1
REORGANIZATION AND STOCK PURCHASE AGREEMENT
This REORGANIZATION AND STOCK PURCHASE AGREEMENT dated as of September 1,
2005 (this "Agreement") is by and between Altadyne, Inc., a Nevada corporation
("ATYD"), Stem Cell Therapy International, Corp., a Florida corporation
("SCTI"), and R Capital Partners, Inc. ("R Capital").
RECITALS
A. WHEREAS, R Capital partners has introduced SCTI to ATYD, and ATYD
desires to acquire directly or indirectly 100% of the equity of SCTI;
B: WHEREAS, the shareholders of SCTI desire to exchange their shares of SCTI
for equity in ATYD;
C: WHEREAS, the parties hereto intend that the transaction contemplated here
by shall be completed as a tax-free exchange of stock.
NOW, THEREFORE, The respective Boards of Directors of ATYD and SCTI deem it
advisable and in the best interests of their corporations and the respective
shareholders of their corporations that ATYD acquire 100% of the securities of
SCTI, in accordance with the terms and conditions of this Reorganization and
Stock Purchase Agreement.
1. Pre-Closing Actions ofATYD. Immediately upon execution of this Agreement
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and prior to any Closing as set forth herein, ATYD shall undertake the following
actions:
(a) The Board of Directors of ATYD shall unanimously approve and deliver to
Xxxxxx Law Group ("Escrow") in escrow resolutions with respect to (a) approving
the Transactions set forth herein; (c) increasing or directing the size of the
Board of Directors to be two members; (c) electing Xxxxxx Xxx and Xxxxxx
Xxxxxxxx to the board of directors of ATYD, and (d) approving a name change of
the corporation to Stem Cell Therapy International, Inc.
(b) Shareholders of ATYD shall deliver together with medallion guaranteed
stock powers shares of ATYD and/or ATYD shall issue and deliver to Escrow for a
total of 25,000,000 shares of ATYD for delivery to shareholders or other
designees of SCTI as advised to Escrow prior to closing (the "Escrowed ATYD
Shares").
(c) ATYD shall use its reasonable best efforts to prepare and complete the
documents necessary to be filed with local, state and federal authorities to
consummate the transactions contemplated hereby.
(d) During a period from the date of this Agreement until September 6, 2005
(the "Due Diligence Period"), ATYD shall make available to SCTI and SCTI's
employees, attorneys, accountants, financial advisors, agents and
representatives during normal business hours all information concerning the
operation, business and prospects of ATYD as may be reasonably requested by
SCTI. ATYD will cooperate with SCTI for the purpose of permitting SCTI to
discuss ATYD's historical business, including without limitation providing
access to all employees, consultants, assets, properties, books, accounts,
records, tax returns, contracts and other documents of ATYD.
2. Pre-Closing Action ofSCTI. Immediately upon execution of this Agreement
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and prior to the Closing as set forth herein, SCTI shall undertake the following
actions:
(a) The Board of Directors of SCTI shall execute and deliver resolutions
unanimously approving the Transactions set forth herein.
(b) The shareholders of SCTI shall deliver to Xxxxxx Law Group in escrow
certificates representing 25,000,000 shares of common stock of SCTI (the
"Escrowed SCTI Shares"), representing 100% of the issued and outstanding equity
of SCTI, for delivery to ATYD at Closing.
(f) During the Due Diligence Period, SCTI shall make available to ATYD and
ATYD's employees, attorneys, accountants, financial advisors, agents and
representatives during normal business hours all information concerning the
operation, business and prospects of SCTI as may be reasonably requested by
ATYD. SCTI will cooperate with ATYD for the purpose of permitting ATYD to
discuss SCTI's business and prospects with customers, creditors, suppliers and
other persons having business dealings with such party, including without
limitation providing access to all employees, consultants, assets, properties,
books, accounts, records, tax returns, contracts and other documents of SCTI,
provided that such access will not materially interfere with the normal business
operations of SCTI.
3. Conditions to Closing
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The parties' obligation to close the proposed Acquisition will be subject to
specified conditions precedent including, but not limited to, the following:
(a) the representations and warranties of ATYD as set forth in Section 6
herein shall remain accurate as of the Closing Date and no material adverse
change in the business of ATYD shall have occurred;
(b) the representations and warranties of SCTI as set forth in Section 7
herein shall remain accurate as of the Closing Date and no material adverse
change in the business of SCTI shall have occurred;
(c) all the documents necessary to be filed with local, state and federal
authorities are prepared
(d) ATYD shall have provided the board resolutions and any other approval
required to complete the board election and the name change.
