EXHIBIT 10.01
AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of this the
30th day of October, 1996 by and among (a) Zeotech Industries, Inc. ("Zeotech"),
▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇.▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), KJM Capital Corp. ("KJM"), ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. ("▇▇▇▇▇▇▇▇"), (b) LS Capital
Corporation, a Delaware corporation ("LS Capital"), and (c) ▇▇▇▇▇▇▇ Gold Group,
Inc., a Delaware corporation and a wholly-owned subsidiary of LS Capital prior
to the consummation of the transactions provided for by this Agreement
("▇▇▇▇▇▇▇"). For purposes of this Agreement, in certain cases, Zeotech and
Hemsted (acting separately or collectively) are referred to collectively as
"Zeotech/Hemsted", and KJM and ▇▇▇▇▇▇▇▇ (acting separately or collectively) are
referred to collectively as "KJM/▇▇▇▇▇▇▇▇."
Recitals
WHEREAS, Zeotech/Hemsted, Groves, KJM/▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ (such persons
are referred to separately as a "Contributor" and collectively as the
"Contributors") separately own certain mining claims, namely the ▇▇▇▇▇▇ Claims
and that portion of the Barstow claims that are not committed, such claims being
more fully described on Exhibit A hereto applicable to the ▇▇▇▇▇▇ Claims and
Exhibit B hereto applicable to the Barstow Claim (such claims are referred to
separately as a "Claim" and collectively as the "Claims");
WHEREAS, the Contributors are willing to contribute the Claims to ▇▇▇▇▇▇▇
in exchange for shares of common stock in ▇▇▇▇▇▇▇ (the "▇▇▇▇▇▇▇ Shares") and
shares of common stock in LS Capital (the "LS Capital Shares"), all upon the
terms, provisions and conditions set forth hereinafter; and
WHEREAS, ▇▇▇▇▇▇▇ is willing to receive a contribution of the Claims in
exchange for the issuance of ▇▇▇▇▇▇▇ Shares, all upon the terms, provisions and
conditions set forth hereinafter, and LS Capital is willing for ▇▇▇▇▇▇▇ to
receive a contribution of the Claims in exchange for the issuance of LS Capital
Shares, all upon the terms, provisions and conditions set forth hereinafter;
Agreement
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, $10.00 and other good and valuable consideration (the receipt, adequacy
and sufficiency of which are hereby acknowledged by each of the parties hereto),
each of the parties mentioned above hereby agrees as follows:
1. General Representations and Warranties.
(a) Each of Zeotech, Hemsted, Groves, KJM, ▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇
(referred to hereinafter separately as a "Representor" and collectively as the
"Representors"), severally but not jointly, hereby represents and warrants to LS
Capital and ▇▇▇▇▇▇▇ that such Representor has full right, power and authority to
execute and deliver this Agreement and all other agreements, documents and
instruments to be executed in connection herewith and perform such Representor's
obligation hereunder and thereunder; each corporate Representor has been duly
organized, is validly existing and is in good standing in the jurisdiction in
which it was incorporated; the execution and delivery by a corporate Representor
of this Agreement and all other agreements, documents and instruments to be
executed by such Representor in connection herewith have been authorized by all
necessary corporate action by such Representor; when this Agreement and all
other agreements, documents and instruments to be executed by such Representor
in connection herewith are executed by such Representor and delivered to LS
Capital and ▇▇▇▇▇▇▇, this Agreement and such other agreements, documents and
instruments will constitute the valid and binding agreements of such Representor
enforceable against such Representor in accordance with their respective terms;
neither the execution and delivery of this Agreement or any other agreements,
documents and instruments to be executed in connection herewith nor the
consummation of the transactions contemplated hereby or thereby will (i)
violate, conflict with or result in the breach or termination of, or otherwise
give any other contracting party the right to terminate, or constitute a default
(by way of substitution, novation or otherwise) under the terms of, any contract
to which such Representor is a party or by which such Representor is bound or by
which any of the assets of such Representor is bound or affected, (ii) violate
any judgment against, or binding upon, such Representor or upon the assets of
such Representor, (iii) result in the creation of any lien, charge or
encumbrance upon any assets of such Representor pursuant to the terms of any
such contract, or (iv) violate any provision in the charter documents, bylaws or
any other agreement affecting the governance and control of any corporate
Representor; there are no actions, suits, claims or legal, administrative or
arbitration proceedings or investigations pending or threatened against,
involving or affecting any of the assets of such Representor, this Agreement, or
the transactions contemplated hereby, and there are no outstanding orders,
writs, injunctions or decrees of any court, governmental agency or arbitration
tribunal against, involving or affecting any assets of such Representor, this
Agreement, or the transactions contemplated hereby; no consent or approval from
any person is required in connection with the execution and delivery of this
Agreement other than board of director approval of each corporate Representor,
which has already been obtained; and the representations and warranties made
immediately above and elsewhere herein are material to LS Capital and ▇▇▇▇▇▇▇
and are being relied upon by LS Capital and ▇▇▇▇▇▇▇ in connection with their
decisions to enter into the transactions provided for by this Agreement.
