REORGANIZATION AND PURCHASE AGREEMENT
This
Reorganization and Purchase Agreement (''Agreement'') dated as of the 15thday
of
October 2005, by and between Bluestar Health, Inc., a Colorado corporation
(“Bluestar”), Xxxxxx Xxxxxxx, an individual, (“Oglesby”), Blue Cat Holdings,
Inc., a Texas corporation wholly owned by Xxxxxxx, (“Blue Cat”), Gold Leaf
Homes, Inc., a Texas corporation, (“Gold Leaf”), and Xxx Xxxxxx, (“Xxxxxx”&“Shareholders”), the sole shareholder of Gold Leaf. Each entity and/or
individual shall also be referred to as a “Party” and collectively as the
“Parties.”
INTRODUCTION
Shareholders
desire to sell and Bluestar desires to purchase all of the issued and
outstanding capital stock of Gold Leaf Homes, Inc. (''Company'') on the terms
and conditions set forth in this Agreement.
In
consideration of the mutual promises of the parties; in reliance on the
representations, warranties, covenants, and conditions contained in this
Agreement; and for other good and valuable consideration, the parties agree
as
follows:
ARTICLE
1
SALE
Sale
of Stock
1.01.
Shareholders agree to sell, convey, transfer, assign, and deliver to Bluestar
all of the issued and outstanding capital stock of Gold Leaf, and Bluestar
agrees to purchase such stock.
Consideration
for Sale
1.02.
In
consideration of the sale and transfer of the shares of capital stock of Gold
Leaf and the representations, warranties, and covenants of Seller set forth
in
this Agreement, Bluestar shall pay the following:
1.02.01
Bluestar shall issue to Shareholders a total of Thirty Seven Million
(37,000,000) shares of Bluestar common stock;
Look-Back
Provision
1.03.
In
further consideration of such sale and transfer, the parties agree to a
look-back provision wherein the productivity of the Company will be evaluated.
Shareholders agree that if revenues of Gold Leaf (as acquired by Bluestar)
reduce by more than forty percent (40%) within the first twelve (12) month
period, Shareholders shall, upon request by Xxxxxxx, immediately transfer the
aforementioned Thirty Seven Million (37,000,000) shares of Bluestar common
stock
to Xxxxxx Xxxxxxx. In conjunction, Bluestar will reassign all previously
acquired Gold Leaf assets to Gold Leaf Shareholders.
Additional
Transactions
1.04.01.
In conjunction with the purchase and sale as set out above, Bluestar and Blue
Cat will enter into an Indemnification Agreement (as attached in Exhibit A)
wherein Blue Cat will acquire the assets and liabilities of Bluestar and provide
indemnification regarding same.
1.04.02
Shareholders shall purchase 250,000 shares of Bluestar restricted common stock
from Xxxxxxx (“Xxxxxxx Common Shares”) for $300,000 (“Xxxxxxx Shares Purchase
Price”);
1.04.03
The Xxxxxxx Shares Purchase Price shall be paid as follows:
| i. |
$60,000
payable at the time of Closing, with the balance in the form of a secured
promissory note (“Xxxxxxx Shares Purchase Note”), without interest,
payable as follows:
|
| ii. |
$20,000
payable on the 1st
day of each month for four (4) consecutive months, beginning January
6,
2006, followed by a payment in the amount of $10,000 due on May 6,
2006. A
copy of the Xxxxxxx Shares Purchase Note is attached hereto as Exhibit
B;
|
The
Xxxxxxx Shares Purchase Note shall be secured by 37,000,000 shares of Xxxxxx
owned Bluestar common stock with a personal guarantee executed by Xxxxxx in
the
amount $150,000.
