AGREEMENT AND PLAN OF SHARE EXCHANGE
by and among
AuraSound, Inc.,
a California corporation
and
the Shareholders of
AuraSound, Inc.,
on the one hand;
and
Hemcure, Inc.,
an Nevada corporation,
SBC Business Consulting, LLC,
a Delaware limited liability company,
and
Xxxxxx X. Xxxxxxx,
an individual,
on the other hand
February 16, 2007
AGREEMENT AND PLAN OF SHARE EXCHANGE
This Agreement and Plan of Share Exchange, dated as of February 16, 2007
(this "Agreement"), is made and entered into by and among AuraSound, Inc., a
California corporation ("Aura Sound"), and the shareholders of Aura Sound listed
on Schedule I attached hereto (each, an "Aura Sound Shareholder", collectively,
the "Aura Sound Shareholders"), on the one hand; and Hemcure, Inc., a publicly
traded Nevada corporation (OTCBB: HMCU) ("Hemcure"), Synergy Business
Consulting, LLC, a Delaware limited liability company and the majority
shareholder of Hemcure ("SBC"), and Xxxxxx X. Xxxxxxx, the managing member of
SBC ("Xxxxxxx"), on the other hand.
RECITALS
WHEREAS, the respective boards of directors of Hemcure and Aura Sound have
adopted resolutions approving and adopting the share exchange described in this
Agreement (the "Exchange") upon the terms and conditions set forth herein;
WHEREAS, the Exchange ratio is 1 share of Hemcure common stock for each
share of Aura Sound common stock;
WHEREAS, after giving effect to the Share Cancellation Agreement, dated on
or about January 4, 2007, by and among Aura Sound, Xxxxxx Xxx and each of the
Aura Sound shareholders signatory thereto (the "Share Cancellation Agreement"),
and the Note Conversion Agreement and Release, dated on or about February 16,
2007, by and among Aura Sound and the lenders of Aura Sound signatory thereto
(the "Note Conversion Agreement)", each Aura Sound Shareholder owns the number
of shares of common stock of Aura Sound set forth opposite such Aura Sound
Shareholder's name in Column I on Schedule I attached hereto (collectively, the
"Aura Sound Shares");
WHEREAS, the Aura Sound Shareholders own, collectively, an amount of
shares of common stock of Aura Sound constituting at least 90% of the issued and
outstanding capital stock of Aura Sound, and the Aura Sound Shareholders desire
to exchange their respective portions of the Aura Sound Shares pursuant to the
terms and conditions of this Agreement;
WHEREAS, SBC and Xxxxxxx will enter into this Agreement for the purpose of
making certain representations, warranties, covenants, indemnifications and
agreements;
WHEREAS, Aura Sound will enter into this Agreement for the purpose of
evidencing its consent to the consummation of the Exchange and for the purpose
of making certain representations, warranties, covenants and agreements;
WHEREAS, it is intended that the terms and conditions of this Agreement
comply in all respects with Section 368(a)(1)(B) of the Internal Revenue Code
(the "Code") and the regulations corresponding thereto, so that the Exchange
shall qualify as a tax free reorganization under the Code;
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree
as follows:
ARTICLE 1
THE EXCHANGE
1.1 Exchange of Shares. Upon the terms and subject to the conditions
hereof, at the Closing the Aura Sound Shareholders will sell, convey, assign,
transfer and deliver to Hemcure stock certificates representing the Aura Sound
Shares, and Hemcure will issue to each Aura Sound Shareholder, in exchange for
such Aura Sound Shareholder's pro rata portion of the Aura Sound Shares, one or
more stock certificates representing the number of shares of Hemcure common
stock set forth opposite such Aura Sound Shareholder's name in Column II on
Schedule I attached hereto (collectively, the "Hemcure Shares"). The aggregate
number of Hemcure Shares to be issued to the Aura Sound Shareholders will not
exceed 11,505,305 shares of common stock.
1.2 Closing. The closing of the Exchange (the "Closing") shall take place
on the date when all of the closing conditions set forth in Article 7 of this
Agreement are either satisfied or waived, or on such other date as may be
mutually agreed upon by the parties. Such date is referred to herein as the
"Closing Date".
1.3 Articles of Exchange. Immediately following the Closing, Hemcure shall
file Articles of Exchange with the Secretary of State of Nevada, in the form of
Exhibit A hereto. The transactions contemplated by this Agreement shall become
effective at such time as the Articles of Exchange are duly filed in the State
of Nevada pursuant to Section 92A.240 of the Nevada Revised Statutes.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF AURA SOUND
Aura Sound hereby represents and warrants to Hemcure as follows:
2.1 Organization. Aura Sound has been duly incorporated, is validly
existing as a corporation and is in good standing under the laws of its
jurisdiction of incorporation, and has the requisite power to carry on its
business as now conducted.
2.2 Capitalization. The authorized capital stock of Aura Sound consists of
100,000,000 shares of common stock, no par value, of which 11,505,305 shares
will be issued and outstanding at the Closing after giving effect to the Share
Cancellation Agreement and the Note Conversion Agreement. All of the issued and
outstanding shares of capital stock of Aura Sound are duly authorized, validly
issued, fully paid, non-assessable and free of preemptive rights. There are no
voting trusts or any other agreements or understandings with respect to the
voting of Aura Sound's capital stock.
2.3 Certain Corporate Matters. Aura Sound is duly qualified to do business
as a corporation and is in good standing in each jurisdiction in which the
ownership of its properties, the employment of its personnel or the conduct of
its business requires it to be so qualified, except where the failure to be so
qualified would not have a material adverse effect on Aura Sound's financial
condition, results of operations or business. Aura Sound has full corporate
power and authority and all authorizations, licenses and permits necessary to
carry on the business in which it is engaged and to own and use the properties
owned and used by it.
