REORGANIZATION
AND
STOCK PURCHASE AGREEMENT
by and between
Star E Media Corp.
a Nevada corporation,
on the one hand
and
ESP International Ltd.
a Nevada corporation
and its Shareholders
on the other hand
REORGANIZATION AND STOCK PURCHASE AGREEMENT
REORGANIZATION AND STOCK PURCHASE AGREEMENT ("Agreement"), dated April 30,
2003, by and among Star E Media Corp., a Nevada corporation ("STAR"), on the one
hand, and ESP International Ltd., a Nevada corporation ("ESP") and Mr. Mike
Gaunt ("Gaunt"), who is the sole shareholder of ESP (the "Shareholder" or
"Shareholders"), on the other hand. Each of STAR, ESP, and the Shareholders
shall be referred to herein as a "Party" and collectively as the "Parties."
W I T N E S S E T H
WHEREAS, the Shareholders collectively own 100% of the issued and
outstanding common stock of ESP as set forth in Exhibit A attached hereto (the
"ESP Shares");
WHEREAS, the Shareholders desire to sell and STAR desires to purchase all
of the ESP Shares in accordance with the terms set forth herein;
WHEREAS, the Parties desire and intend that the transactions contemplated
by this Agreement will be a tax free reorganization under Section 368(a)(1)(A)
of the Internal Revenue Code of 1986, as amended.
NOW THEREFORE, in consideration of the premises and respective mutual
agreements, covenants, representations and warranties herein contained, it is
agreed between the parties hereto as follows:
ARTICLE 1
SALE AND PURCHASE OF THE ESP SHARES
1.1 Sale of the ESP Shares. At the Closing, subject to the terms and
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conditions herein set forth, and on the basis of the representations, warranties
and agreements herein contained, the Shareholders shall sell to STAR and STAR
shall purchase from the Shareholders, all of the ESP Shares. STAR shall pay to
the Shareholder, as consideration for the receipt of the ESP Shares, an
aggregate of Three Hundred Fifty Thousand (350,000) shares of STAR common stock
(the "STAR Shares").
1.2 Position and Title. Effective as of the Closing, the individuals
------------------
listed on Exhibit A will constitute the officers and directors of ESP, to serve
until their successors are elected, and the officers and directors of STAR will
not change.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of ESP and The Shareholders. To
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induce STAR to enter into this Agreement and to consummate the transactions
contemplated hereby, ESP and the Shareholders represent and warrant, as of the
date hereof and as of the Closing, as follows:
2.1.1 Authority of ESP and The Shareholders. ESP and the
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Shareholders have the full right, power and authority to enter into this
Agreement and to carry out and consummate the transactions contemplated
herein. This Agreement constitutes the legal, valid and binding obligation
of ESP and the Shareholders.
2.1.2 Corporate Existence of ESP. ESP is a corporation duly
-----------------------------
organized, validly existing and in good standing under the laws of the
State of Nevada. It has all requisite corporate power, franchises,
licenses, permits and authority to own its properties and assets and to
carry on its business as it has been and is being conducted. It is in good
standing in each state, nation or other jurisdiction wherein the character
of the business transacted by it makes such qualification necessary.
2.1.3 Capitalization of ESP. The authorized equity securities of
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ESP consist of 100,000 shares of common stock, par value $0.01, of which
10,000 shares are issued and outstanding. No other shares of capital stock
of ESP are issued and outstanding. All of the issued and outstanding shares
have been duly and validly issued in accordance and compliance with all
applicable laws, rules and regulations and are fully paid and
nonassessable. There are no options, warrants, rights, calls, commitments,
plans, contracts or other agreements of any character granted or issued by
ESP which provide for the purchase, issuance or transfer of any shares of
the capital stock of ESP nor are there any outstanding securities granted
or issued by ESP that are convertible into any shares of the equity
securities of ESP, and none is authorized. ESP is not obligated or
committed to purchase, redeem or otherwise acquire any of its equity. All
presently exercisable voting rights in ESP are vested exclusively in its
outstanding shares of common stock, each share of which is entitled to one
vote on every matter to come before it's shareholders, and other than as
may be contemplated by this Agreement, there are no voting trusts or other
voting arrangements with respect to any of ESP's equity securities.
2.1.4 Subsidiaries. "Subsidiary" or "Subsidiaries" means all
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corporations, trusts, partnerships, associations, joint ventures or other
Persons, as defined below, of which a corporation or any other Subsidiary
of such corporation owns not less than twenty percent (20%) of the voting
securities or other equity or of which such corporation or any other
Subsidiary of such corporation possesses, directly or indirectly, the power
to direct or cause the direction of the management and policies, whether
through ownership of voting shares, management contracts or otherwise.
