CONTRACT FOR SALE OF STOCK
THIS AGREEMENT, made and entered into this 12th day of August, 1996, by
and between Pharmaceutical Laboratories, Inc. ("PHLB") and each of X.X. Xxxxxx,
Xxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxx X. Xxxxx and Great Plains Financial, Inc.,
by and through X. X. Xxxxxx, as its attorney-in-fact (each, a "Shareholder" and
collectively, the "Shareholders").
WITNESSETH:
WHEREAS, the Shareholders are collectively the owners of all of the issued
and outstanding shares of common stock, $ 1.00 par value per share (the
"Stock"), of Aloe Pharmaceuticals, Inc., a Texas corporation (the
"Corporation") with its principal place of business at 0000 Xxxx Xxxxxxxxxx 00,
Xxxxxxxxx, Xxxxx 00000,
WHEREAS, PHLB, a Nevada corporation with its principal place of business
being 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxx 00000, is desirous of purchasing
the aforementioned Stock so that it may operate the Corporation as a wholly-
owned subsidiary of PHLB, and,
WHEREAS, the Shareholders desire to sell the Stock to PHLB,
NOW, THEREFORE, for and in consideration of the premises and mutual
covenants hereinafter set forth, the parties hereby agree as follows:
Article I - Agreement to Sell and Purchase
Upon the terms and subject to the conditions contained in this Agreement,
and in reliance upon the representations, warranties, and covenants set forth
herein, at the Closing (as hereinafter defined) the Shareholders will sell the
Stock to PHLB and PHLB will acquire the Stock from the Shareholders, free and
clear of any liens or encumbrances.
Article II - Purchase Price
At the Closing, PHLB will transfer Fifty Thousand (50,000) shares of its
restricted common stock, $.001 par value per share (the "PHLB Stock"), to the
Shareholders as follows:
X. X. Xxxxxx 12,000 shares
Xxxxxxx Xxxxxx 1,000 shares
Xxxx Xxxxxx 1,000 shares
Xxxxx X. Xxxxx 20,000 shares
Great Plains Financial, Inc. 16,000 shares
The PHLB Stock shall be represented by certificates issued in the names of
the Shareholders in the denominations listed above.
Article III - Closing
As used herein, the term "Closing" shall mean the consummation of the
transactions contemplated herein. The Closing shall take place on or before
August 15, 1996. If the Closing does not take place by such time, this
Agreement shall be terminated unless extended by the parties hereto in writing.
Article IV -- Shareholder's Conditions to Closing
The obligations of the Shareholders to consummate the transactions
contemplated by this Agreement will be subject to the fulfillment of the
following conditions at or prior to Closing, unless the Shareholders waive any
of such conditions in writing.
a. PHLB will issue to the Shareholders all of the PHLB Stock described
in Article II hereof and deliver to the Shareholders certificates representing
such stock.
b. The transactions contemplated hereby shall have received all consents
necessary from any governmental entities or third parties, including but not
limited to the board of directors of PHLB and the shareholders of PHLB (if
required under applicable laws).
c. The representations and warranties of PHLB set forth herein shall be
true as of the date of Closing, and all covenants required to be performed by
PHLB prior to Closing shall have been performed.
d. The board of directors shall have taken all necessary corporate
action to provide for the issuance of the PHLB Stock.
Article V -- PHLB's Conditions to Closing
The obligations of PHLB to consummate the transactions contemplated by
this Agreement will be subject to the fulfillment of the following conditions
at or prior to Closing, unless PHLB waives any of such conditions in writing:
a. Each Shareholder will deliver to PHLB the original certificates
representing that portion of the Stock owned by such Shareholder, duly endorsed
for transfer.
b. The transactions contemplated hereby shall have received all consents
necessary from any governmental entities or third parties.
c. The representations and warranties of PHLB set forth herein shall be
true as of the date of Closing, and all covenants required to be performed by
PHLB prior to Closing shall have been performed.