2.4 Authority Relative to this Agreement. Aura Sound has the requisite
power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by Aura Sound and the consummation by Aura Sound of the transactions
contemplated hereby have been duly authorized by the board of directors of Aura
Sound and no other actions on the part of Aura Sound are necessary to authorize
this Agreement or the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by Aura Sound and constitutes a valid
and binding agreement of Aura Sound, enforceable against Aura Sound in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
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2.5 Consents and Approvals; No Violations. Except for applicable
requirements of federal securities laws and state securities or blue-sky laws,
no filing with, and no permit, authorization, consent or approval of, any third
party, public body or authority is necessary for the consummation by Aura Sound
of the transactions contemplated by this Agreement. Neither the execution and
delivery of this Agreement by Aura Sound nor the consummation by Aura Sound of
the transactions contemplated hereby, nor compliance by Aura Sound with any of
the provisions hereof, will (a) conflict with or result in any breach of any
provisions of the charter or bylaws of Aura Sound, (b) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation to
which Aura Sound is a party or by which it or any of its properties or assets
may be bound or (c) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to Aura Sound, or any of its properties or assets,
except in the case of clauses (b) and (c) for violations, breaches or defaults
which are not individually or in the aggregate material to Aura Sound.
2.6 Financial Statements.
(a) Aura Sound has provided Hemcure with a copy of the audited
balance sheet of Aura Sound as at March 31, 2004 and 2005, and the related
statement of operations, stockholders' equity and cash flows for the two fiscal
years then ended, together with the unqualified report thereon (except with
respect to continuation as a going concern) of Xxxxxx & Co., LLP ("Xxxxxx"),
independent auditors (collectively, "Aura Sound's Audited Financials").
(b) Included in Aura Sound's Audited Financials are the unaudited
balance sheet of Aura Sound as at December 31, 2006, and the related statement
of operations, stockholders' equity and cash flows for the nine months then
ended, as reviewed by Xxxxxx ("Aura Sound's Interim Financials").
(c) Aura Sound's Audited Financials and Aura Sound's Interim
Financials (collectively "Aura Sound's Financial Statements") (i) are in
accordance with the books and records of Aura Sound, (ii) are correct and
complete in all material respects, (iii) fairly present the financial position
and results of operations of Aura Sound as of the dates indicated, and (iv) are
prepared in accordance with U.S. GAAP (except that (x) unaudited financial
statements may not be in accordance with GAAP because of the absence of
footnotes normally contained therein, and (y) interim (unaudited) financials are
subject to normal year-end audit adjustments that in the aggregate will not have
a material adverse effect on Aura Sound, its business, financial condition or
results of operations.
(d) AuraSound's Financial Statements constitute all of the financial
statements of AuraSound required to be included in the Form 8-K due to be filed
with the SEC by Hemcure within four business days of the Closing Date.
2.7 Tax Matters.
(a) Aura Sound has duly filed all federal, state, local and foreign
tax returns required to be filed by or with respect to it with the Internal
Revenue Service or other applicable taxing authority, and no extensions with
respect to such tax returns have been requested or granted.
(b) Aura Sound has paid, or adequately reserved against in Aura
Sound's Financial Statements, all material taxes due, or claimed by any taxing
authority to be due, from or with respect to them.
(c) To the best knowledge of Aura Sound, there has been no material
issue raised or material adjustment proposed (and none is pending) by the
Internal Revenue Service or any other taxing authority in connection with any of
Aura Sound's tax returns.
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(d) No waiver or extension of any statute of limitations as to any
material federal, state, local or foreign tax matter has been given by or
requested from Aura Sound.
For the purposes of this Section 2.7, a tax is due (and must
therefore either be paid or adequately reserved against in Aura Sound's
Financial Statements) only on the last date payment of such tax can be made
without interest or penalties, whether such payment is due in respect of
estimated taxes, withholding taxes, required tax credits or any other tax.
2.8 Books and Records. The books and records of Aura Sound delivered to
Hemcure prior to the Closing fully and fairly reflect the transactions to which
Aura Sound is a party or by which its properties are bound.
2.9 Questionable Payments. Neither Aura Sound, nor any employee, agent or
representative of Aura Sound has, directly or indirectly, made any bribes,
kickbacks, illegal payments or illegal political contributions using Company
funds or made any payments from Aura Sound's funds to governmental officials for
improper purposes or made any illegal payments from Aura Sound's funds to obtain
or retain business.
2. 10 Intellectual Property. Aura Sound has no knowledge of any claim
that, or inquiry as to whether, any product, activity or operation of Aura Sound
infringes upon or involves, or has resulted in the infringement of, any
trademarks, trade-names, service marks, patents, copyrights or other proprietary
rights of any other person, corporation or other entity; and no such proceedings
have been instituted, are pending or are threatened.
2.11 Litigation. Aura Sound is not subject to any judgment or order of any
court or quasijudicial or administrative agency of any jurisdiction, domestic or
foreign, nor is there any charge, complaint, lawsuit or governmental
investigation pending against Aura Sound. Aura Sound is not a plaintiff in any
action, domestic or foreign, judicial or administrative. There are no existing
actions, suits, proceedings against or investigations of Aura Sound, and Aura
Sound knows of no basis for such actions, suits, proceedings or investigations.
There are no unsatisfied judgments, orders, decrees or stipulations affecting
Aura Sound or to which Aura Sound is a party.
2.12 Legal Compliance. To the best knowledge of Aura Sound, after due
investigation, no claim has been filed against Aura Sound alleging a violation
of any applicable laws or regulations of foreign, federal, state and local
governments and all agencies thereof. Aura Sound holds all of the material
permits, licenses, certificates or other authorizations of foreign, federal,
state or local governmental agencies required for the conduct of its business as
presently conducted; provided, however, Hemcure expressly acknowledges that
there are pending petitions with the U.S. Patent and Trademark Office to revive
seven of Aura Sound's patents, which lapsed due to an inadvertent failure to pay
the required maintenance fees, and that those seven patents are not considered
invalid or unenforceable for the pendency of those petitions.
2.13 Disclosure. The representations and warranties and statements of fact
made by Aura Sound in this Agreement are, as applicable, accurate, correct and
complete and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained herein not false or misleading.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE AURA SOUND SHAREHOLDERS
The Aura Sound Shareholders hereby represent and warrant to Hemcure as
follows:
3.1 Ownership of the Aura Sound Shares. Each Aura Sound Shareholder owns,
beneficially and of record, good and marketable title to the Aura Sound Shares
set forth opposite such Aura Sound Shareholder's name in Column I on Schedule I
attached hereto, free and clear of all security interests, liens, adverse
claims, encumbrances, equities, proxies, options or stockholders' agreements.
