AGREEMENT AND PLAN OF SHARE EXCHANGE
This Agreement and Plan of Share Exchange (the "Agreement"), dated as
of the 14th day of July, 1998, by and between Balanced Living, Inc., a
Colorado corporation ("LIVING") and The Balanced Woman, Inc., a Colorado
corporation ("WOMAN") and the shareholders of WOMAN ("Shareholders"), who
execute this Agreement and the Investment Letter as set forth in Exhibit A
of this Agreement, with reference to the following:
A. LIVING is a privately held corporation organized under the laws of
Colorado on July 1, 1998. LIVING has authorized capital stock of 60,000,000
shares, $.0001par value, 50,000,000 Common Stock and 10,000,000 Preferred
Stock. There are 100,000 common shares outstanding.
B. WOMAN is a privately held corporation organized under the laws of the
State of Colorado, on January 26, 1998. WOMAN has authorized capital stock
of 60,000,000 shares, including 50,000,000 shares of common stock, $0.001
par value and 10,000,000 shares of preferred stock. There are 500,000
common shares outstanding.
C. The respective Boards of Directors of LIVING and WOMAN have deemed it
advisable and in the best interests of LIVING and WOMAN that WOMAN be
acquired by LIVING, pursuant to the terms and conditions set forth in this
Agreement.
D. LIVING and WOMAN propose to enter into this Agreement which provides
among other things that all of the outstanding shares of WOMAN be acquired
by LIVING, in exchange for shares of LIVING and such additional items as
are more fully described in the Agreement.
E. The parties desire the transaction to qualify as a tax-free organization
under Section 368(a)(1)(B) of the internal Revenue Code of 1986, as amended.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
THE ACQUISITION
1.1 At the Closing, a total of 500,000 common shares, which represents all
of the outstanding shares of WOMAN, shall be acquired by LIVING in exchange
for 500,000 shares of LIVING common stock which shall be issued to the
WOMAN shareholders as set forth on the signature page of this Agreement.
1.2 At the Closing, the WOMAN shareholder will deliver certificates for the
outstanding shares of WOMAN, duly endorsed so as to make LIVING the sole
holder thereof, free and clear of all claims and encumbrances and LIVING
shall deliver a transmittal letter directed to the transfer agent of LIVING
directing the issuance of shares to the shareholder of WOMAN set forth on
the signature page of this Agreement.
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1.3 Following the Share Exchange, there will be a total of 600,000 shares of
common stock, $.001 par value issued and outstanding in LIVING.
1.4 In connection with the share exchange contemplated by this Agreement,
LIVING will issue and deliver warrants and options on LIVING common stock in
exchange for any and all warrants and options on WOMAN common stock now
issued and outstanding. Such LIVING warrants and options will be identical
in terms and substance to the WOMAN warrants and options.
ARTICLE 2
THE CLOSING
2.1 The consummation of the transactions contemplated by this Agreement (the
"Closing") shall take place in the offices of Ray, Xxxxxxx & Xxxxxxx, 00
Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000-0000 at 10:00 a.m., on July
14, 1998, or at such other place or date and time as may be agreed to in
writing by the parties hereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LIVING
LIVING and its officers and directors hereby represent and warrant to
WOMAN as follows:
3.1 LIVING shall deliver to WOMAN, on or within a reasonable time after
Closing, each of the following:
(a) Financial Statements. Financial statements of LIVING, including, but
not limited to, balance sheet and income statement as of June 30, 1998.