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d. The Corporation shall have received duly executed resignation letters
from all directors and officers of the Corporation pursuant to which such
individuals resign as officers and directors of the Corporation concurrently
with the Closing.
e. X. X. Xxxxxx shall deliver to PHLB a binding non-competition
agreement in the form of Exhibit A.
Article VI -- Shareholders' Representations,
Warranties and Covenants
Each of the Shareholders represents, warrants, and covenants to PHLB that:
a. Each Shareholder owns the number of shares of the Stock set forth
opposite his name, and no other shares of the common stock of the Corporation
have been issued as of the date hereof:
X. X. Xxxxxx 1,600,000 shares
Xxxxxxx Xxxxxx 200,000 shares
Xxxx Xxxxxx 200,000 shares
Xxxxx X. Xxxxx 350,000 shares
Great Plains Financial, Inc. 300,000 shares
b. This Agreement has been duly and validly executed and delivered by
each Shareholder and constitutes a valid and binding agreement of each
Shareholder enforceable in accordance with its terms, except as such
enforcement may be limited by certain debtor relief laws.
c. To the best of their knowledge, the execution, delivery and
performance of this Agreement will not result in any violation of any federal,
state or local statute, ordinance or regulation.
d. Any and all consents required from third parties with respect to the
Shareholders' consummation of the transactions contemplated hereby have been
obtained and shall be in full force and effect at Closing except as described
in Schedule I.
e. Each Shareholder is the lawful owner of record, has good and
marketable title, and is the sole beneficial owner of the shares of the Stock
being described as owned by such Shareholder, free and clear of any liens.
f. The Corporation has all governmental licenses and permits necessary
to conduct business and all such licenses and permits are in full force and
effect except as described in Schedule II.
g. To the best of their knowledge, there is no pending or threatened
litigation, claim, proceeding or investigation against the Corporation.
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h. Attached hereto as Schedule III are the financial statements of the
Corporation as of April 30, 1996. To the best of their knowledge, such
statements are true and correct as of such date and accurately reflect the
accounts receivable and the accounts payable of the Corporation as of such
date. Such financial statements reflect a note payable to Great Plains
Financial in the amount of $175,270.82. As of April 30, 1996, such
indebtedness was converted into 300,000 shares of the Stock.
i. Since April 30, 1996, the Corporation has not incurred any
indebtedness outside of the regular course of its business and has not made any
payments to a Shareholder outside of the regular course of its business.
j. Attached hereto as Schedule IV is a list of material assets of the
Corporation, identifying which assets are owned by the Corporation and which
assets are leased by the Corporation.
k. All representations and warranties of the Shareholders contained in
this Article VI that are stated "to the best of their knowledge" are so stated
based upon the Shareholders' actual knowledge without further inquiry.
Article VII - Purchaser's Representations
Warranties and Covenants
PHLB represents, warrants, and covenants to each of the Shareholders that:
a. PHLB is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Nevada, is qualified to transact
business in each jurisdiction where the nature and extent of its business and
properties require qualification, and possesses all requisite power and
authority to own, lease, and operate its properties and to conduct its business
as it is now being conducted.
b. PHLB possesses all requisite authority to execute, deliver, and
comply with the terms of this Agreement. The execution and delivery of this
Agreement and the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of PHLB. This Agreement constitutes
a valid and binding agreement of PHLB, enforceable in accordance with its
terms.
c. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby violate or conflict with
any provision of the charter documents of PHLB or any material agreement to
which PHLB is a party or, to the best of their knowledge, violate or conflict
with any federal, state, or local statute, ordinance, or regulation..
d. No filing or registration with, or authorization or consent or
approval of, any governmental entity or any third party is required by or with
respect to PHLB in connection with
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the execution and delivery of this Agreement by PHLB or the consummation by
PHLB of the transactions contemplated hereby except for such authorizations,
consents, or approvals as have been obtained and are in full force and effect
at Closing.
e. Attached hereto as Schedule V is a description of the authorized
capital stock of PHLB and the number of shares of such capital stock that are
issued and outstanding, and the number of treasury shares held, as of June 30,
1996. All shares of such capital stock which are outstanding as of such date
are duly authorized, fully paid, and nonassessable, and have not been issued in
violation of any preemptive rights.