(b) Each of LS Capital and ▇▇▇▇▇▇▇, severally but not jointly, hereby
represents and warrants to each Representor that it has full right, power and
authority to execute and deliver this Agreement and all other agreements,
documents and instruments to be executed by it in connection herewith and
perform its obligation hereunder and thereunder; it has been duly organized, is
validly existing and is in good standing in the jurisdiction in which it was
incorporated; the execution and delivery by it of this Agreement and all other
agreements, documents and instruments to be executed by it in connection
herewith have been authorized by all necessary corporate action; when this
Agreement and all other agreements, documents and instruments to be executed by
it in connection herewith are executed by it and delivered to the Representors,
this Agreement and such other agreements, documents and instruments will
constitute the valid and binding agreements of it enforceable against it in
accordance with their respective terms; neither the execution and delivery of
this Agreement or any other agreements, documents and instruments to be executed
in connection herewith nor the consummation of the transactions contemplated
hereby or thereby will (i) violate, conflict with or result in the breach or
termination of, or otherwise give any other contracting party the right to
terminate, or constitute a default (by way of substitution, novation or
otherwise) under the terms of, any contract to which it is a party or by which
it is bound or by which any of the assets of it is bound or affected, (ii)
violate any judgment against, or binding upon, it or upon its assets, (iii)
result in the creation of any lien, charge or encumbrance upon any of its assets
pursuant to the terms of any such contract, or (iv) violate any provision in the
charter documents, bylaws or any other agreement affecting the governance and
control of it; there are no actions, suits, claims or legal, administrative or
arbitration proceedings or investigations pending or threatened against,
involving or affecting any of its assets, this Agreement, or the transactions
contemplated hereby, and there are no outstanding orders, writs, injunctions or
decrees of any court, governmental agency or arbitration tribunal against,
involving or affecting any of its assets, this Agreement, or the transactions
contemplated hereby; no consent or approval from any person is required in
connection with the execution and delivery of this Agreement; the outstanding
capital stock of ▇▇▇▇▇▇▇ consists of 5,000,000 ▇▇▇▇▇▇▇ Shares, all of which are
owned by LS Capital; the ▇▇▇▇▇▇▇ Shares and the LS Capital Shares to be issued
to the Contributors pursuant to this Agreement shall be duly authorized, validly
issued, fully paid and non-assessable at the time that they are issued; and the
representations and warranties made immediately above and elsewhere herein are
material to each Representor and are being relied upon by each Representor in
connection with such Representor's decision to enter into the transactions
provided for by this Agreement.
2. Contribution of Claims and Issuance of ▇▇▇▇▇▇▇ Shares.
(a) Each Contributor agrees to contribute as soon as possible after the
date of this Agreement, by means of customary assignment documents reasonably
selected by LS Capital and ▇▇▇▇▇▇▇ and reasonably approved by the Contributors
(the "Assignments"), full right, title and interest in and to each Claim held by
such Contributor, free and clear of all liens, mortgages, security interests,
encumbrances, claims and restrictions on the transfer thereof. Each Contributor
hereby agrees that he will execute and deliver, or cause to be executed and
delivered, from time to time after the date hereof, upon the request of LS
Capital or ▇▇▇▇▇▇▇, such other instruments of assignment, transfer and
conveyance and will take such other action as LS Capital or ▇▇▇▇▇▇▇ may
reasonably require to effectuate and/or evidence the contribution provided for
herein. Each Contributor hereby represents and warrants to LS Capital and
▇▇▇▇▇▇▇ that the execution by such Contributor and delivery to ▇▇▇▇▇▇▇ of the
Assignment respecting the Claims to be contributed to ▇▇▇▇▇▇▇ by such
Contributor will vest in ▇▇▇▇▇▇▇ full right, title and interest in and to such
Claims, free and clear of any and all encumbrances, security interests, liens,
charges, claims, restrictions or limitations, whatsoever, by any person of any
kind, including those on the transfer thereof, whether known or unknown.
