STOCK PURCHASE AGREEMENT
Agreement dated as of March 6, 2000 between Starfest, Inc., a California
corporation ("SFST"), on the one hand, and MAS Capital Inc. ("MASC").
1. THE ACQUISITION.
1.1 Purchase and Sale Subject to the Terms and Conditions of this Agreement. At
the Closing to be held as provided in Section 2, MASC shall sell the MAS XX
Shares (defined below) to SFST, free and clear of all Encumbrances other than
restrictions imposed by Federal and State securities laws. SFSX shall pay SFSX
Shares (defined below) to MASC, free and clear of all Encumbrances without any
restrictions.
1.2 Purchase Price. SFST will pay $100,000 cash to MASC for 8,250,000 shares of
MAS Acquisition XX Corp. ("MAS XX"), representing approximately 96.8% of the
issued and outstanding common shares of MAS XX (the "MAS XX Shares"). In
addition SFSX will pay 150,000 common shares of Starfest, Inc. ("SFSX Shares",
OTC B/B symbol "SFSX") to MASC as consulting fee.
2. THE CLOSING.
2.1 Place and Time. The closing of the sale the MAS XX Shares (the "Closing")
shall take place at the office of MAS Acquisition XX Corp., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ no later than the close of business (Central time) on
or before March 8, 2000 or at such other place, date and time as the parties may
agree in writing.
2.2 Deliveries by MASC. At the Closing, the MASC shall deliver the following to
SFST:
1. Certificates representing the MAS XX Shares, duly endorsed for transfer to
SFST and accompanied by appropriate guaranteed stock powers; MASC shall deliver
to SFST at the Closing, a certificate representing the MAS XX Shares registered
in the name of SFST (without any legend or other reference to any Encumbrance
other than appropriate federal securities law limitations).
2. The documents contemplated by Section 3.
3. All other documents, instruments and writings required by this Agreement to
be delivered by MASC at the Closing and any other documents or records relating
to MAS XX's business reasonably requested by SFST in connection with this
Agreement.
2.3 Deliveries by SFST. At the Closing, SFST shall deliver the following to
MASC:
1. $100,000 cash by wire transfer to the account of MASC contemplated by
section 1.
2. Certificates representing the SFSX Shares, duly endorsed for transfer to MASC
and accompanied by appropriate guaranteed stock powers; SFST shall deliver to
MASC at the Closing, a certificate representing the SFSX Shares registered in
the name of MASC (without any legend or other reference to any Encumbrance).
2. The documents contemplated by Section 4.
3. All other documents, instruments and writings required by this Agreement
to be delivered by SFST at the Closing.
3. CONDITIONS TO SFST'S OBLIGATIONS.
The obligations of SFST to effect the Closing shall be subject to the
satisfaction at or prior to the Closing of the following conditions, any one or
more of which may be waived by SFST:
3.1 No Injunction. There shall not be in effect any injunction, order or decree
of a court of competent jurisdiction that prevents the consummation of the
transactions contemplated by this Agreement, that prohibits SFST's acquisition
of the MAS XX Shares or that will require any divestiture as a result of SFST's
acquisition of the MAS XX Shares or that will require all or any part of the
business of SFST to be held separate and no litigation or proceedings seeking
the issuance of such an injunction, order or decree or seeking to impose
substantial penalties on SFST or MAS XX if this Agreement is consummated shall
be pending.
3.2 Representations, Warranties and Agreements. (a) The representations and
warranties of MASC set forth in this Agreement shall be true and complete in all
material respects as of the Closing Date as though made at such time, and (b)
MASC shall have performed and complied in all material respects with the
agreements contained in this Agreement required to be performed and complied
with by it at or prior to the Closing.
3.3 Regulatory Approvals. All licenses, authorizations, consents, orders and
regulatory approvals of Governmental Bodies necessary for the consummation of
SFST's acquisition of the MAS XX Shares shall have been obtained and shall be in
full force and effect.
3.4 Resignations of Director. Effective on the Closing Date, all of officers and
directors shall have resigned as an officer, director and employee of MAS XX.
