<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
March 27, 1998
- --------------------------------------------------------------------------------
Date of Report (Date of earliest event reported)
JAVA GROUP, INC.
- --------------------------------------------------------------------------------
Exact name of registrant as specified in its charter
DELAWARE 0-23920 11-298370
(state or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
141-6200 McKay Avenue -- Box 884, Burnaby, B.C. Canada V5H 4M9
- ------------------------------------------------------ -------
(Address of principal executive offices)
(604) 412-9812
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
Item 1. CHANGES IN CONTROL OF REGISTRANT
The following table sets forth those people who previously had in excess of 5%
of Java Group, Inc.
Amount of Beneficial
Name of Beneficial Owner Ownership Percent of Class
Robert P. Gillingham 1,750,000 22.9%
T*A*B*S Enterprise Ltd. 2,000,000(1) 20.8%
(1) This was previously comprised of currently exercisable warrants to purchase
2,000,000 shares for $.10 per share, which shares are deemed to be
outstanding for purposes of calculating the percentage ownership of T*A*B*S
Enterprise Ltd., but not for purposes of calculating any other person's
percentage ownership.
This warrant agreement has been canceled in the reorganization of the company's
affairs.
On March 27, 1998 Java Group, Inc. acquired 3,562,857 shares (approximately 73%)
of DNR Resources Inc., a Delaware corporation from the Howard Stern Group in
exchange for 24,939,999 shares of Java Group, Inc., which shares will be
considered "restricted shares" as that term is defined in Rule 144, promulgated
under the Securities Act of 1933, as amended. The Howard Stern Group is
comprised of 22 separate shareholders.
The following table sets forth the controlling shareholders of the company as of
March 27, 1998 the name and holdings as to each person (including any "group" as
defined in Section 13(d) of the Securities Exchange Act of 1934) known by the
Company to be the beneficial owner of more than five percent of the Common
Stock.
Name and Address of Amount of Beneficial
Beneficial Owner Ownership Percent of Class
Stern Holding Limited 9,208,500 28.3
Howard B Stern 6,363,000 19.5
Dr. Stuart Friedman 2,625,000 8.1
Rob Gillingham 1,750,000 5.4
While control changed in the acquisition of DNR Resources, Inc shares,
management of the company did not change.
The following table sets forth the beneficial ownership of shares of Common
Stock of the Company as of March 27, 1998 of (i) the Chief Executive Officer and
each of the Company's other executive officers, (ii) each director and nominee
to serve as a director and (iii) all directors and executive officers of the
Company as a group:
<PAGE>
Name of Beneficial Amount and Nature
Owner Beneficial Owner Percent of Class
Rob Gillingham 1,750,000 5.4
Ray Suutari 0 0
Barrett Sleeman 0 0
All directors and executive
officers as a group (3 people) 1,750,000 5.4
Item 5. OTHER EVENTS
On April 2, 1998 Java Group Inc. settled loans outstanding with three entities
for a total of $341,603 by issuing 5,030,400 Common Shares of Java Group, Inc.
by virtue of Regulation S of the US Exchange and Securities Act. The individual
entities are as follows:
ENTITY AMOUNT SHARES
Mt. Production Jersey Limited $ 49,850 734,400
Giant Financial Limited $ 50,960 750,000
New Vision Financial Limited $240,793 3,546,000
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
10.1 Purchase of shares of DNR Resources, Inc. from Howard Stern Group
dated March 27, 1998
10.2 Share Settlement Agreement with Mt. Production Jersey Limited dated
April 2, 1998
10.3 Share Settlement Agreement with Giant Financial Limited dated April 2,
1998
10.4 Share Settlement Agreement with New Vision Financial Limited dated
April 2, 1998.
7.5 Audited Statements of DNR Resources, Inc. dated March 31, 1998 are
required to be filed on or before May 27, 1998
7.6 Pro Forma financial information combining DNR Resources, Inc dated
March 31, 1998 is required to be filed on or before May 27, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: May 20, 1998
JAVA GROUP, INC.
By: /s/ Rob Gillingham
------------------------------------
Rob Gillingham, President
<PAGE>
EXHIBIT 10.1
AGREEMENT
OF PURCHASE AND SALE
BY AND BETWEEN
JAVA GROUP, INC.
AND
THE HOWARD STERN GROUP
EFFECTIVE
MARCH 27, 1998
<PAGE>
STOCK PURCHASE AGREEMENT
AGREEMENT made as of March 27, 1998, by and between Java Group, Inc.
(hereinafter called "Buyer") and The Howard Stern Group (sometimes hereafter
referred to as "Selling Shareholders").
