Exhibit 10.01
AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION
This Amendment to Agreement and Plan of Reorganization ("Amendment") is
entered into on this 31st day of January, 2002, by and among Upland Energy
Corporation, a Utah corporation (hereinafter "Upland"), Upland Merger Co., a
Utah corporation (hereinafter "Merger Co."), and LifeSmart Nutrition, Inc., a
Utah corporation (hereinafter referred to as "LifeSmart").
RECITALS:
A. On March 19, 2001, the parties entered into an Agreement and Plan
of Reorganization ("Agreement and Plan of Reorganization").
B. The parties previously entered into an amendment which extended the
closing deadline of Section 1.06 of the Agreement and Plan of Reorganization
to December 31, 2001.
C. The parties desire to amend Section 1.06 of the Agreement and Plan
of Reorganization to extend the closing deadline again and to provide for
certain other changes to the Agreement and Plan of Reorganization as described
herein.
NOW, THEREFORE, in consideration of the mutual covenants of the parties,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:
AGREEMENT
1. Closing Deadline Extended. Section 1.06 of the Agreement and Plan
of Reorganization is hereby amended in its entirety to read as follows:
1.06 Closing and Parties. Following approval by the holders of a
majority of the shares of Upland Common Stock as set forth in Section 4.02
hereof and the holders of a majority of the shares of LifeSmart Common Stock
as set forth in Section 5.02 hereof, the Closing contemplated hereby shall be
held at a mutually agreed upon time and place on or before February 28, 2002,
or on such other date as may be agreed to in writing by the parties (the
"Closing Date"). The Closing may be accomplished by wire, express mail,
overnight courier, conference telephone call or otherwise agreed to by the
respective parties or their duly authorized representatives.
2. LifeSmart Financial Statements. Section 3.04(a) of the Agreement
and Plan of Reorganization is hereby amended in its entirety to read as
follows:
3.04 Financial Statements.
(a) Included in Schedule 3.04 are the audited balance sheets of LifeSmart
as of May 31, 2001, and 2000, and the related statements of operations,
stockholders' equity (deficit), and cash flows for the fiscal year ended May
31, 2001, including the notes thereto, and the accompanying report of Xxxxxx &
Co., independent certified public accountants, together with the notes thereto
and the representations by the principal accounting and financial officer of
LifeSmart to the effect that such financial statements contain all adjustments
(all of which are normal recurring adjustments) necessary to present fairly
the results of operations and financial position for the periods and as of the
dates indicated.
3. LifeSmart Contracts. Section 3.10(a) of the Agreement and Plan of
Reorganization is hereby amended in its entirety to read as follows:
3.10 Contracts.
(a) Except as disclosed in Schedule 3.10, all contracts, agreements,
franchises, license agreements, and other commitments to which LifeSmart is a
party or by which its properties are bound and which are material to the
operations or financial condition of LifeSmart are valid and enforceable by
LifeSmart in all material respects;
4. LifeSmart Material Contract Defaults. Section 3.11 of the
Agreement and Plan of Reorganization is hereby amended in its entirety to read
as follows:
3.11 Material Contract Defaults. Except as disclosed in Schedule 3.11,
LifeSmart is not in default in any material respect under the terms of any
outstanding contract, agreement, lease, or other commitment which is material
to the business, operations, properties, assets, or condition of LifeSmart,
and there is no event of default or other event which, with notice or lapse of
time or both, would constitute a default in any material respect under any
such contract, agreement, lease, or other commitment in respect of which
LifeSmart has not taken adequate steps to prevent such a default from
occurring.
5. Absence of Environmental Liabilities. A new Section 2.18
containing representations and warranties concerning an absence of
environmental liabilities of Upland and GS&C is hereby added which reads as
follows:
2.18 Environmental, Health and Safety Matters. Upland and its subsidiary,
GS&C, are in compliance with all environmental, health, and safety
requirements. Each of Upland and GS&C has obtained and complied with, and is
in compliance with, all permits, licenses and other authorizations that are
required pursuant to environmental, health, and safety requirements for the
occupation of its facilities and the operation of its business.
(a) Neither Upland nor GS&C has received any written notice, report or
other information regarding any actual or alleged violation of environmental,
health, and safety requirements, or any liabilities or potential liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise), including
any investigatory, remedial or corrective obligations, relating to GS&C or its
facilities arising under environmental, health, and safety requirements.