4. CONDITIONS TO MASC'S OBLIGATIONS.
The obligations of MASC to effect the Closing shall be subject to the
satisfaction at or prior to the Closing of the following conditions, any one or
more of which may be waived by MASC:
4.1 No Injunction. There shall not be in effect any injunction, order or decree
of a court of competent jurisdiction that prevents the consummation of the
transactions contemplated by this Agreement, that prohibits SFST's acquisition
of the MAS XX Shares or that will require any divestiture as a result of SFST's
acquisition of the MAS XX Shares or that will require all or any part of the
business of SFST or MAS XX to be held separate and no litigation or proceedings
seeking the issuance of such an injunction, order or decree or seeking to impose
substantial penalties on SFST or MAS XX if this Agreement is consummated shall
be pending.
4.2 Representations, Warranties and Agreements. (a) The representations and
warranties of SFST set forth in this Agreement shall be true and complete in all
material respects as of the Closing Date as though made at such time, and (b)
SFST shall have performed and complied in all material respects with the
agreements contained in this Agreement required to be performed and complied
with by it at or prior to the Closing.
4.3 Regulatory Approvals. All licenses, authorizations, consents, orders and
regulatory approvals of Governmental Bodies necessary for the consummation of
SFST's acquisition of the MAS XX Shares shall have been obtained and shall be in
full force and effect.
5. REPRESENTATIONS AND WARRANTIES OF MASC.
MASC represents and warrants to SFST that, to the knowledge of MASC, and
except as set forth in an MAS XX Disclosure Letter:
5.1 Authorization. MASC is a corporation duly organized, validly existing and in
good standing under the laws of the state of Indiana. This Agreement constitutes
a valid and binding obligation of MASC, enforceable against it in accordance
with its terms.
5.2 Capitalization. The authorized capital stock of MAS XX consists of
80,000,000 authorized shares of stock, par value $.001, and 20,000,000 preferred
shares, par value $.001, of which 8,519,900 common shares are presently issued
and outstanding. No shares have been registered under state or federal
securities laws. As of the Closing Date there will not be outstanding any
warrants, options or other agreements on the part of MAS XX obligating MAS XX to
issue any additional shares of common or preferred stock or any of its
securities of any kind.
5.3 Ownership of MAS XX Shares. The delivery of certificates to SFST provided in
Section 2.2 will result in SFST's immediate acquisition of record and beneficial
ownership of the MAS XX Shares, free and clear of all Encumbrances subject to
applicable State and Federal securities laws.
5.4 Consents and Approvals of Governmental Authorities. Except with respect to
applicable State and Federal securities laws, no consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Body is required to be made or obtained by MAS XX or SFST or any of its
Subsidiaries in connection with the execution, delivery and performance of this
Agreement by MAS XX or the consummation of the sale of the MAS XX Shares to
SFST.
5.5 Financial Statements. MAS XX has delivered to SFST the balance sheet of MAS
XX as at June 30, 1998 and June 30, 1999, and statements of income and changes
in financial position for the fiscal years then ended and the period from
inception to the period then ended, together with the report thereon of MAS XX's
independent accountant (the "MAS XX Financial Statements"). The MAS XX Financial
Statements are accurate and complete in accordance with generally accepted
accounting principles. The independent accountants for MAS XX will furnish any
and all work papers required by SFST and will sign any and all consent required
to be signed to include the financial statements of SFST in any subsequent
filing by SFST.
5.6 Litigation. There is no action, suit, inquiry, proceeding or investigation
by or before any court or Governmental Body pending or threatened in writing
against or involving MAS XX which is likely to have a material adverse effect on
the business or financial condition of MAS XX.