W I T N E S S E T H:
WHEREAS, the Selling Shareholders presently owns of record and beneficially
3,562,857 shares of common stock, par value $.0001 per share (hereinafter the
"Shares"), of DNR Resources, Inc., a Delaware corporation, (hereinafter "DNR"),
which Shares represent approximately 73% of DNR's issued and outstanding shares
of Common Stock; and
WHEREAS the parties hereto desire to enter into an agreement providing that
Selling Shareholders will sell and deliver to Buyer, and providing that Buyer
will acquire from Selling Shareholders, the Shares;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other valuable consideration, the receipt and adequacy of which is hereby
acknowledged, Buyer and the Selling Shareholders do hereby covenant and agree as
follows:
Section 1. PURCHASE AND SALE OF SHARES.
1.1 Shares to be Conveyed. Subject to the terms, provisions and
conditions contained in this Agreement, and on the basis of the representations
and warranties herein set forth, at the Closing (as defined in Section 1.5), the
Selling Shareholders agree to sell and deliver to Buyer and Buyer agrees to
purchase from the Selling Shareholders, the Shares.
1.2 Purchase Price. The Howard Stern Group are the record and
beneficial owners of 3,562,857 of the Shares and as Selling Shareholders shall
receive as consideration for the Shares the
<PAGE>
delivery of 24,939,999 shares of Java Group, Inc. Common Stock, $.0001 par value
(the "Common Stock"), issued by Buyer and the shares will be considered
"restricted shares" as that term is defined in Rule 144, promulgated under the
Securities Act of 1933, as amended.
1.3 Closing. The sale and delivery and the purchase and acceptance
of the Shares (the "Closing"), shall take place at the office of Arter & Hadden,
1717 Main Street, Suite 4100, Dallas, Texas 75201, at 10:00 o'clock a.m. on the
Closing Date, which shall be March 31, 1998 (or any other date, place or time
prior to March 31, 1998 agreed upon by the parties hereto) being herein called
the "Closing Date". At the Closing, Buyer shall deliver to Selling Shareholder
24,939,999 shares of Common Stock issued in the name of Selling Shareholders,
against delivery by Selling Shareholders of a certificate or certificates duly
endorsed to Buyer representing the Shares.
Section 2. REPRESENTATIONS AND WARRANTIES OF
THE SELLING SHAREHOLDERS.
The selling Shareholders, represent, warrant, covenant and agree that:
2.1 Organization and Corporate Power. DNR is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which it maintains assets or conducts business, with full
power and authority (corporate and other) to own, lease and operate its
properties and to carry on the business in which it is engaged. From the date of
this Agreement until the Closing, DNR will not amend either its articles of
incorporation or by-laws.
2.2 Due Authorization; Effect of Transaction. The Shares to be sold
to the Buyer are owned by Selling Shareholders free and clear of any liens or
encumbrances. Upon consummation of the transactions contemplated hereby the
Buyer will own the Shares free and clear of all liens and encumbrances subject
to certain investment restrictions set forth in Section 3.4 hereof. No provision
<PAGE>
of DNR"s certificate of incorporation or by-laws, or of any agreement,
indenture, instrument or understanding, or any judgment, decree, rule or
regulation, to which DNR or the Selling Shareholders are a party or by which it
or they are bound, has been or will be violated by the execution and delivery by
the Selling Shareholders of this Agreement or the performance or satisfaction of
any agreement or condition herein contained upon the Selling Shareholders part
to be performed or satisfied, or the consummation of all transactions
contemplated hereby. The execution and delivery of this Agreement by the Selling
Shareholders and the consummation of the transactions contemplated hereby do not
require the approval of DNR's Board of Directors or its shareholders. This
Agreement will upon execution and delivery be a legal, valid and binding
obligation of the Selling Shareholders, enforceable in accordance with its
terms.
2.3 Financial Statements. The Shareholders have delivered to Buyer a
balance sheet of DNR, with related statements of operations, stockholders equity
and changes in financial position ("Financial Statements").
All of the Financial Statements are true, correct and complete, and fairly
present the financial condition of DNR and the results of its operations as at
the dates thereof or throughout the periods covered thereby. The Financial
Statements reflect or provide for all claims against, debts and liabilities of
DNR, fixed, contingent or other, as at the dates thereof; and except as set
forth in the Financial Statements, there has not been any change between the
date of the most recent Financial Statements and the date of this Agreement
which has affected materially or adversely the business or properties or
condition, financial or other, or results of operation of DNR, and no fact or
condition exists or, to the knowledge of the Selling Shareholder, is
contemplated or threatened, which might cause any such change at any time in the
future.
