Document:

istar_ex1003.htm

 Exhibit 10.3

 

AMENDED AND RESTATED

SECURITY AGREEMENT

  

This Amended and Restated Security Agreement, which is made and entered into this 25th day of April, 2011, by and between Beaird Operating Companies, LLC (“Lender”), and International Star, Inc., a Nevada corporation (“Borrower”), hereby amends and restates the Security Agreement, dated October 13, 2010, by and between Lender and Borrower.

For the mutual covenants and promises herein, and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged as received between the parties, the parties have agreed as follows:

	  	
1.

	
Secured Debts.  This Amended and Restated Security Agreement (the “Security Agreement”) will secure the following debts ("Secured Debts"), together with all extensions, renewals, re-financings, modifications, or replacements of these debts:  Lender has made loans to Borrower, and Borrower has accepted sums of money and borrowed from Lender as follows (each a “debt” and, collectively, the “debts”):

 

	  	  	
a.  The sum of U.S. Two Hundred Thousand Dollars (U.S. $200,000) principal amount, evidenced by a corporate promissory note, dated October 13, 2010.

 

	  	  	
b.  The sum of U.S. One Hundred Fifty Thousand Dollars (U.S. $150,000) principal amount, evidenced by a corporate promissory note, of even date herewith.

	  	
2.

	
Security Interest.  To secure the payment and performance of the Secured Debts, Borrower gives to Lender a security interest in all of the property described in this Security Agreement that Borrower owns or has sufficient rights in which to transfer an interest now or in the future, wherever the property is or will be located, and all proceeds and products from the property (including but not limited to all parts, accessories, repairs, replacements, improvements, and accessions to the property).  Property is all the collateral given as security for the Secured Debts and described in this Security Agreement, and includes all obligations that support the payment or performance of the property.  “Proceeds” includes anything acquired upon the sale, lease, license, exchange or other disposition of the property; any rights and claims arising from the property; and any collections and distributions on account of the property.

	 	 	 
	 	 
Property also includes any original evidence of title or ownership whether evidenced by a certificate of title or ownership, a manufacturer’s statement of origin or other documents when the property is titled under state or federal law.  Borrower will deliver the title documents, if any, and properly execute such title documents as necessary to reflect Lender’s security interest.  This Security Agreement remains in effect until terminated in writing, even if the Secured Debts are paid and Lender is no longer obligated to advance any funds to Borrower under any credit or loan agreement.

 

	  	
3.

	
Property Description.   The property subject to this Security Agreement is described as follows:  a forty-nine per cent (49%) interest in the mineral rights of all mining claims which Borrower owns or has an interest in, whether now or in the future, located in Mohave County, Arizona.  As set forth in the promissory notes referenced above, made a part hereof by reference, Borrower has the right to convert the security interest from the property described above to 49% of Borrower’s share of proceeds from any joint venture or licensing agreement which Borrower enters into in order to develop the mining claims referenced above, subject to certain conditions set forth in the promissory notes, which are made a part hereof by reference.  This Security Agreement is intended to apply to such proceeds.  Such conversion shall be effective upon Borrower’s written notice to Lender.

	  	
4.

	
Duties Toward Property.

	  	
a.

	
Protection of Secured Party’s Interest:  Borrower will defend the property against any other claim.  Borrower agrees to take such reasonable action as may be necessary to protect Lender’s security interest and to keep its claim in the property ahead of the claims of other creditors.  Borrower will not affirmatively do anything to harm Lender’s position.  Borrower will keep books, records, and accounts about its business and the property.  Lender may examine these and make copies at any reasonable time.  Borrower will prepare any reasonable report or accounting of the property as requested by Lender.  Lender will maintain the confidentiality of any information provided or made available to Lender under this paragraph, unless and until such information is publicly disclosed by Borrower.

 

  

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b.

	
Uses, Location and Protection of Property.  Borrower will keep the property in its possession and in good repair and will use the property only for the commercial uses intended.  Borrower will not change the specified uses of the property without Lender’s prior written consent, which shall not unreasonably be withheld.  Lender has the right of reasonable access to inspect the property using all due care upon entering the property.  Borrower will not permit waste on the property and will immediately inform Lender of any change of use, loss or damage to the property of a material nature.  Borrower will at all times be in compliance with any local, state or federal laws pertaining to the use or operation of the mining activities on the property and will carry sufficient liability insurance.  Notwithstanding the foregoing provisions, Borrower may determine in its discretion not to record or renew any mining claims for which Borrower, in consultation with its geologists, determines that the commercial value of such claims is not sufficient to justify the cost to record or maintain such claims.

	  	
c.