5.7 Absence of Certain Changes. Since the date of the MAS XX Financial
Statements, MAS XX has not:
1. suffered the damage or destruction of any of its properties or assets
(whether or not covered by insurance) which is materially adverse to the
business or financial condition of MAS XX or made any disposition of any of its
material properties or assets other than in the ordinary course of business;
2. made any change or amendment in its certificate of incorporation or
by-laws, or other governing instruments;
3. issued or sold any Equity Securities or other securities, acquired, directly
or indirectly, by redemption or otherwise, any such Equity Securities,
reclassified, split-up or otherwise changed any such Equity Security, or granted
or entered into any options, warrants, calls or commitments of any kind with
respect thereto;
4. organized any new Subsidiary or acquired any Equity Securities of any Person
or any equity or ownership interest in any business;
5. borrowed any funds or incurred, or assumed or become subject to, whether
directly or by way of guarantee or otherwise, any obligation or liability with
respect to any such indebtedness for borrowed money;
6. paid, discharged or satisfied any material claim, liability or obligation
(absolute, accrued, contingent or otherwise), other than in the ordinary course
of business;
7. prepaid any material obligation having a maturity of more than 90 days from
the date such obligation was issued or incurred;
8. canceled any material debts or waived any material claims or rights, except
in the ordinary course of business;
9. disposed of or permitted to lapse any rights to the use of any material
patent or registered trademark or copyright or other intellectual property owned
or used by it;
10. granted any general increase in the compensation of officers or employees
(including any such increase pursuant to any employee benefit plan);
11. purchased or entered into any contract or commitment to purchase any
material quantity of raw materials or supplies, or sold or entered into any
contract or commitment to sell any material quantity of property or assets,
except (i) normal contracts or commitments for the purchase of, and normal
purchases of, raw materials or supplies, made in the ordinary course business,
(ii) normal contracts or commitments for the sale of, and normal sales of,
inventory in the ordinary course of business, and (iii) other contracts,
commitments, purchases or sales in the ordinary course of business;
12. made any capital expenditures or additions to property, plant or equipment
or acquired any other property or assets (other than raw materials and supplies)
at a cost in excess of $100,000 in the aggregate;
13. written off or been required to write off any notes or accounts receivable
in an aggregate amount in excess of $2,000;
14. written down or been required to write down any inventory in an aggregate
amount in excess of $ 2,000;
15. entered into any collective bargaining or union contract or agreement;
or
16. other than the ordinary course of business, incurred any liability required
by generally accepted accounting principles to be reflected on a balance sheet
and material to the business or financial condition of MAS XX.
5.8 No Material Adverse Change. Since the date of the MAS XX Financial
Statements, there has not been any material adverse change in the business or
financial condition of MAS XX.
5.9 Brokers or Finders. MASC has not employed any broker or finder or incurred
any liability for any brokerage or finder's fees or commissions or similar
payments in connection with the sale of the MAS XX Shares to SFST.
6. REPRESENTATIONS AND WARRANTIES OF SFST.
SFST represents and warrants to MASC that, to the Knowledge of SFST (which
limitation shall not apply to Section 6.3). Such representations and warranties
shall survive the Closing for a period of two years.
6.1 Organization of SFST; Authorization. SFST is a corporation duly organized,
validly existing and in good standing under the laws of California with full
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action of
SFST and this Agreement constitutes a valid and binding obligation of SFST;
enforceable against it in accordance with its terms.
6.2 Capitalization. The authorized capital stock of SFST consists of 65,000,000
authorized shares of common stock, no par value of which 23,000,000 are
presently issued and outstanding.
6.3 Ownership of SFSX Shares. The delivery of certificates to MASC provided in
Section 2.2 will result MASC's immediate acquisition of record and beneficial
ownership of the SFST Shares, free and clear of all Encumbrances.
6.2 No Conflict as to SFST and Subsidiaries. Neither the execution and delivery
of this Agreement will (a) violate any provision of the certificate of
incorporation or by-laws (or other governing instrument) of SFST or any of its
Subsidiaries or (b) violate, or be in conflict with, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
required by, or excuse performance by any Person of any of its obligations
under, or cause the acceleration of the maturity of any debt or obligation
pursuant to, or result in the creation or imposition of any Encumbrance upon any
property or assets of SFST or any of its Subsidiaries under, any material
agreement or commitment to which SFST or any of its Subsidiaries is a party or
by which any of their respective property or assets is bound, or to which any of
the property or assets of SFST or any of its Subsidiaries is subject, or (c)
violate any statute or law or any judgment, decree, order, regulation or rule of
any court or other Governmental Body applicable to SFST or any of its
Subsidiaries except, in the case of violations, conflicts, defaults,
terminations, accelerations or Encumbrances described in clause (b) of this
Section 6.4, for such matters which are not likely to have a material adverse
effect on the business or financial condition of SFST and its Subsidiaries,
taken as a whole.
6.4 Consents and Approvals of Governmental Authorities. No consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Body is required to be made or obtained by SFST or any of either of their
Subsidiaries in connection with the execution, delivery and performance of this
Agreement by SFST.
6.5 Other Consents. No consent of any Person is required to be obtained by MAS
XX or SFST to the execution, delivery and performance of this Agreement
including, but not limited to, consents from parties to leases or other
agreements or commitments, except for any consent which the failure to obtain
would not be likely to have a material adverse effect on the business and
financial condition of MAS XX or SFST.
