ACQUISITION AGREEMENT
EXHIBIT 10.13
This Acquisition Agreement (the “Agreement”) is being
entered into by and between International Aerospace Enterprises, Inc. a Nevada
corporation (“IAE”), LifeStem International, Inc., a Nevada Corporation (“LLI”)
and the shareholders of LLI that shall agree to exchange their stockholdings in
accordance with the terms hereof. This Agreement shall become
effective as of the latter date written in conjunction with the signatures
affixed hereto (the “Effective
Date”).
WHEREAS,
IAE is a corporation organized and existing under the laws of the State of
Nevada, with its principal business office located at 0000 Xxxx Xxxxxx Xxxxx,
Xxxxxx, XX 00000, and LLI is a corporation organized and existing under the laws
of the State of Nevada, with its principal business office located at 0000 X.
Xxxxxxx Xxxxxx, Xxxxx X, Xxxxxx, XX 00000. IAE and LLI are
collectively referred to herein as the “Constituent
Corporations”;
WHEREAS,
Xxxxxx Xxxxx (“Xxxxx”) and Xxxxx XxXxxxx (“DeOlden”) collectively own
seventy-five percent (75%) of the outstanding shares of LLI (together referred
to as the “Majority Shareholders”);
WHEREAS,
pursuant to the terms of this Agreement, IAE will acquire forty-nine million
(49,000,000) shares of the issued and outstanding shares of LLI from the
Majority Shareholders as provided for in this Agreement and such transaction is
intended, where applicable, to be a tax-free reorganization under Section 368 of
the Internal Revenue Code of 1986, as amended (the “Code”), and the parties
intend that this Agreement shall constitute a plan of reorganization for the
purposes of Section 368 of the Code, such that immediately following such
exchange, IAE will become a wholly-owned subsidiary of LLI. The
foregoing exchange and issuance, together with the other transactions
contemplated herein, are collectively referred to herein as the
"Transaction”;
WHEREAS,
IAE is a military and commercial aircraft parts company, with Eleven Million
Dollars ($11,000,000) of appraised military and commercial airplane parts for
which it must make payment of One Million Dollars ($1,000,000) by June 15, 2010,
(the “Military Assets”);
WHEREAS,
the Majority Shareholders have unpaid compensation due them which is
collectively $663,699.45. Further, their respective employment agreements
provide for change of ownership event payments to provide one year of salary at
$230,000 each. Therefore, the total due at the close of this Transaction
is a collective total of approximately US$1,120,000 (the “Outstanding
Compensation”). The Majority Shareholders will agree to relinquish
all remaining rights to the Outstanding Compensation in accordance with the
terms of this Agreement;
WHEREAS,
the Majority Shareholders will agree to relinquish five million (5,000,000)
shares of Preferred Stock in accordance with the terms of this
Agreement;
Page 1 of
9
WHEREAS,
the respective Boards of Directors of IAE and LLI, deem it desirable and in
their best interests that the Constituent Corporations enter into this Agreement
and consummate the Transaction pursuant to the terms and conditions contained
herein; and
NOW,
THEREFORE, in consideration of the promises and mutual agreements, provisions
and covenants herein contained, the receipt and sufficiency of which is hereby
acknowledged and agreed, the parties agree as follows:
On
December 17, 2008, or on such other date that the parties shall agree (the
“Closing”):
ARTICLE
I
DIRECTORS
AND OFFICERS
OF
ACQUIRED CORPORATION
1.
Directors.
Xxxxx and DeOlden each agree to
immediately relinquish their Board of Directors seats, post transaction, once
new members are elected to the Board of Directors of LLI.
2.
Officers.
Xxxxx and DeOlden each agree to resign
immediately from their executive positions once the new Executive Officers are
hired and in place post acquisition of the Military Assets.
ARTICLE
II
TERMS
OF THE EXCHANGE OF SHARES
At
Closing, the Majority Shareholders of LLI shall transfer forty-nine million
(49,000,000) of the outstanding shares of LLI to IAE. The Shares issued shall be
unregistered shares and the resale or other transfer thereof shall be subject to
the restrictions set forth in Rule 144, as promulgated the Securities and
Exchange Commission.
At
Closing, IAE shall issue to LLI all of the outstanding shares of IAE such that
IAE will become a wholly-owned subsidiary of LLI.
Post
transaction, LLI will take all necessary steps to merge IAE with LLI such that
the surviving entity will be LLI but renamed International Aerospace
Enterprises, Inc.