(e) ATYD shall retain its good standing as a publicly traded company under
the Securities Exchange Act, trading on the pink sheets under the symbol "ATYD".
4. At the Closing.
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(a) At the Closing, Xxxxxx Law Group shall release from escrow the ATYD
Board Resolutions effectuating the election of two new members of the Board of
Directors. The members of the Board of Directors of ATYD prior to Closing shall
submit resignations at Closing.
(b) At the Closing, Xxxxxx Law Group shall release the Escrowed SCTI Shares
to ATYD.
(c) At the Closing, the existing officers of ATYD shall resign and be
replaced by those officers appointed by the new Board of Directors.
5. Timing of Closing. The Closing shall occur upon the satisfaction of the
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conditions set forth in this Agreement and upon instructions from the parties
hereto to the Escrow Agent. The Closing Date shall occur on or before September
6, 2005, unless the Escrow Agent receives instructions otherwise from the
parties or notice from a party that the conditions set forth herein have not
occurred. In the event the Closing does not occur on or before September 30,
2005, (i) the Escrow Agent shall return the Escrowed ATYD Shares to ATYD and
(ii) the Escrow Agent shall return the Escrowed SCTI Shares to the shareholders
of SCTI.
6. Representations ofATYD. ATYD represents and warrants as follows:
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(a) Ownership of Shares. As of the Closing Date, the shareholders of SCTI
will become the owners of the Escrowed ATYD Shares. The Escrowed ATYD Shares
will be free from claims, liens or other encumbrances, except as provided under
applicable federal and state securities laws;
(b) Fully paid and Nonassessable. The Escrowed ATYD Shares constitute duly
and validly issued shares of ATYD, and are fully paid and nonassessable, and
ATYD further represents that it has the power and the authority to execute this
Agreement and to perform the obligations contemplated hereby;
(c) Organization of ATYD; Authorization. ATYD is a corporation duly
organized, validly existing and in good standing under the laws of Nevada with
full corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action of
ATYD and this Agreement constitutes a valid and binding obligation of ATYD;
enforceable against it in accordance with its terms. ATYD has no subsidiaries.
(d) Capitalization. The authorized capital stock of ATYD consists of
100,000,000 shares of common stock, par value $0.001 per share, and no shares of
preferred stock. As of the Closing Date, ATYD will have a total of 8,400,000
shares of common stock issued and outstanding (not including the Escrowed ATYD
Shares) and no shares of preferred stock issued and outstanding. No shares have
otherwise been registered under state or federal securities laws. As of the
Closing Date, all of the issued and outstanding shares of common stock of ATYD
are validly issued, fully paid and non-assessable and there is not and as of the
Closing Date, except for 250,000 cashless exercise warrants to purchase shares
of ATYD common stock at an exercise price of $1.00 per share held by R Capital,
there will not be outstanding any warrants, options or other agreements on the
part of ATYD obligating ATYD to issue any additional shares of common or
preferred stock or any of its securities of any kind. ATYD will not issue any
shares of capital stock from the date of this Agreement through the Closing
Date. The Common Stock of ATYD is presently trading on the pink sheets under
the symbol "ATYD".
(e) Ownership of ATYD Shares. The delivery of certificates provided herein
for the Escrowed ATYD Shares will result in the shareholders of SCTI or assigns
immediate acquisition of record and beneficial ownership of the Escrowed ATYD
Shares, free and clear of all encumbrances.
(f) No Conflict as to ATYD and Subsidiaries. Neither the execution and
delivery of this Agreement nor the consummation of the exchange of the ATYD
Shares will (a) violate any provision of the certificate of incorporation or
by-laws (or other governing instrument) of ATYD or (b) violate, or be in
conflict with, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or excuse performance by any
Person of any of its obligations under, or cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the creation or
imposition of any Encumbrance upon any property or assets of ATYD under, any
material agreement or commitment to which ATYD is a party or by which its
property or assets is bound, or to which any of the property or assets of ATYD
is subject, or (c) violate any statute or law or any judgment, decree, order,
regulation or rule of any court or other Governmental Body applicable to ATYD
except, in the case of violations, conflicts, defaults, terminations,
accelerations or encumbrances described in clause (b) of this Section for such
matters which are not likely to have a material adverse effect on the business
or financial condition of ATYD.
(g) Consents and Approvals of Governmental Authorities. No consent, approval
or authorization of, or declaration, filing or registration with, any
Governmental Body is required to be made or obtained by ATYD in connection with
the execution, delivery and performance of this Agreement by ATYD or the
consummation of the sale of the Escrowed ATYD Shares.