1.04.04
As of the date of Closing, and as consideration for amounts owed to Xxxxxxx,
Bluestar shall execute a secured promissory note to Xxxxxxx in the amount of
$130,000 (“Xxxxxxx Stock Purchase Note);
| A. |
The
Xxxxxxx Stock Purchase Note shall be convertible into common stock
of
Bluestar at $0.10 per share at Xxxxxxx’x discretion, and shall contain a
clause so that his ownership cannot exceed 9.9% with an anti delusion
clause of the Bluestar common stock. A copy of the Xxxxxxx Stock Purchase
Note is attached hereto as Exhibit C.
|
| B. |
Bluestar
shall, within ninety (90) days following written notice by Xxxxxxx
of
intent to convert, register such stock with the United States Securities
and Exchange Commission (“SEC”).
|
1.04.05
Bluestar will file an amendment to the Articles of Incorporation of Bluestar
to
increase its authorized common stock from 40,000,000 shares to 100,000,000
shares and change its name to a name chosen by Gold Leaf, to be effective at
the
Closing;
1.04.06
As of the Closing date, Blue Cat Holdings, Inc. shall have acquired all of
the
assets and assumed all of the liabilities of Bluestar in accordance with the
Asset Purchase Agreement attached as Exhibit D.
Consulting
Agreement
1.05.
At
Closing, Bluestar will enter into an exclusive consulting and transition
agreement with Xxxxxxx for a period of eighteen (18) months, with compensation
of one million (1,000,000) shares of Bluestar common stock that will be
registered on a Form S-8 and issued to Xxxxxxx no later than ten (10) days
after
the closing (“Xxxxxxx Consulting Agreement”). Gold Leaf Homes agrees not to
issue any consulting shares other than the 1,000,000 shares issued to Xxxxxxx
for a period of one hundred eighty (180) days unless written consent has been
given by Xxxxxxx. A copy of the Xxxxxxx Consulting Agreement is attached hereto
as Exhibit E.
Closing
1.06.
The
parties agree to use their best efforts to consummate this transaction
(''Closing''). The Closing shall take place at the offices of Xxxxxx Xxxxxxx
located at 00000 Xxxxxxxxx Xxxxxxx, Xxxxx Xxxx, Xxxxx 00000 on November 30,
2005, or at such other time, date, and place mutually agreed upon in writing
by
Seller and Purchaser (''Closing Date''). In either event, all terms and
conditions to the Closing of this Agreement shall have been met at least ten
(10) days' prior to the Closing Date.
1.06.01
In recognition of the time and expense associated with this transaction, the
parties agree that a penalty will be assessed against Gold Leaf if this
transaction is not consummated by the closing date as follows:
A. A
penalty
of $20,000 will be assessed against Gold Leaf if this agreement does not
consummate on the date of Closing due to inability of Gold Leaf to acquire
proper financing and such Closing date must be extended to accommodate Gold
Leaf.
B. Neither
party will be assessed a penalty if the Close is terminated due to state and/or
federal regulatory issues.
ARTICLE
2
REPRESENTATIONS
AND WARRANTIES OF GOLD LEAF AND SHAREHOLDERS
Gold
Leaf
(“Company”) hereby represents and warrants to Bluestar and Xxxxxxx that the
following facts and circumstances are and at all times up to the Closing Date
will be true and correct:
Organization
2.01.
Gold Leaf is a corporation duly organized, validly existing, and in good
standing under the laws of Texas and is qualified to do business in the
jurisdictions set forth in Exhibit 1 attached to this Agreement. Company has
all
requisite power and authority (corporate and, when applicable, government)
to
own, operate, and carry on its business as now being conducted. Company's
certificate of incorporation, articles of incorporation, and bylaws as currently
in effect are contained in Exhibit F.
Ownership
of Company
2.02.
The
authorized capital stock and the number of shares issued and outstanding of
Company is set forth in Exhibit G attached to this Agreement. The issued and
outstanding shares of capital stock of Company have been validly issued, are
fully paid and no assessable, and were issued in compliance with applicable
federal and state laws regulating the offer and sale of securities. There are
no
outstanding options, warrants, or similar rights to purchase or convert any
obligation into the capital stock or other securities of Company. The capital
stock of Company is owned, of record and beneficially, by those shareholders
set
forth in Exhibit H free and clear of all liens, claims, and
encumbrances.
Ownership
in Other Companies
2.03.
Company has no interest in any other corporation, firm, business, or partnership
or any subsidiaries.