"Person" means any individual, corporation, trust, association,
partnership, proprietorship, joint venture or other entity. ESP does not
have any subsidiaries.
2.1.5 Execution of Agreement. The execution and delivery of this
----------------------
Agreement does not, and the consummation of the transactions contemplated
hereby will not: (a) violate, conflict with, modify or cause any default
under or acceleration of (or give any party any right to declare any
default or acceleration upon notice or passage of time or both), in whole
or in part, any charter, article of incorporation, bylaw, mortgage, lien,
deed of trust, indenture, lease, agreement, instrument, order, injunction,
decree, judgment, law or any other
restriction of any kind to which either ESP or the Shareholders are a party
or by which either of them or any of their properties are bound; (b) result
in the creation of any security interest, lien, encumbrance, adverse claim,
proscription or restriction on any property or asset (whether real,
personal, mixed, tangible or intangible), right, contract, agreement or
business of ESP or the Shareholders; (c) violate any law, rule or
regulation of any federal or state regulatory agency; or (d) permit any
federal or state regulatory agency to impose any restrictions or
limitations of any nature on ESP or the Shareholders or any of their
respective actions.
2.1.6 Taxes.
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2.1.6.1 All taxes, assessments, fees, penalties, interest
and other governmental charges with respect to ESP (or its
subsidiaries) which have become due and payable on the date
hereof have been paid in full or adequately reserved against by
ESP, (including without limitation, income, property, sales, use,
franchise, capital stock, excise, added value, employees' income
withholding, social security and unemployment taxes), and all
interest and penalties thereon with respect to the periods then
ended and for all periods thereto;
2.1.6.2 There are no agreements, waivers or other
arrangements providing for an extension of time with respect to
the assessment of any tax or deficiency against ESP, nor are
there any actions, suits, proceedings, investigations or claims
now pending against ESP, nor are there any actions, suits,
proceedings, investigations or claims now pending against ESP
with respect to any tax or assessment, or any matters under
discussion with any federal, state, local or foreign authority
relating to any taxes or assessments, or any claims for
additional taxes or assessments asserted by any such authority,
and there is no basis for the assertion of any additional taxes
or assessments against ESP; and
2.1.6.3 The consummation of the transactions contemplated by
this Agreement will not result in the imposition of any
additional taxes on or assessments against ESP.
2.1.7 Disputes and Litigation. There is no suit, action,
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litigation, proceeding, investigation, claim, complaint, or accusation
pending, threatened against or affecting ESP or any of its properties,
assets or business or to which ESP is a party, in any court or before any
arbitrator of any kind or before or by any governmental agency (including,
without limitation, any federal, state, local, foreign or other
governmental department, commission, board, bureau, agency or
instrumentality), and there is no basis for such suit, action, litigation,
proceeding, investigation, claim, complaint, or accusation; (b) there is no
pending or threatened change in any environmental, zoning or building laws,
regulations or ordinances which affect or could affect ESP or any of its
properties, assets or businesses; and (c) there is no outstanding order,
writ, injunction, decree, judgment or award by any court, arbitrator or
governmental body against or affecting ESP or any of its properties, assets
or business. There is no litigation, proceeding, investigation, claim,
complaint or accusation, formal or informal, or arbitration pending, or any
of the aforesaid threatened, or any contingent liability which would give
rise to any right of indemnification or similar right on the part of any
director or officer of ESP or any such person's heirs, executors or
administrators as against ESP.
2.1.8 Compliance with laws. ESP has at all times been, and
----------------------
presently is, in full compliance with, and has not received notice of any
claimed violation of, any applicable federal, state, local, foreign and
other laws, rules and regulations. ESP has filed all returns, reports and
other documents and furnished all information required or requested by any
federal, state, local or foreign governmental agency and all such returns,
reports, documents and information are true and complete in all respects.
All permits, licenses, orders, franchises and approvals of all federal,
state, local or foreign governmental or regulatory bodies required of ESP
for the conduct of its business have been obtained, no violations are or
have been recorded in respect of any such permits, licenses, orders,
franchises and approvals, and there is no litigation, proceeding,
investigation, arbitration, claim, complaint or accusation, formal or
informal, pending or threatened, which may revoke, limit, or question the
validity, sufficiency or continuance of any such permit, license, order,
franchise or approval. Such permits, licenses, orders, franchises and
approvals are valid and sufficient for all activities presently carried on
by ESP.
2.1.9 Guaranties. ESP has not guaranteed any dividend, obligation
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or indebtedness of any Person; nor has any Person guaranteed any dividend,
obligation or indebtedness of ESP.