(h) Other Consents. No consent of any Person is required to be obtained by
ATYD to the execution, delivery and performance of this Agreement or the
consummation of the sale of the ATYD Shares, including, but not limited to,
consents from parties to leases or other agreements or commitments, except for
any consent which the failure to obtain would not be likely to have a material
adverse effect on the business and financial condition of ATYD.
(i) Litigation. There is no action, suit, inquiry, proceeding or
investigation by or before any Court or Governmental body pending or threatened
in writing against or involving ATYD which is likely to have a material adverse
effect on the business or financial condition of ATYD, or which questions or
challenges the validity of this Agreement. ATYD is not subject to any judgment,
order or decree that is likely to have a material adverse effect on the business
or financial condition of ATYD.
(j) Absence of Certain Changes. ATYD has not:
1. suffered the damage or destruction of any of its properties or assets
(whether or not covered by insurance) which is materially adverse to the
business or financial condition of ATYD, or made any disposition of any of its
material properties or assets other than in the ordinary course of business;
2. made any change or amendment in its certificate of incorporation or
by-laws, or other governing instruments;
3. other than the ATYD Escrowed Shares, issued or sold any Equity Securities
or other securities, acquired, directly or indirectly, by redemption or
otherwise, any such Equity Securities, reclassified, split-up or otherwise
changed any such Equity Security, or granted or entered into any options,
warrants, calls or commitments of any kind with respect thereto;
4. organized any new Subsidiary or acquired any Equity Securities of any
Person or any equity or ownership interest in any business;
5. borrowed any funds or incurred, or assumed or become subject to, whether
directly or by way of guarantee or otherwise, any obligation or liability with
respect to any such indebtedness for borrowed money;
6. paid, discharged or satisfied any material claim, liability or obligation
(absolute, accrued, contingent or otherwise), other than in the ordinary course
of business;
7. prepaid any material obligation having a maturity of more than 90 days
from the date such obligation was issued or incurred;
8. cancelled any material debts or waived any material claims or rights,
except in the ordinary course of business;
9. disposed of or permitted to lapse any rights to the use of any material
patent or registered trademark or copyright or other intellectual property owned
or used by it;
10. granted any general increase in the compensation of officers or
employees (including any such increase pursuant to any employee benefit plan);
11. purchased or entered into any contract or commitment to purchase any
material quantity of raw materials or supplies, or sold or entered into any
contract or commitment to sell any material quantity of property or assets;
12. made any capital expenditures or additions to property, plant or
equipment or acquired any other property or assets;
13. written off or been required to write off any notes or accounts
receivable;
14. written down or been required to write down any inventory;
15. entered into any collective bargaining or union contract or agreement;
or
16. incurred any liability.
(k) Contracts and Commitments. ATYD is not a party to any:
1. Contract or agreement involving any liability on the part of ATYD.
2. Lease of personal property;
3. Employee bonus, stock option or stock purchase, performance unit,
profit-sharing, pension, savings, retirement, health, deferred or incentive
compensation, insurance or other material employee benefit plan (as defined in
Section 2(3) of ERISA) or program for any of the employees, former employees or
retired employees of ATYD;
4. Commitment, contract or agreement that is currently expected by the
management of ATYD to result in any material loss upon completion or performance
thereof;
5. Contract, agreement or commitment with any officer, employee, agent,
consultant, advisor, salesman, sales representative, value added reseller,
distributor or dealer; or
6. Employment agreement or other similar agreement.
(l) Compliance with Law. The operations of ATYD have been conducted in
accordance with all applicable laws and regulations of all Governmental Bodies
having jurisdiction over them, except for violations thereof which are not
likely to have a material adverse effect on the business or financial condition
of ATYD. ATYD has not received any notification of any asserted present or past
failure by it to comply with any such applicable laws or regulations. ATYD has
all material licenses, permits, orders or approvals from the Governmental Bodies
required for the conduct of its business, and is not in material violation of
any such licenses, permits, orders and approvals. All such licenses, permits,
orders and approvals are in full force and effect, and no suspension or
cancellation of any thereof has been threatened.
(m) Tax Matters.