(Schedule A)
(b) Leases and Contracts. A complete and accurate list describing all
material terms of each lease (whether of real or personal property) and each
contract, promissory note, mortgage, license, franchise, or other written
agreement to which LIVING is a party which involves or can reasonably be
expected to involve aggregate future payments or receipts by LIVING (whether
by the terms of such lease, contract, promissory note, license, franchise or
other written agreement or as a result of a guarantee of the payment of or
indemnity against the failure to pay same) of $1,000.00 or more annually
during the twelve (12) months period ended June 30, 1998, or any consecutive
12-month period thereafter, except any of said instruments which terminate
or are cancelable without penalty during such 12-month period. (Schedule B)
(c) Loan Agreements. Complete and accurate copies of all loan agreements
and other documents with respect to obligations of LIVING for the repayment
of borrowed money. (Schedule C)
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(d) Articles and Bylaws. Complete and accurate copies of the Articles of
Incorporation and Bylaws of LIVING together with all amendments thereto to
the date hereof. (Schedule D)
(e) Shareholders. A complete list of all persons or entities holding
capital stock of LIVING or any rights to subscribe for, acquire, or receive
shares of the capital stock of LIVING (whether warrants, calls, options, or
conversion rights), including copies of all stock option plans whether
qualified or nonqualified, and other similar agreements. (Schedule E)
(f) Officers and Directors. A complete and current list of all officers and
Directors of LIVING. (Schedule F)
(g) Salary Schedule. A complete and accurate list (in all material
respects) of the names and the current salary rate for each present employee
of LIVING who received $1,000.00 or more in aggregate compensation from
LIVING whether in salary, bonus or otherwise, during the last 12 months, or
who is presently scheduled to receive from LIVING salary in excess of
$1,000.00 during the year ending December 31, 1998, including in each case
the amount of compensation received or scheduled to be received, and a
schedule of the hourly rates of all other employees listed according to
departments. (Schedule G)
(h) Litigation. A complete and accurate list (in all material respects) of
all material civil, criminal administrative, arbitration or other such
proceedings or investigations (including without limitations unfair labor
practice matters, labor organization activities, environmental matters and
civil rights violations) pending or, to the knowledge of LIVING threatened,
which may materially and adversely affect LIVING. (Schedule H)
(i) Tax Returns. Accurate copies of all federal and state tax returns for
LIVING for the last fiscal year. (Schedule I)
(j) Jurisdictions Where Qualified. A list of all jurisdictions wherein
LIVING is qualified to do business and is in good standing. (Schedule J)
(k) Employee and Consultant Contracts. A complete and accurate list of all
employee and consultant contracts which LIVING may have. (Schedule K)
3.2 Organization, Standing and Power. LIVING is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Colorado with all requisite corporate power to own or lease its
properties and carry on its businesses as is now being conducted.
3.3 Qualification. LIVING is duly qualified and is licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it
conducts its business operations. Such jurisdictions, which are the only
jurisdictions in which LIVING is duly qualified and licensed as a foreign
corporation, are shown in Schedule J.
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3.4 Capitalization of LIVING. The authorized capital stock of LIVING
consists of 50,000,000 shares of Common Stock, $.001 par value, and
10,000,000 shares of Preferred Stock, $.001 par value, of which the only
shares issued and outstanding are 100,000 shares of common stock issued to
the shareholders listed on Schedule E, which shares were duly authorized,
validly issued and fully paid and nonassessable. There are no preemptive
rights with respect to the LIVING stock.
3.5 Authority. The execution delivery of this Agreement and consummation of
the transactions contemplated herein have been duly authorized by all
necessary corporate action, including but not limited to duly and validly
authorized action and approval by the Board of Directors, on the part of
LIVING. This Agreement constitutes the valid and binding obligation of
LIVING enforceable against it in accordance with its terms, subject to the
principles of equity applicable to the availability of the remedy of
specific performance. This Agreement has been duly executed by LIVING and
the execution and delivery of this Agreement and the consummation of the
tranactions contemplated by this Agreement shall not result in any breach of
any terms or provisions of LIVING Articles of Incorporation or Bylaws or of
any other agreement, court order or instrument to which LIVING is a party or
is bound.
3.6 Absence of Undisclosed Liabilities. LIVING has no material liabilities
of any nature, whether fixed, absolute, contingent or accrued, which were
not reflected on the financial statements set forth in Schedule A nor
otherwise disclosed in this Agreement or any of the Schedules or Exhibits
attached hereto.
3.7 Absence of Changes. Since June 30, 1998, there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of LIVING, except for changes resulting
from completion of transactions described in Section 5.1.
3.8 Tax Matters. All taxes and other assessments and levies which LIVING is
required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or
are held by LIVING in separate bank accounts for such payment or are
represented by depository receipts, and all such withholdings and
collections and all other payments due in connection therewith (including,
without limitation, employment taxes, both the employee's and employer's
share) have been paid over to the government or placed in a separate and
segregated bank account for such purpose. There are no known deficiencies
in income taxes for any periods and further, the representations and
warranties as to absence of undisclosed liabilities contained in Section 3.6
includes any and all tax liabilities of whatsoever kind or nature (including,
without limitation, all federal, state, local and foreign income, profit,
franchise, sales, use and property taxes) due or to become due, incurred in
respect of or measured by LIVING income or business prior to the Closing
Date.
3.9 Options, Warrants, Etc. There are no outstanding options, warrants,
calls, commitments or agreements of any character to which LIVING or its
shareholders are a party or by which LIVING or its shareholders are bound
calling for the issuance of shares of capital stock of LIVING or securities
representing the right to purchase or receive any such capital stock of
LIVING.
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3.10 Title to Assets. Except for liens set forth in Schedule C, LIVING is
the sole unconditional owner of, with good and marketable title to, all
assets listed in the schedules as owned by it and all other property and
assets are free and clear of any mortgages, liens, pledges, charges or
encumbrances of any nature whatsoever.