2.1.10 Books and Records. ESP keeps its books, records and
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accounts (including, without limitation, those kept for financial reporting
purposes and for tax purposes) in accordance with good business practice
and in sufficient detail to reflect the transactions and dispositions of
its assets, liabilities and equities. The minute books of ESP contain
records of its shareholders' and directors' meetings and of actions taken
by such shareholders and directors. The meeting of directors and
shareholders referred to in such minute books were duly called and held,
and the resolutions appearing in such minute books were duly adopted. The
signatures appearing on all documents contained in such minute books are
the true signatures of the persons purporting to have signed the same. A
true and accurate list of ESP assets and liabilities as of the Closing Date
is attached hereto as Exhibit B. Further, attached hereto as Exhibit C is a
list of all contracts to which ESP is a party or obligated, and ESP hereby
represents and warrants that there are no other material contracts or
agreements in existence as of the Closing Date.
2.1.11 The Shareholders acknowledge that all of the STAR Shares
will be "restricted securities"(as such term is defined in Rule 144
promulgated under the Securities Act of 1933, as amended ("Rule 144")), and
will include the restrictive legend set forth in Section 3.2 hereof, and,
except as otherwise set forth in this Agreement, that the shares cannot be
sold for a period of at least one year from the date of issuance unless
registered with the United States Securities and Exchange Commission
("SEC") and qualified by appropriate state securities regulators, or unless
the Shareholders obtain written consent from STAR and otherwise comply with
an exemption from such registration and qualification (including, without
limitation, compliance with Rule 144).
2.2 Representations and Warranties of STAR. To induce ESP and the
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Shareholders to enter into this Agreement and to consummate the transactions
contemplated hereby, STAR represents and warrants, as of the date hereof and as
of the Closing, as follows:
2.2.1 Corporate Existence and Authority of STAR. STAR is a
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corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada. It has all requisite corporate power,
franchises, licenses, permits and authority to own its properties and
assets and to carry on its business as it has been and is being conducted.
It is in good standing in each state, nation or other jurisdiction in each
state, nation or other jurisdiction wherein the character of the business
transacted by it makes such qualification necessary.
2.2.2 Capitalization of STAR. The authorized equity securities of
-----------------------
STAR consists of 100,000,000 shares of common stock, par value $0.001, of
which 13,230,000 shares are issued and outstanding as of the date hereof,
and 20,000,000 shares of preferred stock, par value $0.001, of which no
shares are issued or outstanding. No other shares of capital stock of STAR
are issued and outstanding. All of the issued and outstanding shares have
been duly and validly issued in accordance and compliance with all
applicable laws, rules and regulations and are fully paid and
nonassessable. All presently exercisable voting rights in STAR are vested
exclusively in its outstanding shares of common stock, each share of which
is entitled to one vote on every matter to come before it's shareholders.
Other than as may be contemplated by this Agreement, there are no voting
trusts or other voting arrangements with respect to any of STAR's equity
securities.
2.2.3 Subsidiaries. STAR currently has no subsidiaries.
------------
2.2.4 Execution of Agreement. The execution and delivery of this
----------------------
Agreement does not, and the consummation of the transactions contemplated hereby
will not: (a) violate, conflict with, modify or cause any default under or
acceleration of (or give any party any right to declare any default or
acceleration upon notice or passage of time or both), in whole or in part, any
charter, article of incorporation, bylaw, mortgage, lien, deed of trust,
indenture, lease, agreement, instrument, order, injunction, decree, judgment,
law or any other restriction of any kind to which STAR is a party or by which it
or any of its properties are bound; (b) result in the creation of any security
interest, lien, encumbrance, adverse claim, proscription or restriction on any
property or asset (whether real, personal, mixed, tangible or intangible),
right, contract, agreement or business of STAR; (c) violate any law, rule or
regulation of any federal or state regulatory agency; or (d) permit any federal
or state regulatory agency to impose any restrictions or limitations of any
nature on STAR or any of its actions.
ARTICLE 3
CLOSING AND DELIVERY OF DOCUMENTS
3.1 Closing. The Closing shall be deemed to have occurred as of the
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date that each of the Parties hereto has executed this Agreement. Subsequent to
the Closing the following shall occur as a single integrated transaction:
3.2 Delivery by STAR:
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(a) STAR shall deliver to the Shareholders the STAR Shares, fully
paid and non-assessable and subject to no liens, security interests,
pledges, encumbrances, charges, restrictions, demands or claims in any
other party whatsoever, except as set forth in the legend on the
certificate(s), which legend shall provide as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE, AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF FOR A PERIOD OF ONE
YEAR FROM THE ISSUANCE THEREOF EXCEPT (i) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT AND ANY APPLICABLE STATE LAWS OR (ii) UPON
THE EXPRESS WRITTEN AGREEMENT OF THE COMPANY AND
COMPLIANCE, TO THE EXTENT APPLICABLE, WITH RULE 144
UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT
RELATING TO THE DISPOSITION OF SECURITIES).