(b) None of the following exists at any property or facility owned or
operated by GS&C: (1) underground storage tanks, (2) asbestos-containing
material in any form or condition, (3) materials or equipment containing
polychlorinated biphenyls, or (4) landfills, surface impoundments, or disposal
areas.
(c) Neither GS&C nor its predecessors or affiliates has treated, stored,
disposed of, arranged for or permitted the disposal of, transported, handled,
or released any substance, including without limitation any hazardous
substance, or owned or operated any property or facility (and substance) in a
manner that has given or would give rise to corrective action costs, personal
injury, property damage, natural resources damages or attorney fees, pursuant
to the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), the Solid Waste Disposal Act, as amended ("SWDA")
or any other environmental, health, and safety requirements.
(d) Neither this Agreement nor the consummation of the transactions that
are the subject of this Agreement will result in any obligations for site
investigation or cleanup, or notification to or consent of governmental
agencies or third parties, pursuant to any of the so-called "transaction-
triggered" or "responsible property transfer" environmental, health, and
safety requirements.
(e) Neither GS&C nor any of its predecessors or affiliates, has, either
expressly or by operation of law, assumed or undertaken any liability,
including without limitation any obligation for corrective or remedial action,
of any other persons relating to environmental, health, and safety
requirements.
(f) No facts, events or conditions relating to the past or present
facilities, properties or operations of GS&C, or any of its predecessors or
affiliates will prevent, hinder or limit continued compliance with
environmental, health, and safety requirements, give rise to any
investigatory, remedial or corrective obligations pursuant to environmental,
health, and safety requirements, including without limitation any relating to
onsite or offsite releases or threatened releases of hazardous materials,
substances or wastes, personal injury, property damaged or natural resources
damage.
(g) GS&C presently has liability insurance coverage of $1,000,000
insuring GS&C and Upland against any and all liabilities of an environmental
nature, and will keep such insurance in force through the date of closing and
at least until such time as GS&C is spun-off or sold by Upland.
6. New Conditions Precedent to Obligations of LifeSmart. New
sections 4.09 through 4.14 have been added to the Agreement and Plan of
Reorganization. As stated in Article IV of the Agreement and Plan of
Reorganization, LifeSmart shall be bound by the terms and conditions of the
Agreement and Plan of Reorganization provided that all of the conditions
described in Article IV (which is hereby amended to add Sections 4.09 through
4.14 described below) are complied with and satisfied by Upland at or before
the Closing Date:
4.09 Additional Financing. In addition to the financing described in
Section 4.01 of the Agreement, Arizona Capital Group, Inc. must raise the
following gross amounts of equity capital for LifeSmart pursuant to the terms
and conditions of the LifeSmart private placement memorandum dated January 25,
2002: (a) $220,000 on or before February 8, 2002; and (b) $750,000 before or
at the Closing of the business combination between Upland and LifeSmart which
is to occur on or before February 28, 2002 (unless extended by mutual written
agreement of LifeSmart and Upland).
4.10 Financial Advisory Agreement. A new Financial Advisory Agreement
shall be entered into by and between LifeSmart and Arizona Capital Group,
Inc., the terms of which shall be negotiated by and between representatives of
LifeSmart and with Xxxxx X. Xxxxxx.
4.11 Expenses of GS&C Spinoff. All expenses associated with the spinoff
of GS&C, including but not limited to legal fees, accounting fees,
registration filing fees, printing fees, blue sky fees, etc. are to be paid
from net profits obtained through the operations of GS&C following the Closing
of the business combination between Upland and LifeSmart, but prior to the
effective date of the spinoff. To the extent that the net profits generated
by GS&C during that period of time are not sufficient to cover all expenses
associated with the spinoff, Xxx Xxxxxxx and Xxxxx Xxxxxx, shall personally
guarantee, jointly and severally, the payment of all such excess expenses.
For any amount paid by Xxx Xxxxxxx and/or Xxxxx Xxxxxx to fulfill this
obligation, the person making the payments shall receive additional shares of
GS&C common stock at the rate of $0.25 per share.
4.12 Leak Out Agreement. Xxxxx Xxxxxxx, Xxxx Xxxxxxxx, Xxxx Xxxxxx, Xxx
Xxxxxxx and Xxxxx Xxxxxx shall sign leak out agreements which will provide
that each of them will be limited to selling an amount of post-merger Upland
common stock not greater than one percent (1.0%) of the then total issued and
outstanding Upland common shares during each calendar quarter following the
Closing of the business combination between Upland and LifeSmart. The leak
out agreements shall also prohibit Xxxxx Xxxxxxx, Xxxx Xxxxxxxx, Xxxx Xxxxxx,
Xxx Xxxxxxx and Xxxxx Xxxxxx from selling any shares of Upland stock and/or
LifeSmart stock between the date of this Amendment and the closing date of the
business combination between LifeSmart and Upland.