	
Selling, Leasing or Encumbering the Property.  Any disposition of the property contrary to this Security Agreement may adversely affect the rights of Lender.  Consequently, Borrower will not sell, offer to sell, lease, or otherwise transfer or encumber the property without prior written consent of Lender, which shall not unreasonably be withheld.  Borrower will not permit the Property to be the subject of any court order or decree affecting its rights in the property in any action by anyone other than Lender.  If the property includes chattel paper or instruments, either as original collateral or as proceeds of the property, Borrower will note Lender’s security interest on the face of the chattel paper or instruments.

	  	
5.

	
Authority to Perform.  Borrower authorizes Lender to do anything it deems reasonably necessary to protect the property, and to perfect and continue Lender’s security interest in the property.  If Borrower fails any of its duties under the Note, or this Security Agreement, Lender is authorized, without notice to Borrower, to perform the duties or cause them to be performed, including but not limited to:

	  	
a.

	
Pay and discharge taxes, liens, security interests, or other encumbrances at any time levied or placed on the property.

	  	
b.

	
Pay any rents or other charges under any lease affecting the property.

	  	
c.

	
Order and pay for the repair, maintenance and preservation of the property.

	  	
d.

	
Sign, when permitted by law, and file any financing statements on Borrower’s behalf and pay for filing or recording fees.

	  	
e.

	
Place a note on any chattel paper indicating Lender’s interest in the property.

	  	
f.

	
Take any action Lender deems necessary to realize on the property, including performing any part of a contract or endorsing it in Borrower’s name.

	  	
g.

	
Handle any suits or other proceedings involving the property in Borrower’s name.

	  	
h.

	
Prepare, file and sign Borrower’s name to any necessary reports or accountings.

 

  

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i.

	
Make an entry on Borrower’s books or records showing the existence of this agreement.

Lender has no obligation to perform for Borrower.  But if Lender performs for Borrower, it will use reasonable care to preserve and protect the property.

	  	
6.

	
The note and security interest therein is assignable in whole or in part by Lender upon reasonable written notice to Borrower.

	  	
7.

	
7.    Borrower hereby represents and warrants to Lender that Borrower has all the authority necessary to enter into this security agreement.  Each officer signing this Security Agreement and the note and loan agreement has all of the necessary corporate authority to bind Borrower to the terms and conditions of performance recited herein.

	  	
8.

	
Borrower authorizes Lender to file a financing statement, notice of security interest, or notice of lien covering the property.  Borrower will comply with, assist, or otherwise facilitate such filing for perfecting of Lender’s security interest.

	  	
9.

	
Any notices called for herein shall be deemed delivered if deposited in the U. S. mail with first class postage prepaid and addressed as follows:

 

	
If to Borrower:

	
International Star, Inc.

Post Office Box 7202

Shreveport, Louisiana 71137

 

	
If to Lender:

	
Beaird Operating Companies, LLC

330 Marshall, Suite 1112

Shreveport, Louisiana 71101

 

	  	
10.

	
In the event of Borrower’s default, Lender shall be entitled to costs of collection to enforce the terms of the security agreement, including reasonable attorney fees and court costs.  This agreement may be interpreted according to the commercial laws of the State of Louisiana and may be enforced in the proper court or courts of jurisdiction in that state.

	  

Dated the above date.  In witness the parties have executed this agreement.

	
BORROWER 

	
LENDER 

	
International Star, Inc.

	
Beaird Operating Companies, LLC

 

	
By: /s/ Sterling M. Redfern                           

      Sterling M. Redfern

      President

	
By: /s/ J. b. Beaird                                 

       Name:  J. B. Beaird

      Title:  Manager

	
By: /s/ Jacqulyn B. Wine                           

       Jacqulyn B. Wine

       Secretary and Treasurer

	  

 

 

 

 

 

 

 

 

3istar_ex1004.htm

 

Exhibit 10.4

 

STOCK PURCHASE WARRANT AGREEMENT

This STOCK PURCHASE WARRANT AGREEMENT, dated as of April 25, 2011 (the “Effective Date”), is entered into by and between International Star, Inc., a Nevada corporation with its principal office located in Shreveport, Louisiana (the “Company”), and Beaird Operating Companies, LLC, a Louisiana limited liability company with its principal office located in Shreveport, Louisiana (“Grantee”).

The Company hereby grants to Grantee 15,000,000 warrants (each a “Warrant” and, collectively, the “Warrants”) to purchase shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”), subject to the following terms and conditions:

1.           Shares Issuable Per Warrant.  Each Warrant shall entitle the Grantee to purchase one share of Common Stock under the terms and conditions of this Agreement.