Each Aura Sound Shareholder represents that such person has no right or claims
whatsoever to any shares of Aura Sound capital stock, other than shares listed
opposite such Aura Sound Shareholder's name in Column I on Schedule I and does
not have any options, warrants or any other instruments entitling such Aura
Sound Shareholder to exercise to purchase or convert into shares of Aura Sound
capital stock. At the Closing, the Aura Sound Shareholders will convey to
Hemcure good and marketable title to the Aura Sound Shares, free and clear of
any security interests, liens, adverse claims, encumbrances, equities, proxies,
options, stockholders' agreements or restrictions.
3.2 Authority Relative to this Agreement. This Agreement has been duly and
validly executed and delivered by each Aura Sound Shareholder and constitutes a
valid and binding agreement of each Aura Sound Shareholder, enforceable against
each Aura Sound Shareholder in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity.
3.3 Restricted Securities. Each Aura Sound Shareholder acknowledges that
the Hemcure Shares will not be registered pursuant to the Securities Act of
1933, as amended (the "Securities Act") or any applicable state securities laws,
that the Hemcure Shares will be characterized as "restricted securities" under
federal securities laws, and that under such laws and applicable regulations the
Hemcure Shares cannot be sold or otherwise disposed of without registration
under the Securities Act or an exemption therefrom. In this regard, each Aura
Sound Shareholder is familiar with Rule 144 promulgated under the Securities
Act, as currently in effect, and understands the resale limitations imposed
thereby and by the Securities Act.
3.4 Accredited Investor. Each Aura Sound Shareholder is an "Accredited
Investor" as that term is defined in rule 501 of Regulation D promulgated under
the Securities Act. Each Aura Sound Shareholder is able to bear the economic
risk of acquiring the Hemcure Shares pursuant to the terms of this Agreement,
including a complete loss of such Aura Sound Shareholder's investment in the
Hemcure Shares.
3.5 Legend. Each Aura Sound Shareholder acknowledges that the
certificate(s) representing such Aura Sound Shareholder's pro rata portion of
the Hemcure Shares shall each conspicuously set forth on the face or back
thereof a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO
THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
HEMCURE, SBC AND XXXXXXX
Hemcure, SBC and Xxxxxxx hereby represent and warrant, jointly and
severally, to Aura Sound and the Aura Sound Shareholders as follows:
4.1 Organization. Hemcure is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
and has the requisite corporate power to carry on its business as now conducted.
4.2 Capitalization. Hemcure's authorized capital stock consists of (i)
100,000,000 shares of common stock, of which 563,695 shares are issued and
outstanding, and (ii) 20,000,000 shares of preferred stock, none of which are
issued and outstanding. At the Closing, Hemcure shall have no more than
17,505,305 issued and outstanding shares of common stock (including all shares
of common stock sold in the private placement described in Section 7.1(c) of
this Agreement). All issued and outstanding shares of Hemcure capital stock are
duly authorized, validly issued, fully paid, non-assessable and free of
preemptive rights. When issued, the Hemcure Shares will be duly authorized,
validly issued, fully paid, non-assessable and free of preemptive rights. There
are no outstanding or authorized options, rights, warrants, calls, convertible
securities, rights to subscribe, conversion rights or other agreements or
commitments to which Hemcure is a party or which are binding upon Hemcure
providing for the issuance by Hemcure or transfer by Hemcure of additional
shares of Hemcure's capital stock and Hemcure has not reserved any shares of its
capital stock for issuance, nor are there any outstanding stock option rights,
phantom equity or similar rights, contracts, arrangements or commitments to
issue capital stock of Hemcure. To Hemcure's, SBC's and Xxxxxxx'x knowledge,
there are no voting trusts or any other agreements or understandings with
respect to the voting of Hemcure's capital stock. There are no obligations of
Hemcure to repurchase, redeem or otherwise re-acquire any shares of its capital
stock as of the Closing. Other than (a) the shares of Hemcure common stock to be
registered pursuant to an anticipated convertible loan to Hemcure at or after
the Closing in the principal amount of $5,500,000 and the shares of Hemcure
common stock to be registered pursuant to the PPM (as defined in Section 7.1(c)
hereof), (b) 1,229,476 shares of common stock held or to be held by Next Stage
Investments, LLC, (c) 619,329 shares held or to be held by Galway Holdings, LLC,
and (d) 1,285,714 shares of common stock underlying warrants issued to certain
bridge lenders of Aura Sound, Hemcure does not have any outstanding obligations
to register any of its shares of capital stock with the Securities and Exchange
Commission.
4.3 Certain Corporate Matters. Hemcure is duly licensed or qualified to do
business and is in good standing as a foreign corporation in every jurisdiction
in which the character of Hemcure's properties or nature of Hemcure's business
requires it to be so licensed or qualified other than such jurisdictions in
which the failure to be so licensed or qualified does not, or insofar as can
reasonably be foreseen, in the future will not, have a material adverse effect
on its financial condition, results of operations or business. Hemcure has full
corporate power and authority and all authorizations, licenses and permits
necessary to carry on the business in which it is engaged or in which it
proposes presently to engage and to own and use the properties owned and used by
it. Hemcure has delivered to Aura Sound true, accurate and complete copies of
its certificate or articles of incorporation and bylaws, which reflect all
restatements of and amendments made thereto at any time prior to the date of
this Agreement. The records of meetings of the stockholders and board of
directors of Hemcure are complete and correct in all material respects. The
stock records and stockholder list of Hemcure that Hemcure has previously
furnished to Aura Sound are complete and correct in all material respects and
accurately reflect the record ownership and the beneficial ownership of all the
outstanding shares of Hemcure's capital stock and any other outstanding
securities issued by Hemcure. Hemcure is not in default under or in violation of
any provision of its certificate or articles of incorporation or bylaws in any
material respect. Hemcure is not in any material default or in violation of any
restriction, lien, encumbrance, indenture, contract, lease, sublease, loan
agreement, note or other obligation or liability by which it is bound or to
which any of its assets is subject.