(b) In consideration of the contribution by the Contributors of the Claims
to ▇▇▇▇▇▇▇, each Contributor shall be issued ▇▇▇▇▇▇▇ Shares; provided, however,
pending ▇▇▇▇▇▇▇'▇ receipt of the full amount of the Additional Capital
Contribution (as defined herein) the stock certificates representing
the ▇▇▇▇▇▇▇ Shares issued to the Contributors shall be held by ▇▇▇▇▇▇▇ and
released to the Contributors only upon ▇▇▇▇▇▇▇'▇ receipt of the full amount of
the Additional Capital Contribution. The number of ▇▇▇▇▇▇▇ Shares to issued to
each Contributor is indicated in the table below.
Number of ▇▇▇▇▇▇▇ Shares
Zeotech/Hemsted 1,250,000
▇▇▇▇▇▇ 1,250,000
KJM/▇▇▇▇▇▇▇▇ 1,375,000
▇▇▇▇▇▇▇▇ 1,125,000
(c) (i) If any Contributor or LS Capital (referred to in this Section 2(c)
as the "Transferring Stockholder") desires to dispose of its ▇▇▇▇▇▇▇ Shares now
owned or hereafter acquired, the Transferring Stockholder shall first offer, in
writing in the manner provided for in Section 10(g) hereof, to sell its ▇▇▇▇▇▇▇
Shares to ▇▇▇▇▇▇▇, at a purchase price and on such terms as the Transferring
Stockholder intends in good faith to sell to a bona fide third party. The
written offer shall contain the identity of the proposed transferee and the
purchase price and terms upon which the transfer is proposed to occur. Following
the receipt of the written offer provided for hereinabove, ▇▇▇▇▇▇▇ shall have an
option, exercisable for thirty (30) days, to purchase all or any portion of the
▇▇▇▇▇▇▇ Shares proposed to be sold at the price and on the terms set forth in
the notice. If ▇▇▇▇▇▇▇ fails to exercise its option with respect to all of the
▇▇▇▇▇▇▇ Shares proposed to be transferred, then ▇▇▇▇▇▇▇ shall notify immediately
each of its stockholders of its failure to fully exercise its option. The
▇▇▇▇▇▇▇ stockholders shall then have concurrent options, exercisable for fifteen
(15) days commencing on the date of ▇▇▇▇▇▇▇'▇ notice, to purchase all or any
portion of the ▇▇▇▇▇▇▇ Shares not purchased by ▇▇▇▇▇▇▇, on a basis proportionate
to their respective stock ownership. If one or more of the ▇▇▇▇▇▇▇ stockholders
elects to purchase such stockholders' full proportionate shares and one or more
others do not, the ▇▇▇▇▇▇▇ stockholders who exercised their options to purchase
their full proportionate shares shall have concurrent options to purchase all of
the remaining ▇▇▇▇▇▇▇ Shares subject to the options, on a basis proportionate to
their respective stock ownership, exercisable for a period of five (5) days from
the expiration of the ▇▇▇▇▇▇▇ stockholders' initial concurrent options. The
foregoing procedure shall be repeated until each ▇▇▇▇▇▇▇ stockholder has had an
opportunity to purchase as many of the ▇▇▇▇▇▇▇ Shares subject to the options as
such stockholder desires, subject to the right of the other ▇▇▇▇▇▇▇ stockholders
to purchase their full proportionate shares. Notwithstanding anything else
contained in this Section 2(c), neither ▇▇▇▇▇▇▇ nor the ▇▇▇▇▇▇▇ stockholders
shall have any rights to purchase any ▇▇▇▇▇▇▇ Shares proposed to be transferred
by the Transferring Stockholder unless ▇▇▇▇▇▇▇ and/or the ▇▇▇▇▇▇▇ stockholders,
separately or collectively, exercise the options provided for in this Section
2(c) with respect to all, and not less than all, of the ▇▇▇▇▇▇▇ Shares proposed
to be transferred.