ARTICLE
IV
OTHER
TERMS OF PAYMENT
Upon
Closing, other terms of payment pursuant to this transaction shall
be:
A. The
Majority Shareholders will relinquish all remaining rights to the Outstanding
Compensation ($1,200,000) in exchange for:
Page 2 of
9
1. Two
promissory notes shall be issued, one to Xxxxx, and one to DeOlden, or to their
designees. Each promissory note shall be in the amount of
seventy-five thousand dollars (US$75,000) so as the total of the promissory
notes shall be one hundred, fifty thousand dollars (US$150,000) (collectively,
the “Promissory Notes”). The Promissory Notes shall accrue interest
at a rate of six percent (6%) annually on any unpaid balance. The
term of the Promissory Notes shall be six (6) months. The Promissory
Notes shall be payable beginning thirty (30) days after issuance in six equal
monthly payments of US$12,720; and
2. LLI
shall transfer one hundred percent (100%) of the issued and outstanding shares
of its subsidiary, KD Medical, Inc., a Maryland Corporation (“KD”) to the
Majority Shareholders in such amounts as they designate. LLI shall transfer one
hundred percent (100%) of the issued and outstanding shares of its subsidiary
Molecula, Inc., a Nevada corporation, to the Majority Shareholders in such
amounts as they designate. LLI shall transfer one hundred percent
(100%) of the issued and outstanding shares of its subsidiary, Molecularware,
Inc., a Massachusetts Corporation (“Molecularware”) to the Majority Shareholders
in such amounts as they designate. The above listed transactions are
intended, where applicable, to be tax-free reorganizations under Section 368 of
the Internal Revenue Code of 1986, as amended (the “Code”), and the parties
intend that this Agreement shall constitute a plan of reorganization for the
purposes of Section 368 of the Code.
B. The
Majority Shareholders will each relinquish two million, five hundred thousand
(2,500,000) shares of Preferred Stock and in exchange LLI shall transfer one
hundred percent (100%) of the issued and outstanding shares of its subsidiary,
LifeStem, Inc., a Nevada Corporation (“LifeStem”) to the Majority Shareholders
in such amounts as they designate. The above listed transaction is intended,
where applicable, to be tax-free reorganizations under Section 368 of the
Internal Revenue Code of 1986, as amended (the “Code”), and the parties intend
that this Agreement shall constitute a plan of reorganization for the purposes
of Section 368 of the Code.
C. IAE,
post transaction, shall contract with Xxxxx and DeOlden to serve as financial
and legal consultants respectively to LLI for one (1) year. Xxxxx and
DeOlden shall each be paid sixty thousand dollars (US$60,000) and shall serve as
consultants only.
Page 3 of
9
ARTICLE
IV
CONDUCT
OF BUSINESS BY LLI
Prior to Closing, LLI shall conduct its business in its usual and ordinary
manner, and shall not enter into any transaction other than in the usual and
ordinary course of such business. Without limiting the generality of
the above, LLI shall not, except as otherwise consented to in writing by IAE or
as otherwise provided in this Agreement:
1. Amend
its certificate of incorporation or its bylaws;
2. Declare
or pay any dividend or make any other distribution upon or with respect to its
capital stock;
3. Repurchase
any of its outstanding stock or by any other means transfer any of its funds to
its shareholders either selectively or rateably, in return for value or
otherwise, except as salary or other compensation in the ordinary or normal
course of business;
4. Undertake
or incur any obligations or liabilities except current obligations or
liabilities in the ordinary course of business and except for liabilities for
fees and expenses in connection with the negotiation and consummation of the
Transaction in amounts to be determined after the Effective Date;
5. Mortgage,
pledge, subject to lien or otherwise encumber any realty or any tangible or
intangible personal property;
6. Sell,
assign or otherwise transfer any tangible assets of whatever kind, or cancel any
claims, except in the ordinary course of business;
7. Sell,
assign, or otherwise transfer any trademark, trade name, patent or other
intangible asset;
8. Default
in performance of any material provision of any material contract or other
obligation; or
9. Waive
any right of any substantial value.
ARTICLE
V
CONDUCT
OF BUSINESS BY IAE
Prior
to Closing, IAE shall not sell, assign or transfer any of the Military Assets or
perform any action which would in any way reduce their value.
ARTICLE
VI
WARRANTIES
OF THE CONSTITUENT CORPORATIONS
1. Representations
and Warranties of IAE.