Financial
Statements
2.04.
Exhibit I attached to this Agreement contains the audited financial statements
of Company, together with notes related to the financial statements. The
Financial Statements present fairly and accurately the financial position,
results of operations, and changes in financial position of Company at the
dates
and for the periods covered, in each case in conformity with generally accepted
and consistently applied accounting principles. There are no liabilities or
obligations of Company, accrued, absolute, contingent, inchoate, or otherwise
that arose out of or relate to any matter, act, or omission occurring from
the
date of the unaudited financial statement to the date of this Agreement, other
than liabilities or obligations incurred in the normal course of business.
Since
the date of the unaudited financial statement, there have not been:
(a)
Any
material adverse change in financial condition, operations, sales, or net income
of Company.
(b)
Any
loss, damage, or destruction to properties or assets, tangible or intangible
(whether or not covered by insurance).
(c)
Any
change in policy regarding compensation payable to or to become payable to
any
of Company's officers, directors, employees, or agents.
(d)
Any
labor dispute, disturbance, or attempt to organize a union.
(e)
Any
proposed law or regulation or any actual event or condition of any character
that is known to Company or Seller that materially adversely affects the
business or future prospects of Company.
(f)
Any
claim, litigation, event, or condition of any character that materially
adversely affects the business or future prospects of Company.
(g)
Any
issuance, purchase of, or agreement to issue or purchase shares of capital
stock
or other securities of Company.
(h)
Any
mortgage, pledge, lien, or encumbrance made or agreed to be made on any of
Company's assets or properties, tangible or intangible.
(i)
Any
sale, transfer, other disposition of, or agreement to sell, transfer, or dispose
of Company's properties or assets, tangible or intangible, except as
contemplated in this Agreement and except in the normal course of business
and
then only for full and fair value received.
(j)
Any
borrowings or agreements to borrow by or from Company.
(k)
Any
loans, advances, or agreements with respect to any loans or advances, other
than
to customers in the normal course of business and that have been properly
reflected as ''accounts receivable'' on Company's books.
(l)
Any
transaction outside the ordinary course of business.
(m)
Any
dividends or distributions paid or declared, or any repayment of loans or other
obligations to the shareholders of Company.
Taxes
2.05.
All
federal, state, local, and foreign income, ad valorem, excise, sales, use,
payroll, unemployment, and other taxes and assessments (''Taxes'') that are
due
and payable by Company or by Seller on behalf of Company have been properly
computed, duly reported, fully paid, and discharged. There are no unpaid Taxes
that are or could become a lien on the property or assets of Company or require
payment by Company, except for current Taxes not yet due and payable. All
current Taxes not yet due and payable by Company have been properly accrued
on
the balance sheets of Company. Company has not incurred any liability for
penalties, assessments, or interest under the Internal Revenue Code. No
unexpired waiver executed by or on behalf of Company with respect to any Taxes
is in effect.
Title
to Assets and Properties
2.06.
Company has good and marketable title to all of its assets and properties,
tangible and intangible that is material to Company's business and future
prospects. These assets and properties constitute all of the assets and
interests in assets that are used in Company's business. All of these assets
are
free and clear of mortgages, liens, pledges, charges, encumbrances, equities,
claims, easements, rights of way, covenants, conditions, and restrictions,
except for the following:
(a)
Those
disclosed in Company's balance sheets as of September 30, 2005 included in
the
Financial Statements, or in the Exhibits to this Agreement.
(b)
The
lien of current Taxes not yet due and payable.
All
real
property and tangible personal property of Company are in good operating
condition and repair, ordinary wear and tear excepted. Company is in possession
of all premises leased to Company from others. Except as set forth in the
appropriate Exhibit listing such assets, no officer, director, or employee
of
Company, nor any spouse, child, or other relative of any of these persons owns
or has any interest, directly or indirectly, in any of the real or personal
property owned by or leased by Company or in any copyrights, patents,
trademarks, trade names, or trade secrets licensed by Company. Company does
not
occupy any real property in violation of any law, regulation, or decree that
would materially adversely affect its business or future prospects.