3.11 Agreements in Force and Effect. All material contracts, agreements,
plans, promissory notes, mortgages, leases, policies, licenses, franchises
or similar instruments to which LIVING is a party are valid and in full
force and effect on the date hereof and LIVING has not breached any
material provision of, and is not in default in any material respect under
the terms of any such contract, agreement, plan, promissory note, mortgage,
lease, policy, license, franchise or similar instrument which breach or
default would have a material adverse effect upon the business, operations
or financial condition of LIVING.
3.12 Legal Proceedings, Etc. There are no civil, criminal, administrative,
arbitration or other such proceedings or investigations pending or, to the
knowledge of either LIVING or the shareholders thereof threatened, in which,
individually or in the aggregate, an adverse determination would materially
and adversely affect the assets, properties, business or income of LIVING.
LIVING has substantially complied with, and is not in default in any
material respect under, any laws, ordinances, requirements, regulations or
orders applicable to its businesses.
3.13 Governmental Regulation. To the knowledge of LIVING, the company is
not in violation of or in default with respect to any applicable law or any
applicable rule, regulation, order, writ or decree of any court or any
governmental commission, board, bureau, agency or instrumentality, or
delinquent with respect to any report required to be filed with any
governmental commission, board, bureau, agency or instrumentality which
violation or default could have a material adverse effect upon the business,
operations or financial condition of LIVING.
3.14 Accuracy of Information. No representation or warranty by LIVING
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to WOMAN pursuant hereto or in
connection with the transactions contemplated hereby (including without
limitation all Schedules and Exhibits hereto) contains or will contain any
untrue statement of material fact or omits or will omit to state any
material fact necessary in order to make the statement contained herein or
therein not misleading.
3.15 Subsidiaries. LIVING does not currently have any subsidiaries or own
capital stock representing ten percent (10%) or more of the issued and
outstanding stock of any other corporation.
3.16 Consents. No consent or approval of, or registration, qualification or
filing with any governmental authority or other person is required to be
obtained or accomplished by LIVING or any shareholder thereof in connection
with the consummation of the transactions contemplated hereby.
3.17 Improper Payments. Neither LIVING, nor any person acting on behalf of
LIVING has made any payment or otherwise transmitted anything of value,
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directly or indirectly, to (a) any official or any government or agency or
political subdivision thereof for the purpose of influencing any decision
affecting the business of LIVING, (b) any customer, supplier or competitor
of LIVING or employee of such customer, supplier or competitor, for the
purpose of obtaining, retailing or directing business for LIVING, or (c)
any political party or any candidate for elective political office nor has
any fund or other asset of LIVING been maintained that was not fully and
accurately recorded on the books of account of LIVING.
3.18 Copies of Documents. LIVING has made available for inspection and
copying to WOMAN and its duly authorized representatives, and will continue
to do so at all times, true and correct copies of all documents which it has
filed with any governmental agencies which are material to the terms and
conditions contained in this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF WOMAN
WOMAN and its Officers and Directors hereby represent and warrant to
LIVING as follows:
4.1 WOMAN shall deliver to LIVING, on or within a reasonable time after
Closing, each of the following:
(a) Financial Statements. Balance sheet and income statement of WOMAN as of
June 30, 1998. (Schedule AA)
(b) Leases and Contracts. A complete and accurate list describing all
material terms of material leases (whether of real or personal property) and
each contract, promissory note, mortgage, license, franchise, or other
written agreement to which WOMAN is a party which involves or can reasonably
be expected to involve aggregate future payments or receipts by WOMAN
(whether by the terms of such lease, contract, promissory note, license,
franchise or other written agreement or as a result of a guarantee of the
payment of or indemnity against the failure to pay same) of $1,000.00 or
more annually during the twelve (12) months period ended June 30, 1998, or
any consecutive 12-month period thereafter, except any of said instruments
which terminate or are cancelable without penalty during such 12-month
period. (Schedule BB)
(c) Loan Agreements. Complete and accurate copies of all loan agreements
and other documents with respect to obligations of WOMAN for the repayment
of borrowed money. (Schedule CC)
(d) Articles and Bylaws. Complete and accurate copies of the Certificate
and Articles of Incorporation and Bylaws of WOMAN, together with all
amendments thereto to the date hereof. (Schedule DD)
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(e) Shareholders. A complete list of all persons or entities holding
capital stock of WOMAN or any rights to subscribe for, acquire, or receive
shares of the capital stock of WOMAN (whether warrants, calls, options, or
conversion rights), including copies of all stock option plans whether
qualified or nonqualified, and other similar agreements. (Schedule EE)