f. Upon its acquisition of the Stock, PHLB will cause the Corporation to
be managed in such a way as to comply with the terms of that certain Supply
Agreement dated as of January 1, 1996 by and between Aloe Care International,
L.L.C., X. X. Xxxxxx, and the Corporation. PHLB will indemnify and hold
harmless each of the Shareholders from and against any liability he may incur
as a result of PHLB's breach of such Supply Agreement.
g. PHLB has reviewed the financial statements attached hereto as
Schedule III and has agreed to issue the PHLB Stock to the Shareholders in
consideration for the Stock. PHLB recognizes that the financial statements are
unaudited and do not constitute an absolute appraised or market value with
respect to the Corporation or the Stock.
h. Upon Closing, PHLB will cause the Corporation to cancel and forgive
the indebtedness of $50,000 owed by Xxxxx X. Xxxxx to the Corporation pursuant
to his Stock Subscription Agreement dated as of November 29, 1993.
i. Upon Closing, PHLB will indemnify and hold harmless each of the
Shareholders from any liabilities he may incur as a result of any personal
guaranty of the Corporation's indebtedness such Shareholder may have executed
prior to the Closing.
j. Within twenty-four months after the Closing, PHLB will use its best
efforts to cause the PHLB Stock to be registered for sale under the Securities
Act of 1933, as amended, and other applicable federal and state securities
laws.
Article VIII - Due Diligence
Until the date and time of Closing, PHLB and/or its authorized agents
shall have the right to inspect the Corporation's premises, the property and
the inventory owned by the Corporation, and any and all records of the
Corporation's, including but not limited to, financial records, sales, property
and income tax records, at reasonable times upon reasonable notice.
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Article IX - Further Assurances
The parties hereto agree to expeditiously execute and deliver any
instrument or document required to carry out the provisions of this Agreement
as time is of the essence.
Article X - Entire Agreement/Amendment
This Agreement and the other documents to be delivered prior to or at
closing set forth the entire understanding of the parties and supersede all
prior agreements, whether written or oral, between them. This Agreement may be
amended, modified, or supplemented only by a written agreement between the
parties hereto.
Article XI - Exhibits and Schedules
All exhibits and schedules referenced in this Agreement are incorporated
by reference and shall constitute a part of this Agreement.
Article XII - Binding Effect
This Agreement shall be binding on the heirs, assigns, personal
representatives and successors in interest of the parties hereto.
Article XIII - Severability
This Agreement is intended to be performed in accordance with, and only to
the extent permitted by, all applicable laws, ordinances, rules and
regulations. If any provisions of this agreement or the application thereof to
any person or circumstances shall, for any reason and to any extent, be invalid
or unenforceable, the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected thereby, but
rather shall be enforced to the greatest extent permitted by law.
Article XIV - Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas.
Article XV - Counterparts
This Agreement is executed in several counterparts, all of which taken
together shall constitute one instrument.
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Article XVI - Tax-Free Exchange
PHLB agrees to take such steps as may be necessary to enable the
transaction contemplated hereby to qualify as a tax-free or tax-deferred
transaction under Section 368 of the Internal Revenue Code of 1986, as amended.
[Remainder of this page intentionally left blank.]
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Witness the following signatures:
Pharmaceutical Laboratories, Inc.
By: /s/ XXXXX XXXXXXX
Xxxxx XxXxxxx, President
/s/ X.X. XXXXXX
X.X. Xxxxxx
/s/ XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
/s/ XXXX XXXXXX
Xxxx Xxxxxx
/s/ XXXXX X. XXXXX
Xxxxx X. Xxxxx
Great Plains Financial, Inc.
By: /s/ X.X. XXXXXX
X.X. Xxxxxx, its attorney-in-fact
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STATE OF TEXAS )
COUNTY OF _______ )
BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this day personally appeared Xxxxx XxXxxxx, known to me to be a
person and officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that the same was the act of the said Pharmaceutical
Laboratories, Inc., a corporation, and that he executed the same as the act of
such corporation for the purpose and consideration therein expressed, and in
the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 21 day of August,
1996.