(b) STAR shall deliver to ESP and the Shareholders written
confirmation of the approval of the herein described transactions by STAR's
Board of Directors as set forth in Section 4.1 hereof.
3.3 Delivery by The Shareholders:
--------------------------------
(a) The Shareholders shall deliver to STAR the ESP Shares subject
to no liens, security interests, pledges, encumbrances, charges,
restrictions, demands or claims in any other party whatsoever.
3.4 Delivery by ESP:
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(a) ESP shall deliver to STAR written confirmation of the
approval of the herein described transactions by ESP's Board of Directors
and shareholders as set forth in Section 4.1 hereof.
(b) ESP shall deliver to STAR a fully executed Assignment of
Contract and Consent Thereto in form and substance substantially similar to
Exhibit D hereto for each of the contracts set forth in Exhibit C hereto.
(c) ESP shall deliver to STAR a Termination Agreement as set
forth in Exhibit E attached hereto terminating that certain Licensing
Representative Agreement between Star E Media Corporation and ESP
International United Kingdom upon execution of this Agreement and payment
of $10,000 to Gaunt, a copy of which is attached as Exhibit F hereto.
(d) ESP shall deliver to STAR an Acknowledgement and Consent
Agreement executed by the Shareholder and Educational Software Promotions
International (ESP) Limited, a British Virgin Islands corporation (ESP
United Kingdom), an entity controlled by the Shareholder, a copy of which
is attached as Exhibit G hereto, which states that the Shareholder and ESP
United Kingdom agree to present to STAR for assignment to STAR all future
contracts of ESP United Kingdom and Shareholder that in any way relate to
the business of STAR, the receipt of which may be accepted or denied by
STAR in its sole discretion.
(e) ESP shall deliver to STAR a Unanimous Written Consent of the
Shareholder of ESP United Kingdom in form and substance substantially
similar to Exhibit H hereto which indicates the shareholders consent to the
assignment of the contracts set forth in Exhibit C hereto.
(f) ESP shall deliver to STAR a Certificate of Officers in form
and substance substantially similar to Exhibit I hereto.
(g) ESP shall deliver to STAR a Certificate of Officers of ESP
United Kingdom substantially similar to Exhibit J hereto.
ARTICLE 4
CONDITIONS, TERMINATION, AMENDMENT AND WAIVER
4.1 Conditions Precedent. This Agreement, and the transactions
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contemplated hereby, shall be subject to the approval of the Board of Directors
of STAR and ESP, and the shareholders of ESP, which shall be delivered at the
Closing. In the event ESP does not deliver the documents set forth in 3.4(b)
and (e) by May 15, 2003, then STAR shall have the option, but not the
obligation, to rescind this Agreement in its entirety, which shall in no way
limit its ability to pursue whatever other legal remedies it may have. In the
event STAR does not deliver the $10,000 payment contemplated by 3.4(c) by May 9,
2003 and as set forth in the Termination Agreement attached as Exhibit E, then
ESP shall have the option, but not the obligation, to rescind this Agreement in
its entirety, which shall in no way limit its ability to pursue whatever other
legal remedies it may have
4.2 Termination. Notwithstanding anything to the contrary contained in
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this Agreement, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned only by the mutual consent of all of the
parties.
4.3 Waiver and Amendment. Any term, provision, covenant,
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representation, warranty or condition of this Agreement may be waived, but only
by a written instrument signed by the party entitled to the benefits thereof.
The failure or delay of any party at any time or times to require performance of
any provision hereof or to exercise its rights with respect to any provision
hereof shall in no manner operate as a waiver of or affect such party's right at
a later time to enforce the same. No waiver by any party of any condition, or
of the breach of any term, provision, covenant, representation or warranty
contained in this Agreement, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such condition or breach
or waiver of any other condition or of the breach of any other term, provision,
covenant, representation or warranty. No modification or amendment of this
Agreement shall be valid and binding unless it be in writing and signed by all
parties hereto.
ARTICLE 5
COVENANTS
5.1 To induce STAR to enter into this Agreement and to consummate the
transactions contemplated hereby, and without limiting any covenant, agreement,
representation or warranty made, ESP and the Shareholders covenant and agree as
follows:
5.1.1 Notices and Approvals. ESP and the Shareholders agree: (a)
---------------------
to give all notices to third parties which may be necessary or deemed
desirable by STAR in connection with this Agreement and the consummation of
the transactions contemplated hereby; (b) to use its best efforts to obtain
all federal and state governmental regulatory agency approvals, consents,
permit, authorizations, and orders necessary or deemed desirable by STAR in
connection with this Agreement and the consummation of the transaction
contemplated hereby; and (c) to use its best efforts to obtain all consents
and authorizations of any other third parties necessary or deemed desirable
by STAR in connection with this Agreement and the consummation of the
transactions contemplated hereby.