(f) Officers and Directors. A complete and current list of all officers and
Directors of WOMAN. (Schedule FF)
(g) Salary Schedule. A complete and accurate list (in all material
respects) of the names and the current salary rate for each present employee
of WOMAN who received $1,000 or more in aggregate compensation from WOMAN
whether in salary, bonus or otherwise, during the 12 months ended June 30,
1998, or who is presently scheduled to receive from WOMAN a salary in excess
of $1,000.00 during the year ending December 31, 1998, including in each case
the amount of compensation received or scheduled to be received, and a
schedule of the hourly rates of all other employee listed according to
departments. (Schedule GG)
(h) Litigation. A complete and accurate list (in all material respects) of
all material civil criminal administrative, arbitration or other such
proceedings or investigations (including without limitations unfair labor
practice matters, labor organization activities, environmental matters and
civil rights violations) pending or, to the knowledge of WOMAN threatened,
which may materially and adversely affect WOMAN. (Schedule HH)
(i) Tax Returns. Accurate copies of all Federal and State tax returns for
WOMAN, for the last fiscal year. (Schedule II)
(j) Jurisdictions Where Qualified. A list of all jurisdictions wherein
WOMAN is qualified to do business and is in good standing. (Schedule JJ)
(k) Employee and Consultant Contracts. A complete and accurate list of an
employee and consultant contracts which WOMAN may have. (Schedule KK)
4.2 Organization, Standing and Power. WOMAN is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Colorado with all requisite corporate power to own or lease its
properties and carry on its business as is now being conducted.
4.3 Qualification. WOMAN is duly qualified and licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it
conducts business operations. Such jurisdictions, which are the only
jurisdictions in which WOMAN is duly qualified and licensed as a foreign
corporation, is shown in Schedule JJ.
4.4 Capitalization of WOMAN. The authorized capital stock of WOMAN consists
of 60,000,000 shares of Capital Stock, 50,000,000 which are Common Stock,
par value $0.001 and 10,000,000 of which are preferred stock, of which the
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only shares issued and outstanding are 500,000 shares of Common Stock issued
to the shareholder listed on Schedule EE, which shares were duly authorized,
validly issued and fully paid and nonassessable. There are no preemptive
rights with respect to the WOMAN stock.
4.5 Authority. The execution delivery of this Agreement and consummation of
the transactions contemplated herein have been duly authorized by all
necessary corporate action, including but not limited to duly and validly
authorized action and approval by the Board of Directors, on the part of
WOMAN. This Agreement constitutes the valid and binding obligation of WOMAN
enforceable against it in accordance with its terms, subject to the
principles of equity applicable to the availability of the remedy of
specific performance. This Agreement has been duly executed by WOMAN and
the execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement shall not result in any breach
of any terms or provisions of WOMAN Certificate and Articles of Incorporation
or Bylaws or of any other agreement, court order or instrument to which WOMAN
is a party or is bound.
4.6 Absence of Undisclosed Liabilities. WOMAN has no material liabilities
of any nature, whether fixed, absolute, contingent or accrued, which were
not reflected on the financial statements set forth in Schedule AA nor
otherwise disclosed in this Agreement or any of the Schedules or Exhibits
attached hereto.
4.7 Absence of Changes. Since June 30, 1998, there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of WOMAN, except for changes resulting
from completion of transactions described in Section 5.1.
4.8 Tax Matters. All taxes and other assessments and levies which WOMAN is
required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or
are held by WOMAN in separate bank accounts for such payment or are
represented by depository receipts, and all such withholdings and
collections and all other payments due in connection therewith (including,
without limitation, employment taxes, both the employee's and employer's
share) have been paid over to the government or placed in a separate and
segregated bank account for such purpose. There are no known deficiencies
in income taxes for any periods and further, the representations and
warranties as to absence of undisclosed liabilities contained in Section
4.6 includes any and all tax liabilities of whatsoever kind or nature
(including, without limitation, all federal, state, local and foreign
income, profit, franchise, sales, use and property taxes) due or to become
due, incurred in respect of or measured by WOMAN income or business prior
to the Closing Date.
4.9 Options, Warrants, Etc. There are no outstanding options, warrants,
calls, commitments or agreements of any character to which WOMAN or its
shareholders are a party or by which WOMAN or its shareholders are bound, or
area party, calling for the issuance of shares of capital stock of WOMAN or
any securities representing the right to purchase or receive any such
capital stock of WOMAN.
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4.10 Title to Assets. Except for liens set forth in Schedule CC, WOMAN is
the sole unconditional owner of, with good and marketable title to, all
assets listed in the schedules as owned by them and all other property and
assets are free and clear of any mortgages, liens, pledges, charges or
encumbrances of any nature whatsoever.
