
FOUR STAR HOLDINGS.
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SECTION 4. CONDITIONS
PRECEDENT
4.1
Conditions
Precedent to the Obligation of FOUR STAR REALTY. All obligations of FOUR
STAR REALTY and the FOUR STAR REALTY Member Holders under this Agreement are
subject to the fulfillment, prior to or as of the Closing Date, as indicated
below, of each of the following conditions (anyone of which may be waived at
Closing by FOUR STAR REALTY):
(a) The
representations and warranties by or on behalf of FOUR STAR HOLDINGS contained
in this Agreement or in any certificate or document delivered pursuant to the
provisions hereof shall be true in all material respects at and as of Closing
Date as though such representations and warranties were made at and as of such
time.
(b) FOUR
STAR HOLDINGS shall have performed and complied in all material respects, with
all covenants, agreements, and conditions set forth in, and shall have executed
and delivered all documents required by this Agreement to be performed or
complied with or executed and delivered by them prior to or at the
Closing.
(c) On
the Closing Date, an executive officer of FOUR STAR HOLDINGS shall have
delivered to FOUR STAR REALTY a certificate, duly executed by such Person and
certifying, that to the best of such Person's knowledge and belief, the
representations and warranties of FOUR STAR HOLDINGS set forth in this Agreement
are true and correct in all material respects.
(d) On
or before the Closing, the Board of Directors and the shareholders of FOUR STAR
HOLDINGS shall have approved, in accordance with applicable law, the execution,
delivery and performance of this Agreement and the consummation of the
transaction contemplated herein and authorized all of the necessary and proper
action to enable FOUR STAR HOLDINGS to comply with the Terms of the
Agreement
(e) The
Stock Exchange shall be permitted by applicable law and FOUR STAR HOLDINGS shall
have sufficient shares of FOUR STAR HOLDINGS Common Stock authorized to complete
the Stock Exchange.
(f) At
the Closing, all instruments and documents delivered to FOUR STAR REALTY and the
Shareholders pursuant to provisions hereof shall be reasonably satisfactory to
legal counsel for FOUR STAR REALTY.
(g) The
Stock Exchange Shares to be issued to the Shareholders of FOUR STAR REALTY at
Closing will be validly issued, non-assessable and fully paid for and will be
issued in a non-public offering and exempt Stock Exchange transaction in
Compliance with all federal and State securities laws, bearing a restrictive
legend, as is more fully set forth herein.
4.2 Conditions Precedent to the
Obligations of FOUR STAR HOLDINGS. All obligations of FOUR STAR HOLDINGS
under this Agreement are subject to the fulfillment, prior to or at Closing, of
each of the following conditions (anyone of which may be waived at Closing by
FOUR STAR HOLDINGS):
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(a) The
representations and warranties by FOUR STAR REALTY contained in this Agreement
or in any certificate or document delivered pursuant to the provisions hereof
shall be true in all material respects at and as of the Closing as though such
representations and warranties were made at and as of such time;
(b) FOUR
STAR REALTY and the FOUR STAR REALTY Membership Holders shall have performed and
complied with, in all material respects, with all covenants, agreements, and
conditions set forth in, and shall have executed and delivered all documents
required by this Agreement to be performed or complied or executed and delivered
by them prior to or at the Closing;
(c) On
the Closing Date, one of the FOUR STAR REALTY Managing Members shall have
delivered to FOUR STAR HOLDINGS a certificate, duly executed by such Person and
certifying, that to the best of such Person's knowledge and belief, the
representations and warranties of FOUR STAR REALTY set forth in this Agreement
are true and correct in all material respects.
(d) The
holders of a majority of the issued and outstanding Member Interests of FOUR
STAR REALTY Membership Interests shall have approved, ratified and confirmed
this Agreement, the Stock Exchange and all of the transactions contemplated
hereby, all in accordance with applicable Alabama law.
SECTION 5.
COVENANTS
5.1
Corporate Examinations
and Investigations. Prior to the Closing Date, the parties acknowledge
that they have been entitled, through their employees and representatives, to
make such investigation of the assets, properties, business and operations,
books, records and financial condition of the other as they each may reasonably
require. No investigations, by a party hereto shall, however, diminish or waive
any of the representations, warranties, covenants or agreements of the party
under this Agreement.
5.2
Further Assurances.
The parties shall execute such documents and other papers and take such
further actions as may be reasonably required or desirable to carry out the
provisions hereof and the transactions contemplated hereby. Each such party
shall use its best efforts to fulfill or obtain the fulfillment of the
conditions to the Closing, including, without limitation, the execution and
delivery of any documents or other papers, the execution and delivery of which
are necessary or appropriate to the Closing.
5.3
Confidentiality.