1. ATYD (1) has filed or shall file prior to Closing all nonconsolidated and
noncombined Tax Returns and all consolidated or combined Tax Returns that
include only ATYD and not SCTI or its other Affiliates (for the purposes of this
Section, such tax Returns shall be considered nonconsolidated and noncombined
Tax Returns) required to be filed through the date hereof and will have paid any
Tax due through the date hereof with respect to the time periods covered by such
nonconsolidated and noncombined Tax Returns and shall timely pay any such Taxes
required to be paid by it after the date hereof with respect to such Tax Returns
and (2) shall prepare and timely file all such nonconsolidated and noncombined
Tax Returns required to be filed after the date hereof and through the Closing
Date and pay all Taxes required to be paid by it with respect to the periods
covered by such Tax Returns; (B) all such Tax Returns filed pursuant to clause
(A) after the date hereof shall, in each case, be prepared and filed in a manner
consistent in all material respects (including elections and accounting methods
and conventions) with such Tax Return most recently filed in the relevant
jurisdiction prior to the date hereof, except as otherwise required by law or
regulation. Any such Tax Return filed or required to be filed after the date
hereof shall not reflect any new elections or the adoption of any new accounting
methods or conventions or other similar items, except to the extent such
particular reflection or adoption is required to comply with any law or
regulation.
2. ATYD represents that prior to Closing, all consolidated or combined Tax
Returns (except those described in subparagraph (1) above) required to be filed
by any person through the date hereof that are required or permitted to include
the income, or reflect the Activities, operations and Transactions, of ATYD for
any taxable period shall have been timely filed, and the income, activities,
operations and Transactions of ATYD shall have been properly included and
reflected thereon. ATYD shall prepare and file, or cause to be prepared and
filed, all such consolidated or combined Tax Returns that are required or
permitted to include the income, or reflect the activities, operations and
Transactions, of ATYD, with respect to any taxable year or the portion thereof
ending on or prior to the Closing Date, including, without limitation, ATYD's
consolidated federal income tax return for such taxable years. Prior to Closing,
ATYD will timely file a consolidated federal income tax return for the taxable
year ended December 31, 2004 and such return shall include and reflect the
income, activities, operations and Transactions of ATYD for the taxable period
then ended, and hereby expressly covenants and agrees to file a consolidated
federal income tax return, and to include and reflect thereon the income,
activities, operations and Transactions of ATYD for the taxable period through
the Closing Date. All Tax Returns filed pursuant to this subparagraph (2) after
the date hereof shall, in each case, to the extent that such Tax Returns
specifically relate to ATYD and do not generally relate to matters affecting
other members of ATYD's consolidated group, be prepared and filed in a manner
consistent in all material respects (including elections and accounting methods
and conventions) with the Tax Return most recently filed in the relevant
jurisdictions prior to the date hereof, except as otherwise required by law or
regulation. ATYD has paid or will pay all Taxes that may now or hereafter be
due with respect to the taxable periods covered by such consolidated or combined
Tax Returns.
3. There is no (nor has there been any request for an) agreement, waiver or
consent providing for an extension of time with respect to the assessment of any
Taxes attributable to ATYD, or its assets or operations and no power of attorney
granted by ATYD with respect to any Tax matter is currently in force.
4. There is no action, suit, proceeding, investigation, audit, claim,
demand, deficiency or additional assessment in progress, pending or threatened
against or with respect to any Tax attributable to ATYD or its assets or
operations.
5. All amounts required to be withheld as of the Closing Date for Taxes or
otherwise have been withheld and paid when due to the appropriate agency or
authority.
(n) Borrowing and Guarantees. ATYD (a) does not have any indebtedness for
borrowed money, (b) are not lending or committed to lend any money (except for
advances to employees in the ordinary course of business), and (c) are not
guarantors or sureties with respect to the obligations of any Person.
7. Representations ofSCTI. SCTI for their respective rights and interests
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represent and warrant as follows:
(a) Organization; Authorization. SCTI is a corporation duly organized,
validly existing and in good standing under the laws of Nevada with full
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action of
SCTI and this Agreement constitutes a valid and binding obligation; enforceable
against in accordance with its terms. SCTI has no subsidiaries.
(b) Capitalization. The authorized capital stock of SCTI consists of
____________ shares of common stock, par value $_____ per share, and no shares
of preferred stock, par value $____ per share As of the date of this Agreement,
SCTI has 25,000,000 shares of common stock issued and outstanding and no shares
of preferred stock issued and outstanding. No shares have otherwise been
registered under state or federal securities laws. As of the Closing Date, all
of the issued and outstanding shares of common stock of SCTI are validly issued,
fully paid and non-assessable and there is not and as of the Closing Date there
will not be outstanding any warrants, options or other agreements on the part of
SCTI obligating any of SCTI to issue any additional shares of common or
preferred stock or any of its securities of any kind. Except for 5,000,000
shares to be issued to Institute of Cell Therapy ("ICT") in accordance with a
Licensing Agreement dated as of September 1, 2005 between SCTI and ICT (the "ICT
Agreement"), SCTI will not issue any shares of capital stock from the date of
this Agreement through the Closing Date.