 

 

2.           Exercise Price.  The exercise price per share of the shares of Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”) shall be $0.01 per share (the “Exercise Price”).

3.           Exercisability of Warrant; Termination of Warrant.  Subject to the provisions of this Section 3, each Warrant shall be exercisable by Grantee commencing on the date of issuance of such Warrant and expiring on the later of the second anniversary of the date of issuance, as provided on the warrant certificate evidencing the Warrants, or the date that the outstanding principal balance owed by the Company to Grantee pursuant to the $150,000 debt financing provided by Grantee to the Company on or about the date hereof, excluding any liquidation preference amount (the “Outstanding Debt”), has been paid in full (the “Expiration Date”), subject to the following provisions:

(a)           All issued but unexercised Warrants shall continue to be fully exercisable in accordance with the provisions herein, subject to the Company’s right to cancel provided in paragraph (b), if:

(i)           there occurs any corporate transaction (which shall include a series of corporate transactions occurring within 60 days or occurring pursuant to a plan), that has the result that shareholders of the Company immediately before such transaction cease to own at least a majority of the voting stock of the Company immediately after a (a) reorganization, (b) consolidation, (c) merger, (d) liquidation or (e) a similar corporate transaction;

(ii)           the shareholders of the Company approve a plan of merger, consolidation, reorganization, liquidation or dissolution in which the Company does not survive (unless the approved merger, consolidation, reorganization, liquidation or dissolution is subsequently abandoned); or

 

  

 

  

(iii)           the shareholders of the Company approve a plan for the sale, lease, exchange or other disposition of all or substantially all the property and assets of the Company (unless such plan is subsequently abandoned).

(b)           Right to Cancel.  The Company reserves the right to cancel the Warrants prior to the Expiration Date, after a period of one year has elapsed from the date of issuance of the Warrants and upon 15 days written notice to Grantee, if the closing price of the Company’s Common Stock is an amount equal to or exceeding $0.20 per share for a period of 20 consecutive trading days; provided that the Outstanding Debt has been paid in full on or before the date of such cancellation.

4.           Non-Transferability.  The Warrants shall not be given, granted, sold, exchanged, transferred, pledged, encumbered, assigned or otherwise disposed of by the Grantee without the prior written consent of the Company and subject to such transferree’s execution of a Stock Purchase Warrant Agreement with the Company.  The Warrants shall not be exercisable by any person other than a duly authorized officer of the Grantee.

5.           Method of Exercise.  Grantee shall notify the Company by written notice, in the form of the Notice of Exercise attached hereto (Attachment A), executed by a duly authorized officer of the Grantee and delivered to the Company’s principal office, attention:  Secretary.

(a)           Payment for the Warrant Shares must accompany the Notice of Exercise and shall be made by:

(i)           Grantee’s check payable to International Star, Inc. or wire transfer in full payment of the Exercise Price times the number of Warrant Shares purchased (the “Total Exercise Price”); or

(ii)           Grantee’s written acknowledgment in a form satisfactory to the Company of the reduction in principal amount of any Outstanding Debt owed by the Company to Grantee at the time of exercise equal to the Total Exercise Price (or such portion thereof as designated by Grantee), and if such reduction results in the Outstanding Debt being fully satisfied, surrender of any promissory note evidencing such Outstanding Debt; or

(iii)           any combination of (i) and (ii).

(b)           As soon as practicable after (i) the Company has received the Notice of Exercise and the accompanying payment of the Total Exercise Price or written acknowledgment of debt reduction as described in Section 5(a) and, if applicable, surrender of the promissory note, and (ii) Grantee’s check or wire transfer, if applicable, has been paid, the Company shall instruct its transfer agent to issue to Grantee a certificate or certificates evidencing the Warrant Shares purchased by Grantee hereunder.

6.           Securities Laws.  Grantee acknowledges and understands that the sale of the Warrant Shares will not be registered under federal or state securities laws and such shares will be sold only under exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”), and from the securities laws of the state in which the Grantee resides; and therefore, that the transfer of the Warrant Shares will be restricted, except to the extent that the Warrant Shares may be subsequently registered for resale pursuant to Section 11 hereof.

 

  

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7.           Restriction on Exercise.  As a condition to the exercise of any Warrant, the Company may require the person exercising the Warrant to make any representation and warranty to the Company as may be required by any applicable law or regulation.

8.           No Fractional Shares.  No fractional shares of Common Stock will be issued upon exercise of the Warrants, but the Company shall pay to Grantee the cash value of any fraction of a Warrant Share to which Grantee is entitled upon the exercise of one or more Warrants.

