STOCK PURCHASE AGREEMENT
THIS
STOCK PURCHASE AGREEMENT (“Agreement”) is entered into this __ day of December
2007, between NEW
LIFE SCIENTIFIC, INC,
with a corporate address at 00
X.
00xx
Xxxxxx,
Xxxxx
000, XX, XX 00000,
a Nevada corporation (“Buyer”), and Energy Balance Resources, Inc, a Utah
corporation, who is the Sole Stockholder (the “Seller”) of EBR
Wellness Products, Inc.
and EBR
Wellness Products, Inc,
a Nevada corporation with offices at 0000
Xxxxxx Xxx Xxxxx#000, Xxx Xxxxx, XX 00000
(the “Company”).
WHEREAS,
the Company is engaged in the business of distributing therapeutic devices
such
as ionic foot spa’s, (the “ Business”) located in San Diego, California; and
WHEREAS,
Seller desires to sell, assign and transfer to Buyer one hundred percent (100%)
of the issued and outstanding capital stock of the Company (“Stock”), and Buyer
desires to purchase the Stock from Seller,
NOW,
THEREFORE, the parties hereto agree as follows:
ARTICLE
I
Purchase
and Sale of Stock
SECTION
1.01 Sale
of Stock.
Seller
agrees to sell to Buyer, and Buyer agrees to purchase from Seller one hundred
percent (100%) of the issued and outstanding capital stock of the Company.
SECTION
1.02
(a) Security
Interest. Seller
warrants and covenants that at Closing (as defined by Section 1.03 hereof),
the
assets owned by the Company shall be held free and clear of all mortgages,
liens, deeds of trust, security interests, pledges, restrictions, prior
assignments, charges, claims, defects in title and encumbrances of any kind
or
type whatsoever (Collectively, the “Security Interests”) except for: (1) the
Security Interests disclosed on Appendix A; (2) liens for taxes, other than
state, federal or local income taxes and other taxes of the Company that not
yet
due and payable, accruing before the Closing Date, and (3) the Continuing
Liabilities described below.
(b) Continuing
Liabilities. Except
as otherwise provided herein and subject to the terms and conditions of this
Agreement, Seller represent, warrant, and covenant that the Company shall have
no liabilities at Closing except the following (collectively, the “Continuing
Liabilities”):
(i)
All liabilities and obligations of the Company that are accrued or reserved
against on the Company’s balance sheet, dated November 30, 2007 (the “Interim
Balance Sheet Date”) and as attached hereto as Appendix B (the “Interim Balance
Sheet”), and which remain unpaid as of the Closing Date to the extent of any
remaining reserve or accrual on the Company’s balance sheet, dated as of the
Closing Date (the “Closing Balance Sheet”);
(ii)
all liabilities of the Company that are incurred in the ordinary course of
the
Business, consistent with past practice, subsequent to the Interim Balance
Sheet
Date and through the Closing Date, which remain unpaid as of the Closing Date
and are accrued or reserved against in the Closing Balance Sheet, but only
to
the extent of such reserve accrual;
(iii)
any liability or obligation arising before the Closing Date under the Contracts
(as defined in Section 2.01(e) hereof) but only to the extent of any reserve
or
accrual on the Closing Balance Sheet and all liabilities and obligations arising
after the Closing Date under the Contracts.
1
(c)
Excluded
Liabilities. Buyer
shall not assume, nor does Buyer agree to pay, any debts not specifically
described in Section 1.02(a) and 1.02(b) hereof. Seller shall indemnify and
hold
Buyer harmless against any such debts.
SECTION
1.03 Closing.
The Closing of this transaction shall be held at the law offices of New Venture
Attorneys, P.C., 0 Xxxxxx Xxxx Xxxxx #000, Xxxxxxxxx, XX 00000, on January
,
2008 or at such other time, date and place as shall be fixed by agreement among
the parties hereto ( “Closing Date”). At the Closing, the parties shall execute
and deliver the documents referred to in Section 1.05 below.
SECTION
1.04 Purchase
Price and Payment.
The Purchase Price for the Seller’ Stock shall be Forty Five Million
(45,000,000) Shares of Buyer’s Common Stock (“Stock”), to be releases as
follows:
|
(i)
|
11,250,000
shares of Stock shall be issued to Seller on the Closing Date;
and
|
|
(ii)
|
11,250,000
shares of Stock shall be issued to Seller upon the earlier of (x)
12
months following the Closing Date or (ii) achievement of the Company
of
gross revenues of $1,000,000;
and
|
|
(iii)
|
11,250,000
shares of Stock shall be issued to Seller upon the earlier of (x)
18
months following the Closing Date or (ii) achievement of the Company
of
gross revenues of $2,000,000; and
|
|
(iv)
|
11,250,000
shares of Stock shall be issued to Seller upon the earlier of (x)
24
months following the Closing Date or (ii) achievement of the Company
of
gross revenues of $3,000,000.
|
SECTION
1.05 Items
to be Delivered at Closing.