(ii) In the event that all of the ▇▇▇▇▇▇▇ Shares proposed to be sold
by the Transferring Stockholder are not purchased in accordance with this
Section 2(c) before the expiration of the time periods established in this
Section 2(c) therefor, all of the ▇▇▇▇▇▇▇ Shares may be sold to the transferee
identified in the written notice to ▇▇▇▇▇▇▇ at a price no lower and upon terms
no more favorable than the price and terms that the ▇▇▇▇▇▇▇ Shares could have
been purchased pursuant to the options to which it was subject. Such sale shall
be free and clear of the terms of this Section 2(c) during the three-month
period beginning on the date that the last option period in this Section 2(c)
terminates, but thereafter any ▇▇▇▇▇▇▇ Shares not so sold shall again be subject
to the terms and conditions of this Section 2(c). Any attempted disposition in
contravention of the provisions of this Section 2(c) shall be null and void
and of no force and effect and, therefore, shall not preclude the exercise of
the options provided for in this Section 2(c).
(iii) The closing of the sale and purchase of any ▇▇▇▇▇▇▇ Shares
pursuant to this Section 2(c) shall occur within fifteen (15) days after the
last option exercised is exercised in accordance with this Section 2(c). At the
closing, (a) the Transferring Stockholder shall deliver the appropriate stock
certificates, properly endorsed or accom- panied by a properly prepared and
executed stock power, and (b) the purchasers shall deliver the consideration
required by this Section 2(c). Each of the parties hereby grants to the other
the right of specific performance with respect to this Section 2(c) in
recognition of the uniqueness of the subject matter hereof.
(iv) All certificates representing ▇▇▇▇▇▇▇ Shares now owned or that
may hereafter be acquired by a Contributor or LS Capital shall have a legend on
the back thereof substantially as follows:
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST
REFUSAL AGREEMENT WHICH PROVIDES SIGNIFICANT RESTRICTIONS ON THE
TRANSFERABILITY OF THE SHARES REPRESENTED HEREBY.
Such certificates shall state on the front thereof substantially as
follows:
SEE RESTRICTIONS ON TRANSFER HEREOF ON REVERSE SIDE.
(v) The agreements contained in this Section 2(c) may be terminated
by an instrument in writing signed by all Contributors and LS Capital. The
agreements contained in this Section 2(c) shall automatically terminate whenever
the ▇▇▇▇▇▇▇ Shares or any securities received with respect to the ▇▇▇▇▇▇▇ Shares
becomes registered under the Act.
3. Issuance of LS Capital Shares. In further consideration of the
contribution by Zeotech/Hemsted, ▇▇▇▇▇▇ and KJM/▇▇▇▇▇▇▇▇ of their respective
Claims to ▇▇▇▇▇▇▇, Zeotech/Hemsted, ▇▇▇▇▇▇ and KJM/▇▇▇▇▇▇▇▇ shall be issued LS
Capital Shares. The number of LS Capital Shares to issued to Zeotech/Hemsted,
▇▇▇▇▇▇ and KJM/▇▇▇▇▇▇▇▇ is indicated in the table below.
Number of LS Capital Shares
Zeotech/Hemsted 166,666
▇▇▇▇▇▇ 166,666
KJM/▇▇▇▇▇▇▇▇ 166,667
4. Additional Capital Contribution. From time to time but on or before
▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇/▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and KJM/▇▇▇▇▇▇▇▇ shall make an
additional capital contribution (the "Additional Capital Contribution") to
▇▇▇▇▇▇▇ in the aggregate amount of $500,000 for which Zeotech/Hemsted, ▇▇▇▇▇▇
and KJM/▇▇▇▇▇▇▇▇ shall receive no additional ▇▇▇▇▇▇▇ Shares, LS Capital Shares
or any other item. Each of Zeotech/Hemsted, ▇▇▇▇▇▇ and KJM/▇▇▇▇▇▇▇▇ grants to LS
Capital a pledge of and security interest in and agrees and acknowledges that LS
Capital has and shall continue to have a pledge of and security interest each
and every one of the ▇▇▇▇▇▇▇ Shares issued to them separately pursuant to
Section 2 above, to secure their obligations to make the Additional Capital
Contribution on or before April 30, 1997; and if they fail to fulfill such
obligations timely LS Capital shall have all rights and remedies of a secured
party with respect to such ▇▇▇▇▇▇▇ Shares.