<PAGE>
2.4 Employment Arrangements. DNR does not have any obligation,
contingent or otherwise, under any employment agreement, collective bargaining
or other labor agreement, any agreement containing severance or termination pay
arrangements, deferred compensation agreement, retainer or consulting
agreements, pension or retirement plan, bonus or profit-sharing plan, stock
option or purchase plan or other employee contract.
2.5 Continuing Representations. The representations and warranties
of the Selling Shareholder herein contained shall be true and correct on and as
of the Closing Date with the same force and effect as if made on and as of that
date.
Section 3. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents, warrants, covenants and agrees that:
3.1 Organization and Corporate Power. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power and authority (corporate and other) to execute and
deliver and to carry out the transactions contemplated by this Agreement.
3.2 Due Authorization; Effect of Transaction. No provision of
Buyer's certificate of incorporation or by-laws, or of any agreement, instrument
or understanding, or any judgment, decree, rule or regulation, to which Buyer is
a party or by which it is bound, has been or will be violated by the execution
by Buyer of this Agreement or the performance or satisfaction of any agreement
or condition herein contained upon its part to be performed or satisfied, and
all requisite corporate and other authorizations for such execution, delivery,
performance and satisfaction have been duly obtained. This Agreement will upon
execution and delivery be a legal, valid and binding obligation of Buyer,
enforceable in accordance with its terms.
<PAGE>
3.4 Continuing Representation. The representations and warranties of
Buyer herein contained shall be true and correct on and as of the Closing Date
with the same force and
Section 4. EXPENSES.
The Selling Shareholders and Buyer shall pay its own expenses incident to
the preparation and carrying out of this Agreement, including all fees and
expenses of counsel and accountants.
Section 5. SEVERABILITY.
If any provisions of this Agreement shall be held or deemed to be, or shall
in fact be, invalid, inoperative or unenforceable as applied to any particular
case in any jurisdiction or jurisdictions, or in all jurisdictions or in all
cases, because of the conflicting of any provision with any constitution or
statute or rule of public policy or for any other reason, such circumstances
shall not have the effect of rendering the provision or provisions in question,
invalid, inoperative or unenforceable in any other jurisdiction or in any other
case or circumstance or of rendering any other provision or provisions herein
contained invalid, inoperative or unenforceable to the extent that such other
provisions are not themselves actually in conflict with such constitution,
statute or rule of public policy, but this Agreement shall be reformed and
construed in any such jurisdiction or case as if such invalid, inoperative or
unenforceable provision had never been contained and such provision reformed so
that it would be valid, operative and enforceable to the maximum extent
permitted in such jurisdiction or in such case.
Section 6. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall constitute one and the same instrument, and in pleading or proving any
provision of this Agreement it shall not be necessary to produce more than one
such counterpart.
<PAGE>
Section 7. SECTION AND OTHER HEADING.
The headings contained in this Agreement are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
Section 8. NOTICES.
All notices, requests, demands, and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered or mailed,
postage prepaid, certified mail, return receipt requested:
(a) TO THE BUYER: If to the Buyer, to:
Rob Gillingham, President
Java Group, Inc.
6595 Willingdon
Suite 1402
Burnaby, B.C. V5H4E5
Canada
(b) TO SELLING SHAREHOLDERS: If to Selling Shareholders, to:
Howard Stern
100 W. Cypress Creek Road
5th floor
Ft. Lauderdale, Florida 33309
Section 10. GENDER.
Whenever used herein, the singular number shall include the plural, the
plural shall include the singular, and the use of any gender shall include all
genders.
Section 11. TEXAS LAW TO GOVERN.
This Agreement shall be governed by and construed and enforced in
accordance with the law (other than the law governing conflict of law questions)
of the State of Texas.
<PAGE>
Section 12. TEXAS COURTS.
Any action to enforce, arising out of, or relating in any way to, any of
the provisions of this Agreement may be brought and prosecuted in such court or
courts located within the State of Texas as provided by law; and the parties
consent to the jurisdiction of said court or courts located within the State of
Texas and to service of process by registered mail, return receipt requested, or
by any other manner provided by law.
IN WITNESS WHEREOF, the Selling Shareholders and Buyer have caused this
Agreement to be executed on this 27 day of March, 1998 effective the 27th day of
March, 1998.
JAVA GROUP, INC. SELLING SHAREHOLDERS
By /s/ Rob Gillingham By: /s/ Howard Stern
----------------------- --------------------------------
Rob Gillingham, President Howard Stern, for the Howard Stern Group:
Stern Family Holding Ltd.
James D. Stern
Howard B. Stern
Audrey & Arnold Stern
Jesse R. Golbin
Allan L. Howard
Janice Friedman
Dorothy Friedman
Dr. Stuart J. Friedman
North Bridge Holding Corp.