Seller
shall deliver the following to Buyer at Closing
(i). fully
executed certificates of the Stock of the Company, free and clear of all liens
and encumbrances of any kind;
(ii) all
third
party consents which may be necessary of desirable in connection with the
transactions contemplated hereby, including the Contracts (as defined
herein);
(iii)
a
certificate, signed by a duly authorized officer of the Company and dated the
Closing Date, representing that any conditions described herein is
satisfied;
(iv)
documents
designated by Buyer sufficient to evidence the Company’s intellectual property
rights;
(v). Resolutions
of the Board of Directors and Shareholders of Seller authorizing and approving
the transaction; and
(vi) any
other
certificates, documents, and instruments reasonably required to complete the
transaction.
Buyer
shall deliver to Seller the following:
|
i.
|
a
certificate, signed by an authorized officer of Buyer and dated the
Closing Date, representing that any conditions represented in this
agreement have been met;
|
|
ii.
|
copies
of resolutions of the Board of Directors of Buyer with respect to
the
approval of this Agreement and the transactions contemplated
hereby;
|
|
iii.
|
any
other certificates or other documents and instruments required herein
to
be delivered by Buyer in order to complete the
transaction.
|
|
iv.
|
fully
executed certificates for shares of the Buyer’s common stock required by
the Purchase Price and;
|
2
|
v.
|
a
Registration Rights Agreement, attached hereto as Exhibit
__
|
ARTICLE
II
Representations
and Warranties
SECTION
2.01. Representations
and Warranties of Seller.
In order to induce Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, Seller represents and warrants to Buyer as
follows:
(a) Stock;
Status of the Company.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada and is duly qualified to transact
business in every state in which the failure to be so qualified would have
a
material adverse affect on the Business. The Company has the requisite power
to
carry on its Business as it is now being conducted and to own and operate the
Business, and has the requisite power (corporate, financing and other) to enter
into and complete the transactions contemplated by this Agreement. The Company
has no business other than as stated in this Stock Purchase Agreement. No person
has any option or right to acquire from Seller or the Company any of the Stock
or other equity interest in the Company. The Stock in the Company is validly
issued, fully paid and non-assessable. Attached as Appendix
A
are the Articles of Incorporation and Bylaws of the Company and all amendments
thereto.
(b) Authorization
of Agreement; Non-Contravention; Consents and Approvals.
(1) The
execution, delivery and performance by Seller of this Agreement has been duly
and validly authorized and approved by all necessary corporate action of the
Company. This Agreement has been duly executed and delivered by Seller and
constitutes a valid and binding obligation of Seller enforceable against Seller
in accordance with its terms.
(2) Neither
the execution and delivery by Seller of this Agreement nor the consummation
of
the transactions contemplated hereby, nor compliance by Seller with any of
the
provisions hereof, will (i) conflict with or result in a breach of any
provision of the Articles of Incorporation, as amended, or Bylaws, as amended,
of the Company, (ii) result in the breach of, or conflict with, any of the
terms and conditions of, or constitute a default (with or without the giving
of
notice or the lapse of time or both) with respect to, or result in the
cancellation or termination of, or the acceleration of the performance of any
obligations or of any indebtedness under any contract, agreement, lease,
commitment, indenture, mortgage, note, bond, license or other instrument or
obligation to which Seller or the Company is a party or by which Seller or
the
Company may be bound or affected, or (iii) violate any law or any rule or
regulation of any administrative agency or governmental body (a “Governmental
Entity”), or any order, writ, injunction or decree of any court or Governmental
Entity to which Seller or the Company may be subject.
(c) Capitalization.
Seller
is the sole shareholder of the Company. All issued and outstanding shares of
capital stock of the Corporation have been validly issued and are fully paid
and
nonassessable. There are no other securities, options, warrants or other
existing rights with respect to any Company securities. The offer, issuance
and
sale of the capital stock of the Corporation was made in compliance with
applicable federal and state securities laws. Except as set forth on
Appendix
C,
there
are no agreements, written or oral, relating to the acquisition, disposition,
voting or registration of any security or interest of the
Corporation
(d)
Assets.
The Company has, or will have at the Closing, good, valid and marketable title
to all assets shown on the Interim and Closing Balance Sheets, free and clear
of
any Liens, except as disclosed under Appendix
B.
The Company has not sold, transferred, assigned or conveyed any of its right,
title and interest, or granted or entered into any option to purchase or acquire
any of its right, title or interest, in and to any of the Assets or its
Business. No third party has any option or right to acquire the Company’s
Business or any of the Assets.
(e) Real
Property.
The Company owns no real property. Appendix
E
includes a complete list of the only real property leased by the Company
(“Leased
Real Property”).
The Company has a valid leasehold interest in the Leased Real Property and
will
deliver to Buyer at Closing, a certificate confirming that such lease is in
full
force and effect and that its leasehold interest will be transferred to Buyer
at
Closing without penalty or any condition that would be unacceptable to
Buyer.