6.6 Financial Statements. After closing, SFST ackwledge and agrees that within
60 days from the effective date of this agreement, SFST shall have file on Form
8-K which includes two years of audited and unaudited consolidated financial
statements of SFST. Such SFST Financial Statements and notes shall fairly
present the financial condition and results of operations of SFST and its
Subsidiaries as at the respective dates thereof and for the periods therein
referred to, all in accordance with generally accepted United States accounting
principles consistently applied throughout the periods involved, except as set
forth in the notes thereto, and shall be utilizable in any SEC filing in
compliance with Rule 310 of Regulation S-B promulgated under the Securities Act.
6.7 Brokers or Finders. SFST has not employed any broker or finder or incurred
any liability for any brokerage or finder's fees or commissions or similar
payments in connection with the purchase of the MAS XX Shares.
6.8 Purchase for Investment. SFST is purchasing the MAS XX Shares solely for its
own account for the purpose of investment and not with a view to, or for sale in
connection with, any distribution of any portion thereof in violation of any
applicable securities law.
7. Access and Reporting; Filings With Governmental Authorities; Other
Covenants.
7.1 Access Between the date of this Agreement and the Closing Date. Each of MASC
and SFST shall (a) give to the other and its authorized representatives
reasonable access to all plants, offices, warehouse and other facilities and
properties of MAS XX or SFST, as the case may be, and to its books and records,
(b) permit the other to make inspections thereof, and (c) cause its officers and
its advisors to furnish the other with such financial and operating data and
other information with respect to the business and properties of such party and
its Subsidiaries and to discuss with such and its authorized representatives its
affairs and those of its Subsidiaries, all as the other may from time to time
reasonably request.
7.2 Regulatory Matters. MASC and SFST shall (a) file with applicable regulatory
authorities any applications and related documents required to be filed by them
in order to consummate the contemplated transaction and (b) cooperate with each
other as they may reasonably request in connection with the foregoing.
8. CONDUCT OF MAS XX'S BUSINESS PRIOR TO THE CLOSING. MASC shall use its best
efforts to ensure the following:
8.1 Operation in Ordinary Course. Between the date of this Agreement and the
Closing Date, MAS XX shall cause conduct its businesses in all material respects
in the ordinary course.
8.2 Business Organization. Between the date of this Agreement and the Closing
Date, MAS XX shall (a) preserve substantially intact the business organization
of MAS XX; and (b) preserve in all material respects the present business
relationships and good will of MAS XX.
8.3 Corporate Organization. Between the date of this Agreement and the Closing
Date, MAS XX shall not cause or permit any amendment of its certificate of
incorporation or by-laws (or other governing instrument) and shall not:
1. issue, sell or otherwise dispose of any of its Equity Securities, or create,
sell or otherwise dispose of any options, rights, conversion rights or other
agreements or commitments of any kind relating to the issuance, sale or
disposition of any of its Equity Securities;
2. create or suffer to be created any Encumbrance thereon, or create, sell or
otherwise dispose of any options, rights, conversion rights or other agreements
or commitments of any kind relating to the sale or disposition of any Equity
Securities;
3. reclassify, split up or otherwise change any of its Equity Securities; be
party to any merger, consolidation or other business combination;
4. sell, lease, license or otherwise dispose of any of its properties or assets
(including, but not limited to rights with respect to patents and registered
trademarks and copyrights or other proprietary rights), in an amount which is
material to the business or financial condition of MAS XX except in the ordinary
course of business; or
5. organize any new Subsidiary or acquire any Equity Securities of any Person or
any equity or ownership interest in any business.
8.4 Other Restrictions. Between the date of this Agreement and the
Closing Date, MAS XX shall not:
1. borrow any funds or otherwise become subject to, whether directly or by
way of guarantee or otherwise, any indebtedness for borrowed money;
2. create any material Encumbrance on any of its material properties or
assets;
3. increase in any manner the compensation of any director or officer or
increase in any manner the compensation of any class of employees;
4. create or materially modify any material bonus, deferred compensation,
pension, profit sharing, retirement, insurance, stock purchase, stock option, or
other fringe benefit plan, arrangement or practice or any other employee benefit
plan (as defined in section 3(3) of ERISA);
5. make any capital expenditure or acquire any property or assets;
6. enter into any agreement that materially restricts SFST, MAS XX or any of
their Subsidiaries from carrying on business;
7. pay, discharge or satisfy any material claim, liability or obligation,
absolute, accrued, contingent or otherwise, other than the payment, discharge or
satisfaction in the ordinary course of business of liabilities or obligations
reflected in the MAS XX Financial Statements or incurred in the ordinary course
of business and consistent with past practice since the date of the MAS XX
Financial Statements; or
8. cancel any material debts or waive any material claims or rights.