West Atlantic Corp.
Southeast Holding Corp.
Commerce Capital Finance Corp.
Waylon E. McMullen
Joel Held
Chris Taylor
James & Carolyn Murata Family Limited Partnership
Lynne Tilton
Douglas Feurring
Robert Schmier
Jeffrey Schmier
Stanford and Ada Davis
<PAGE>
The following List of shareholders constitutes the Howard Stern list of
shareholders per the stock purchase agreement dated March 27, 1998 between Java
Group Inc. and Howard Stern:
<TABLE>
<CAPTION>
Name Of Stockholder SS#/Tax ID# Place of Residence DNR Shares Java Shares
<S> <C> <C> <C> <C>
Stern Holding Limited 65-064-9467 5698 St Annes Way 1315500 9208500
Boca Raton, Fl 33496
James D. Stern ###-##-#### 5698 St Annes Way 28000 196000
Boca Raton, Fl 33496
Howard B Stern ###-##-#### 5698 St Annes Way 909,000 6,363,000
Boca Raton, Fl 33496
Jesse R Golbin ###-##-#### 18347 103rd Trail Sq. 25,000 175,000
Boca Raton, Fl 33498
Howard, Allan L ###-##-#### 6378 N.W. 26th 40,000 280,000
Terrace
Boca Raton, Fl 33496
Stern, Audrey & Arnold 5698 St. Annes Way
Boca Raton, Fl 33496 30,000 210,000
Janice Friedman 1311 Murdock Rd 35,000 245,000
Pittsburgh, PA 15217
North Bridge Holding Corp 13-385-8171 1619 Third Ave #6878 120,000 840,000
New York, NY 10128
Lynne Tilton ###-##-#### 6814 N.W. 35th Way 62,500 437500
Boca Raton, Fl 33496
Robert Schmier ###-##-#### 4155 George's Way 93750 656250
Boca Raton, Fl 33434
Jeffrey Schmier ###-##-#### 21441 Burnside Court 93750 656250
Boca Raton, Fl 33433
Stanford & Ada Davis 5850 Ellsworth Ave 62500 437500
Suite 30
Pittsburgh, Pa 15232
Waylon McMullen ###-##-#### 3113 Sleepy Hollow Dr. 10000 70000
Plano, Tx, 75093
Joel Held ###-##-#### 253 Penuel Drive 10000 70000
Coppell, Tx 75019
Chris Taylor ###-##-#### 360 W 22nd Street 10000 70000
Suite 168
New York, NY 10011
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
West Atlantic Corp 13-370-2685 505 Park Ave 14Th Fl 25000 175000
New York, Ny 10022
Southeast Holding Corp 13-039-5892 505 Park Ave - 14th Fl 25000 175000
New York, Ny 10022
Commerce Capital Finance 13-373-0010 505 Park Ave - 14th FL 25000 175000
New York, Ny 10022
Dr. Stuart Friedman 17224 Northway Circle 375000 2625000
Boca Raton Fl 33496
Murata, James & Carolyn 65-037-5425 50130 Linton Blvd #8-4 125000 875000
Family Ltd Partnership Delray Beach Fl 33484
Douglas Feurring 7777 Glades Road #31 42857 299999
Boca Raton Fl 33434
Dorothy Friedman 17224 Northway Circle 100000 700000
Boca Raton Fl 33496
TOTAL 3562857 24939999
</TABLE>
<PAGE>
EXHIBIT 10.2
SETTLEMENT AGREEMENT
This AGREEMENT made as of April 2, 1998
BETWEEN:
Java Group, Inc.
(hereinafter referred to as the "Company")
OF THE FIRST PART
AND:
Mt. Production Jersey
(hereinafter referred to as the "Creditor")
OF THE SECOND PART
Whereas the Company is indebted to the Creditor in the amount of US$49,850
(the "DEBT") for monies advanced by the Creditor to the Company:
And Whereas the Creditor considers it both appropriate and necessary to
settle the Debt by the issuance of 734400 shares of the Company to the Creditor
(the "Shares")
AND WHEREAS THE SHARES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE US SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES
LAW THEY ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
REGULATIONS ("REGULATIONS") PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (the "ACT") THE SHARES MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO US PERSONS (AS SUCH TERM IS DEFINED IN
REGULATION S) UNLESS THE SHARES ARE REGISTERED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO
AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
AND WHEREAS THIS SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY. ANY OF THE SHARES OFFERED HEREBY BY
OR TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OF SOLICITATION WOULD
BE UNLAWFUL. INVESTMENT IN THESE SHARES INVOLVES A HIGH DEGREE OF RISK. IN
MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF
THE COMPANY AND THE TERMS OF THE OFFERING,
<PAGE>
INCLUDING THE MERITS AND THE RISKS INVOLVED. THESE SHARES HAVE NOT BEEN
RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED OR
DETERMINED THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of one
($1.00) dollar (the receipt and sufficiency of which is hereby acknowledged) the
mutual covenants and agreements herein and agreements herein contained and
subject to the terms and conditions set forth herein, the parties agree as
follows:
1. The Company hereby agrees to issue to the Creditor and the Creditor hereby
agrees to accept from the Company the Shares at a deemed price of $0.0679 per
share in full and final settlement of the Debt and any other monies owed to the
Creditor, including without limitation, any interest, costs or other claims of
the Creditor related either directly or indirectly to the Debt.