IAE covenants, represents and warrants to LLI that:
a. It
has clear and unencumbered right, title, and interest to the Military
Assets;
Page 4 of
9
b. It
is, on the date of this Agreement and will be up to and including the Closing:
(i) a corporation duly organized and existing and in good standing under the
laws of the jurisdiction of the State of Nevada; and (ii) duly authorized under
its articles, and under applicable laws, to engage in the business carried on by
it;
c. Its
Board of Directors has and its shareholders have authorized and approved the
execution and delivery of this Agreement, and the performance of the Transaction
contemplated by this Agreement;
d. To
the best of IAE’s knowledge,
it has complied with, and is not in violation of any applicable Federal, State,
or local statutes, laws, and regulations affecting its properties or the
operation of its business;
e. IAE is
not involved as a defendant or plaintiff in any suit, action, arbitration, or
legal, administrative or other proceeding, which to its best knowledge, would
affect the company or its business, assets, or financial condition in a negative
manner; or, governmental investigation which is pending; to the best of its
knowledge, threatened against or affecting the company or its business assets or
financial condition; and is not in default with respect to any order, writ,
injunction or decree of any Federal, State, local/foreign court, department,
agency, or instrumentality applicable to it;
f. The
execution and delivery of this Agreement and its performance in the time and
manner contemplated will not cause, constitute, or conflict with, or result in:
(i) a breach or violation of any provisions of or constitute a default under any
license, mortgage, article of incorporation, bylaw, other similar agreement to
which the company is a party, or by which it may be bound, nor will any consents
or authorizations of any party other than those required; (ii) any event that
would permit any party to any agreement or instrument to terminate it or to
accelerate the maturity of any indebtedness or other obligation of the company;
or, (iii) an event that would result in the creation or imposition of any lien,
charge, encumbrance on any asset;
2.
Representations
and Warranties of LLI.
LLI covenants, represents and warrants to IAE that:
a. It
is on the date of this Agreement, and will be on Closing Date: (i) a corporation
duly organized and existing and in good standing under the laws of the
jurisdiction of the State of Nevada; and (ii) duly authorized under its
articles, and under applicable laws, to engage in the business carried on by
it;
b. Its
Board of Directors has authorized and approved the execution and delivery of
this Agreement, and the performance of the Transaction contemplated by this
Agreement;
c. It
has complied with, and is not in violation of any applicable Federal, State, or
local statutes, laws, and regulations affecting its properties or the operation
of its business.
Page 5 of
9
d. The
execution and delivery of this Agreement and its performance in the time and
manner contemplated will not cause, constitute, or conflict with, or result in
any of the following: (i) a breach or violation of any provisions of or
constitute a default under any license, indenture, mortgage instrument, article
of incorporation, bylaw, other agreement or instrument to which the company is a
party, or by which it may be bound, nor will any consents or authorizations of
any party other than those required, (ii) any event that would permit any party
to any agreement or instrument to terminate it or to accelerate the maturity of
any indebtedness or other obligation of the company, or, (iii) an event that
would result in the creation or imposition of any lien, charge, encumbrance on
any asset;
e. It
is a fully reporting company under the Securities Exchange Act of 1934, and is
current in all its reporting requirements; and
f. LLI’s
common stock is listed and trading on the Over the Counter Bulletin Board (under
the trading symbol “LSTM”) and no restrictions have been imposed on the trading
of these shares by the National Association of Securities Dealers, Inc. or any
other regulatory body.
ARTICLE
VII
CONSUMMATION
OF EXCHANGE
If the
exchange contemplated is completed, all expenses incurred in consummating the
plan of exchange shall, except as otherwise agreed in writing between the
Constituent Corporations, be borne by the party incurring the
expense.
ARTICLE
VIII
MISCELLANEOUS
1.
Access to Books and Records.
LLI
shall, before Closing, afford to the officers and authorized representatives of
IAE free and full access to its books and records, and the officers of LLI will
furnish IAE with financial and operating data and other information as to the
business and properties of LLI as IAE shall from time to time reasonably
request. IAE shall, before Closing, afford to the officers and
authorized representatives of LLI free and full access to its books and records,
and the officers of IAE will furnish LLI with financial and operating data and
other information as to the business and properties of IAE as LLI shall from
time to time reasonably request. IAE and LLI agree that, unless and
until the asset purchase contemplated by this Agreement has been consummated,
IAE and LLI and their officers and representatives will hold in strict
confidence all data and information obtained from one another as long as it is
not in the public domain, and if the asset purchase provided for is not
consummated as contemplated, IAE and LLI will each return to the other party all
data as the other party may reasonably request.
Page 6 of
9
2.
Rights Cumulative; Waivers.