(c) No Conflict as to SCTI and Subsidiaries. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
herein will (a) violate any provision of the articles of incorporation or
organization of SCTI or any of its Subsidiaries or (b) violate, or be in
conflict with, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or excuse performance by any
Person of any of its obligations under, or cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the creation or
imposition of any Encumbrance upon any property or assets of any of SCTI or any
of its Subsidiaries under, any material agreement or commitment to which any of
SCTI, any of its Subsidiaries is a party or by which any of their respective
property or assets is bound, or to which any of the property or assets of any of
SCTI or any of its Subsidiaries is subject, or (c) violate any statute or law or
any judgment, decree, order, regulation or rule of any court or other
Governmental Body applicable to SCTI or any of its Subsidiaries except, in the
case of violations, conflicts, defaults, terminations, accelerations or
Encumbrances described in clause (b) of this Section for such matters which are
not likely to have a material adverse effect on the business or financial
condition of SCTI and its subsidiaries, taken as a whole.
(d) Consents and Approvals of Governmental Authorities. No consent, approval
or authorization of, or declaration, filing or registration with, any
Governmental Body is required to be made or obtained by SCTI or any of either of
its Subsidiaries in connection with the execution, delivery and performance of
this Agreement by SCTI or the consummation of the transactions contemplated
herein.
(e) Other Consents. No consent of any Person is required to be obtained by
SCTI to the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated herein, including, but not limited
to, consents from parties to leases or other agreements or commitments, except
for any consent which the failure to obtain would not be likely to have a
material adverse effect on the business and financial condition of SCTI.
(f) Buildings, Plants and Equipment. The buildings, plants, structures and
material items of equipment and other personal property owned or leased by SCTI
or its Subsidiaries are, in all respects material to the business or financial
condition of SCTI and its Subsidiaries, taken as a whole, in good operating
condition and repair (ordinary wear and tear excepted) and are adequate in all
such respects for the purposes for which they are being used. SCTI has not
received notification that it is in violation of any applicable building,
zoning, anti-pollution, health, safety or other law, ordinance or regulation in
respect of its buildings, plants or structures or their operations, which
violation is likely to have a material adverse effect on the business or
financial condition of SCTI and its Subsidiaries, taken as a whole or which
would require a payment by SCTI or any of its subsidiaries in excess of $2,000
in the aggregate, and which has not been cured.
(g) No Condemnation or Expropriation. Neither the whole nor any portion of
the property or leaseholds owned or held by SCTI or any of its Subsidiaries is
subject to any governmental decree or order to be sold or is being condemned,
expropriated or otherwise taken by any Governmental Body or other Person with or
without payment of compensation therefore, which action is likely to have a
material adverse effect on the business or financial condition of SCTI and its
Subsidiaries, taken as a whole.
(h) Litigation. There is no action, suit, inquiry, proceeding or
investigation by or before any court or Governmental Body pending or threatened
in writing against or involving SCTI or any of its Subsidiaries which is likely
to have a material adverse effect on the business or financial condition of SCTI
and any of its Subsidiaries, taken as whole, or which would require a payment by
SCTI or its subsidiaries in excess of $2,000 in the aggregate or which questions
or challenges the validity of this Agreement. Neither SCTI nor any or its
Subsidiaries is subject to any judgment, order or decree that is likely to have
a material adverse effect on the business or financial condition of SCTI or any
of its Subsidiaries, taken as a whole, or which would require a payment by SCTI
or its Subsidiaries in excess of $2,000 in the aggregate.
(i) Absence of Certain Changes. Neither SCTI nor any of its Subsidiaries
has:
1. suffered the damage or destruction of any of its properties or assets
(whether or not covered by insurance) which is materially adverse to the
business or financial condition of SCTI and its Subsidiaries, taken as a whole,
or made any disposition of any of its material properties or assets other than
in the ordinary course of business;
2. made any change or amendment in its certificate of incorporation or
by-laws, or other governing instruments;
3. paid, discharged or satisfied any material claim, liability or obligation
(absolute, accrued, contingent or otherwise), other than in the ordinary course
of business;
4. prepaid any material obligation having a maturity of more than 90 days
from the date such obligation was issued or incurred;
5. cancelled any material debts or waived any material claims or rights,
except in the ordinary course of business;
6. disposed of or permitted to lapse any rights to the use of any material
patent or registered trademark or copyright or other intellectual property owned
or used by it;
7. granted any general increase in the compensation of officers or employees
(including any such increase pursuant to any employee benefit plan);
8. purchased or entered into any contract or commitment to purchase any
material quantity of raw materials or supplies, or sold or entered into any
contract or commitment to sell any material quantity of property or assets,
except (i) normal contracts or commitments for the purchase of, and normal
purchases of, raw materials or supplies, made in the ordinary course business,
(ii) normal contracts or commitments for the sale of, and normal sales of,
inventory in the ordinary course of business, and (iii) other contracts,
commitments, purchases or sales in the ordinary course of business;
9. written off or been required to write off any notes or accounts
receivable in an aggregate amount in excess of $2,000;
10. written down or been required to write down any inventory in an
aggregate amount in excess of $ 2,000;
11. entered into any collective bargaining or union contract or agreement;
or
12. other than the ordinary course of business, incurred any liability
required by generally accepted accounting principles to be reflected on a
balance sheet and material to the business or financial condition of SCTI and
their subsidiaries taken as a whole.