2. The Creditor covenants, represents and warrants to the Company that:
(I) the Creditor is not a "US person" as that term is defined in
Regulation S and the Creditor is not an entity organized or incorporated
under the laws of any foreign jurisdiction by any "US person" principally
for the purpose of investing in securities not registered under the Act:
(ii) the shares were not offered to the Creditor in the United States and
at the time of execution of this Agreement and of any offer to the
Creditor, the Creditor was physically outside the United States:
(iii) the Creditor is purchasing the Shares for its own account and not on
behalf of or for the benefit of any US person and the sale and resale of
the Shares have not been prearranged with any buyer in the United States:
(iv) all offers and sales of the Shares prior to the expiration of a
period commencing on the Closing of the Agreement and ending forty (40)
days thereafter (the "Restricted Period") shall not be made to US persons
or for the account or benefit of US persons and shall otherwise be made in
compliance with the provisions of Regulation S;
(v) the Creditor has not been engaged or acted as or on behalf of a
distributor or dealer (and is not an affiliate of a distributor or dealer)
with respect to this transaction:
(vi) the Creditor has not, and to the best of the Creditor's knowledge,
neither the Company nor any distributor, if any, participating in the
offering of the Shares nor any person acting for the Company or any such
distributor has conducted any "directed selling Efforts" as that term is
defined in Regulation S. Such activity includes, without limitation, the
mailing of printed materials to investors residing in the United States,
the holding of promotional seminars in the United States, the placements of
advertisements with radio or television stations broadcasting in the United
States or in
<PAGE>
publications with a general circulation in the United States, which discuss
the offering of Shares: (vii)the Creditor will not make any sale, transfer
or other disposition of the Shares in violation of the Act (including
Regulation S) the Securities Exchange Act of 1934, as amended or the rules
and regulations of the Securities and Exchange Commissions promulgated
thereunder. (viii) the Creditor acknowledges and agrees that the Shares may
and will only be resold (a) in compliance with Regulation S: (b) pursuant
to a Registration Statement under the Act: or (c) pursuant to an exemption
from registration under the Act.
3. The certificates representing the Shares shall bear the legend set forth
below and any other legend if such legend or legends are reasonably
required by the Company to comply with state, federal or foreign law.
Subject to the Company's transfer agent's receipt of a legal opinion from
US legal counsel to the Company, the certificate representing the Shares
after the Restricted Period shall not bear a legend.
"The securities represented by this certificate have been issued pursuant
to Regulation S, promulgated under the Securities Act of 1933, as
amended(the "act"), and have not been registered under the Act or any
applicable state securities laws. These securities may not be offered or
sold within the United States or to or for the account of a "US Person"(as
that term is defined in Regulation S) during the period commencing on the
sale of these securities and ending on the fortieth (40th) day following
completion of the Regulation S offering of the Issuer pursuant to which
these securities have been issued, which day is May 12, 1998 (the
"Restricted Period"). The Issuer will notify the transfer agent of the date
of completion of such offering and of the expiration of such Restricted
Period. Following expiration of the Restricted Period, these securities may
not be offered or sold unless such offer or sale is registered or exempt
from registration under the Act."
4. Subject to receipt of a legal opinion from US legal counsel to the Company,
the Company agrees and shall instruct its agents, that the Shares may be
transferred to any person or entity who is not an affiliate of the Company
if such transfer occurs after the Restricted Period, without(a) any further
restriction on transfer (provided the transfer is made in compliance with
the Act) or (b) the entry of a "stop transfer" order against such Shares,
and the Shares delivered to the transferee shall not bear a legend.
5. The Creditor represents and warrants that it has not assigned the Debt, in
whole or in part, to any other party and that it is not settling the Debt
for the Shares as a result of any information about the material affairs of
the Company that is not generally known to the public.