5.1.2 Information for STAR's Statements and Applications. The
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Shareholders and ESP and their employees, accountants and attorneys shall
cooperate fully with STAR in the preparation of any statements or
applications made by STAR to any federal or state governmental regulatory
agency in connection with this Agreement and the transactions contemplated
hereby and to furnish STAR with all information concerning the Shareholders
and ESP necessary or deemed desirable by STAR for inclusion in such
statements and applications, including, without limitation, all requisite
financial statements and schedules.
5.1.3 Access to Information. STAR, together with its appropriate
---------------------
attorneys, agents and representatives, shall be permitted to make the full
and complete investigation of the Shareholders and ESP and have full access
to all of the books and records of the other during reasonable business
hours. Notwithstanding the foregoing, such parties shall treat all such
information as confidential and shall not disclose such information without
the prior consent of the other.
5.1.4 Termination of Previous Agreements. All prior agreements
------------------------------------
between STAR and ESP, ESP United Kingdom, and/or Gaunt, including but not
limited to the Memorandum of Understanding dated December 30, 2002, the
Acquisition Outline which is undated, and the Letter of Agreement dated
April ___, 2003, are hereby cancelled in their entirety and replaced by
this Agreement.
5.2 To induce ESP and the Shareholders to enter into this Agreement and
to consummate the transactions contemplated hereby, and without limiting any
covenant, agreement, representation or warranty made, STAR covenants and agrees
as follows:
5.2.1 Access to Information. The Shareholders, together with
-----------------------
their appropriate attorneys, agents and representatives, shall be permitted
to make the full and complete investigation of STAR and have full access to
all of the books and records of the other during reasonable business hours.
Notwithstanding the foregoing, such parties shall treat all such
information as confidential and shall not disclose such information without
the prior consent of the other.
ARTICLE 6
MISCELLANEOUS
6.1 Expenses. Except as otherwise specifically provided for herein,
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whether or not the transactions contemplated hereby are consummated, each of the
parties hereto shall bear the cost of all fees and expenses relating to or
arising from its compliance with the various provisions of this Agreement and
such party's covenants to be performed hereunder, and except as otherwise
specifically provided for herein, each of the parties hereto agrees to pay all
of its own expenses (including, without limitation, attorneys and accountants'
fees and printing expenses) incurred in connection with this Agreement, the
transactions contemplated hereby, the negotiations leading to the same and the
preparations made for carrying the same into effect, and all such fees and
expenses of the parties hereto shall be paid prior to Closing.
6.2 Notices. Any notice, request, instruction or other document
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required by the terms of this Agreement, or deemed by any of the parties hereto
to be desirable, to be given to any other party hereto shall be in writing and
shall be given by hand delivery, overnight mail with a recognized carrier, or by
facsimile with facsimile confirmation, to the following addresses:
To STAR:
Star E Media Corp.
27171 Burbank Road
Lake Forest, CA 92610
Attn: President
Facsimile (949) 581-9957
with a copy to:
The Lebrecht Group, APLC
22342 Avenida Empresa, Suite 220
Rancho Santa Margarita, CA 92688
Attn: Brian A. Lebrecht, Esq.
Facsimile (949) 635-1244
To ESP or the Shareholders:
ESP International Ltd.
c/o Mike Gaunt
26A Albemarle Street
London, W2S 4HY
Facsimile: +44(0)845 125 9087
Mike Gaunt
26A Albemarle Street
London, W2S 4HY
Facsimile: +44(0)845 125 9087
Notice shall be deemed to be given at the time of receipt of the notice by
the recipient. The persons and addresses set forth above may be changed from
time to time by a notice sent as stated in this Section.
6.3 Entire Agreement. This Agreement, together with the schedules and
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exhibits hereto, sets forth the entire agreement and understanding of the
parties hereto with respect to the transactions contemplated hereby, and
supersedes all prior agreements, arrangements and understandings related to the
subject matter hereof. No understanding, promise, inducement, statement of
intention, representation, warranty, covenant or condition, written or oral,
express or implied, whether by statute or otherwise, has been made by any party
hereto which is not embodied in this Agreement, or exhibits hereto or the
written statements, certificates, or other documents delivered pursuant hereto
or in connection with the transactions contemplated hereby, and no party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not so set forth.