Laws
and Regulations
2.07.
Company is not in default or in violation of any law; regulation; court order;
or order of any federal, state, municipal, foreign, or other government
department, board, bureau, agency, or instrumentality, wherever located, that
would materially adversely affect its business or future prospects.
Litigation
2.08.
There are no pending, outstanding, or threatened claims; legal, administrative,
or other proceedings; or suits, investigations, inquiries, complaints, notices
of violation, judgments, injunctions, orders, directives, or restrictions
against or involving Company or any of the assets, properties, or business
of
Company or any of Company's officers, directors, employees, or stockholders
that
will materially adversely affect Company, its assets, properties, or business.
To the best of Seller's and Company's knowledge and belief, after conducting
a
due diligence investigation, there is no basis for any of these proceedings
against any of Company's assets, properties, persons, or entities. Neither
Seller nor Company is presently engaged in any legal action to recover moneys
due Company or for damages sustained by Company.
Business
Operations
2.09.
The
business operations of Company are and have been for the past five years in
material compliance with all laws, treaties, rulings, directives, and similar
regulations of all government authorities having jurisdiction over such business
insofar as failure to comply could materially adversely affect Company's
business and future prospects.
Authority
2.10.
Parties each have full power and authority to execute, deliver, and/or
consummate this Agreement, subject to the conditions to Closing set forth in
this Agreement. All reports and returns required to be filed by each with any
government and regulatory agency with respect to this transaction have been
properly filed. Except as otherwise disclosed in this Agreement, no notice
to or
approval by any other person, firm, or entity, including governmental
authorities, is required of Seller or Company to consummate the transaction
contemplated by this Agreement.
Full
Disclosure
2.11.
No
representation, warranty, or covenant made to Bluestar or Xxxxxxx in this
Agreement nor any document, certificate, exhibit, or other information given
or
delivered to Bluestar or Xxxxxxx pursuant to this Agreement contains or will
contain any untrue statement of a material fact, or omits or will omit a
material fact necessary to make the statements contained in this Agreement
or
the matters disclosed in the related documents, certificates, information,
or
exhibits not misleading.
Brokers
2.12.
Neither Shareholders nor Company, nor any of Company's officers, directors,
employees, or stockholders, has retained, consented to, or authorized any
broker, investment banker, or third party to act on Company's behalf, directly
or indirectly, as a broker or finder in connection with the transactions
contemplated by this Agreement.
Securities
to be Restricted Securities
2.13.
Xxxxxx acknowledges that all of the Bluestar Common Shares will be “restricted
securities” (as such term is defined in Rule 144 promulgated under the
Securities Act of 1933, as amended (“Rule 144”), and will include the
restrictive legend set forth in Section 4.2.1(a) hereof, and, except as
otherwise set froth in this Agreement, that the shares cannot be sold for a
period of at least one year from the date of issuance unless registered with
the
United States Securities and Exchange Commission (“SEC”) and qualified by
appropriate state securities regulators, or unless Xxxxxx obtains written
consent from Bluestar and otherwise complies with an exemption from such
registration and qualification (including, without limitation, compliance with
Rule 144).
Post-Closing
Capital Structure
2.14
Gold
Leaf and the shareholder, Xxxxxx, acknowledge that the capital structure of
Bluestar as of the Closing date shall be as set froth in Exhibit J.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF BLUESTAR AND XXXXXXX
Bluestar
and Xxxxxxx represent and warrant to Gold Leaf and Xxxxxx that:
Authority
3.01.
Bluestar and Xxxxxxx have full power and authority to execute, deliver, and
consummate this Agreement subject to the conditions to Closing set forth in
this
Agreement. All corporate acts, reports, and returns required to be filed by
each
respective party herein with any government or regulatory agency with respect
to
this transaction have been or will be properly filed prior to the Closing Date.
No provisions exist in any contract, document, or other instrument to which
a
party is bound that would be violated by consummation of the transactions
contemplated by this Agreement.
Broker
3.02.