6. This Agreement constitutes the entire Agreement and supersedes any previous
understandings, communications, representations and agreements, whether
written or oral.
7. This Agreement shall endure to the benefit of and be binding upon the
parties hereto, their and each of their heirs executors, administrators,
successors and permitted assigns.
8. This Agreement may be executed in counterparts, which taken together shall
constitute one and the same instrument, and any facsimile signature shall
be taken as an original.
<PAGE>
In WITNESS WHEREOF the parties have hereunto executed this Agreement as of the
day first above mentioned.
Mt. Production Jersey
/s/ RICHARD FAGAN
_______________________________________
Per: Authorized Signatory
Java Group, Inc.
/s/ ROB GILLINGHAM
_______________________________________
Per: Authorized Signatory
<PAGE>
EXHIBIT 10.3
SETTLEMENT AGREEMENT
This AGREEMENT made as of April 2, 1998
BETWEEN:
Java Group, Inc.
(hereinafter referred to as the "Company")
OF THE FIRST PART
AND:
Giant Financial Ltd.
(hereinafter referred to as the "Creditor")
OF THE SECOND PART
Whereas the Company is indebted to the Creditor in the amount of US$50,960
(the "DEBT") for monies advanced by the Creditor to the Company:
And Whereas the Creditor considers it both appropriate and necessary to
settle the Debt by the issuance of 750,000 shares of the Company to the Creditor
(the "Shares")
AND WHEREAS THE SHARES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE US SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES
LAW THEY ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
REGULATIONS ("REGULATIONS") PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (the "ACT") THE SHARES MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO US PERSONS (AS SUCH TERM IS DEFINED IN
REGULATION S) UNLESS THE SHARES ARE REGISTERED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO
AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
AND WHEREAS THIS SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY. ANY OF THE SHARES OFFERED HEREBY BY
OR TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OF SOLICITATION WOULD
BE UNLAWFUL. INVESTMENT IN THESE SHARES INVOLVES A HIGH DEGREE OF RISK. IN
MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF
THE COMPANY AND THE TERMS OF THE OFFERING,
<PAGE>
INCLUDING THE MERITS AND THE RISKS INVOLVED. THESE SHARES HAVE NOT BEEN
RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED OR
DETERMINED THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of one
($1.00) dollar (the receipt and sufficiency of which is hereby acknowledged) the
mutual covenants and agreements herein and agreements herein contained and
subject to the terms and conditions set forth herein, the parties agree as
follows:
1. The Company hereby agrees to issue to the Creditor and the Creditor hereby
agrees to accept from the Company the Shares at a deemed price of $0.0679 per
share in full and final settlement of the Debt and any other monies owed to the
Creditor, including without limitation, any interest, costs or other claims of
the Creditor related either directly or indirectly to the Debt.
2. The Creditor covenants, represents and warrants to the Company that:
(I) the Creditor is not a "US person" as that term is defined in
Regulation S and the Creditor is not an entity organized or incorporated
under the laws of any foreign jurisdiction by any "US person" principally
for the purpose of investing in securities not registered under the Act:
(ii) the shares were not offered to the Creditor in the United States and
at the time of execution of this Agreement and of any offer to the
Creditor, the Creditor was physically outside the United States:
(iii) the Creditor is purchasing the Shares for its own account and not on
behalf of or for the benefit of any US person and the sale and resale of
the Shares have not been prearranged with any buyer in the United States:
(iv) all offers and sales of the Shares prior to the expiration of a
period commencing on the Closing of the Agreement and ending forty (40)
days thereafter (the "Restricted Period") shall not be made to US persons
or for the account or benefit of US persons and shall otherwise be made in
compliance with the provisions of Regulation S;
(v) the Creditor has not been engaged or acted as or on behalf of a
distributor or dealer (and is not an affiliate of a distributor or dealer)
with respect to this transaction:
(vi) the Creditor has not, and to the best of the Creditor's knowledge,
neither the Company nor any distributor, if any, participating in the
offering of the Shares nor any person acting for the Company or any such
distributor has conducted any "directed selling Efforts" as that term is
defined in Regulation S. Such activity includes, without limitation, the
mailing of printed materials to investors residing in the United States,
the holding of promotional seminars in the United States, the placements of
advertisements with radio or television stations broadcasting in the United
States or in
<PAGE>
publications with a general circulation in the United States, which discuss
the offering of Shares: (vii)the Creditor will not make any sale, transfer
or other disposition of the Shares in violation of the Act (including
Regulation S) the Securities Exchange Act of 1934, as amended or the rules
and regulations of the Securities and Exchange Commissions promulgated
thereunder. (viii) the Creditor acknowledges and agrees that the Shares may
and will only be resold (a) in compliance with Regulation S: (b) pursuant
to a Registration Statement under the Act: or (c) pursuant to an exemption
from registration under the Act.