3
(f) Contracts.
All Revenue Contracts (meaning contracts to which the Company is a party with
its clients or customers by which the Company generates revenue) are listed
on
Appendix
F-1.
All Vendor Contracts (meaning standing contracts to which the Company is a
party
with third-party vendors from which the Company receives goods or services)
are
listed on Appendix
F-2
. All Other Contracts (meaning all other standing contracts to which the Company
is a party which are essential to the operation of it business) are listed
on
Appendix
F-3.
Except as disclosed on Appendix
X-0, Xxxxxxxx X-0, Xxxxxxxx F-3 (collectively,
the “Contract
Schedules”)
each Contract will be enforceable after the Closing and sale of the Stock to
Buyer without the consent of any party. A complete and accurate copy of each
Scheduled Contract has been delivered or made available to Buyer or, if oral,
a
complete and accurate summary thereof has been delivered to Buyer. Except as
set
forth on Appendix
F-1, Appendix X-0, Xxxxxxxx X-0,
the Scheduled Contracts are valid, binding and enforceable in accordance with
their respective terms, are in full force and effect and were entered into
in
the ordinary course of business on an “arms-length” basis. The Company is not in
breach or default of any of the Scheduled Contracts and no occurrence or
circumstance exists which constitutes a present breach or default by the other
party thereto. The Company has not been notified or advised by any party to
a
Scheduled Contract of such party's intention or desire to terminate or modify
any such contract or agreement. The Company has not granted any lien on any
Scheduled Contract included in the Assets.
(g) Litigation.
Other than a pending arbitration with Erchonia Medical, Inc. in the amount
of
$82,295.89, and pending litigation with them regarding the use of the name
Therapy Products, Inc., there
is no litigation, suit, proceeding, action, claim or investigation, at law
or in
equity, pending or, to the knowledge of Seller, threatened against, or affecting
in any way the Seller, the Company or the Company’s ability to own or operate
its Business, or which questions the validity of this Agreement or challenges
any of the transactions contemplated hereby. Neither the Company nor the Seller
is subject to any judgment, order, writ, injunction or decree of any court
or
any federal, state, municipal or other Governmental Entity, department,
commission, board, bureau, agency or other instrumentality.
(h) Absence
of Change or Events.
Since the Interim Balance Sheet Date, the Company has operated its business
only
in the ordinary course and there has not been any material adverse change in
the
financial condition, results of operations, business, assets or prospects of
the
Company or the value or condition of the Assets.
(i) Intellectual
Property.
(1) Company
IP Property.
The Company owns, or has the valid right or license to use, possess, sell or
license, all Intellectual Property (as defined below and more precisely
enumerated in Appendix
G)
necessary or required for the conduct of its business as presently conducted
and
as presently proposed to be conducted, (such Intellectual Property being
hereinafter collectively referred to as the “Company IP Rights”), and such
rights to use, possess, sell or license are sufficient for such conduct of
such
business. As used herein, the term “Intellectual Property” means, collectively,
all worldwide industrial and intellectual property rights, including, without
limitation, patents, patent applications, rights to file for patent applications
(including but not limited to continuations, continuations-in-part, divisionals
and reissues), trademarks, logos, service marks, trade names and service names
(in each case whether or not registered) and applications for and the right
to
file applications for registration thereof, Internet domain name or application
for an Internet domain name, Internet and World Wide Web URLs or addresses,
copyrights (whether or not registered) and applications for and the right to
file applications for registration thereof, franchises, licenses, inventions,
trade secrets, trade dress, know-how, customer lists, supplier lists,
proprietary processes and formulae, software source code and object code,
algorithms, net lists, architectures, structures, screen displays, layouts,
inventions, development tools, designs, blueprints, specifications, technical
drawings (or similar information in electronic format), publicity and privacy
rights and any other intellectual property rights arising under the laws of
the
United States of America, any State thereof, or any country or province, and
all
documentation and media (in whatever form) constituting, describing or relating
to the foregoing, including, without limitation, manuals, programmers’ notes,
memoranda and records.
(2) No
Default.
Neither the execution, delivery and performance of this Agreement nor the
consummation of the transactions contemplated hereby will: (i) constitute a
breach, violation or default of any instrument, contract, license or other
agreement governing any Company IP Right to which the Company is a party; (ii)
cause the forfeiture or termination of, or give rise to a right of forfeiture
or
termination of, any Company IP Right held or owned by the Company; or (iii)
impair the rights of the Company or Buyer or their subsidiaries to use, possess,
sell or license any Company IP Right or portion thereof. There are no royalties,
honoraria, fees or other payments payable by the Company or any of its
affiliates to any third person by reason of the ownership, use, possession,
license, sale, marketing, advertising or disposition of any Company IP Rights
by
Company.
4
(3) Protection
of Proprietary Information.
The Company has taken all necessary and appropriate steps to protect, preserve
and maintain the secrecy and confidentiality of the Company IP Rights and all
Seller’ ownership interests and proprietary rights therein.