6.4 Survival of Representations. All statements of fact (including
------------------------------
financial statements) contained in the schedules, the exhibits, the certificates
or any other instrument delivered by or on behalf of the parties hereto, or in
connection with the transactions contemplated hereby, shall be deemed
representations and warranties by the respective party hereunder. All
representations, warranties, agreements, and covenants hereunder shall survive
the Closing and remain effective regardless of any investigation or audit at any
time made by or on behalf of the parties or of any information a party may have
in respect thereto. Consummation of the transactions contemplated hereby shall
not be deemed or construed to be a waiver of any right or remedy possessed by
any party hereto, notwithstanding that such party knew or should have known at
the time of Closing that such right or remedy existed.
6.5 Incorporated by Reference. All documents (including, without
----------------------------
limitation, all financial statements) delivered as part hereof or incident
hereto are incorporated as a part of this Agreement by reference.
6.6 Remedies Cumulative. No remedy herein conferred upon any Party is
---------------------
intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
6.7 Execution of Additional Documents. Each party hereto shall make,
------------------------------------
execute, acknowledge and deliver such other instruments and documents, and take
all such other actions as may be reasonably required in order to effectuate the
purposes of this Agreement and to consummate the transactions contemplated
hereby.
6.8 Finders' and Related Fees. Each of the parties hereto is
-----------------------------
responsible for, and shall indemnify the other against, any claim by any third
party to a fee, commission, bonus or other remuneration arising by reason of any
services alleged to have been rendered to or at the instance of said party to
this Agreement with respect to this Agreement or to any of the transactions
contemplated hereby.
6.9 Governing Law. This Agreement has been negotiated and executed in
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the State of California and shall be construed and enforced in accordance with
the laws of such state.
6.10 Forum. Each of the parties hereto agrees that any action or suit
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which may be brought by any party hereto against any other party hereto in
connection with this Agreement or the transactions contemplated hereby may be
brought only in a federal or state court in Orange County, California.
6.11 Attorneys' Fees. Except as otherwise provided herein, if a
----------------
dispute should arise between the parties including, but not limited to
arbitration, the prevailing party shall be reimbursed by the non-prevailing
party for all reasonable expenses incurred in resolving such dispute, including
reasonable attorneys' fees exclusive of such amount of attorneys' fees as shall
be a premium for result or for risk of loss under a contingency fee arrangement.
6.12 Binding Effect and Assignment. This Agreement shall inure to the
------------------------------
benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, legal representatives and assigns.
6.13 Counterparts. This Agreement may be executed in counterparts,
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each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. In making proof of this Agreement, it
shall not be necessary to produce or account for more than one such counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
the date first written hereinabove.
"STAR" "ESP"
Star E Media Corp., ESP International Ltd.,
a Nevada corporation a Nevada corporation
/s/ E.G. Abbadessa /s/ Mike Gaunt
- ----------------------------- ----------------------------
By: E.G. Abbadessa By: Mike Gaunt
Its: President and COO Its: President
"Shareholder"
/s/ Mike Gaunt
- -----------------------------
Mike Gaunt
EXHIBIT A
ESP SHAREHOLDERS
Name No. of ESP Shares
-------------------------------- --------------------------------
Mike Gaunt 10,000 shares
ESP OFFICERS AND DIRECTORS
Name Position(s)
-------------------------------- --------------------------------
Mike Gaunt Director, President,
Secretary, and Treasurer
E.G. Abbadessa Director
Gabriel Nassar Director
Mehdi Hatamian Director
EXHIBIT B
ASSETS AND LIABILITIES OF ESP
AS OF THE DATE OF CLOSING
As of the date of Closing, other than the contractual agreements set forth
in Exhibit C, there are no assets or liabilities of ESP.
EXHIBIT C
CONTRACTS TO WHICH ESP
IS A PARTY OR IS OBLIGATED
1. Licensing Representative Agreement dated November 6, 2002 by and
between Centennial Media P/L and ESP International, including Exhibit A
thereto.
2. Licensing Representative Agreement dated February 1, 2002 by and
between Lizard Edutainment Pty Ltd. and ESP International, including Exhibit A
and Schedule 2 thereto.
3. Licensing Representative Agreement dated September 22, 2002 by and
between WebsterWorld Pty Ltd. and ESP International, including Exhibit A and
Exhibit B thereto.
4. Licensing Representative Agreement dated May 2, 2002 by and between
Assessment Technology Pty Ltd and Computer Basics Australia Pty Ltd, two
Australian companies trading as the registered business name of Hoopers
Multimedia and ESP International, including Exhibit A thereto.
5. Licensing Representative Agreement dated January 10, 2002 by and
between Unlimited S.A., a Chilean Company of Silvina Hurtado and ESP
International, including Exhibits 1, 2 and 3 thereto.
6. Licensing Representative Agreement dated October 6, 2002 by and
between Idigicon Ltd. and ESP International, including Exhibit A thereto.