4.11 Agreements in Force and Effect. All material contracts, agreements,
plans, promissory notes, mortgages, leases, policies, licenses, franchises
or similar instruments to which WOMAN is a party are valid and in full force
and effect on the date hereof and WOMAN has not breached any material
provision of, and is not in default in any material respect under the terms
of, any such contract, agreement, plan, promissory note, mortgage, lease,
policy, license, franchise or similar instrument which breach or default
would have a material adverse effect upon the business, operations or
financial condition of WOMAN.
4.12 Legal Proceedings, Etc. There are no civil, criminal, administrative,
arbitration or other such proceedings or investigations pending or, to the
knowledge of WOMAN or the shareholders thereof threatened, in which,
individually or in the aggregate, an adverse determination would materially
and adversely affect WOMAN' properties, business or income of WOMAN. WOMAN
has substantially complied with, and is not in default in any material
respect under, any laws, ordinances, requirements, regulations or orders
applicable to its businesses.
4.13 Governmental Regulation. To the knowledge of WOMAN, the company is not
in violation of or in default with respect to any applicable law or any
applicable rule, regulation, order, writ or decree of any court or any
governmental commission, board, bureau, agency or instrumentality, or
delinquent with respect to any report required to be filed with any
governmental commission, board, bureau, agency or instrumentality which
violation or default could have a material adverse effect upon the business,
operations or financial condition of WOMAN.
4.14 Accuracy of Information. No representation or warranty by WOMAN
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to LIVING pursuant hereto or
in connection with the transactions contemplated hereby (including without
limitation all Schedules and Exhibits hereto) contains or will contain any
untrue statement of material fact or omits or will omit to state any
material fact necessary in order to make the statement contained herein or
therein not misleading.
4.15 Subsidiaries. WOMAN does not have any subsidiaries or own capital
stock representing ten percent (10%) or more of the issued and outstanding
stock of any other corporation.
4.16 Consents. No consent or approval of, or registration, qualification or
filing with any governmental authority or other person is required to be
obtained or accomplished by WOMAN or any shareholder thereof in connection
with the consummation of the transactions contemplated hereby.
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4.17 Improper Payments. No person acting on behalf of WOMAN has made any
payment or otherwise transmitted anything of value, directly or indirectly,
to (a) any official or any government or agency or political subdivision
thereof for the purpose of influencing any decision affecting the business
of WOMAN, (b) any customer, supplier or competitor of WOMAN or employee of
such customer, supplier or competitor, for the purpose of obtaining,
retailing or directing business for WOMAN, or (c) any political party or
any candidate for elective political office nor has any fund or other asset
of WOMAN been maintained that was not fully and accurately recorded on the
books of account of WOMAN.
4.18 Copies of Documents. WOMAN has made available for inspection and
copying to LIVING and its duly authorized representatives, and will continue
to do so at all times, true and correct copies of all documents which it has
filed with any governmental agencies which are material to the terms and
conditions contained in this Agreement.
4.19 Investment Intent of Shareholders. Each shareholder of WOMAN
represents and warrants to LIVING that the shares of LIVING being acquired
pursuant to this Agreement are being acquired for her own account and for
investment and not with a view to the public resale or distribution of such
shares and further acknowledges that the shares being issued have not been
registered under the Securities Act and are "restricted securities" as that
term is defined in rule 144 promulgated under the Securities Act and must be
held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.
ARTICLE 5
CONDUCT AND TRANSACTIONS PRIOR TO THE EFFECTIVE TIME OF THE ACQUISITION
5.1 Conduct and Transactions of LIVING. During the period from the date
hereof to the date of Closing, LIVING shall:
(a) Conduct its operations in the ordinary course of business, including but
not limited to, paying all obligations a they mature, complying with any
applicable tax laws, filing all tax returns required to be filed and paying
all taxes due;
(b) Maintain its records and books of account in a manner that fairly and
correctly reflect its income, expenses, assets and liabilities.
5.2 LIVING shall not during such period, except in the ordinary course of
business, without the prior written consent of WOMAN:
(a) Except as otherwise contemplated or required by this Agreement, sell,
dispose of or encumber any of its properties or assets;
(b) Declare or pay any dividends on shares of its capital stock or make any
other distribution of assets to the holders thereof;
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(c) Issue, reissue or sell or issue options or rights to subscribe to, or
enter into any contract or commitment to issue, reissue or sell any shares
of its capital stock or acquire or agree to acquire any shares of its
capital stock;
(d) Except as otherwise contemplated and required by this Agreement, amend
its Articles of Incorporation or merge or consolidate with or into any other
corporation or sell all or substantially all of its assets or change in any
manner the rights of its capital stock or other securities;
(e) Except as contemplated or required by this Agreement, pay or incur any
obligation or liability, direct or contingent more than $1,000;
(f) Incur any indebtedness for borrowed money, assume, guarantee, endorse or
otherwise become responsible for obligations of any other party, or make
loans or advances to any other party;
(g) Make any material change in its insurance coverage;
(h) Increase in any manner the compensation, direct or indirect, of any of
its officers or executive employees, except in accordance with existing
employment contracts;
(i) Enter into any agreement or make any commitment to any labor union or
organization;
(j) Make any capital expenditures.