5. Securities Representations and Warranties.
(a) Each Contributor (other than ▇▇▇▇▇▇▇▇), severally but not jointly,
hereby represents and warrants to LS Capital and ▇▇▇▇▇▇▇ that such Contributor
is not a "U.S. Person" as that term in defined in Regulation S under Securities
Act of 1933 (the "Act"); at the time the buy order originated for any ▇▇▇▇▇▇▇
Shares or LS Capital Shares and the date of this Agreement, such Contributor was
and will be outside of the United States of America (the "U.S."); such
Contributor is acquiring the Griffin Shares and the LS Capital Shares for its
own account and not on behalf of any U.S. Person, and a sale has not been
prearranged with a U.S. Person or a purchaser in the U.S.; such Contributor
agrees that all offers and sales of the ▇▇▇▇▇▇▇ Shares and the LS Capital Shares
prior to the expiration of a period commencing on the date of the issuance
thereof and ending 40 days thereafter shall only be made in compliance with the
safe harbor contained in Regulation S, or pursuant to the registration thereof
or an exemption from registration (and in all cases in accordance with Section
2(c) hereof), and that all offers and sales in the U.S. after expiration of the
40- day period shall be made only pursuant to the registration thereof or an
exemption from registration (and in all cases in accordance with Section 2(c)
hereof); all offering documents received by such Contributor have included
statements, and all stock certificates that such Contributor shall receive
representing ▇▇▇▇▇▇▇ Shares or LS Capital Shares shall feature legends, to the
effect that the ▇▇▇▇▇▇▇ Shares and the LS Capital Shares have not been
registered under the Act and may not be offered or sold in the U.S. or to U.S.
Persons prior to the expiration of a period commencing on the date of the
issuance thereof and ending 40 days thereafter and all offers and sales shall
only be made in compliance with the safe harbor contained in Regulation S, or
pursuant to the registration thereof or an exemption from registration; such
Contributor has been furnished with LS Capital's most recent Annual Report on
Form 10-K and any subsequent Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K; such Contributor is familiar with the business and financial
condition, properties, operations and prospects of LS Capital and ▇▇▇▇▇▇▇, and
has been given full access to all material information concerning the condition,
properties, operations and prospects of LS Capital and ▇▇▇▇▇▇▇; such Contributor
has had an opportunity to ask such questions of, and to receive such information
from, LS Capital and ▇▇▇▇▇▇▇ as such Contributor has desired and to obtain any
additional information necessary to verify the accuracy of the information and
data received; and such Contributor is satisfied that there is no material
information concerning the condition, properties, operations and prospects of LS
Capital and ▇▇▇▇▇▇▇, of which such Contributor is unaware.
(b) ▇▇▇▇▇▇▇▇ hereby represents and warrants to LS Capital and ▇▇▇▇▇▇▇ that
he is a director of LS Capital and that as such he is familiar with the business
and financial condition, properties, operations and prospects of LS Capital and
▇▇▇▇▇▇▇, he has been given full access to all material information concerning
the condition, properties, operations and prospects of LS Capital and ▇▇▇▇▇▇▇,
he has had an opportunity to ask such questions of, and to receive such
information from, LS Capital and ▇▇▇▇▇▇▇ as he has desired and to obtain any
additional information necessary to verify the accuracy of the information and
data received, and he is satisfied that there is no material information
concerning the condition, properties, operations and prospects of LS Capital and
▇▇▇▇▇▇▇, of which he is unaware; he has such knowledge, skill and experience in
business, financial and investment matters so that he is capable of evaluating
the merits and risks of an acquisition of the ▇▇▇▇▇▇▇ Shares; he has reviewed
its or his financial condition and commitments and that, based on such review,
he is satisfied that he (a) has adequate means of providing for contingencies,
(b) has no present or contemplated future need to dispose of all or any of the
▇▇▇▇▇▇▇ Shares to satisfy existing or contemplated undertakings, needs or
indebtedness, (c) is capable of bearing the economic risk of the ownership of
the ▇▇▇▇▇▇▇ Shares for the indefinite future, and (d) has assets or sources of
income which, taken together, are more than sufficient so that he could bear the
loss of the entire value of the ▇▇▇▇▇▇▇ Shares; he is acquiring the ▇▇▇▇▇▇▇
Shares solely for his own beneficial account, for investment purposes, and not
with a view to, or for resale in connection with, any distribution of the
▇▇▇▇▇▇▇ Shares; he understands that the ▇▇▇▇▇▇▇ Shares have not been registered
under the Act or any state securities laws and therefore the ▇▇▇▇▇▇▇ Shares are
"restricted" under such laws; and he has not offered or sold any portion of the
▇▇▇▇▇▇▇ Shares and has no present intention of reselling or otherwise disposing
of any portion of the ▇▇▇▇▇▇▇
Shares either currently or after the passage of a fixed or determinable period
of time or upon the occurrence or non-occurrence of any predetermined event or
circumstance.