/s/ XXXXX XXXXXX
Notary Public, State of Texas
Xxxxx Xxxxxx
Notary's Printed Name
My Commission Expires: 10/19/96
[Notary seal as follows: Xxxxx Xxxxxx, Notary Public, State of Texas, My Comm.
Exp. Oct. 19, 1996]
STATE OF TEXAS )
COUNTY OF CAMERON )
BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this day personally appeared X. X. Xxxxxx, known to me to be a person
whose name is subscribed to the foregoing instrument, and acknowledged to me
the execution thereof.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 7th day of August,
1996.
/s/ XXXXXXXX X. XXXX
Notary Public, State of Texas
Xxxxxxxx X. Xxxx
Notary's Printed Name
My Commission Expires 12/16/99
[Notary seal as follows: Xxxxxxxx X. Xxxx, Xxxxxx Xxxxxx, Xxxxx xx Xxxxx, Comm.
Exp. 12-16-99]
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STATE OF TEXAS )
COUNTY OF CAMERON )
BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this day personally appeared Xxxxxxx Xxxxxx, known to me to be a
person whose name is subscribed to the foregoing instrument, and acknowledged
to me the execution thereof.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 7th day of August,
1996.
/s/ XXXXXXXX X. XXXX
Notary Public, State of Texas
Xxxxxxxx X. Xxxx
Notary's Printed Name
My Commission Expires 12/16/99
[Notary seal as follows: Xxxxxxxx X. Xxxx, Xxxxxx Xxxxxx, Xxxxx xx Xxxxx, Comm.
Xxx. 00-00-00]
XXXXX XX XXXXX )
COUNTY OF XXXXXX )
BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this day personally appeared Xxxx Xxxxxx, known to me to be a person
whose name is subscribed to the foregoing instrument, and acknowledged to me
the execution thereof.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 8th day of August,
1996.
/s/ XXXXXXXX X. XXXXXXX
Notary Public, State of Texas
Xxxxxxxx X. Xxxxxxx
Notary's Printed Name
My Commission Expires 11-15-99
[Notary seal as follows: Xxxxxxxx X. Xxxxxxx, Notary Public, State of Texas, My
Commission Expires 11-15-99]
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STATE OF TEXAS )
COUNTY OF CAMERON )
BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this day personally appeared Xxxxx X. Xxxxx, known to me to be a
person whose name is subscribed to the foregoing instrument and acknowledged to
me the execution thereof.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 9 day of August, 1996.
/s/ XXXXXX XXXXXXX
Notary Public, State of Texas
_____________________________
Notary's Printed Name
My Commission Expires _____________
[Notary seal as follows: Xxxxxx Xxxxxxx, My Commission Expires March 25, 1998]
STATE OF TEXAS )
COUNTY OF CAMERON )
BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this day personally appeared X. X. Xxxxxx, known to me to be a person
whose name is subscribed to the foregoing instrument, and acknowledged to me
the execution thereof as attorney-in-fact for Great Plains Financial.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 7th day of August,
1996.
/s/ XXXXXXXX X. XXXX
Notary Public, State of Texas
Xxxxxxxx X. Xxxx
Notary's Printed Name
My Commission Expires 12/16/99
[Notary seal as follows: Xxxxxxxx X. Xxxx, Xxxxxx Xxxxxx, Xxxxx xx Xxxxx, Comm.
Exp. 12-16-99]
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The following exhibits and schedules are not attached but are available to
the Securities and Exchange Commission for review upon request.
Exhibit A
Non-Competition Agreement between X.X. Xxxxxx and Pharmaceutical
Laboratories, Inc. (a Nevada corporation)
Schedule I
Third-Party Consents
Schedule II
Licenses and Permits
Schedule III
Financial Statements of Aloe Pharmaceuticals, Inc. dated April 30,
1996
Schedule IV
List of Assets
Schedule V
Capital Stock of PHLB