In the event the transactions contemplated by this Agreement are not
consummated, FOUR STAR HOLDINGS, and FOUR STAR REALTY and the respective parties
Principal Executive Officers agree to keep confidential any information
disclosed to each other in connection therewith for a period of three (3) years
from the Date hereof; provided, however, such obligation shall not apply to
information which:
(i) at
the time of the disclosure was public knowledge;
(ii) is
required to be disclosed publicly pursuant to any applicable Federal or State
securities
laws;
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(iii) after
the time of disclosure becomes public knowledge (except due to the action of
the
receiving party);
(iv) the
receiving party had within its possession at the time of disclosure;
or
(v) is
ordered disclosed by a Court of proper jurisdiction.
5.4
Stock
Certificates. Within thirty (30) days of the Closing or a time frame as
determined by SEC regulatory requirements for filings etc., the FOUR STAR
HOLDINGS Security Holders shall have delivered the certificates representing the
FOUR STAR HOLDINGS Securities duly endorsed (or with executed stock powers) so
as to make FOUR STAR REALTY the sole owner thereof. Further, within thirty (30)
days of such Closing, FOUR STAR HOLDINGS shall issue to the FOUR STAR REALTY
Membership Holders the Stock Exchange Shares.
5.5 Filing of Certificate of
Stock Exchange. The Articles of Stock Exchange shall have been filed in
the office of the
Secretary of State for the State of Florida.
5.6
Board of
Directors. A list of the initial board of directors of FOUR STAR REALTY
subsequent to the Stock Exchange shall be provided by FOUR STAR REALTY prior to
the Closing. Such initial members of the board of directors shall serve until
the earlier of their death, resignation or removal or until the next annual
meeting of the stockholders of FOUR STAR REALTY, when their respective
successors are duly appointed and qualified. The officers of FOUR STAR REALTY
subsequent to the Stock Exchange shall be the current officers of FOUR STAR
REALTY.
5.7
Indemnification of
Officers and Directors. It is the intention of the Parties that FOUR STAR
HOLDINGS and FOUR STAR REALTY shall indemnify its officers and directors to the
fullest extent permitted by law, as applicable. In such connection, the Parties
agree not to amend the Certificates of incorporation or Bylaws of either FOUR
STAR HOLDINGS or FOUR STAR REALTY if such amendment shall have the effect of
reducing, terminating or otherwise adversely affecting the indemnification
rights and privileges applicable to officers and directors of each of FOUR STAR
HOLDINGS and FOUR STAR REALTY, as the same are in effect Immediately prior to
the Effective Time of the Stock Exchange.
SECTION
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Notwithstanding any right of either party to investigate the affairs of the
other party and its Shareholders, each party has the right to rely fully upon
representations, warranties, covenants and agreements of the other party and its
Shareholders contained in this Agreement or in any document delivered to one by
the other or any of their representatives, in connection with the transactions
contemplated by this Agreement. All such representations, warranties, covenants
and agreements shall survive the execution and delivery hereof and the closing
hereunder for three (3) years following the Closing.
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SECTION 7. DOCUMENTS AT
CLOSING AND THE CLOSING
7.1 Documents at Closing
At the Closing, the following transactions shall occur, all of such
transactions
being deemed to occur simultaneously:
(a) FOUR
STAR REALTY will deliver, or will cause to be delivered, to FOUR STAR HOLDINGS
the following:
(i) a
certificate executed by the Managing Member of FOUR STAR REALTY to the effect
that all representations and warranties made by FOUR STAR REALTY under this
Agreement are true and correct as of the Closing, the same as though originally
given to FOUR STAR HOLDINGS on said Date;
(ii) a
certificate from the State of Alabama Dated at or about the Closing to the
effect
that FOUR STAR REALTY is validly existing under the laws of said
State;
(iii) Membership
Interests representing those Member Interests of FOUR STAR REALTY to be
exchanged for the Stock Exchange Shares.
(iv) all
other items, the delivery of which is a condition precedent to the obligations
of FOUR STAR HOLDINGS, as set forth in Section 4.
(b) FOUR
STAR HOLDINGS will deliver or cause to be delivered to FOUR STAR REALTY and the
FOUR STAR REALTY Security Holders:
(i) a
certificate from FOUR STAR HOLDINGS executed by the President or Secretary of
FOUR STAR HOLDINGS, to the effect that all representations and warranties of
FOUR STAR HOLDINGS made under this Agreement are true and correct as of the
Closing, the same as though originally given to FOUR STAR REALTY on said
Date;
(ii)
certified
copies of resolutions by FOUR STAR HOLDINGS Board of Directors authorizing this
transaction;
(iii) certificates
from the Florida Secretary of State Dated at or about the Closing Date that
FOUR STAR HOLDINGS are in good standing under the laws of said State;
and
(iv) all
other items, the delivery of which is a condition precedent to the obligations
of FOUR STAR REALTY, as set forth in Section 4 hereof.