9.           Adjustment of Warrant Shares.  If at any time prior to the expiration or exercise in full of the Warrants, there shall be any increase or decrease in the number of issued and outstanding shares of the Common Stock through the declaration of a stock dividend or through any recapitalization resulting in a stock split, combination or exchange of the Common Stock, then the number of Warrant Shares subject to the Warrants shall be proportionately adjusted for any such change in the stock structure of the Company.

Except as otherwise expressly provided herein, the issuance by the Company of shares of its capital stock of any class, or securities convertible into shares of capital stock of any class, either in connection with a direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversions of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or exercise price of the Warrant Shares that remain unexercised under the Warrants.

Without limiting the generality of the foregoing, the existence of unexercised Warrant Shares under the Warrants shall not affect in any manner the right or power of the Company to make, authorize or consummate (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; (ii) any merger or consolidation of the Company; (iii) any issue by the Company of debt securities, or preferred or preference stock that would rank above the Warrant Shares issuable upon exercise of the Warrant; (iv) the dissolution or liquidation of the Company; (v) any sale, transfer or assignment of all or any part of the assets or business of the Company; or (vi) any other corporate act or proceeding, whether of a similar character or otherwise.

10.           No Rights as Stockholder.  The Grantee shall have no rights as a stockholder of the Company with respect to any Warrant Shares as to which Warrants have not been exercised and payment of the Total Exercise Price has not been made therefor as herein provided.

 

  

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11.           Registration Rights.

(a)           Right to Include Registrable Shares.  If the Company at any time after the Effective Date proposes to register shares of its Common Stock (or any security which is convertible into or exchangeable or exercisable for Common Stock) under the Securities Act (other than a registration on Form S-4 or S-8, or any successor or other forms promulgated for similar purposes), whether or not for sale for its own account, it will, at each such time, give prompt written notice to Grantee of its intention to do so and of Grantee’s rights under this Section 11(a).  Upon the written request of Grantee made within 20 days after the receipt of any such notice (which request shall specify such Warrant Shares and such other shares of Common Stock intended to be disposed of by Grantee (the “Registrable Shares”)), the Company will, as expeditiously as practicable, use its reasonable best efforts to effect the registration under the Securities Act of the Registrable Shares; provided that (i) if, after giving written notice of its intention to register shares of its Common Stock and prior to the effective date of the filing of the registration statement, the Company determines not to proceed with the proposed registration, the Company may, at its election, give written notice of such determination to Grantee and, thereupon, shall be relieved of its obligation to register the Registrable Shares (but the Company shall not be relieved of its obligation to pay any expenses related to the proposed registration and its dismissal), and (ii) if such registration involved an underwritten offering, Grantee must sell its Registrable Shares to the underwriters selected by the Company on the same terms and conditions as apply to the Company, with such differences, including any with respect to indemnification and liability insurance, as may be customary or appropriate in combined primary and secondary offerings.  If a registration requested pursuant to this paragraph involves an underwritten public offering, Grantee may elect, in writing prior to the effective date of the registration statement, not to register such securities in connection with such registration.

(b)           Expenses.  The Company will pay any and all expenses related to performance of or compliance with this section, including, without limitation, registration and filing fees, all printing fees, any fees related to listing the shares on an exchange, attorneys’ fees, accounting fees, underwriters’ fees, travel or “road show” expenses and other reasonable out-of-pocket expenses of Grantee, excluding attorneys’ fees and expenses of any separate counsel obtained by Grantee.

(c)           Priority in Piggyback Registrations.  If a registration pursuant to Section 11(a) involves an underwritten offering and the managing underwriter advises the Company in writing that, in its opinion, the number of securities requested to be included in such registration exceeds the number which can be sold in such offering, so as to be likely to have a materially adverse effect on the price, timing or distribution of the securities offered in such offering as contemplated by the Company (other than the Registrable Shares), then the Company will include in such registration (i) first, 100% of the securities the Company proposes to sell, (ii) second, to the extent that the number of shares requested to be included in the registration (including shares requested by holders of shares other than Grantee) may be sold, in the opinion of the underwriters, without having a materially adverse effect, those shares may be allocated pro rata among all holders.

(d)           Additional Rights.  If the Company at any time grants to any other holders of Common Stock any rights to request the Company to effect the registration under the Securities Act of any shares of Common Stock on terms more favorable to such holders than the terms set forth in this Section 11, the terms of this Section 11 shall be deemed amended or supplemented to the extent necessary to provide Grantee such more favorable rights and benefits.