(4) Registered
and Unregistered Intellectual Property.
Appendix G
contains a true and correct list of (i) all worldwide registrations of any
patents, copyrights, trademarks, service marks, Domain Names or Internet or
World Wide Web URLs or addresses with any governmental or quasi-governmental
authority; (ii) all applications, registrations, filings and other formal
actions made or taken pursuant to federal, state and foreign laws by the Company
to secure, perfect or protect its interest in the Company IP Rights, including,
without limitation, all patent applications, copyright applications, and
applications for registration of trademarks and service marks, (iii) all
unregistered copyrights, trademarks and service marks and (iv) all 800- or
888-
prefix phone numbers (or similar toll-free phone numbers) used by the Company
in
connection with the conduct of its business. All patents, and all registered
trademarks, service marks, Internet domain names, Internet or World Wide Web
URLs or addresses and copyrights held by the Company are valid and
enforceable.
(5) No
Infringement by Third Parties.
To the knowledge of Seller, there is no unauthorized use, disclosure,
infringement or misappropriation of any Company IP Rights or any Intellectual
Property Right of the Company by any third party, including any employee or
former employee of the Company. The Company has not agreed to indemnify any
person for any infringement of any Intellectual Property of any third party
by
any product or service that has been sold, licensed, leased, supplied, marketed,
distributed, or provided by the Company.
(j) No
Broker’s or Finder’s Fees.
No agent, broker, investment banker, person or firm acting on behalf of Seller
or the Company is or will be entitled to any broker’s or finder’s fee or any
other commission or similar fee in connection with any of the transactions
contemplated herein.
(k) Employee
Benefit Plans.
Except as shown on Appendix
H,
the Company has no plans in effect for pension, profit sharing, deferred
compensation, severance pay, bonuses, stock options, stock purchases, or any
other form of retirement or deferred benefit, or for any health, accident or
other welfare plan, as to which Buyer will become liable as a result of the
transactions contemplated hereby.
(l) Environmental
Matters.
The Company has duly complied with, and to the best of Seller’ and the Company’s
knowledge, the Property is in compliance with, the provisions of all federal,
state and local environmental, health and safety laws, codes and ordinances
and
all rules and regulations promulgated hereunder.
(m) Financial
Statements.
The Company has delivered to Buyer the Interim Balance Sheet of the Company
at
the offices of Buyer and the related statements of income for the 11 month
period then ended. Such financial statements, including the notes thereto,
are
in accordance with the books and records of the Company, have been prepared
in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods covered thereby and present fairly the financial
position and the results of operations of the Company as of the dates and for
the periods indicated. On or before the Closing, the Company shall deliver
to
Buyer monthly financial statements in a form reasonably satisfactory to Buyer
for all monthly periods after the Interim Balance Sheet Date for which financial
information is available, including the Closing Balance Sheet, which financial
statements shall be prepared on a consistent basis with the financial statements
described above.
(n) Taxes.
(1) Except
as shown on Schedule
I
the Company has filed all Tax Returns (as defined below) that it was required
to
file. All such Tax Returns were correct and complete in all respects. To the
best knowledge of Seller and the Company, all Taxes owed by the Company (whether
or not shown on any Tax Return) have been paid. The Company is not currently
the
beneficiary of any extension of time within which to file any Tax Return. No
claim has ever been made by any Taxing Authority in a jurisdiction where the
Company does not file Tax Returns that it is or may be subject to taxation
by
that jurisdiction which has not been resolved. There are no security interests
on any of the Assets that arose in connection with any failure (or alleged
failure) to pay any Tax. The Company has not waived any statute of limitations
in respect of any Taxes or agreed to any extension of time with respect to
a Tax
assessment or deficiency. There is no pending or threatened action, audit,
proceeding or investigation for the assessment of collection of any Taxes for
which the Company could be liable, and no written or legally binding agreement
has been entered into with any Taxing Authority relating to Taxes for which
the
Company could be liable.
5
(2) To
the actual knowledge of Seller, the Company has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or
owing
to any employee, independent contractor, creditor, stockholder, or other third
party.
(3) For
purposes of this Agreement, “Tax” means any federal, state, local or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
section 59A of the Internal Revenue Code), customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated or other
tax
of any kind whatsoever, including any interest, penalty or addition thereto,
whether or not disputed; “Tax Return” means any return, declaration, report,
claim for refund or information return or statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof; and
“Taxing Authority” means any governmental authority responsible for the
imposition or collection of any Tax.
(o) Absence
of Undisclosed Liabilities.
To the actual knowledge of Seller, the Company has no material liabilities
or
obligations, other than (a) those reflected in the Interim Balance Sheet, (b)
those liabilities or obligations incurred, consistently with past business
practice, in or as a result of the normal and ordinary course of business since
the Interim Balance Sheet Date, and (c) those revealed in the Appendix and
Schedules attached hereto or delivered at Closing.