3. The certificates representing the Shares shall bear the legend set forth
below and any other legend if such legend or legends are reasonably
required by the Company to comply with state, federal or foreign law.
Subject to the Company's transfer agent's receipt of a legal opinion from
US legal counsel to the Company, the certificate representing the Shares
after the Restricted Period shall not bear a legend.
"The securities represented by this certificate have been issued pursuant
to Regulation S, promulgated under the Securities Act of 1933, as
amended(the "act"), and have not been registered under the Act or any
applicable state securities laws. These securities may not be offered or
sold within the United States or to or for the account of a "US Person"(as
that term is defined in Regulation S) during the period commencing on the
sale of these securities and ending on the fortieth (40th) day following
completion of the Regulation S offering of the Issuer pursuant to which
these securities have been issued, which day is May 12, 1998 (the
"Restricted Period"). The Issuer will notify the transfer agent of the date
of completion of such offering and of the expiration of such Restricted
Period. Following expiration of the Restricted Period, these securities may
not be offered or sold unless such offer or sale is registered or exempt
from registration under the Act."
4. Subject to receipt of a legal opinion from US legal counsel to the Company,
the Company agrees and shall instruct its agents, that the Shares may be
transferred to any person or entity who is not an affiliate of the Company
if such transfer occurs after the Restricted Period, without(a) any further
restriction on transfer (provided the transfer is made in compliance with
the Act) or (b) the entry of a "stop transfer" order against such Shares,
and the Shares delivered to the transferee shall not bear a legend.
5. The Creditor represents and warrants that it has not assigned the Debt, in
whole or in part, to any other party and that it is not settling the Debt
for the Shares as a result of any information about the material affairs of
the Company that is not generally known to the public.
6. This Agreement constitutes the entire Agreement and supersedes any previous
understandings, communications, representations and agreements, whether
written or oral.
7. This Agreement shall endure to the benefit of and be binding upon the
parties hereto, their and each of their heirs executors, administrators,
successors and permitted assigns.
8. This Agreement may be executed in counterparts, which taken together shall
constitute one and the same instrument, and any facsimile signature shall
be taken as an original.
<PAGE>
In WITNESS WHEREOF the parties have hereunto executed this Agreement as of the
day first above mentioned.
Giant Financial Ltd.
/s/ SIMON BOYD de CARTERET
_______________________________________
Per: Authorized Signatory
Java Group, Inc.
/s/ ROB GILLINGHAM
_______________________________________
Per: Authorized Signatory
<PAGE>
EXHIBIT 10.4
SETTLEMENT AGREEMENT
This AGREEMENT made as of April 2, 1998
BETWEEN:
Java Group, Inc.
(hereinafter referred to as the "Company")
OF THE FIRST PART
AND:
New Vision Financial Ltd.
(hereinafter referred to as the "Creditor")
OF THE SECOND PART
Whereas the Company is indebted to the Creditor in the amount of US$240,793
(the "DEBT") for monies advanced by the Creditor to the Company:
And Whereas the Creditor considers it both appropriate and necessary to
settle the Debt by the issuance of 3,546,000 shares of the Company to the
Creditor (the "Shares")
AND WHEREAS THE SHARES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE US SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES
LAW THEY ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
REGULATIONS ("REGULATIONS") PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (the "ACT") THE SHARES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
IN THE UNITED STATES OR TO US PERSONS (AS SUCH TERM IS DEFINED IN REGULATION S)
UNLESS THE SHARES ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO AVAILABLE
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
AND WHEREAS THE SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY. ANY OF THE SHARES OFFERED HEREBY BY
OR TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OF SOLICITATION WOULD
BE UNLAWFUL. INVESTMENT IN THESE SHARES INVOLVES A HIGH DEGREE OF RISK. IN
MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF
THE COMPANY AND THE TERMS OF THE OFFERING,
<PAGE>
INCLUDING THE MERITS AND THE RISKS INVOLVED. THESE SHARES HAVE NOT BEEN
RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED OR
DETERMINED THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of one
($1.00) dollar (the receipt and sufficiency of which is hereby acknowledged) the
mutual covenants and agreements herein and agreements herein contained and
subject to the terms and conditions set forth herein, the parties agree as
follows:
1. The Company hereby agrees to issue to the Creditor and the Creditor hereby
agrees to accept from the Company the Shares at a deemed price of $0.0679 per
share in full and final settlement of the Debt and any other monies owed to the
Creditor, including without limitation, any interest, costs or other claims of
the Creditor related either directly or indirectly to the Debt.