6. Securities Registration. ▇▇▇▇▇▇▇ may at the option of its Board of
Directors register with the United States Securities and Exchange Commission
(the "Commission") an in-kind dividend to the stockholders of LS Capital
consisting of 1,000,000 ▇▇▇▇▇▇▇ Shares owned by LS Capital, which shares equal
10% of the total number of outstanding ▇▇▇▇▇▇▇ Shares. In the event of such
registration, ▇▇▇▇▇▇▇ shall use its best efforts to qualify such ▇▇▇▇▇▇▇ Shares
under the securities laws for each state for which an exemption is not available
and qualification is required, unless the cost and expense of such qualification
outweighs the benefit of qualification. In connection with any registration
undertaken pursuant to this Section 6, each Contributor shall use reasonable
efforts to cooperate with ▇▇▇▇▇▇▇ and LS Capital and will furnish to ▇▇▇▇▇▇▇ and
LS Capital in writing such information, as shall be reasonably necessary in
order to assure compliance with federal and applicable state securities laws
pertaining to disclosure and otherwise, with respect to the Claims, the gold
mining industry and the micro-fine ▇▇▇▇▇ recovery technology, know-how, trade
secrets and inventions developed by ▇▇▇▇▇▇ (as described in United States Patent
No. 5,405,430 or any substitutes, revisions, continuations,
continuations-in-part, renewals, reissues, re-examinations, extensions, and
divisions thereof, or any other Letters Patent therefore in the United States or
any countries foreign to the United States), as well as any subsequent
improvements, modifications, variations, additions, substitutions, or
enhancements of such technology, know-how, trade secrets and inventions.
Moreover, each Contributor shall, upon the request of ▇▇▇▇▇▇▇, review drafts of
the registration statement to be filed the Commission and any and all amendments
thereto and furnish ▇▇▇▇▇▇▇ with such Contributor's comments upon and approval
of or reasons for declining to approve such portions of the drafts for which
▇▇▇▇▇▇▇ has requested comments and approval. Any such portions with respect to
which a Contributor has not expressly disapproved in writing shall be deemed
approved by such Contributor. ▇▇▇▇▇▇▇ shall pay all registration expenses in
connection with any registration undertaken pursuant to this Section 6.
7. Spin-Off. As soon as possible after the registration statement filed in
connection with any registration undertaken pursuant to Section 6 above is
declared effective, LS Capital shall declare and effect to its stockholders a
pro-rata, in-kind dividend of the ▇▇▇▇▇▇▇ Shares registered. In this connection,
LS Capital shall deliver to each of its stockholders receiving the registered
▇▇▇▇▇▇▇ Shares an unlegended stock certificate representing the ▇▇▇▇▇▇▇ Shares
that such stockholder is to receive as well as a copy of the prospectus
comprising part of the registration statement declared effective during the
course of any registration undertaken pursuant to Section 6.
8. Termination. If Zeotech/Hemsted, ▇▇▇▇▇▇ and KJM/▇▇▇▇▇▇▇▇ fails to make
the full $500,000 Additional Capital Contribution on or before April 30, 1997,
this Agreement shall, except as hereafter provided, become null and void, the
parties hereto shall be relieved of any further duties, obligations and
responsibilities with respect to this Agreement, and the parties shall cooperate
in good faith in unwinding all actions taken in reliance on this Agreement.
Notwithstanding the preceding, the following actions shall occur upon the
termination of this Agreement pursuant to the preceding:
(a) Each Contributor shall deliver to LS Capital and ▇▇▇▇▇▇▇ (as the case
may be) all stock certificates representing ▇▇▇▇▇▇▇ Shares and LS Capital Shares
not theretofore sold, and such stock certificates shall be cancelled;
(b) LS Capital may exercise the rights of a secured creditor to realize
the portion of the Additional Capital Contribution not made in accordance with
Section 4 above;
(c) ▇▇▇▇▇▇▇ shall reconvey to each Contributor each Claim contributed by
such Contributor to ▇▇▇▇▇▇▇, such reconveyance being by means of a document in
substantially the form of the Assignment contributing such Claim to ▇▇▇▇▇▇▇; and
(d) The indemnification provisions of Section 9 shall remain in full force
and effect for two years after the date of termination.