(p) Guarantees.
The Company has not guaranteed or pledged any Assets with respect to any
obligation or indebtedness of any person or entity and no person or entity
has
guaranteed any obligation or indebtedness of Seller.
(q)
Accuracy
of Documents and Information.
The information provided to the Buyer by Seller in connection with its
investigation of Seller and the Company, does not (and will not at the Closing
Date) contain any statement of a material fact known to be untrue by the
Seller.
SECTION
2.02 Representations
and Warranties of Buyer.
Buyer represents and warrants to Seller as follows:
(a) Organization.
Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada. Buyer has the full power and authority
to
enter into and perform this Agreement, to carry on its business as it is now
being conducted, and to execute, deliver and perform its obligations under
this
Agreement and consummate the transactions contemplated hereby.
(b) Capitalization.
The authorized capital stock of the Buyer consists of 1,000,000,000
shares of Common Stock. As of the date hereof, there are 54,620,586 shares
of
Common Stock issued and outstanding. All outstanding shares of Buyer’s Common
Stock have been duly authorized and validly issued and are fully paid and
nonassessable, and none of such outstanding shares has been issued in violation
of the preemptive rights of any person, firm or entity.
(c) Binding
Obligation.
The execution, delivery and performance by Buyer of this Agreement and the
consummation of the transactions contemplated hereby and thereby have been
duly
and validly authorized and approved by all necessary corporate action of Buyer.
Neither the execution and delivery by Buyer of this Agreement nor the
consummation by Buyer of the transactions contemplated hereby, nor compliance
by
the Buyer with any of the provisions hereof, will (i) conflict with or
result in a breach of any provision of the Articles of Incorporation or Bylaws
of Buyer, (ii) result in the breach of, or conflict with, any of the terms
and conditions of, or constitute a default, or result in the cancellation or
termination of, or the acceleration of the performance of any obligations or
of
any indebtedness under any contract, agreement, lease, commitment, indenture,
mortgage, note, bond, license or other instrument or obligation to which Buyer
is a party or by which its assets may be bound or affected, (iii) violate
any law or any rule or regulation of any administrative agency or Governmental
Entity, or any order, writ, injunction or decree of any court, administrative
agency or Governmental Entity to which Buyer may be subject.
(d) Financial
Statements.
The Buyer has delivered to Seller the Interim Balance Sheet of the Buyer and
the
related statements of income for the [
]-month
period then ended. Such financial statements, including the notes thereto,
are
in accordance with the books and records of the Buyer, have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods covered thereby and present fairly the financial
position and the results of operations of the Buyer as of the dates and for
the
periods indicated. On or before the Closing, the Buyer shall deliver to Seller
monthly financial statements in a form reasonably satisfactory to Seller for
all
monthly periods after the Interim Balance Sheet Date for which financial
information is available, including the Closing Balance Sheet, which financial
statements shall be prepared on a consistent basis with the financial statements
described above.
6
(e) Litigation.
There is no litigation, suit, proceeding, action, claim or investigation, at
law
or in equity, pending or, to the knowledge of Buyer, threatened against, or
affecting in any way the Buyer or which questions the validity of this Agreement
or challenges any of the transactions contemplated hereby. The Buyer is not
subject to any judgment, order, writ, injunction or decree of any court or
any
federal, state, municipal or other Governmental Entity, department, commission,
board, bureau, agency or other instrumentality.
ARTICLE
III
Covenants
Relating to Conduct of Business
SECTION
3.01 Covenants
of Seller.
During the period from the date of this Agreement and continuing until the
Closing, Seller agree (except as expressly contemplated by this Agreement or
to
the extent that Buyer shall otherwise consent in writing) that they will cause
the business of the Company to take the following actions
Ordinary
Course.
From the date hereof until the Closing Date, the Company shall carry on its
business in the usual, regular and ordinary course in substantially the same
manner as heretofore conducted and, to the extent consistent with such business,
use all reasonable efforts consistent with past practice and policies to
preserve intact its present business organization, keep available the services
of its presents officers and key employees and preserve its relationships with
customers, suppliers and others having business dealings with it to the end
that
its goodwill and ongoing business shall be unimpaired as a result of the
transactions contemplated hereby.
ARTICLE
IV
Additional
Agreements
SECTION
4.01 Confidentiality
and Access to Information.
The Seller shall cause the Company to afford to Buyer and to Buyer’s
accountants, counsel and other representatives, reasonable access during normal
business hours during the period prior to the Closing to all of the Company’s
books and records, and during such period, the Company shall furnish promptly
to
Buyer all information concerning the Company’s Business, properties and
personnel, as Buyer may reasonably request. Buyer agrees that (except as may
be
required by law) it will disclose or use any information revealed during this
executory period with respect to Seller or the Company at any time or in any
manner, and will not use such information other than in connection its
preparation for Closing of the transactions contemplated by this Agreement.