9. DEFINITIONS.
As used in this Agreement, the following terms have the meanings specified
or referred to in this Section 9.
9.1 "Business Day" = Any day that is not a Saturday or Sunday or a day on which
banks located in the City of New York are authorized or required to be closed.
9.2 "Code" = The Internal Revenue Code of 1986, as amended.
9.3 "Encumbrances" = Any security interest, mortgage, lien, charge, adverse
claim or restriction of any kind, including, but not limited to, any restriction
on the use, voting, transfer, receipt of income or other exercise of any
attributes of ownership, other than a restriction on transfer arising under
Federal or state securities laws.
9.4 "Equity Securities" = See Rule 3aB11B1 under the Securities Exchange Act of
1934.
9.5 "ERISA" = The Employee Retirement Income Security Act of 1974, as amended.
9.6 "Governmental Body" = Any domestic or foreign national, state or municipal
or other local government or multi-national body (including, but not limited to,
the European Economic Community), any subdivision, agency, commission or
authority thereof.
9.7 "Knowledge" = Actual knowledge, after reasonable investigation.
9.8 "Person" = Any individual, corporation, partnership, joint venture, trust,
association, unincorporated organization, other entity, or Governmental Body.
9.9 "Subsidiary" = With respect to any Person, any corporation of which
securities having the power to elect a majority of that corporation's Board of
Directors (other than securities having that power only upon the happening of a
contingency that has not occurred) are held by such Person or one or more of its
Subsidiaries.
10. TERMINATION.
10.1 Termination. This Agreement may be terminated before the Closing occurs
only as follows:
1. By MASC at any time on or after March 8, 2000, if $100,000 cash is not
received by MASC at MASC's account.
2. By SFST, by notice to MASC at any time, if one or more of the conditions
specified in Section 3 is not satisfied at the time at which the Closing (as it
may be deferred pursuant to Section 2.1) would otherwise occur or if
satisfaction of such a condition is or becomes impossible.
3. By MASC, by notice to SFST at any time, if one or more of the conditions
specified in Section 4 is not satisfied at the time at which the Closing (as it
may be deferred pursuant to Section 2.1), would otherwise occur of if
satisfaction of such a condition is or becomes impossible.
10.2 Effect of Termination. If this Agreement is terminated pursuant to Section
10.1, this Agreement shall terminate without any liability or further obligation
of any party to another.
13. NOTICES. All notices, consents, assignments and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
when (a) delivered by hand, (b) sent by telex or facsimile (with receipt
confirmed), provided that a copy is mailed by registered mail, return receipt
requested, or (c) received by the delivery service (receipt requested), in each
case to the appropriate addresses, telex numbers and facsimile numbers set forth
below (or to such other addresses, telex numbers and facsimile numbers as a
party may designate as to itself by notice to the other parties).
(a) If to SFST:
Starfest, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
(b) If to MASC:
MAS Capital Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, President
14. MISCELLANEOUS.
14.2 Expenses. Each party shall bear its own expenses incident to the
preparation, negotiation, execution and delivery of this Agreement and the
performance of its obligations hereunder.
14.3 Captions. The captions in this Agreement are for convenience of reference
only and shall not be given any effect in the interpretation of this agreement.
14.4 No Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
14.5 Exclusive Agreement; Amendment. This Agreement supersedes all prior
agreements among the parties with respect to its subject matter with respect
thereto and cannot be changed or terminated orally.
14.6 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be considered an original, but all of which together shall
constitute the same instrument.
14.7 Governing Law, Venue. This Agreement and (unless otherwise provided) all
amendments hereof and waivers and consents hereunder shall be governed by the
internal law of the State of Indiana, without regard to the conflicts of law
principles thereof. Venue for any cause of action brought to enforce any part of
this Agreement shall be in Indiana.
14.8 Binding Effect. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns, provided
that neither party may assign its rights hereunder without the consent of the
other, provided that, after the Closing, no consent of MAS XX or the MASC shall
be needed in connection with any merger or consolidation of SFST with or into
another entity.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective offi-cers, hereunto duly authorized, and
entered into as of the date first above written.
STARFEST, INC.
a California corporation
/s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
MAS CAPITAL INC.
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By: ▇▇▇▇▇ ▇▇▇▇, President