9. General Indemnification.
(a) All representations and warranties made herein by a party hereto shall
survive all transactions provided for or contemplated herein, including, without
limitation, the contribution of the Claims to ▇▇▇▇▇▇▇, the issuance and sale of
the ▇▇▇▇▇▇▇ Shares and the LS Capital Shares, the Additional Capital
Contribution, any registration of the ▇▇▇▇▇▇▇ Shares permitted in Section 6
hereof, any spin-off of the ▇▇▇▇▇▇▇ Shares provided for in Section 7 hereof, or
the termination of this Agreement.
(b) Each of Zeotech, Hemsted, Groves, KJM, ▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇,
severally but not jointly, shall protect, indemnify and hold LS Capital and
▇▇▇▇▇▇▇ harmless from any and all demands, claims, actions, causes of actions,
lawsuits, proceedings, judgments, losses, damages, injuries, liabilities,
obligations, expenses and costs (including costs of litigation and attorneys'
fees), arising from any breach of any agreement, representation or warranty made
by such indemnifying party in this Agreement.
(c) Each of LS Capital and ▇▇▇▇▇▇▇, severally but not jointly, shall
protect, indemnify and hold each of Zeotech, Hemsted, Groves, KJM, ▇▇▇▇▇▇▇▇, and
▇▇▇▇▇▇▇▇ harmless from any and all demands, claims, actions, causes of actions,
lawsuits, proceedings, judgments, losses, damages, injuries, liabilities,
obligations, expenses and costs (including costs of litigation and attorneys'
fees), arising from any breach of any agreement, representation or warranty made
by it in this Agreement.
10. Securities Indemnification.
(a) Each of Zeotech, Hemsted, Groves, KJM, ▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇,
severally but not jointly, shall protect, indemnify and hold LS Capital and
▇▇▇▇▇▇▇ harmless from any and all demands, claims, actions, causes of actions,
lawsuits, proceedings, investigations, judgments, losses, damages, injuries,
liabilities, obligations, expenses and costs (including costs of litigation and
attorneys' fees), arising out of or based upon (a) any untrue statement or
alleged untrue statement of any material fact contained in or incorporated by
reference into the registration statement under which the ▇▇▇▇▇▇▇ Shares are
registered pursuant to Section 6, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, (b) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (c) any material
violation by the indemnifying party of any rule or regulation promulgated under
the Act applicable to the indemnifying party and relating to action or inaction
by the indemnifying party in connection with any such registration; provided,
however, that the indemnifying party shall be liable in the case of (a) and (b)
above only if and to the extent that the event giving rise to indemnification
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in conformity with information furnished by
the indemnifying party in writing specifically for use in the registration
statement or prospectus or information contained in a writing that has been
expressly approved or deemed approved by the indemnifying party.
(b) Each of LS Capital and ▇▇▇▇▇▇▇, severally but not jointly, shall
protect, indemnify and hold each of Zeotech, Hemsted, Groves, KJM, ▇▇▇▇▇▇▇▇, and
▇▇▇▇▇▇▇▇ harmless from any and all demands, claims, actions, causes of actions,
lawsuits, proceedings, investigations, judgments, losses, damages, injuries,
liabilities, obligations, expenses and costs (including costs of litigation and
attorneys' fees), arising out of or based upon (a) any untrue statement or
alleged untrue statement of any material fact contained in or incorporated by
reference into the registration statement under which the ▇▇▇▇▇▇▇ Shares are
registered pursuant to Section 6, any preliminary prospectus or final prospectus
contained
therein, or any amendment or supplement thereto, (b) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (c) any material
violation by ▇▇▇▇▇▇▇ or LS Capital of any rule or regulation promulgated under
Act applicable to ▇▇▇▇▇▇▇ or LS Capital and relating to action or inaction by
▇▇▇▇▇▇▇ in connection with any such registration; provided, however, that
▇▇▇▇▇▇▇ and LS Capital will not be liable in the case of (a) and (b) above if
and to the extent that the event otherwise giving rise to indemnification arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in conformity with information furnished by a
person otherwise indemnified hereby in writing specifically for use in the
registration statement or prospectus or information contained in a writing that
has been expressly approved or deemed approved by the otherwise indemnified
party.
(c) Promptly after receipt by an indemnified party under this Section 10
of notice of the threat or commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party
hereunder, notify each such indemnifying party in writing thereof, but the
omission so to notify an indemnifying party shall not relieve it from any
liability which it may have to any indemnified party to the extent that the
indemnifying party is not prejudice as a result thereof. In case any such action
shall be brought against any indemnified party and it shall notify an
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel reasonably satisfactory to such
indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 10 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so elected; provided,
however, that, if the defendants in any such action include both an indemnified
party and an indemnifying party and the related indemnified party shall have
reasonably concluded that there may be reasonable defenses available to it which
are different from or additional to those available to the indemnifying party or
if the interests of the indemnified party reasonably may be believed to conflict
with the interests of the indemnifying party, the indemnified party shall have
the right to select separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred. No indemnifying party
will be subject to any liability for any settlement made without consent which
shall not be unreasonably withheld. No indemnifying party will consent to the
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability with respect to such claim or
litigation.