  

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(e)           Covenants of the Company.  The Company agrees that, in connection with an offering of the Company’s securities, including the Registrable Shares, the Company will use its reasonable best efforts in all aspects of the offering.

(f)           Covenants of the Grantee.  Grantee agrees that, in connection with an offering of the Company’s securities, including the Registrable Shares, Grantee (i) will furnish all information reasonably requested by the Company as related to the offering and (ii) will not effect any sale, disposition or distribution of the Registrable Shares (other than those included in the registration) without the prior written consent of the managing underwriter from such period of time (not to exceed 180 days) from the effective date of such registration as the Company or the underwriters may specify.

12.           Amendment.  This Agreement may not be amended except by an instrument in writing signed on behalf of the Company and Grantee.

13.           Successors.  This Agreement shall inure to the benefit of and be binding upon the parties hereto and their successors and assigns.

14.           Notices.  All notices or other communications hereunder shall be in writing and shall be faxed, hand delivered or mailed, postage prepaid, as follows:

(a)           if to the Company, to:                          International Star, Inc.

1818 Marshall Street

P.O. Box 7202

Shreveport, LA 71137

Attn:  Secretary

(b)           if to Grantee, to:                                   Beaird Operating Companies, LLC

330 Marshall Street, Suite 1112

Shreveport, LA 71101

All such notices and communications shall be deemed to have been given or made (a) when delivered by hand, (b) five business days after being deposited in the mail, postage prepaid, or (c) when faxed, receipt acknowledged.

15.           Headings.  Any headings provided in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meanings of the terms of this Agreement.

16.           Severability.  In the event that any one or more of the provisions, paragraphs, words, clauses, phrases or sentences contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision, paragraph, word, clause, phrase or sentence in every other respect and of the remaining provisions, paragraphs, words, clauses, phrases or sentences hereof shall not be in any way impaired, it being intended that all rights, powers and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law.

  

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17.           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same instrument.

18.           Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Louisiana.

IN WITNESS WHEREOF, this Agreement has been executed by the Company and Grantee as of the date first written above.

 

 

	 	 
INTERNATIONAL STAR, INC.

By:   /s/ Sterling M. Redfern 

Name:  Sterling M. Redfern

Title:  President

BEAIRD OPERATING COMPANIES, LLC

By:   /s/ J. b. Beaird                                                      

Name:  J. B. Beaird

Title:  Manager

 

  

  

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ATTACHMENT A

NOTICE OF EXERCISE

To:           International Star, Inc.

P.O. Box 7202

Shreveport, LA  71137

Attn:  Secretary

Beaird Operating Companies, LLC (“Grantee”) hereby irrevocably elects to purchase _____________ shares (the “Shares”) of Common Stock of International Star, Inc., a Nevada corporation (the “Company”), pursuant to the terms of exercise of the attached Warrant(s) (Certificate No(s). ________________________________) and hereby makes payment of $____________ as payment in full therefor in the form of (check all that apply):

____ check tendered herewith payable to International Star, Inc.

____ concurrent wire transfer to the account of International Star, Inc.

 ____ written acknowledgment of reduction of the Outstanding Debt in the amount of $____________ (a copy of which is attached hereto).

Grantee hereby requests that a stock certificate or stock certificates representing the Shares be issued to Grantee in the name specified below.

Grantee hereby represents and warrants that:  (i) the Shares are being acquired for the account of Grantee for investment and not with a view to or for resale or in connection with the distribution thereof; (ii) Grantee has no present intention of distributing or reselling such Shares; (iii) Grantee is knowledgeable about the Company, its business, its financial condition and its competitors and has had the opportunity to obtain such additional information about the Company as Grantee deems necessary in order to make an informed investment decision; (iv) Grantee has the required degree of knowledge and experience in financial and business matters, including making investment decisions of this type, that enables Grantee to utilize the information made available to Grantee, to evaluate the risks of the prospective investment and to make an informed investment decision; and (v) all representations of Grantee set forth in the Stock Purchase Warrant Agreement between the Company and Grantee with respect to the attached Warrant(s) are true and correct as of the date hereof.

_________________________                                                                Date: ______________________

Name:

Title:

INSTRUCTIONS FOR ISSUANCE OF STOCK AND CORPORATE RECORDS

 

 

	Name:  	 	 
	 	(Please type or print in block letters)	 
	 	 	 
	Address:	 	 
	 	 	 
	 	 	 
	Social Security #	 	 
	or Tax Identification #:	 	 
	 	 	 
	Phone #:  	(      )	 
	Fax #: 	(      ) 	 
	 	 	 

 

                 

 

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