4.4 Authority Relative to this Agreement. Each of Hemcure, SBC and Xxxxxxx
has the requisite power and authority to enter into this Agreement and carry out
its or his obligations hereunder. The execution, delivery and performance of
this Agreement by Hemcure and the consummation of the transactions contemplated
hereby have been duly authorized by the board of directors of Hemcure and no
other actions on the part of Hemcure are necessary to authorize this Agreement
or the transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by Hemcure, SBC and Xxxxxxx and constitutes a
valid and binding obligation of Hemcure, SBC and Xxxxxxx, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
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4.5 Consents and Approvals; No Violations. Except for applicable
requirements of federal securities laws and state securities or blue-sky laws,
no filing with, and no permit, authorization, consent or approval of, any third
party, public body or authority is necessary for the consummation by Hemcure of
the transactions contemplated by this Agreement. Neither the execution and
delivery of this Agreement by Hemcure nor the consummation by Hemcure of the
transactions contemplated hereby, nor compliance by Hemcure with any of the
provisions hereof, will (a) conflict with or result in any breach of any
provisions of the charter or bylaws of Hemcure, (b) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation to
which Hemcure (as hereinafter defined) is a party or by which they or any of
their respective properties or assets may be bound or (c) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to Hemcure, or
any of their respective properties or assets, except in the case of clauses (b)
and (c) for violations, breaches or defaults which are not in the aggregate
material to Hemcure taken as a whole.
4.6 SEC Documents. Hemcure hereby makes reference to the following
documents filed with the United States Securities and Exchange Commission (the
"SEC"), as posted on the SEC's website, xxx.xxx.xxx: (collectively, the "SEC
Documents"): (a) Annual Report on Form 10-KSB for the fiscal years ended June
30, 2006 and 2004; (b) Form 10-SB12G/A filed with the SEC on October 17, 2005,
and (c) Quarterly Reports on Form 10-QSB for the periods ended September 30,
December 31 and March 31, 2005 and 2004; and (c) Quarterly Reports on Form
10-QSB for the periods ended September 30 and December 31, 2006; and any
amendments thereto. The SEC Documents constitute all of the documents and
reports that Hemcure was required to file with the SEC pursuant to the
Securities Exchange Act of 1934 ("Exchange Act") and the rules and regulations
promulgated thereunder by the SEC since June 30, 2004. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Securities Act and/or the Exchange Act, as the case may require, and the
rules and regulations promulgated thereunder and none of the SEC Documents
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
financial statements of Hemcure included in the SEC Documents comply as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles in the
United States ("GAAP") (except, in the case of unaudited statements, as
permitted by the applicable form under the Securities Act or the Exchange Act)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the financial position of
Hemcure as of the dates thereof and its consolidated statements of operations,
stockholders' equity and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal and recurring year-end audit adjustments
which were and are not expected to have a material adverse effect on Hemcure,
its business, financial condition or results of operations). Except as and to
the extent set forth on the balance sheet of Hemcure as of December 31, 2006,
including the notes thereto, Hemcure has no liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise and whether required
to be reflected on a balance sheet or not).
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4.7 Financial Statements.
(a) Included in the SEC Documents are the audited balance sheets of
Hemcure as at June 30, 2006, 2005 and 2004, and the related statements of
operations, stockholders' equity and cash flows for the three years then ended,
together with the unqualified report thereon (except with respect to
continuation as a going concern) of Xxxxxxxxxx & Associates ("Xxxxxxxxxx"),
independent auditors (collectively, "Hemcure's Audited Financials").
(b) Included in the SEC Documents are the unaudited balance sheet of
Hemcure as at December 31, 2006, and the related statements of operations,
stockholders' equity and cash flows for the three months then ended, as reviewed
by Xxxxxxxxxx ("Hemcure's Interim Financials").
(c) Hemcure's Audited Financials and Hemcure's Interim Financials
(collectively "Hemcure's Financial Statements") (i) are in accordance with the
books and records of Hemcure, (ii) are correct and complete in all material
respects, (iii) fairly present the financial position and results of operations
of Hemcure as of the dates indicated, and (iv) are prepared in accordance with
GAAP (except that (x) unaudited financial statements may not be in accordance
with GAAP because of the absence of footnotes normally contained therein, and
(y) interim (unaudited) financials are subject to normal year-end audit
adjustments that in the aggregate will not have a material adverse effect on
Hemcure , their respective businesses, financial condition or results of
operations.
4.8 Events Subsequent to Financial Statements. Since June 30, 2006, there
has not been:
(a) Any sale, lease, transfer, license or assignment of any assets,
tangible or intangible, of Hemcure;
(b) Any damage, destruction or property loss, whether or not covered
by insurance, affecting adversely the properties or business of Hemcure;
(c) Any declaration or setting aside or payment of any dividend or
distribution with respect to the shares of capital stock of Hemcure or any
redemption, purchase or other acquisition of any such shares;
(d) Any subjection to any lien on any of the assets, tangible or
intangible, of Hemcure;
(e) Any incurrence of indebtedness or liability or assumption of
obligations by Hemcure;
(f) Any waiver or release by Hemcure of any right of any material
value;
(g) Any compensation or benefits paid to officers or directors of
Hemcure;
(h) Any change made or authorized in the articles of incorporation
or bylaws of Hemcure, except for the change to the articles of incorporation and
by-laws made incident to re-domiciling from Minnesota to Nevada;
(i) Any loan to or other transaction with any officer, director or
stockholder of Hemcure giving rise to any claim or right of Hemcure against any
such person or of such person against Hemcure; or
(j) Any material adverse change in the condition (financial or
otherwise) of the respective properties, assets, liabilities or business of
Hemcure.
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4.9 Liabilities. Except as otherwise disclosed in Hemcure's Financial
Statements, Hemcure does not have any liability or obligation whatsoever, either
direct or indirect, matured or unmatured, accrued, absolute, contingent or
otherwise. In addition, Hemcure, SBC and Xxxxxxx represent that upon Closing,
Hemcure will not have any liability or obligation whatsoever, either direct or
indirect, matured or unmatured, accrued, absolute, contingent or otherwise.