5.3 Conduct and Transactions of WOMAN. During the period from the date
hereof to the date of Closing, WOMAN shall:
(a) Obtain an investment letter from each shareholder of WOMAN in a form
substantially like that attached hereto as Exhibit A.
(b) Conduct the operations of WOMAN in the ordinary course of business.
5.4 WOMAN shall not during such period, except in the ordinary course of
business, without the prior written consent of LIVING:
(a) Except as otherwise contemplated or required by this Agreement, sell,
dispose of or encumber any of the properties or assets of WOMAN;
(b) Declare or pay any dividends on shares of its capital stock or make any
other distribution of assets to the holders thereof;
(c) Issue, reissue or sell, or issue options or rights to subscribe to, or
enter into any contract or commitment to issue, reissue or sell, any shares
of its capital stock or acquire or agree to acquire any shares of its
capital stock;
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(d) Except as otherwise contemplated and required by this Agreement, amend
its Articles of Incorporation or merge or consolidate with or into any other
corporation or sell all or substantially all of its assets or change in any
manner the rights of its capital stock or other securities;
(e) Except as otherwise contemplated and required by this Agreement, pay or
incur any obligation or liability, direct or contingent;
(f) Incur any indebtedness for borrowed money, assume, guarantee, endorse or
otherwise become responsible for obligations of any other party, or make
loans or advances to any other party;
(g) Make any material change in its insurance coverage;
(h) Increase in any manner the compensation, direct or indirect, of any of
its officers or executive employees; except in accordance with existing
employment contracts;
(i) Enter into any agreement or make any commitment to any labor union or
organization;
(j) Make any material capital expenditures;
(k) Allow any of the foregoing actions to be taken by any subsidiary of
WOMAN.
ARTICLE 6
RIGHTS OF INSPECTION
6.1 During the period from the date of this Agreement to the date of Closing
of the acquisition, LIVING and WOMAN agree to use their best efforts to give
the other party, including its representatives and agents, full access to
the premises, books and records of each of the entities, and to furnish the
other with such financial and operating data and other information including,
but not limited to, copies of all legal documents and instruments referred to
on any schedule or exhibit hereto, with respect to the business and
properties of LIVING or WOMAN, as the case may be, as the other shall from
time to time request; provided, however, if there are any such
investigations: (1) they shall be conducted in such manner s not to
unreasonably interfere with the operation of the business of the other
parties and (2) such right of inspection shall not affect in any way
whatsoever any of the representations or warranties given by the respective
parties hereunder. In the event of termination of this Agreement, LIVING
and WOMAN will each return to the other all documents, work papers and
other materials obtained from the other party in connection with the
transactions contemplated hereby, and will take such other steps necessary
to protect the confidentiality of such material.
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ARTICLE 7
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of LIVING. The obligation of LIVING to
perform this Agreement is subject to the satisfaction of the following
conditions on or within a reasonable time after Closing unless waived in
writing by WOMAN.
7.2 Representations and Warranties. There shall be no information disclosed
in the schedules delivered by LIVING which in the opinion of WOMAN would
materially adversely affect the proposed transaction and intent of the
parties as set forth in this Agreement. The representations and warranties
of LIVING set forth in Article 3 hereof shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing as
though made on and as of the Closing, except as otherwise permitted by this
Agreement.
(a) Performance of Obligations. LIVING shall have in all material respects
performed all agreements required to be performed by it under this Agreement
and shall have performed in all material respects any actions contemplated
by this Agreement prior to or on the Closing and LIVING shall have complied
in all material respects with the course of conduct required by this
Agreement.
(b) Corporate Action. Minutes, certified copies of corporate resolutions
and/or other documentary evidence satisfactory to counsel for WOMAN that
LIVING submitted this Agreement and any other documents required hereby to
such parties for approval as provided by applicable law.
(c) Consents. Execution of this Agreement by the shareholders of LIVING and
any consents necessary for or approval of any party on any Schedule
delivered by LIVING whose consent or approval is required pursuant thereto
shall have been obtained.
(d) Financial Statements. WOMAN shall have been furnished with financial
statements of LIVING including, but not limited to, balance sheets and
profit and loss statements as of June 30, 1998. Such financial statements
shall have been prepared in conformity with generally accepted accounting
principles on a basis consistent with those of prior periods and fairly
present the financial position of LIVING as of June 30, 1998.