7. Licensing Representative Agreement dated June 3, 2002 by and between
Maestro Learning, Inc. and ESP International, including Exhibit A thereto.
8. Know-How License and Technical Assistance Agreement dated April 10,
2003 by and between 100 Limited and ESP International, including the "Territory"
page and Schedule 2 thereto.
EXHIBIT D
FORM OF ASSIGNMENT OF CONTRACT AND CONSENT THERETO
ASSIGNMENT OF CONTRACT
AND CONSENT THERETO
This Assignment of Contract and Consent Thereto (this "Assignment") dated
as of April 29, 2003, is executed by and among ESP International ("Assignor")
and ESP International Ltd., a Nevada corporation ("Assignee"), and consented to
by ______________________ ("Consenting Party"), in connection with the proposed
assignment (the "Assignment") by Assignor to Assignee of the contractual
agreement attached hereto as Exhibit A (the "Contract").
In connection with the foregoing, Assignor and Assignee hereby agree as
follows:
1. For value received, Assignor hereby sells and assigns to Assignee,
its successors and assigns, WITHOUT RECOURSE as to the financial ability of the
Consenting Party to pay, the Contract, together with all of Assignor's right,
title and interest in the property covered by and described in the Contract, and
all of Assignor's rights and remedies thereunder and under any guaranty or
endorsement thereof, including the right to collect any and all installments due
and to become due on the Contract and to take, in Assignor's or Assignee's name,
any and all actions Assignor might otherwise take.
2. Assignor warrants that (i) the Contract and any accompanying notes,
guaranties, waivers and/or other instruments (collectively "Contracts") are
true, valid and genuine and represent existing valid and enforceable obligations
in accordance with their terms; (ii) all signatures, names, addresses, amounts
and other statements and facts contained therein are true and correct; (iii) the
Contracts (including their form and substance and the computation of all
charges) and the transactions underlying the obligations (including any sale and
delivery) conform to all applicable laws, rules, regulations, ordinances and
orders; and (iv) the present unpaid balance shown on Exhibit A (if shown) is
correct, the property (if applicable) has been delivered to the Consenting Party
under the Contract in satisfactory condition and has been accepted by the
Consenting Party, or their assigns, the Contracts are not and will not at any
time be subject to any defense, claim, counterclaim or set-off and Assignor will
comply with all its obligations under the Contracts. In addition, Assignor
shall indemnify and save Assignee harmless from any loss, damage or expense,
including attorneys' fees, incurred by Assignee as a result of Assignor's breach
of any of the terms of this assignment or any of the warranties, obligations or
undertakings described herein.
3. Assignor agrees that Assignee may in Assignor's name endorse all
accompanying notes and all remittances received. Assignor waives notice of
acceptance hereof as well as presentment, demand, protest and notice of
non-payment and protest as to all contracts heretofore, now, or hereafter
signed, accepted, endorsed or assigned to Assignee. Assignor waives all
exemptions and homestead laws and any other demands and notices required by law,
and Assignor waives all set-offs and counterclaims. Assignee may at any time,
without consent of Assignor, without notice to Assignor and without affecting or
impairing the obligations of Assignor hereunder, do any of the following: (a)
renew, extend, modify, release or discharge any obligation of the Consenting
Party or any persons obligated on the Contracts or on any accompanying note or
guaranty, ("the Contract Obligations"); (b) accept partial payments of the
Contract Obligations; (c) accept new or additional documents, instruments or
agreements relating to or in substitution of the Contract Obligations; (d)
settle, release (by operation of law or otherwise), compound, compromise,
collect or liquidate any of the Contract Obligations and the security therefor
in any manner; (e) consent to the transfer or return of security and take and
hold additional security or guaranties for the Contract Obligations; (f) amend,
exchange, release or waive any security or guaranty; or (g) bid and purchase at
any sale of the Contracts or security and apply any proceeds and security and
direct the order and manner of sale. Assignor shall have no authority to, and
will not, without Assignee's prior written consent, accept collections,
repossess or consent to the return of the property described in the Contract or
modify the terms thereof or of any accompanying note or guaranty. Assignee's
knowledge at any time of any breach of or non-compliance with any of the
foregoing shall not constitute any waiver by Assignee.