The
rights of each of the parties under this Agreement are
cumulative. The rights of each of the parties hereunder shall not be
capable of being waived or varied other than by an express waiver or variation
in writing. Any failure to exercise or any delay in exercising any of
such rights shall not operate as a waiver or variation of that or any other such
right. Any defective or partial exercise of any of such rights shall
not preclude any other or further exercise of that or any other such
right. No act or course of conduct or negotiation on the part of any
party shall in any way preclude such party from exercising any such right or
constitute a suspension or any variation of any such right.
3.
Benefit; Successors
Bound.
This
Agreement and the terms, covenants, conditions, provisions, obligations,
undertakings, rights, and benefits hereof, shall be binding upon, and shall
inure to the benefit of, the undersigned parties and their heirs, executors,
administrators, representatives, successors, and permitted assigns.
4.
Entire Agreement.
This
Agreement contains the entire agreement between the parties with respect to the
subject matter hereof. There are no promises, agreements, conditions,
undertakings, understandings, warranties, covenants or representations,
oral or written, express or implied, between them with respect to this Agreement
or the matters described in this Agreement, except as set forth in this
Agreement. Any such negotiations, promises, or understandings shall
not be used to interpret or constitute this Agreement.
5.
Assignment.
Neither
this Agreement nor any other benefit to accrue hereunder shall be assigned or
transferred by either party, either in whole or in part, without the written
consent of the other party, and any purported assignment in violation hereof
shall be void.
6.
Amendment.
This
Agreement may be amended only by an instrument in writing executed by all the
parties hereto.
7.
Severability.
Each part
of this Agreement is intended to be severable. In the event that any
provision of this Agreement is found by any court or other authority of
competent jurisdiction to be illegal or unenforceable, such provision shall be
severed or modified to the extent necessary to render it enforceable and as so
severed or modified, this Agreement shall continue in full force and
effect.
Page 7 of
9
8.
Section Headings.
The
Section headings in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
9.
Construction.
Unless
the context otherwise requires, when used herein, the singular shall be deemed
to include the plural, the plural shall be deemed to include each of the
singular, and pronouns of one or no gender shall be deemed to include the
equivalent pronoun of the other or no gender.
10.
Further Assurances.
In
addition to the instruments and documents to be made, executed and delivered
pursuant to this Agreement, the parties hereto agree to make, execute and
deliver or cause to be made, executed and delivered, to the requesting party
such other instruments and to take such other actions as the requesting party
may reasonably require to carry out the terms of this Agreement and the
transactions contemplated hereby.
11.
Notices.
Any
notice which is required or desired under this Agreement shall be given in
writing and may be sent by personal delivery or by mail by either the United
States mail, postage prepaid, or by Federal Express or similar generally
recognized overnight carrier to the Constituent Corporations at their respective
addresses set forth in the recitals to this Agreement, and to the Majority
Shareholders, or to such other address as a party may communicate in writing to
the other parties.
12.
Arbitration,
Venue, Governing Law.
This agreement shall be deemed to be
made, governed by, interpreted under and construed in all respects in accordance
with the commercial rules of Judicial Arbitration and Mediation Service
(“JAMS”). This chosen jurisdiction is irrespective of the country or place of
domicile or residence of either party. In the event of controversy
arising out of the interpretation, construction, performance or breach of this
agreement, the parties hereby consent to adjudication under the commercial rules
of JAMS. Said venue of the arbitration shall be in Orange County, California. Judgment on the award
rendered by the arbitrator may be entered in any federal or state court in
Orange County, California. The Laws of the State of Nevada shall govern all disputes regarding
this matter. Any provision herein which is later determined to
be in violation of any such laws shall be eliminated from the terms of this
Agreement, and the remainder of this Agreement shall continue in full force and
effect.
13.
Consents.
The
person signing this Agreement on behalf of each party hereby represents and
warrants that he has the necessary power, consent and authority to execute and
deliver this Agreement on behalf of such party.
Page 8 of
9
14.
Execution in Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties have
caused this Agreement to be executed and delivered as of the date first above
written.
|
International
Aerospace Enterprises, Inc.:
|
||||
|
Dated:
December 26, 2008
|
Dated:
December 17, 2008
|
|||
| By: s/s Xxxxx XxXxxxx | By: s/s Xxxx X. Xxxx | |||
|
Xxxxx
XxXxxxx, Chief Executive Officer
|
Xxxx X.
Xxxx
|
|
Majority
Shareholders:
|
|
|||
|
s/s Xxxxxx Xxxxx
|
s/s Xxxxx XxXxxxx
|
|||
| Xxxxxx Xxxxx | Xxxxx XxXxxxx | |||
| Dated: December 26, 2008 | Dated: December 26, 2008 | |||
|
|
|
Page 9 of 9