(e) Statutory Requirements. All statutory requirements for the valid
consummation by LIVING of the transactions contemplated by this Agreement
shall have been fulfilled.
(f) Governmental Approval. All authorizations, consents, approvals, permits
and orders of all federal and state governmental agencies required to be
obtained by LIVING for consummation of the transactions contemplated by this
Agreement shall have been obtained.
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(g) Changes in financial Condition of LIVING. There shall not have occurred
any material adverse change in the financial condition or in the operations
of the business of LIVING, except expenditures in furtherance of this
Agreement.
(h) Absence of Pending Litigation. LIVING is not engaged in or threatened
with any suit, action, or legal administrative or other proceedings or
governmental investigations pertaining to this Agreement or the condition of
the transactions contemplated hereunder.
(i) Authorization for Issuance of Stock. WOMAN shall have received in form
and substance satisfactory to counsel for WOMAN a letter instructing and
authorizing the Registrar and Transfer agent for the shares of common stock
of LIVING to issue stock certificates representing ownership of LIVING
common stock to the shareholders of WOMAN in accordance with the terms of
this Agreement.
7.3 Conditions to Obligations of WOMAN. The obligation of WOMAN to perform
this Agreement is subject to the satisfaction of the following conditions on
or before the Closing unless waived in writing by LIVING
(a) Representations and Warranties. There shall be no information disclosed
in the schedules delivered by WOMAN which in the opinion of LIVING would
materially adversely affect the proposed transaction and intent of the
parties as set forth in this Agreement. The representations and warranties
of WOMAN set forth in Article 4 hereof shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing as
though made on and as of the Closing, except as otherwise permitted by this
Agreement.
(b) Performance of Obligations. WOMAN shall have in all material respects
performed all agreements required to be performed by it under this Agreement
and shall have performed in all material respects any actions contemplated
by this Agreement prior to or on the Closing and WOMAN shall have complied
in all material respects with the course of conduct required by this
Agreement.
(c) Corporate Action. Minutes, certified copies of corporate resolutions
and/or other documentary evidence satisfactory to counsel for LIVING that
WOMAN submitted this Agreement and any other documents required hereby to
such parties for approval as provided by applicable law.
(d) Consents. Any consents necessary for or approval of any party listed on
any Schedule delivered by WOMAN, whose consent or approval is required
pursuant thereto, shall be have been obtained.
(e) Financial Statements. LIVING shall have been furnished with an internal
unaudited balance sheet and income statement of WOMAN for the period ended
June 30, 1998. Such financial statements shall fairly and accurately
present the financial position of WOMAN as of June 30, 1998.
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(f) Statutory Requirements. All statutory requirements for the valid
consummation by WOMAN of the transactions contemplated by this Agreement
shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents, approvals, permits
and orders of all federal and state governmental agencies required to be
obtained by WOMAN for consummation of the transactions contemplated by this
Agreement shall have been obtained.
(h) Employment Agreements. Existing WOMAN employment agreements will have
been delivered to counsel for LIVING.
(i) Changes in Financial Condition of WOMAN. There shall not have occurred
any material adverse change in the financial condition or in the operations
of the business of WOMAN, except expenditures in furtherance of this
Agreement.
(j) Absence of Pending Litigation. WOMAN is not engaged in or threatened
with any suit, action, or legal administrative or other proceedings or
governmental investigations pertaining to this Agreement or the condition of
the transactions contemplated hereunder.
ARTICLE 8
MATTERS SUBSEQUENT TO CLOSING
8.1 Covenant of Further Assurance. The parties covenant and agree that they
shall, from time o time, execute an deliver or cause to be executed and
delivered all such further instruments of conveyance, transfer, assignments,
receipts and other instruments, and shall take or cause to be taken such
further or other actions as the other party or parties to this Agreement may
reasonably deem necessary in order to carry out the purposes and intent of
this Agreement.
ARTICLE 9
NATURE AND SURVIVAL OF REPRESENTATIONS
9.1 All statements contained in any written certificate, schedule, exhibit
or other written instrument delivered by LIVING or WOMAN pursuant hereto,
or otherwise adopted by LIVING, by its written approval or by WOMAN by its
written approval or in connection with the transactions contemplated hereby,
shall be deemed representations and warranties by LIVING or WOMAN as the
case may be. All representations, warranties and agreements made by either
party shall survive for the period of the applicable statute of limitations
and until the discovery of any claim, loss, liability or other matter based
on fraud, if longer.