4.10 Tax Matters.
(a) Hemcure has duly filed all federal, state, local and foreign tax
returns required to be filed by or with respect to it with the Internal Revenue
Service or other applicable taxing authority, and no extensions with respect to
such tax returns have been requested or granted;
(b) Hemcure has paid, or adequately reserved against in Hemcure's
Financial Statements, all material taxes due, or claimed by any taxing authority
to be due, from or with respect to them;
(c) To the best knowledge of Hemcure, there has been no material
issue raised or material adjustment proposed (and none is pending) by the
Internal Revenue Service or any other taxing authority in connection with any of
Hemcure's tax returns;
(d) No waiver or extension of any statute of limitations as to any
material federal, state, local or foreign tax matter has been given by or
requested from Hemcure; and
For the purposes of this Section 4.10, a tax is due (and must
therefore either be paid or adequately reserved against in Hemcure's Financial
Statements) only on the last date payment of such tax can be made without
interest or penalties, whether such payment is due in respect of estimated
taxes, withholding taxes, required tax credits or any other tax.
4.11 Real Property. Hemcure does not own or lease any real property.
4.12 Books and Records. The books and records of Hemcure delivered to Aura
Sound prior to the Closing fully and fairly reflect the transactions to which
Hemcure is a party or by which its properties are bound.
4.13 Questionable Payments. Neither Hemcure, nor any employee, agent or
representative of Hemcure has, directly or indirectly, made any bribes,
kickbacks, illegal payments or illegal political contributions using Company
funds or made any payments from Hemcure's funds to governmental officials for
improper purposes or made any illegal payments from Hemcure's funds to obtain or
retain business.
4.14 Intellectual Property. Hemcure does not own or use any trademarks,
trade names, service marks, patents, copyrights or any applications with respect
thereto. Hemcure, SBC and Xxxxxxx have no knowledge of any claim that, or
inquiry as to whether, any product, activity or operation of Hemcure infringes
upon or involves, or has resulted in the infringement of, any trademarks,
trade-names, service marks, patents, copyrights or other proprietary rights of
any other person, corporation or other entity; and no such proceedings have been
instituted, are pending or are threatened against Hemcure.
4.15 Insurance. Hemcure does not have any insurance policies in effect.
4.16 Contracts. Except as set forth on Schedule 4.16, Hemcure does not
have any material contracts, leases, arrangements or commitments (whether oral
or written). Hemcure is not a party to or bound by or affected by any contract,
lease, arrangement or commitment (whether oral or written) relating to: (a) the
employment of any person; (b) collective bargaining with, or any representation
of any employees by, any labor union or association; (c) the acquisition of
services, supplies, equipment or other personal property; (d) the purchase or
sale of real property; (e) distribution, agency or construction; (f) lease of
real or personal property as lessor or lessee or sublessor or sublessee; (g)
lending or advancing of funds; (h) borrowing of funds or receipt of credit; (i)
incurring any obligation or liability; or (j) the sale of personal property.
10
4.17 Litigation. Hemcure is not subject to any judgment or order of any
court or quasijudicial or administrative agency of any jurisdiction, domestic or
foreign, nor is there any charge, complaint, lawsuit or governmental
investigation pending against Hemcure. Hemcure is not a plaintiff in any action,
domestic or foreign, judicial or administrative. There are no existing actions,
suits, proceedings against or investigations of Hemcure, and Hemcure knows of no
basis for such actions, suits, proceedings or investigations. There are no
unsatisfied judgments, orders, decrees or stipulations affecting Hemcure or to
which Hemcure is a party.
4.18 Employees. Hemcure does not have any employees. Hemcure does not owe
any compensation of any kind, deferred or otherwise, to any current or previous
employees. Hemcure does not have a written or oral employment agreement with any
officer or director of Hemcure. Hemcure is not a party to or bound by any
collective bargaining agreement. There are no loans or other obligations payable
or owing by Hemcure to any stockholder, officer, director or employee of
Hemcure, nor are there any loans or debts payable or owing by any of such
persons to Hemcure or any guarantees by Hemcure of any loan or obligation of any
nature to which any such person is a party.
4.19 Employee Benefit Plans. Hemcure does not have any (a) non-qualified
deferred or incentive compensation or retirement plans or arrangements, (b)
qualified retirement plans or arrangements, (c) other employee compensation,
severance or termination pay or welfare benefit plans, programs or arrangements
or (d) any related trusts, insurance contracts or other funding arrangements
maintained, established or contributed to by Hemcure.
4.20 Legal Compliance. To the best knowledge of Hemcure, after due
investigation, no claim has been filed against Hemcure alleging a violation of
any applicable laws or regulations of foreign, federal, state and local
governments and all agencies thereof. Hemcure holds all of the material permits,
licenses, certificates or other authorizations of foreign, federal, state or
local governmental agencies required for its business as presently conducted.
4.21 Subsidiaries and Investments. Hemcure does not own any capital stock
or have any interest of any kind whatsoever in any corporation, partnership, or
other form of business organization.
4.22 Broker's Fees. Neither Hemcure, nor anyone on its behalf, has any
liability to any broker, finder, investment banker or agent, or has agreed to
pay any brokerage fees, finder's fees or commissions, or to reimburse any
expenses of any broker, finder, investment banker or agent in connection with
this Agreement.
4.23 Internal Accounting Controls. Hemcure maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Hemcure has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for Hemcure and designed such
disclosure controls and procedures to ensure that material information relating
to Hemcure is made known to the certifying officers by others within those
entities, particularly during the period in which Hemcure's Form 10-KSB or
10-QSB, as the case may be, is being prepared. Hemcure's certifying officers
have evaluated the effectiveness of Hemcure's controls and procedures as of end
of the filing period prior to the filing date of the Form 10-QSB for the quarter
ended December 31, 2006 (such date, the "Evaluation Date"). Hemcure presented in
its most recently filed Form 10-KSB or Form 10-QSB the conclusions of the
certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no significant changes in Hemcure's internal
controls (as such term is defined in Item 307(b) of Regulation S-K under the
Exchange Act) or, to the Company's knowledge, in other factors that could
significantly affect the Company's internal controls.