2. The Creditor covenants, represents and warrants to the Company that:
(I) the Creditor is not a "US person" as that term is defined in
Regulation S and the Creditor is not an entity organized or incorporated
under the laws of any foreign jurisdiction by any "US person" principally
for the purpose of investing in securities not registered under the Act:
(ii) the shares were not offered to the Creditor in the United States and
at the time of execution of this Agreement and of any offer to the
Creditor, the Creditor was physically outside the United States:
(iii) the Creditor is purchasing the Shares for its own account and not on
behalf of or for the benefit of any US person and the sale and resale of
the Shares have not been prearranged with any buyer in the United States:
(iv) all offers and sales of the Shares prior to the expiration of a
period commencing on the Closing of the Agreement and ending forty (40)
days thereafter (the "Restricted Period") shall not be made to US persons
or for the account or benefit of US persons and shall otherwise be made in
compliance with the provisions of Regulation S;
(v) the Creditor has not been engaged or acted as or on behalf of a
distributor or dealer (and is not an affiliate of a distributor or dealer)
with respect to this transaction:
(vi) the Creditor has not, and to the best of the Creditor's knowledge,
neither the Company nor any distributor, if any, participating in the
offering of the Shares nor any person acting for the Company or any such
distributor has conducted any "directed selling Efforts" as that term is
defined in Regulation S. Such activity includes, without limitation, the
mailing of printed materials to investors residing in the United States,
the holding of promotional seminars in the United States, the placements of
advertisements with radio or television stations broadcasting in the United
States or in
<PAGE>
publications with a general circulation in the United States, which discuss
the offering of Shares: (vii)the Creditor will not make any sale, transfer
or other disposition of the Shares in violation of the Act (including
Regulation S) the Securities Exchange Act of 1934, as amended or the rules
and regulations of the Securities and Exchange Commissions promulgated
thereunder. (viii) the Creditor acknowledges and agrees that the Shares may
and will only be resold (a) in compliance with Regulation S: (b) pursuant
to a Registration Statement under the Act: or (c) pursuant to an exemption
from registration under the Act.
3. The certificates representing the Shares shall bear the legend set forth
below and any other legend if such legend or legends are reasonably
required by the Company to comply with state, federal or foreign law.
Subject to the Company's transfer agent's receipt of a legal opinion from
US legal counsel to the Company, the certificate representing the Shares
after the Restricted Period shall not bear a legend.
"The securities represented by this certificate have been issued pursuant
to Regulation S, promulgated under the Securities Act of 1933, as
amended(the "act"), and have not been registered under the Act or any
applicable state securities laws. These securities may not be offered or
sold within the United States or to or for the account of a "US Person"(as
that term is defined in Regulation S) during the period commencing on the
sale of these securities and ending on the fortieth (40th) day following
completion of the Regulation S offering of the Issuer pursuant to which
these securities have been issued, which day is May 12, 1998 (the
"Restricted Period"). The Issuer will notify the transfer agent of the date
of completion of such offering and of the expiration of such Restricted
Period. Following expiration of the Restricted Period, these securities may
not be offered or sold unless such offer or sale is registered or exempt
from registration under the Act."
4. Subject to receipt of a legal opinion from US legal counsel to the Company,
the Company agrees and shall instruct its agents, that the Shares may be
transferred to any person or entity who is not an affiliate of the Company
if such transfer occurs after the Restricted Period, without(a) any further
restriction on transfer (provided the transfer is made in compliance with
the Act) or (b) the entry of a "stop transfer" order against such Shares,
and the Shares delivered to the transferee shall not bear a legend.
5. The Creditor represents and warrants that it has not assigned the Debt, in
whole or in part, to any other party and that it is not settling the Debt
for the Shares as a result of any information about the material affairs of
the Company that is not generally known to the public.
6. This Agreement constitutes the entire Agreement and supersedes any previous
understandings, communications, representations and agreements, whether
written or oral.
7. This Agreement shall endure to the benefit of and be binding upon the
parties hereto, their and each of their heirs executors, administrators,
successors and permitted assigns.
8. This Agreement may be executed in counterparts, which taken together shall
constitute one and the same instrument, and any facsimile signature shall
be taken as an original.
<PAGE>
In WITNESS WHEREOF the parties have hereunto executed this Agreement as of the
day first above mentioned.
New Vision Financial Ltd.
/s/ RAYMOND GIBSON
_______________________________________
Per: Authorized Signatory
Java Group, Inc.
/s/ ROB GILLINGHAM
_______________________________________
Per: Authorized Signatory