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ARTICLE 10
TERMINATION OF AGREEMENT AND ABANDONMENT OF SHARE EXCHANGE
10.1 Termination. Anything here into the contrary notwithstanding, this
Agreement and any agreement executed as required hereunder and the
acquisition contemplated hereby may be terminated at any time before the
closing date as follows:
(a) By mutual written consent of the Boards of Directors of LIVING and
WOMAN.
(b) By the Board of Directors of LIVING if any of the conditions set forth
in Section 7.2 shall not have been satisfied.
(c) By the board of Directors of WOMAN if any of the conditions set forth in
Section 7.1 shall not have been satisfied.
10.2 Termination of Obligations and Waiver of Conditions; Payment of
Expenses. In the event this Agreement and the Share Exchange are terminated
and abandoned pursuant to this Article 10 hereof this Agreement shall become
void and of no force and effect and there shall be no liability on the part
of any of the parties hereto, or their respective directors, officers,
shareholders or controlling persons to each other. Each party hereto will
pay all costs and expenses incident to its negotiation and preparation of
this agreement and any of the documents evidencing the transactions
contemplated hereby, including fees, expenses and disbursements of counsel.
ARTICLE 11
EXCHANGE OF SHARES; FRACTIONAL SHARES
11.1 Exchange of Shares. At the Closing, LIVING shall issue a letter
to the transfer agent of LIVING with a copy of the resolution of the Board of
Directors of LIVING authorizing and directing the issuance of LIVING shares
as set forth on the signature page of this Agreement.
11.2 Restrictions on Shares Issued to WOMAN. Due to the fact that
WOMAN will receive shares of LIVING common stock in connection with the
acquisition which have not been registered under the 1933 Act by virtue of
the exemption provided in Section 4(2) of such Act, those shares of LIVING
contain the following legend:
The shares represented by this certificate have not been registered
under the Securities Act of 1933. The shares have been acquired for
investment and may not be sold or offered for sale in the absence of an
effective Registration Statement for the shares under the Securities Act of
1933 or an opinion of counsel to the Corporation that such registration is
required.
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ARTICLE 12
MISCELLANEOUS
12.1 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of Colorado excluding the conflicts of
laws.
12.2 Notices. All notices necessary or appropriate under this Agreement
shall be effective when personally delivered or deposited in the United
States mail postage prepaid, certified or registered, return receipt
requested, and addressed to the parties' last known address which addresses
are currently as follows:
If to "LIVING" If to "WOMAN"
BALANCED LIVING, INC THE BALANCED WOMAN, INC.
10920 South 1700 East 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx X
Xxxxx, XXXX 00000 Xxxx Xxxx Xxxx, Xxxx 00000
12.3 Amendment and Waiver. The parties hereby may, by mutual agreement in
writing signed by each party, amend this Agreement in any respect. Any term
or provision of this agreement may be waived in writing at any time by the
party which is entitled to the benefits thereof such waiver right shall
include, but not be limited to, the right of either party to:
(a) Extend the time for the performance of any of the obligations of the
other;
(b) Waive any inaccuracies in representations by the other contained in this
Agreement or in any document delivered pursuant hereto;
(c) Waiver compliance by the other with any of the covenants contained in
this Agreement, and performance of any obligations by the other; and
(d) Waive the fulfillment of any condition that is precedent to the
performance by the party so waiving of any of its obligations under this
Agreement. Any writing on the part of a party relating to such amendment,
extension or waiver as provided in this Section 12.03 shall be valid if
authorized or ratified by the board of directors of such party.
12.4 Remedies Not Exclusive. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute or otherwise. The election of any one or
more remedies by LIVING or WOMAN shall not constitute a waiver of the right
to pursue other available remedies.
12.5 Counterparts. This agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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12.6 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of LIVING and WOMAN.
12.7 Entire Agreement. This Agreement and the Schedules and Exhibits
attached hereto represent the entire agreement of the undersigned regarding
the subject matter hereof, and supersedes all prior written or oral
understandings or agreements between the parties.
12.8 Each Party to Bear Its Own Expense. LIVING and WOMAN shall each bear
their own respective expenses incurred in connection with the negotiation,
execution, closing, and performance of this Agreement, including counsel
fees and accountant fees.
12.9 Captions and Section Headings. Captions and section headings used
herein are for convenience only and shall not control or affect the meaning
or construction of any provision of this Agreement.
BALANCED LIVING, INC.
By: __________________________
President
THE BALANCED WOMAN, INC.
By: ________________________
President
THE BALANCED WOMAN SHAREHOLDERS:
_______________________________
XXXX X. XXXXXXXX
250,000 SHARES OF COMMON STOCK
_______________________________
XXXXXXXX X. XXXXXX
250,000 SHARES OF COMMON STOCK
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