11
4.24 Listing and Maintenance Requirements. Hemcure's common stock is
currently quoted on the OTC Bulletin Board. Hemcure has not, since October 1,
2005, received any notice from the OTC Bulletin Board or the NASD or any trading
market on which Hemcure's common stock is or has been listed or quoted to the
effect that Hemcure is not in compliance with the quoting, listing or
maintenance requirements of the OTC Bulletin Board or such other trading market.
Hemcure is, and has no reason to believe that it will not, in the foreseeable
future continue to be, in compliance with all such quoting, listing and
maintenance requirements.
4.25 Application of Takeover Protections. Hemcure and its board of
directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under Hemcure's certificate or articles of incorporation
(or similar charter documents) or the laws of its state of incorporation that is
or could become applicable to Aura Sound or the Aura Sound Shareholders as a
result of the Exchange or the exercise of any rights by Aura Sound or the Aura
Sound Shareholders pursuant to this Agreement.
4.26 No SEC or NASD Inquiries. Neither Hemcure nor any of its past or
present officers or directors is, or has ever been, the subject of any formal or
informal inquiry or investigation by the SEC or NASD.
4.27 Disclosure. The representations and warranties and statements of fact
made by Hemcure in this Agreement are, as applicable, accurate, correct and
complete and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained herein not false or misleading.
ARTICLE 5
INDEMNIFICATION
5.1 SBC/Xxxxxxx Indemnification. For a period of one year after the
Closing, SBC and Xxxxxxx each agree, jointly and severally, to indemnify Aura
Sound, the Aura Sound Shareholders and each of the officers, agents and
directors of Aura Sound or the Aura Sound Shareholders against any loss,
liability, claim, damage or expense (including, but not limited to, any and all
expenses whatsoever reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever) (each
an "Indemnified Party") to which it or they may become subject arising out of or
based on either (i) any breach of or inaccuracy in any of the representations
and warranties or covenants or conditions made by Hemcure, SBC or Xxxxxxx in
this Agreement; (ii) any and all liabilities arising out of or in connection
with any of the assets, business or operations of Hemcure prior to the Closing,
or (iii) any breach of or inaccuracy in any of the representations and
warranties or covenants or conditions made by Hemcure in the XXXX Loan Agreement
or the Subscription Agreement attached as an exhibit to the PPM, in any case
only as such representations, warranties, covenants or conditions apply to
Hemcure prior to the Closing (collectively, the "Xxxxxxx Indemnification").
12
5.2 Indemnification Procedures. If any action shall be brought against an
Indemnified Party in respect of which indemnity may be sought pursuant to this
Agreement, such Indemnified Party shall promptly notify Xxxxxxx and SBC in
writing, and Xxxxxxx and SBC shall each have the right to assume the defense
thereof with counsel of his or its own choosing. Any Indemnified Party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party except to the extent that the employment
thereof has been specifically authorized by Xxxxxxx or SBC in writing, SBC and
Xxxxxxx have failed after a reasonable period of time to assume such defense and
to employ counsel or in such action there is, in the reasonable opinion of such
separate counsel, a material conflict on any material issue between the position
of SBC or Xxxxxxx and the position of such Indemnified Party. Neither SBC nor
Xxxxxxx will be liable to any Indemnified Party under this Article 5 for any
settlement by an Indemnified Party effected without SBC or Xxxxxxx'x prior
written consent, which shall not be unreasonably withheld or delayed.
ARTICLE 6
COVENANTS AND AGREEMENTS OF THE PARTIES
EFFECTIVE PRIOR TO CLOSING
6.1 Corporate Examinations and Investigations. Prior to the Closing, each
party shall be entitled, through its employees and representatives, to make such
investigations and examinations of the books, records and financial condition of
Aura Sound and Hemcure as each party may request. In order that each party may
have the full opportunity to do so, Aura Sound and Hemcure shall furnish each
party and its representatives during such period with all such information
concerning the affairs of Aura Sound or Hemcure as each party or its
representatives may reasonably request and cause Aura Sound or Hemcure and their
respective officers, employees, consultants, agents, accountants and attorneys
to cooperate fully with each party's representatives in connection with such
review and examination and to make full disclosure of all information and
documents requested by each party or its representatives. Any such
investigations and examinations shall be conducted at reasonable times and under
reasonable circumstances, it being agreed that any examination of original
documents will be at each party's premises, with copies thereof to be provided
to each party or its representatives upon request.
6.2 Cooperation; Consents. Prior to the Closing, each party shall
cooperate with the other parties to the end that the parties shall (i) in a
timely manner make all necessary filings with, and conduct negotiations with,
all authorities and other persons the consent or approval of which, or the
license or permit from which is required for the consummation of the Exchange
and (ii) provide to each other party such information as the other party may
reasonably request in order to enable it to prepare such filings and to conduct
such negotiations.
6.3 Conduct of Business. Subject to the provisions hereof, from the date
hereof through the Closing, each party hereto shall (i) conduct its business in
the ordinary course and in such a manner so that the representations and
warranties contained herein shall continue to be true and correct in all
material respects as of the Closing as if made at and as of the Closing and (ii)
not enter into any material transactions or incur any material liability not
required or specifically contemplated hereby, without first obtaining the
written consent of Aura Sound and the Aura Sound Shareholders on the one hand
and Hemcure, SBC and Xxxxxxx on the other hand. Without the prior written
consent of Aura Sound, the Aura Sound Shareholders, Hemcure, SBC or Xxxxxxx,
except as required or specifically contemplated hereby, each party shall not
undertake or fail to undertake any action if such action or failure would render
any of said warranties and representations untrue in any material respect as of
the Closing.
13
6.4 Litigation. From the date hereof through the Closing, each party
hereto shall promptly notify the representative of the other parties of any
lawsuits, claims, proceedings or investigations which after the date hereof are
threatened or commenced against such party or any of its affiliates or any
officer, director, employee, consultant, agent or shareholder thereof, in their
capacities as such, which, if decided adversely, could reasonably be expected to
have a material adverse effect upon the condition (financial or otherwise),
assets, liabilities, business, operations or prospects of such party or any of
its subsidiaries.