In
the event of termination of this Agreement for any reason, Buyer shall promptly
return, or cause to be returned, to Seller and the Company all nonpublic
documents obtained from Seller and the Company that it would not otherwise
have
been entitled to obtain; and shall not, in any manner, utilize any such
information for Buyer’s benefit or in any manner harmful to Seller and the
Company. The provisions of this Section 4.01 shall survive the termination
of
this Agreement.
SECTION
4.02 Expenses.
Whether or not the transactions contemplated hereby are consummated, all costs
and expenses incurred by Buyer, Seller and the Company in connection with this
Agreement and the transactions contemplated hereby, including, without
limitation, expenses of legal counsel, accountants and other advisers, shall
be
paid by the party incurring such costs.
7
SECTION
4.03 Board
Seat.
Upon the execution of this Agreement, Dr. Xxxxxxx Xxx, owner of Seller, shall
become the President of Buyer and be added to the Buyer’s Board of
Directors.
ARTICLE
V
Conditions
Precedent
SECTION
5.01 Conditions
to Each Party’s Obligation.
The respective obligations of each of the parties to this Agreement shall be
subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Approvals.
All authorizations, consents, orders or approvals of, or declarations or filings
with, or expiration of waiting periods imposed by, any Governmental Entity
necessary for the consummation of the transactions contemplated by this
Agreement, if any, shall have been filed, occurred or been
obtained.
(b) Legal
Action.
No action, suit or proceeding by any person shall have been commenced and still
be pending, no investigation by any governmental or regulatory authority shall
have been commenced and still be pending, and no action, suit or proceeding
by
any person shall have been threatened against Buyer, Seller or the Company,
(a)
seeking to restrain, prevent or change the transactions contemplated hereby
or
questioning the validity or legality of any such transactions or (b) which
if
resolved adversely to any party, would materially and adversely affect the
business or condition, financial or otherwise, of the Buyer, Seller or the
Company.
SECTION
5.02 Conditions
of Obligations of Buyer.
The obligations of Buyer to effect the transactions contemplated hereby are
subject to the satisfaction of the following conditions unless waived by Buyer
in writing:
(a) Representations
and Warranties.
The representations and warranties of Seller set forth in this Agreement shall
be true and correct in all material respects as of the date of this Agreement
and as of the Closing Date as through made on and as of the Closing Date, and
Buyer shall have received a separate certificate signed by Seller to such
effect.
(b) Performance
of Obligations of the Company.
Seller shall have performed all obligations required to be performed by them
under this Agreement prior to the Closing Date, and Buyer shall have received
a
certificate signed by Seller to such effect. All proceedings to be taken by
the
Company in connection with the transactions contemplated hereby and all
documents incident thereto shall be reasonably satisfactory in form and
substance to the Buyer and its counsel, and Buyer and its counsel shall have
received all such counterpart originals or certified or other copies of such
documents as it or they may reasonably request.
(c) No
Material Adverse Change.
Unless this condition shall be waived in writing by Buyer, since the Interim
Balance Sheet Date, there shall have been no material adverse change in the
financial condition, results of operations, business or assets of the Company,
and the Buyer shall have received a certificate signed by Seller to such effect.
For purposes of this Paragraph, the term “material change” shall mean some
condition(s) or event(s) which, when taken individually or in total, shall
have
the effect of reducing the current net worth of the Company by greater than
ten
percent (10%) than as shown in the Interim Balance Sheet.
(d) Consents
and Actions.
All requisite consents of any third parties to the transactions contemplated
by
this Agreement shall have been obtained.
(e) Approval
of Audit.
The Company’s auditors shall have concluded a financial audit of the Company’s
2007 financial statements and such financial statements shall be satisfactory
to
Buyer.
(f) Other
Documents. Buyer
shall have received such other documents, instruments or certificates as shall
be reasonably requested by Buyer or its counsel.
SECTION
5.03 Conditions
and Obligations of Seller.
The obligations of Seller to close the transactions contemplated hereby are
subject to the satisfaction of the following conditions unless waived by Seller
in writing:
(a) Representations
and Warranties.
The representations and warranties of Buyer set forth in this Agreement shall
be
true and correct in all material respects as of the date of this Agreement
and
as of the Closing Date as through made on and as of the Closing Date, and Seller
shall have received a certificate signed by an authorized officer of Buyer
to
such effect.
8
(b) Performance
of Obligations of Buyer.
Buyer shall have performed all obligations required to be performed by it under
this Agreement at and prior to the Closing Date, and Seller shall have received
a certificate signed by an authorized officer of Buyer to such
effect.
(c) Consents
and Actions.
All requisite consents of any third parties or governmental agencies to the
transactions contemplated hereby shall have been obtained.
(d) Other
Documents.
Seller shall have received such other documents, instruments or certificates
as
shall be reasonably requested by Seller or its counsel.
ARTICLE
VI
Indemnification
SECTION
6.01
(a) Indemnification.