(j) Labor Relations. Neither SCTI nor any of its Subsidiaries is a party to
any collective bargaining agreement. Except for any matter which is not likely
to have a material adverse effect on the business or financial condition of SCTI
and its Subsidiaries, taken as a whole, (a) SCTI and its Subsidiaries is in
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and is not
engaged in any unfair labor practice, (b) there is no unfair labor practice
complaint against SCTI or any of its Subsidiaries pending before the National
Labor Relations Board, (c) there is no labor strike, dispute, slowdown or
stoppage actually pending or threatened against SCTI or any of its Subsidiaries,
(d) no representation question exists respecting the employees of SCTI or any of
its Subsidiaries, (e) neither SCTI nor any of its Subsidiaries has experienced
any strike, work stoppage or other labor difficulty, and (f) no collective
bargaining agreement relating to employees of SCTI or any of its Subsidiaries is
currently being negotiated.
(k) Compliance with Law. The operations of SCTI and its Subsidiaries have
been conducted in accordance with all applicable laws and regulations of all
Governmental Bodies having jurisdiction over them, except for violations thereof
which are not likely to have a material adverse effect on the business or
financial condition of SCTI and its Subsidiaries, taken as a whole, or which
would not require a payment by SCTI or its Subsidiaries in excess of $2,000 in
the aggregate, or which have been cured. Neither SCTI nor any of its
Subsidiaries has received any notification of any asserted present or past
failure by it to comply with any such applicable laws or regulations. SCTI and
its Subsidiaries have all material licenses, permits, orders or approvals from
the Governmental Bodies required for the conduct of their businesses, and are
not in material violation of any such licenses, permits, orders and approvals.
All such licenses, permits, orders and approvals are in full force and effect,
and no suspension or cancellation of any thereof has been threatened.
(l) Tax Matters.
1. Each of SCTI and its Subsidiaries (1) has filed or shall file prior to
Closing all nonconsolidated and noncombined Tax Returns and all consolidated or
combined Tax Returns that include only SCTI and not ATYD or its other Affiliates
(for the purposes of this Section, such tax Returns shall be considered
nonconsolidated and noncombined Tax Returns) required to be filed through the
date hereof and will have paid any Tax due through the date hereof with respect
to the time periods covered by such nonconsolidated and noncombined Tax Returns
and shall timely pay any such Taxes required to be paid by it after the date
hereof with respect to such Tax Returns and (2) shall prepare and timely file
all such nonconsolidated and noncombined Tax Returns required to be filed after
the date hereof and through the Closing Date and pay all Taxes required to be
paid by it with respect to the periods covered by such Tax Returns; (B) all such
Tax Returns filed pursuant to clause (A) after the date hereof shall, in each
case, be prepared and filed in a manner consistent in all material respects
(including elections and accounting methods and conventions) with such Tax
Return most recently filed in the relevant jurisdiction prior to the date
hereof, except as otherwise required by law or regulation. Any such Tax Return
filed or required to be filed after the date hereof shall not reflect any new
elections or the adoption of any new accounting methods or conventions or other
similar items, except to the extent such particular reflection or adoption is
required to comply with any law or regulation.