11. General.
(a) THIS AGREEMENT AND ALL QUESTIONS RELATING TO ITS VALIDITY,
INTERPRETATION, PERFORMANCE, AND ENFORCEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
(b) Mandatory venue for any controversy arising out of or relating to this
Agreement or any modification or extension thereof, including any claims for
breach, for damages, and/or for recision or reformation, shall be in a court of
competent jurisdiction located in ▇▇▇▇▇▇ County, Texas.
(c) This Agreement contains the entire understanding among the parties
hereto with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings, inducements, or conditions,
express or implied, oral or written, except as herein contained. This Agreement
may not be modified or amended other than by an agreement in writing signed by
all parties affected.
(d) The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof.
The section headings in this Agreement are for convenience only; they form no
part of this Agreement and shall not affect its interpretation.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together constitute one and
the same instrument.
(f) The parties hereto hereby agree that time is of the essence for all
purposes of this Agreement.
(g) Any notices to be given hereunder by any party to the other parties
may be effected either by personal delivery in writing, or by mail, registered
or certified, postage prepaid with return receipt requested, addressed to the
one or more parties to be notified at the addresses set forth beneath such
parties' respective signatures below.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have signed their names hereto as
of the first date written above.
ZEOTECH INDUSTRIES, INC.
By: /S/ ▇▇ ▇▇▇▇▇▇▇ /S/ ▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇
Name Printed: ▇▇ ▇▇▇▇▇▇▇
Title: President
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ #▇▇▇▇ Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ #▇▇▇▇
--------------------------------- ---------------------
▇▇▇▇▇▇▇▇▇ ▇.▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇.▇ ▇▇▇ ▇▇▇
KJM CAPITAL CORP.
By:/S/ ▇.▇. ▇▇▇▇▇▇▇▇ /S/ ▇.▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name Printed: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
Address: 1400 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇. Address: 1400 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
------------------------------------ ---------------------
Vancouver, British Columbia ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
/S/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. /S/▇.▇. ▇▇▇▇▇▇, PhD., P.Eng.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. ▇.▇. ▇▇▇▇▇▇, PhD., P.Eng.
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇ Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇. #▇▇▇
--------------------------------- --------------------
Gulfport, Mississippi ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
LS CAPITAL CORPORATION ▇▇▇▇▇▇▇ GOLD GROUP, INC.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name Printed: ▇▇▇▇ ▇ ▇▇▇▇▇▇ Name Printed:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President Title: Secretary
Address: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
CERTIFICATE
Each of the undersigned hereby certifies and acknowledges that the
undersigned has signed and executed the foregoing agreement with multiple
original signature pages at separate locations to be effective immediately upon
signing and that the transmission of a telecopier facsimile of their respective
signatures, each to the other, shall be sufficient to cause the mutual delivery
of this executed agreement in order to bind the parties and make the agreement
effective upon the date of signing. It is further certified, acknowledged and
agreed that the original signature pages are to be circulated hereafter but that
the failure of any party to obtain the original signature pages hereafter shall
not affect the validity and effectiveness of this agreement which is effective
from and after the execution by all parties and the transmission by telecopier
facsimile of the signature of all parties, each to the other.
IN WITNESS WHEREOF, the parties hereto have signed their names hereto as
of the first date written above.
ZEOTECH INDUSTRIES, INC.
By: /S/ ▇▇ ▇▇▇▇▇▇▇ /S/ ▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇
Name Printed: ▇▇ ▇▇▇▇▇▇▇
Title: President
KJM CAPITAL CORP.
By:/S/ ▇.▇. ▇▇▇▇▇▇▇▇ /S/ ▇.▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name Printed: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
/S/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. /S/▇.▇. ▇▇▇▇▇▇, PhD., P.Eng.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. ▇.▇. ▇▇▇▇▇▇, PhD., P.Eng.
LS CAPITAL CORPORATION ▇▇▇▇▇▇▇ GOLD GROUP, INC.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name Printed: ▇▇▇▇ ▇ ▇▇▇▇▇▇ Name Printed:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