(1) Seller
shall indemnify and hold harmless Buyer against all loss, liability, damage
or
expense, including reasonable attorney's fees, net of any applicable insurance
proceeds (“Losses”), for claims brought by a third party, which Buyer shall
suffer, sustain or become subject to as a direct result of any breach of
representation or warranty of Seller contained in this Agreement.
(2) Subject
to the provisions of Section 6.01(a) hereof, Buyer shall indemnify and hold
harmless Seller against all Losses that Seller may suffer, sustain, or become
subject to as a direct result of any breach or inaccuracy of any representation,
warranty, covenant or other agreement of Buyer contained in this Agreement,
or a
claim by a third party which, without regard to the merits of the claim, would
constitute a breach or misrepresentation.
(b) Conditions
of Indemnification for Third Party Claims.
The obligations and liabilities of the parties under this Article 6 shall be
subject to the following conditions:
(1) The
party entitled to be indemnified hereunder (the “Indemnified Party”) shall give
the party obligated to provide the indemnity (the “Indemnifying Party”) prompt
notice of any Third Party Claim (the “Claim Notice”). If the Indemnifying Party
promptly acknowledges in writing its obligation to indemnify in accordance
with
the terms and subject to the limitations of such party's obligation to indemnify
contained in this Agreement with respect to that claim, the Indemnifying Party
shall have a reasonable time to assume the defense of the Third Party Claim
at
its expense and with counsel of its choosing, which counsel shall be reasonably
satisfactory to the Indemnified Party. Any Claim Notice shall identify, to
the
extent known to the Indemnified Party, the basis for the Third Party Claim,
the
facts giving rise to the Third Party Claim, and the estimated amount of the
Third Party Claim (which estimate shall not be conclusive of the final amount
of
such claim or demand). The Indemnified Party shall make available to the
Indemnifying Party copies of all relevant documents and records in its
possession.
(2) If
the Indemnifying Party, within a reasonable time after receipt of such Claim
Notice, fails to assume the defense of any Third Party Claim in accordance
with
Section 6.01(b)(1), the Indemnified Party shall (upon further notice to the
Indemnifying Party) have the right to undertake the defense, compromise or
settlement of the Third Party Claim, at the expense and for the account and
risk
of the Indemnifying Party.
(3) Anything
in this Section 6.01 to the contrary notwithstanding, (i) the Indemnifying
Party
shall not without the written consent of the Indemnified Party, settle or
compromise any Third Party Claim or consent to the entry of judgment which
does
not include as an unconditional term thereof the giving by the claimant or
the
plaintiff to the Indemnified Party of an unconditional release from all
liability in respect of the Third Party Claim; (ii) if such Third Party Claim
involves an issue or matter which the Indemnified Party believes will have
a
materially adverse effect on the Indemnified Party's business, operations,
assets, properties or prospects of its business, the Indemnified Party shall
have the right to control the defense or settlement of any such claim or demand,
at the expense of the Indemnified Party without contribution from the
Indemnifying Party; and (iii) the Indemnified Party shall have the right to
employ its own counsel to defend any claim at the expense of the Indemnify
Party
if (x) the employment of such counsel by the Indemnified Party has been
authorized by the Indemnifying Party, or (y) counsel selected by the
Indemnifying Party shall have reasonably concluded that there may be a conflict
of interest between the Indemnifying Party and the Indemnified Party in the
conduct of the defense of such action or (z) the Indemnifying Party shall not
have employed counsel to assume the defense of such claim in accordance with
Section 6.01(b).
9
(4) Nothing
herein shall be deemed to prevent any Indemnified Party from making a claim
hereunder for potential or contingent claims or demands, provided that (i)
the
Claim Notice sets forth (A) the specific basis for any such potential or
contingent claim or demand and (B) the estimated amount thereof (to the extent
then feasible) and (ii) the Indemnified Party has reasonable grounds to believe
that such a claim or demand will be made.
(5)
Notwithstanding any other provision of this Agreement, a party’s right to
indemnification shall not arise until the aggregate claims (exclusive of
attorney fees) exceed Twenty Five Thousand Dollars ($25,000).
(6)
This Article VI shall survive the consummation of this Agreement and the
transactions contemplated herein; PROVIDED HOWEVER that no claim for
indemnification may be made after the one (1) year anniversary of the Closing
of
this transaction.
ARTICLE
VII
Termination,
Amendment and Waiver
SECTION
7.01 Termination.
This Agreement may be terminated at any time prior to the Closing:
(a) by
mutual consent of Buyer and all Seller;
(b) by
Buyer, on the one hand, and Seller, on the other hand, if there has been a
material misrepresentation or breach of covenant or agreement contained in
this
Agreement on the part of the other and such breach of a covenant or agreement
has not been promptly cured;
(c) by
Buyer if any of the conditions set forth in Sections 5.01 and 5.02 shall not
have been satisfied before ___,
2008 or such later date as the parties hereto shall mutually agree in
writing;
(d) by
Seller if any of the conditions set forth in Sections 5.01 and 5.03 shall not
have been satisfied before ___,
2008 or such later date as the parties hereto shall mutually agree in
writing.