2. Each of SCTI and its Subsidiaries represents that prior to Closing, all
consolidated or combined Tax Returns (except those described in subparagraph (1)
above) required to be filed by any person through the date hereof that are
required or permitted to include the income, or reflect the Activities,
operations and Transactions, of SCTI and its Subsidiaries for any taxable period
shall have been timely filed, and the income, activities, operations and
Transactions of SCTI and its Subsidiaries shall have been properly included and
reflected thereon. SCTI and its Subsidiaries shall prepare and file, or cause
to be prepared and filed, all such consolidated or combined Tax Returns that are
required or permitted to include the income, or reflect the activities,
operations and transactions, of SCTI and its Subsidiaries, with respect to any
taxable year or the portion thereof ending on or prior to the Closing Date,
including, without limitation, SCTI' and Subsidiaries' consolidated federal
income tax return for such taxable years. Prior to Closing, SCTI and its
Subsidiaries will timely file a consolidated federal income tax return for the
taxable year ended December 31, 2004 and such return shall include and reflect
the income, activities, operations and transactions of SCTI and its Subsidiaries
for the taxable period then ended, and hereby expressly covenants and agrees to
file a consolidated federal income tax return, and to include and reflect
thereon the income, activities, operations and Transactions of SCTI and its
Subsidiaries for the taxable period through the Closing Date. All Tax Returns
filed pursuant to this subparagraph (2) after the date hereof shall, in each
case, to the extent that such Tax Returns specifically relate to SCTI and its
Subsidiaries, be prepared and filed in a manner consistent in all material
respects (including elections and accounting methods and conventions) with the
Tax Return most recently filed in the relevant jurisdictions prior to the date
hereof, except as otherwise required by law or regulation. Each of SCTI and its
Subsidiaries has paid or will pay all Taxes that may now or hereafter be due
with respect to the taxable periods covered by such consolidated or combined Tax
Returns.
3. Neither SCTI nor its Subsidiaries have agreed, or are required, to make
any adjustment (x) under Section 481(a) of the Code by reason of a change in
accounting method or otherwise or (y) pursuant to any provision of the Tax
Reform Act of 1986, the Revenue Act of 1987 or the Technical and Miscellaneous
Revenue Act of 1988.
4. There is no (nor has there been any request for an) agreement, waiver or
consent providing for an extension of time with respect to the assessment of any
Taxes attributable to SCTI or its Subsidiaries, or their assets or operations
and no power of attorney granted by SCTI or its Subsidiaries with respect to any
Tax matter is currently in force.
5. There is no action, suit, proceeding, investigation, audit, claim,
demand, deficiency or additional assessment in progress, pending or threatened
against or with respect to any Tax attributable to SCTI, its Subsidiaries or
their assets or operations.
6. All amounts required to be withheld as of the Closing Date for Taxes or
otherwise have been withheld and paid when due to the appropriate agency or
authority.
7. There shall be delivered or made available to ATYD at or prior to Closing
true and complete copies of all income Tax Returns (or with respect to
consolidated or combined returns, the portion thereof) and any other Tax Returns
requested by ATYD as may be relevant to SCTI, its Subsidiaries, or their assets
or operations for any and all periods ending after December 31, 1998, or for any
Tax years which are subject to audit or investigation by any taxing authority or
entity.
(m) Environmental Matters.
1. At all times prior to the date hereof, SCTI and its Subsidiaries have
complied in all material respects with applicable environmental laws, orders,
regulations, rules and ordinances relating to the Properties (as hereinafter
defined), the violation of which would have a material adverse effect on the
business or financial condition of SCTI and its Subsidiaries, taken as a whole,
or which would require a payment by SCTI or its Subsidiaries in excess of
$2,000 in the aggregate, and which have been duly adopted, imposed or
promulgated by any legislative, executive, administrative or judicial body or
officer of any Governmental Body.
2. The environmental licenses, permits and authorizations that are material
to the operations of SCTI and its Subsidiaries, taken as a whole, are in full
force and effect.
8. Stock Market Application.
--------------------------
ATYD is a Nevada public corporation that currently trades on the Pink
Sheets. Upon completion of the Closing, R Capital agrees to assist ATYD with
(i) obtain a new CUSIP number; (ii) obtain a new trading symbol, (iii) undertake
any other matters required to effectuate the transactions contemplated by this
Agreement, (iv) assist with the preparation and filing of an initial filing and
SEC review of a Form 10-SB; and (v) upon approval of such 10-SB, assist SCTI
with filing an application for trading on the over-the-counter bulletin or, if
SCTI meets the other qualifications, the American Stock Exchange or the Nasdaq
Small Cap Market, including without limitation responding to any and all
comments or other information requests received by any such market. SCTI will
be responsible for any and all costs associated with such filing (excluding
legal costs) including applicable audit costs.
9.Notices.
-------
Any notice which any of the parties hereto may desire to serve upon any of
the other parties hereto shall be in writing and shall be conclusively deemed to
have been received by the party at its address, if mailed, postage prepaid,
United States mail, registered, return receipt requested, to the following
addresses:
If to ATYD c/o Cutler Law Group
0000 Xxxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: M. Xxxxxxx Xxxxxx
If to SCTI: Stem Cell Therapy International, Inc.