6.5 Notice of Default. From the date hereof through the Closing, each
party hereto shall give to the representative of the other parties prompt
written notice of the occurrence or existence of any event, condition or
circumstance occurring which would constitute a violation or breach of this
Agreement by such party or which would render inaccurate in any material respect
any of such party's representations or warranties herein.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of Aura Sound and the Aura Sound
Shareholders. The obligations of Aura Sound and the Aura Sound Shareholders
under this Agreement shall be subject to each of the following conditions:
(a) Closing Deliveries. At the Closing, Hemcure shall have delivered
or caused to be delivered to Aura Sound the following:
(i) resolutions duly adopted by the board of directors of
Hemcure authorizing and approving the Exchange and the execution,
delivery and performance of this Agreement;
(ii) a certificate of good standing for Hemcure from its
jurisdiction of incorporation, dated not earlier than five days
prior to the Closing Date;
(iii) written resignations of all officers and directors of
Hemcure in office immediately prior to the Closing, and board
resolutions electing the following individuals to the positions with
Hemcure listed opposite their names below:
Xxxxxx Xxx Chairman of the Board, Chief Executive
Officer and Chief Financial Officer
Xxxxxx North Vice President Engineering
Xxx Xxx Director
Xxxxx Xxxxx Secretary, Director
(iv) this Agreement duly executed by Hemcure, SBC and Xxxxxxx;
(v) all corporate records, agreements, seals and any other
information reasonably requested by Aura Sound's representatives
with respect to Hemcure; and
(vi) such other documents as Aura Sound or the Aura Sound
Shareholders may reasonably request in connection with the
transactions contemplated hereby.
(b) Representations and Warranties to be True. The representations
and warranties of Hemcure, SBC and Xxxxxxx herein contained shall be true in all
material respects at the Closing with the same effect as though made at such
time. Hemcure, SBC and Xxxxxxx shall have performed in all material respects all
obligations and complied in all material respects with all covenants and
conditions required by this Agreement to be performed or complied with by them
at or prior to the Closing.
14
(c) Private Placement. On or before the Closing Date, Hemcure and
AuraSound shall have in an escrow account for their collective benefit no less
than $6,000,000 in gross proceeds pursuant to the Confidential Private Placement
Memorandum, dated February 16, 2007, in connection with the reverse merger of
Hemcure and Aura Sound (the "PPM"), and such funds shall be released from escrow
at the Closing.
(d) SEC Filings. At the Closing, Hemcure will be current in all SEC
filings required by it to be filed.
(e) OTCBB Trading. Hemcure's common stock shall be quoted and
eligible for trading on the OTC Bulletin Board.
(f) Warrants. At the Closing, Hemcure shall issue the following
warrants:
(i) GP Group, LLC, an affiliate of the placement agent named
in the PPM, will receive a five year warrant to purchase 251,429 shares of
common stock at an exercise price of $1.40/share.
(ii) Mapleridge Investment Services, a bridge lender of
AuraSound, will receive a five-year warrant to purchase 428,571 shares of
Hemcure common stock at an exercise price of $1.75 per share.
(iii) Westrec Properties, Inc. and Affiliated Companies 401(k)
Plan, a bridge lender of AuraSound, will receive a five year warrant to purchase
428,571 shares of Hemcure common stock at an exercise price of $1.75/share.
(iv) Apex Investment Fund, Ltd., a bridge lender of AuraSound,
will receive a five year warrant to purchase 428,571 shares of common stock at
an exercise price of $1.75/share.
All of the foregoing warrants will be issued in form and
substance reasonably acceptable to AuraSound and as required by the applicable
transaction documents requiring the issuance of such warrants.
7.2 Conditions to Obligations of Hemcure, SBC and Xxxxxxx. The obligations
of Hemcure, SBC and Xxxxxxx under this Agreement shall be subject to each of the
following conditions:
(a) Closing Deliveries. On the Closing Date, Aura Sound or the Aura
Sound Shareholders shall have delivered to Hemcure the following:
(i) certificates representing the Aura Sound Shares, duly
endorsed in blank or each accompanied by a stock power effecting the
transfer thereof to Hemcure;
(ii) this Agreement duly executed by Aura Sound and the Aura
Sound Shareholders;
(iii) such other documents as Hemcure may reasonably request
in connection with the transactions contemplated hereby.
15
(b) Representations and Warranties to be True. The representations
and warranties of Aura Sound and the Aura Sound Shareholders herein contained
shall be true in all material respects at the Closing with the same effect as
though made at such time. Aura Sound and the Aura Sound Shareholders shall have
performed in all material respects all obligations and complied in all material
respects with all covenants and conditions required by this Agreement to be
performed or complied with by them at or prior to the Closing.
ARTICLE 8
TERMINATION
8.1 Events of Termination. This Agreement may, by notice given in the
manner hereinafter provided, be terminated and abandoned at any time prior to
completion of the Closing, as follows:
(a) by Aura Sound if (1) there has been a material Breach by Hemcure
and, in the case of a covenant or agreement Breach, such Breach shall not have
been cured within ten (10) days after receipt by Hemcure of notice specifying
particularly such Breach, (2) if Aura Sound identifies hereafter any fact,
circumstance or event that could be reasonably determined to have a material
adverse effect on Hemcure and such fact, circumstance or event is not cured by
Hemcure within ten (10) days after receipt by Hemcure of notice specifying
particularly such fact, event or circumstance, or (3) if the closing conditions
set forth in Article 7 have not been satisfied by the close of business on May
31, 2007;
(b) by Hemcure (1) if there has been a material Breach by Aura Sound
and, in the case of a covenant or agreement Breach, such Breach shall not have
been cured within ten (10) days after receipt by Aura Sound of notice specifying
particularly such Breach, or (2) if Hemcure identifies hereafter any fact,
circumstance or event that could be reasonably determined to have a material
adverse effect on Aura Sound, or Hemcure following the Merger, and such fact,
circumstance or event is not cured by Aura Sound within ten (10) days after
receipt by Aura Sound of notice specifying particularly such fact, event or
circumstance, or (3) if the closing conditions set forth in Article 7 have not
been satisfied by the close of business on May 31, 2007; or
(c) at any time by mutual written agreement of Aura Sound and
Hemcure.