SECTION
7.02 Amendment.
This Agreement may not be amended except by an instrument in writing signed
on
behalf of each of the parties hereto.
ARTICLE
VIII
General
Provisions
SECTION
8.01
(a) Entire
Agreement.
This Agreement, together with all exhibits and schedules attached hereto,
constitutes the entire agreement between and among the parties hereto pertaining
to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties, and there are no warranties, representations or other agreements
between the parties in connection with the subject matter hereof except as
set
forth specifically herein or contemplated hereby. No supplement, modification
or
waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(regardless of whether similar), nor shall any such waiver constitute a
continuing waiver unless otherwise expressly provided.
(b) Survival
of Covenants, Representations, Warranties and Agreements.
The covenants, agreements, representations and warranties of the parties hereto
contained in this Agreement or in any certificate or other writing delivered
pursuant hereto or in connection herewith shall not survive the Closing except
for the covenants and agreements contained herein which contemplate or
specifically provide for performance after the Closing Date.
10
(c) Costs
and Expenses.
Each of the parties to this Agreement shall bear his or its own expenses
incurred in connection with the negotiation, preparation, execution and closing
of this Agreement and the transactions contemplated hereby (the “Transaction
Expenses”).
(d) Notices.
Any notice, request, instruction, correspondence or other document to be given
hereunder by any party hereto to another (herein collectively called “Notice”)
shall be in writing and delivered personally or mailed by registered or
certified mail, postage prepaid and return receipt requested, or by facsimile,
as follows:
| If to Buyer: |
00
X.
00xx
Xxxxxx
Xxxxx
000
XX,
XX 1001
Fax
( ) ___ ___
Attn :
Xxxxx Xxx
| With a copy to: |
New
Venture Attorneys, P.C.
|
0
Xxxxxx Xxxx Xxxxx
Xxxxx
000
Xxxxxxxxx,
XX 00000
Attn:
Xxxxx Xxx, Esq.
| If to Seller: |
EBR
Balance Resources, Inc.
|
0000
Xxxxxx Xxx #000
Xxx
Xxxxx, XX 9211 ]
Attn:
Dr. Xxxxxxx Xxx
Which
copy shall not consist of notice under the terms of this Agreement.
Each
of the above addresses for notice purposes may be changed by providing
appropriate notice hereunder. Notice given by personal delivery or registered
mail shall be effective upon actual receipt. Notice given by facsimile shall
be
effective upon actual receipt if received during the recipient’s normal business
hours, or at the beginning of the recipient’s next normal business day after
receipt if not received during the recipient’s normal business hours. All
Notices by facsimile shall be confirmed by the sender thereof promptly after
transmission in writing by registered mail or personal delivery. Anything to
the
contrary contained herein notwithstanding, notices to any party hereto shall
not
be deemed effective with respect to such party until such Notice would, but
for
this sentence, be effective both as to such party and as to all other persons
to
whom copies are provided above to be given.
(e) Governing
Law.
This Agreement shall be governed in all respects, including validity,
interpretation and effect, by the internal laws of the State of
California.
(f) Counterparts.
This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one
or
more counterparts have been signed by each of the parties and delivered to
the
other party, it being understood that all parties need not sign the same
counterpart.
(g) Severability.
If any provision of this Agreement (or any portion thereof) or the application
of any such provision (or any portion thereof) to any person or circumstance
shall be held invalid, illegal or unenforceable in any respect by a court of
competent jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision hereof (or the remaining portion thereof) or
the
application of such provision to any other persons or
circumstances.
11
(h) Captions.
The captions herein are included for convenience of reference only and shall
be
ignored in the construction or interpretation hereof.
IN
WITNESS WHEREOF,
Buyer, Seller and the Company have executed this Agreement as of the date first
written above.
| NEW LIFE SCIENTIFIC, INC. | ENERGY BALANCE RESOURCES, INC. | ||
| By: | By: | ||
| Name: Xxxxx Xxx |
Name: Xxx Xxxx |
||
| Title: Chairman & CEO | Title: President | ||
| EBR WELLNESS PRODUCTS, INC | |||
| By: | |||
|
Name: Dr. Xxxxxxx Xxx, President |
12
APPENDIX
A
(Articles
of Incorporation, Bylaws with any Amendments)
APPENDIX
B
(Interim
Balance Sheet)
APPENDIX
C
Not
Applicable
APPENDIX
D
(Capitalization
Schedule)
APPENDIX
E
(Leased
Real Property)
APPENDIX
F-1
(Revenue
Contracts)
APPENDIX
F-2
(Vendor
Contracts)
APPENDIX
F-3
(Other
Contracts)
APPENDIX
G
(Registered
and Unregistered Intellectual Property)
APPENDIX
H
(Employee
Benefit Plans)
APPENDIX
I
(Tax
Returns)
13