0000 X. Xxxx Xxxxxx, 0xx Xxxxx
Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx Xxx, President
If to R Capital: c/o Cutler Law Group
0000 Xxxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: M. Xxxxxxx Xxxxxx
10. Successors.
----------
This Agreement shall be binding upon and inure to the benefit of the heirs,
personal representatives and successors and assigns of the parties.
11. Choice of Law.
---------------
This Agreement shall be construed and enforced in accordance with the laws
of the State of New York, and the parties submit to the exclusive jurisdiction
of the courts of New York in respect of all disputes arising hereunder.
12. Counterparts.
------------
This Agreement may be signed in one or more counterparts, all of which
taken together shall constitute an entire agreement.
13. Confidential Information.
-------------------------
Each of ATYD, SCTI and R Capital hereby acknowledges and agrees that all
information disclosed to each other whether written or oral, relating to the
other's business activities, its customer names, addresses, all operating plans,
information relating to its existing services, new or envisioned products or
services and the development thereof, scientific, engineering, or technical
information relating to the others business, marketing or product promotional
material, including brochures, product literature, plan sheets, and any and all
reports generated to customers, with regard to customers, unpublished list of
names, and all information relating to order processing, pricing, cost and
quotations, and any and all information relating to relationships with
customers, is considered confidential information, and is proprietary to, and is
considered the invaluable trade secret of such party (collectively "Confidential
Information"). Any disclosure of any Confidential Information by any party
hereto, its employees, or representatives shall cause immediate, substantial,
and irreparable harm and loss to the other. Each party understands that the
other desires to keep such Confidential Information in the strictest confidence,
and that such party's agreement to do so is a continuing condition of the
receipt and possession of Confidential Information, and a material provision of
this agreement, and a condition that shall survive the termination of this
Agreement. Consequently, each party shall use Confidential Information for the
sole purpose of performing its obligations as provided herein.
14. Public Announcement.
--------------------
The parties shall make no public announcement concerning this agreement,
their discussions or any other letters, memos or agreements between the parties
relating to this agreement until such time as they agree to the contents of a
mutually satisfactory press release which they intend to release on the date of
execution of this Agreement. Either of the parties, but only after reasonable
consultation with the other, may make disclosure if required under applicable
law.
15. Entire Agreement.
-----------------
This Agreement sets forth the entire agreement and understanding of the
Parties hereto with respect to the transactions contemplated hereby, and
supersedes all prior agreements, arrangements and understandings related to the
subject matter hereof. No understanding, promise, inducement, statement of
intention, representation, warranty, covenant or condition, written or oral,
express or implied, whether by statute or otherwise, has been made by any Party
hereto which is not embodied in this Agreement or the written statements,
certificates, or other documents delivered pursuant hereto or in connection with
the transactions contemplated hereby, and no party hereto shall be bound by or
liable for any alleged understanding, promise, inducement, statement,
representation, warranty, covenant or condition not so set forth.
16. Costs and Expenses.
--------------------
Except as otherwise specifically set forth herein, each party will bear its
own attorneys, brokers, investment bankers, agents, and finders employed by,
such party. The parties will indemnify each other against any claims, costs,
losses, expenses or liabilities arising from any claim for commissions, finder's
fees or other compensation in connection with the transactions contemplated
herein which may be asserted by any person based on any agreement or arrangement
for payment by the other party.
17. Attorney's Fees.
-----------------
Should any action be commenced between the parties to this Agreement
concerning the matters set forth in this Agreement or the right and duties of
either in relation thereto, the prevailing party in such Action shall be
entitled, in addition to such other relief as may be granted, to a reasonable
sum as and for its Attorney's Fees and Costs.
18. Finders.
--------
ATYD represents and warrants that there are no finders or other parties
which have represented ATYD in connection with this transaction other than R
Capital which have not received appropriate compensation. In the event any such
finders make a claim for any fee, share issuance of other compensation in
connection with the transactions contemplated hereby, they shall be the sole
responsibility of ATYD. SCTI represents and warrants that there are no finders
or other parties which have represented SCTI in connection with this
transaction. In the event any such finders make a claim for any fee, share
issuance of other compensation in connection with the transactions contemplated
hereby, they shall be the sole responsibility of SCTI.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
For and on behalf of: Altadyne, Inc.
a Nevada corporation
By:__________________________
M. Xxxxxxx Xxxxxx
President
For and on behalf of: Stem Cell Therapy International, Corp.
a Nevada corporation
By:__________________________
Xxxxxx Xxx
President
For and on behalf of: R Capital Partners, Inc.
a Nevada corporation
[GRAPHIC OMITED]
By:__________________________
M. Xxxxxxx Xxxxxx
President