SECTION 8.
MISCELLANEOUS
8.1
Waivers.
The waiver of a breach of this Agreement or the failure of any party
hereto to exercise any right under this Agreement shall in no way constitute
waiver as to future breach whether similar or dissimilar in nature or as to the
exercise of any further right under this Agreement.
8.2 Amendment. This
Agreement may be amended or modified only by an instrument of equal formality
signed by the parties or the duly authorized representatives of the respective
parties.
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8.3 Assignment. This
Agreement is not assignable except by operation of law.
8.4 Notice. Until
otherwise specified in writing, the mailing addresses and fax numbers of the
parties
of this Agreement shall be as follows:
To:
FOUR STAR
HOLDINGS:
Bobby R.
Smith, Jr., Four Star Holdings, Inc., 100 Four Star Lane, Odenville, AL
35120
To:
FOUR STAR REALTY AND THE FOUR
STAR REALTY PRINCIPAL EXECUTIVE OFFICERS:
Fran Mize, Four Star Realty, LLC, 100
Four Star Lane, Odenville, AL 35120
Any
notice or Statement given under this Agreement shall be deemed to have been
given if sent by registered mail addressed to the other party at the address
indicated above or at such other address which shall have been furnished in
writing to the addressor.
8.5
Governing Law.
This Agreement shall be construed, and the legal relations between the
parties determined, in accordance with the laws of the State of Florida, thereby
precluding any
choice of
law rules which may direct the application of the laws of any other
jurisdiction.
8.6
Arbitration. The
parties hereby agree that any dispute or cause of action arising under this
Agreement shall be settled by arbitration conducted by one arbitrator. The
arbitrator shall be acceptable to both FOUR STAR REALTY and FOUR STAR HOLDINGS.
If an arbitrator cannot be agreed upon as provided in the preceding sentence, an
arbitrator will be appointed. The arbitrator shall set a limited time period and
establish procedures designed to reduce the cost and time for discovery while
allowing the parties an opportunity, adequate in the sole judgment of the
arbitrator, to discover relevant information from the opposing parties about the
subject matter of the dispute The arbitrator shall rule upon motions to compel
or limit discovery and shall have the authority to impose sanctions, including
attorneys' fees and costs, to the same extent as a court of competent law or
equity, should the arbitrator determine that discovery was sought without
substantial justification or that discovery was refused or objected to without
substantial justification. The decision of the arbitrator shall be written,
shall be in accordance with applicable law and with this Agreement, and shall be
supported by written findings of fact and conclusion of law which shall set
forth the basis for the decision of the arbitrator. Any such arbitration shall
be held exclusively in Florida.
8.7
Publicity. No
publicity release or announcement concerning this Agreement or the transactions
contemplated hereby shall be issued by either party hereto at any time from the
signing hereof without advance approval in writing of the form and substance by
the other party.
8.8
Entire
Agreement. This Agreement (including the Exhibits and Schedules to be
attached hereto) and the collateral agreements executed in connection with the
consummation of the transactions contemplated herein contain the entire
agreement among the parties with respect to the transactions contemplated
hereby, and supersedes all prior agreements, written or oral, with respect
hereof.
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8.9 Headings. The
headings in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
8.10 Severability of Provisions.
The invalidity or unenforceability of any term, phrase, clause,
paragraph, restriction, covenant, agreement or provision of this Agreement shall
in no way affect the validity or enforcement of any other provision or any part
thereof.
8.11
Counterparts.
This Agreement may be executed in any number of counterparts, each of
which when so executed, shall constitute an original copy hereof, but all of
which together shall consider but one and the same document.
8.12
Binding Effect.
This Agreement shall be binding upon the parties hereto and inure to the
benefit of the parties, their respective heirs, administrators,
executors,
successors
and assigns.
8.13
Press
Releases. The parties will mutually agree as to the wording and timing of
any informational releases concerning this transaction prior to and through
Closing.
SIGNATURE
PAGE FOLLOWS
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IN WITNESS WHEREOF, the
parties have executed this agreement on the Date first above
written.
FOUR
STAR HOLDINGS, INC.
By: /s/ Bobby R. Smith,
Jr.
Name: Bobby R. Smith, Jr.
Its:
Chief Executive Officer
Date: March 31, 2010
FOUR
STAR REALTY, LLC
By: /s/ Frances
Mize
Name:
Frances Mize
Its:
Managing Member
Date: March 31, 2010
Page 19
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SCHEDULE
A
|
Entity
|
Description
|
Amount
Owed
|
Preferred
Stock
|
Un-Restricted
Common
Stock
or Cash
|
Restricted
Common
Stock
|
|
|
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