4. Consenting Party warrants and agrees that: (i) Consenting Party
hereby consents to the Assignment by Assignor to Assignee of the Contracts; (ii)
nothing in this Assignment shall be construed to modify, waive, release, or
otherwise affect, as between Assignor and Consenting Party (prior to the date of
this Assignment) or Assignee and Consenting Party (following the date of this
Assignment), any of the provisions of the Contracts; (iii) in the event of any
conflict between the Assignment and the Contracts, this Assignment shall
prevail; (iv) following the date of this Assignment, Assignor shall not be
liable for any of the obligations under the Contracts; (v) following the date of
this Assignment, Consenting Party shall remain fully liable for all of its
obligations under the Contracts; (vi) this Assignment shall not be construed as
a consent by Consenting Party to any further assignment by Assignor or Assignee;
and (vii) to the best of Consenting Party's knowledge, the Contracts are in full
force and effect, there are no uncured defaults on the part of any party to the
Contracts, and there are no existing offsets or defenses which either party has
against enforcement of the Contracts.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the undersigned parties have duly executed this
Assignment as of the date first written above.
"Assignor" "Assignee"
ESP International ESP International Ltd.,
a Nevada corporation
_____________________________ ____________________________
By: Mike Gaunt By: Mike Gaunt
Its: President Its: President
"Consenting Party"
_____________________________
_____________________________
By: ______________________
Its: ______________________
EXHIBIT E
TERMINATION OF AGREEMENT
TERMINATION OF AGREEMENT
This Termination of Agreement ("Termination") is entered into effective
this April 30, 2003 by and between Star E Media Corp., a Nevada corporation
("STAR"), and Educational Software Promotions International (ESP) Limited, a
British Virgin Islands corporation ("ESP").
WHEREAS, STAR and ESP are parties to that certain Licensing Representative
Agreement dated June 21, 2002, a copy of which is attached hereto as Exhibit A
(the "Agreement").
WHEREAS, STAR and ESP are parties to an agreement whereby STAR will acquire
ESP International Ltd., a Nevada corporation and an affiliate of ESP, and as a
condition to the closing of that agreement STAR and ESP desire to terminate the
Agreement in its entirety, effective as of the date hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties agree as follows:
1. STAR agrees to pay to ESP the sum of $10,000 under the Agreement.
2. The Agreement is hereby terminated in its entirety as of the date
hereof. Neither party shall have any obligations under the Agreement, and both
parties hereby waive and forfeit all rights to enforce any provisions of the
Agreement. In the event STAR does not deliver the $10,000 payment contemplated
above by May 9, 2003, then ESP shall have the option, but not the obligation, to
rescind this Termination in its entirety.
IN WITNESS WHEREOF, the undersigned parties have duly executed this
Termination as of the date first written above.
"STAR" "ESP"
Star E Media Corp., Educational Software Promotions International
a Nevada corporation (ESP) Limited, a British Virgin Islands
corporation
_____/s/ E.G. Abbadessa_________ /s/ Mike Gaunt___________________
By: E.G. Abbadessa By: Mike Gaunt
Its: President and COO Its: President
Exhibit A to Termination Agreement
EXHIBIT F
COPY OF LICENSING REPRESENTATIVE AGREEMENT BETWEEN
STAR E MEDIA CORPORATION AND ESP INTERNATIONAL UNITED KINGDOM
EXHIBIT G
ACKNOWLEDGEMENT AND CONSENT AGREEMENT OF
ESP INTERNATIONAL (UNITED KINGDOM) AND SHAREHOLDER
ACKNOWLEDGMENT AND CONSENT AGREEMENT
This Acknowledgment and Consent Agreement ("Agreement") is executed this
April 30, 2003 by Educational Software Promotions International (ESP) Limited, a
British Virgin Islands corporation ("ESP"), and Mike Gaunt, an individual
("Gaunt").
WHEREAS, Gaunt is a party to an agreement with Star E Media Corp. ("STAR")
whereby STAR will acquire ESP International Ltd., a Nevada corporation and an
affiliate of ESP, and as a condition to the closing of that agreement ESP and
Gaunt have agreed to execute this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, ESP agrees as follows:
1. Effective as of the date hereof, Gaunt and ESP agree to present to
STAR for assignment to STAR all contracts, whether previously entered into or
entered into in the future, of ESP and Gaunt that in any way relate to the
business of STAR, the receipt of which may be accepted or denied by STAR in its
sole discretion.
2. ESP acknowledges and discloses the existence of communication with
each of the following which may lead to a contract which will be subject to this
Agreement:
E-Tech Group
Nightengale
Imparo
Tom Snyder
Executed effective as of the date first written above.
"Gaunt" "ESP"
Educational Software Promotions International
(ESP) Limited, a British Virgin Islands
corporation
____/s/ Mike Gaunt_____________
Mike Gaunt, an individual
_____/s/ Mike Gaunt___________________
By: Mike Gaunt
Its: President
EXHIBIT H
UNANIMOUS WRITTEN CONSENT OF
SHAREHOLDERS OF ESP UNITED KINGDOM
EXHIBIT I
OFFICERS CERTIFICATE OF ESP
EXHIBIT J
OFFICERS CERTIFICATE OF ESP UNITED KINGDOM