4.13 Indemnification Agreement. Xxx Xxxxxxx and Xxxxx Xxxxxx shall sign
written agreements in which they agree to indemnify and hold harmless Upland,
LifeSmart, GS&C, and all of their respective officers, directors, employees
and agents, from and against any and all liabilities associated with GS&C,
including, but not limited to, any liabilities associated with environmental
problems, remediation costs, etc. This indemnification will be subject to a
limitation of liability of One Hundred Thousand Dollars ($100,000). In the
event the current insurance coverage lapses or is otherwise not available to
Upland, GS&C and/or LifeSmart to protect against claims, the indemnification
limit of Xxx Xxxxxxx shall be increased to One Million One Hundred Thousand
Dollars ($1,100,000).
4.14 Release of Claims. Upland, Arizona Capital Group, Inc., and
LifeSmart will sign a Release Agreement conditioned upon the successful
Closing of the business combination between Upland and LifeSmart. The Release
Agreement will provide that Upland, Arizona Capital Group, Inc. and LifeSmart
will release any and all claims which either party may assert against each
other and each party's respective officers, directors, employees and agents
which are associated with any contracts or agreements entered into by and
between LifeSmart, Carriage House Capital, L.L.C. and/or Xxxxxx Xxxx, or any
other activities between said persons, including, but not limited to, any
settlement agreement reached between LifeSmart, Carriage House, L.L.C. and/or
Xxxxxx Xxxx pursuant to which LifeSmart may pay compensation to Carriage House
Capital, LLC and/or Xxxxxx Xxxx to obtain a release of any and all claims
which Carriage House Capital, L.L.C. and/or Xxxxxx Xxxx could assert against
LifeSmart, Upland and/or their respective officers, directors, employees
and/or agents. In the event Upland is not satisfied with the terms of any
Release Agreement entered into between LifeSmart, Carriage House Capital,
L.L.C. and/or Xxxxxx Xxxx. Upland shall not be required to close the business
combination with LifeSmart.
7. Operation of GS&C. A new Section 7.04 is hereby added which reads
as follows:
7.04 Operation of GS&C Following Closing. Following the closing of the
business combination between Upland and LifeSmart, the present officers and
directors of GS&C shall continue to serve as the officers and directors of
GS&C and will continue to operate GS&C as it is now being operated, at least
until the following occurs: (a) the spin-off of GS&C described in Section
7.01 occurs; or (b) the option to purchase GS&C is exercised or it expires.
They will continue to keep GS&C's existing liability insurance coverage in
force during the time period described above. Any oil and gas assets of
Upland will be contributed to GS&C, and Xxx Xxxxxxx will be paid Three
Thousand Dollars ($3,000.00) per month during this time period from the net
profits of GS&C. No other officer or director of GS&C shall be compensated by
GS&C or Upland during this time period.
8. Increase in Number of Upland Shares and Upland Warrants
Outstanding. The number of outstanding shares of Upland common stock and the
number of outstanding Upland warrants has increased since the Agreement and
Plan of Reorganization was signed on March 19, 2001 due solely to the issuance
of Upland shares and warrants in connection with raising $918,250 in equity
capital which was loaned to LifeSmart.
9. Other Inconsistent Provisions Hereby Amended. Any other
provisions of the Agreement and Plan of Reorganization which are inconsistent
with the terms of this Amendment shall be deemed to be amended consistent
herewith. All other terms and conditions of the Agreement and Plan of
Reorganization shall remain unchanged and in full force and effect.
10. Counterparts; Facsimile Signatures. This Amendment may be
executed in multiple counterparts, each of which shall be deemed an original
and all of which taken together shall be but a single instrument. This
Amendment may be signed by facsimile signatures.
This Amendment is entered into as of the date and year first above
written.
UPLAND ENERGY CORPORATION,
a Utah corporation
By /S/
-------------------------
Xxx Xxxxxxx, President
UPLAND MERGER CO.,
a Utah corporation
By /s/
---------------------------
Xxx Xxxxxxx, President
LIFESMART NUTRITION, INC.,
a Utah corporation
By /s/
---------------------------
Xxxxxxx X. Xxxxxxx, C.E.O.
AGRS\0848.2