This Agreement may not be terminated after completion of the
Closing, except by mutual agreement of Aura Sound and Hemcure.
For the purposes of this Article 8, there shall be deemed to be a
"Breach" of a representation, warranty, covenant, obligation, or other provision
if there is or has been (a) any inaccuracy (subject to applicable knowledge and
materiality qualifiers, if any) in, or breach of, or any failure to comply with,
or perform, such representation, warranty, covenant, obligation, or other
provision, or (b) any claim (by any person) or other circumstance that is
inconsistent with such representation, warranty, covenant, obligation, or other
provision; and the term "Breach" shall be deemed to refer to any such
inaccuracy, breach, failure, claim, or circumstance.
ARTICLE 9
GENERAL PROVISIONS
9.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
sent by overnight courier or mailed by registered or certified mail (postage
prepaid and return receipt requested) to the party to whom the same is so
delivered, sent or mailed at the addresses set forth on the signature page
hereof (or at such other address for a party as shall be specified by like
notice).
16
9.2 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer to
sections and articles of this Agreement unless otherwise stated.
9.3 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated and the parties shall negotiate
in good faith to modify this Agreement to preserve each party's anticipated
benefits under this Agreement.
9.4 Miscellaneous. This Agreement (together with all schedules, documents
and instruments referred to herein): (a) constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and oral,
among the parties with respect to the subject matter hereof; (b) except as
expressly set forth herein, is not intended to confer upon any other person any
rights or remedies hereunder and (c) shall not be assigned by operation of law
or otherwise, except as may be mutually agreed upon by the parties hereto.
9.5 Separate Counsel. Each party hereby expressly acknowledges that it has
been advised to seek its own separate legal counsel for advice with respect to
this Agreement, and that no counsel to any party hereto has acted or is acting
as counsel to any other party hereto in connection with this Agreement.
9.6 Governing Law; Venue. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of California.
Any and all actions brought under this Agreement shall be brought in the state
or federal courts of the United States sitting in the City of Los Angeles,
California and each party hereby waives any right to object to the convenience
of such venue.
9.7 Counterparts and Facsimile Signatures. This Agreement may be executed
in two or more counterparts, which together shall constitute a single agreement.
This Agreement and any documents relating to it may be executed and transmitted
to any other party by facsimile, which facsimile shall be deemed to be, and
utilized in all respects as, an original, wet-inked document.
9.8 Amendment. This Agreement may be amended, modified or supplemented
only by an instrument in writing executed by Hemcure, Aura Sound and the holders
of at least 75% of the Aura Sound Shares.
9.9 Parties In Interest: No Third Party Beneficiaries. Except as otherwise
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective heirs, legal representatives,
successors and assigns of the parties hereto. This Agreement shall not be deemed
to confer upon any person not a party hereto any rights or remedies hereunder.
9.10 Waiver. No waiver by any party of any default or breach by another
party of any representation, warranty, covenant or condition contained in this
Agreement shall be deemed to be a waiver of any subsequent default or breach by
such party of the same or any other representation, warranty, covenant or
condition. No act, delay, omission or course of dealing on the part of any party
in exercising any right, power or remedy under this Agreement or at law or in
equity shall operate as a waiver thereof or otherwise prejudice any of such
party's rights, powers and remedies. All remedies, whether at law or in equity,
shall be cumulative and the election of any one or more shall not constitute a
waiver of the right to pursue other available remedies.
17
9.11 Expenses. At or prior to the Closing, the parties hereto shall pay
all of their own expenses relating to the transactions contemplated by this
Agreement, including, without limitation, the fees and expenses of their
respective counsel and financial advisers.
9.12 Recitals Incorporated. The recitals of this Agreement are
incorporated herein and made a part hereof.
[SIGNATURES FOLLOW]
18
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Aura Sound, Inc.,
a California corporation
By: ___________________________
Name: Xxxxxx Xxx
Title: Chief Executive Officer
Address:
00000 Xxxx Xxxxx Xxxxxx
Xxxxx Xx Xxxxxxx, XX 00000
With a copy to (which shall not constitute notice):
Xxxxxxxxxx & Xxxxx, LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
[SIGNATURE PAGES OF AURA SOUND SHAREHOLDERS,
HEMCURE, SBC AND XXXXXXX FOLLOW]
19
[SIGNATURE PAGE OF AURA SOUND SHAREHOLDERS]
Name Signature Address
--------------------------------------------------------------------------------
Xxxxxx Xxx
--------------------------------------------------------------------------------
By:
Haztlacha Investment Its:
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx
--------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx
--------------------------------------------------------------------------------
Gimilis Chesed Xxxxx
Xxxxx B'Xxx Xxxx By:
Association Its:
--------------------------------------------------------------------------------
[INSERT AURA SOUND SHAREHOLDERS:]
20
[SIGNATURE PAGE OF HEMCURE, SBC AND XXXXXXX]
Hemcure, Inc., a Nevada corporation
By: __________________________
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
Synergy Business Consulting, LLC
By: __________________________
Xxxxxxx X. Xxxxxxx
Its: Managing Member
_______________________________
Xxxxxx X. Xxxxxxx, an individual
21
SCHEDULE I
Column I Column II
Name Number of Shares of Aura Sound Number of Shares of Hemcure
--------------------------------------------------------------------------------------------------
Xxxxxx Xxx 10,647,071 10,647,071
--------------------------------------------------------------------------------------------------
Haztlacha Investment 377,082 377,082
--------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxx 219,883 219,883
--------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 147,475 147,475
--------------------------------------------------------------------------------------------------
Gimilis Chesed Xxxxx Xxxxx
B'Xxx Xxxx Association 113,794 113,794
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Total 11,505,305 11,505,305
--------------------------------------------------------------------------------------------------
22
SCHEDULE 4.16
Hemcure, Inc. engages services from the following providers: ComputerShare
(transfer agent); Synergy Law Group, LLC (legal); Vintage Filings (XXXXX filing
services); and Xxxxxxxxxx & Associates, Inc. (accounting services).
23
EXHIBIT A
Form of Articles of Exchange (Nevada)
24