Neither Party has retained, consented to, or authorized any broker, investment
banker, or third party to act on its behalf, directly or indirectly, as a broker
or finder in connection with the transactions contemplated by this
Agreement.
Organization
and Standing of Bluestar
3.03.
Bluestar is a corporation duly organized, validly existing, and in good standing
under the laws of the state of Colorado and Texas, with corporate power to
own
property and carry on its business as it is now being conducted.
Capitalization
of Bluestar
3.04
The
authorized equity securities of Bluestar consists of 40,000,000 shares of common
stock, par value $0.001, of which approximately 13,607,094 shares are
outstanding as of the date hereof and of which approximately 50,782,094 will
be
issued and outstanding as of the Closing. As of the closing, there will be
100,000,000 shares of common stock, par value $0.001, and 10,000,000 shares
of
preferred stock, par value $0.001, authorized. No other shares of capital stock
of Bluestar are issued and outstanding. All of the issued and outstanding shares
have been duly and validly issued in accordance and compliance with all
applicable laws, rules and regulations and are fully paid and no assessable.
All
presently exercisable voting rights in Bluestar are vested exclusively in its
outstanding shares of common stock, each share of which is entitled to one
vote
on every matter to come before its shareholders.
Ownership
in Other Companies
3.05.
At
the closing, Bluestar will have no interest in any other corporation, firm,
business, or partnership or any subsidiaries.
ARTICLE
4
COVENANTS
Gold
Leaf
and Shareholders covenant with Bluestar and the other parties that from and
after the date of this Agreement until the Closing Date, Gold Leaf will and
will
cause Company to:
Business
Operations
4.01.
Operate its business and conduct its activities in the normal course of business
and not introduce any material new method of management, operation, or
accounting.
Maintenance
of Assets and Properties
4.02.
Maintain all tangible assets and properties of Company in as good a state of
operating condition and repair as they are on the date of this Agreement, except
for ordinary depreciation, wear, and tear.
Absence
of Liens
4.03.
Not
sell, pledge, lease, mortgage, encumber, dispose of, or agree to do any of
these
acts regarding any of the assets or properties of Company, other than in the
normal course of business, without the prior written approval of Bluestar or
Xxxxxxx.
Preservation
of Business
4.04.
Use
its best efforts to preserve intact its organization and personnel and to keep
available the services of all of its employees, agents, independent contractors,
and consultants commensurate with Company's business requirements.
Preservation
of Customer Relations
4.05.
Use
its best efforts to preserve intact the present customers of Company and the
goodwill of all customers and others with respect to the business.
Maintain
Insurance
4.06.
Keep in force all policies of insurance covering the Company's business,
properties, and assets, including all insurance listed in this Agreement. If
Bluestar or Xxxxxxx so request in writing, to purchase additional insurance
as
may be reasonably required at Bluestar’s expense.
Performance
of Obligations
4.07
Perform all of its obligations and not make any material amendment to its
obligations under all agreements relating to or affecting Company's customers,
business, properties, and assets.
Notification
of Litigation
4.08
Promptly notify Bluestar and Xxxxxxx in writing of any outstanding or threatened
claims; legal, administrative, or other proceedings, suits, investigations,
inquiries, complaints, notices of violation, or other process; or other
judgments, orders, directives, injunctions, or restrictions against or involving
Company or its personnel that could adversely affect Company.
Provide
Financial Statements
4.09Provide
Bluestar and Xxxxxxx with fairly presented monthly financial statements with
respect to Company within ten (10) days after the end of each month, together
with copies of customary monthly management reports.
Access
to Books and Records
4.10
Make
available to Bluestar and Xxxxxxx and their authorized agents and accountants
for inspection at reasonable times and under reasonable circumstances the
following items with respect to Company: assets; properties; business and
financial records; and tax returns, working papers, files, and memoranda of
its
public accountants and outside legal counsel for the purposes of making an
accounting review, a legal audit, and investigation and examination of Company
as deemed desirable by Bluestar and Xxxxxxx. Seller will use its best efforts
to
cause Company's officers, employees, public accountants, and outside legal
counsel to cooperate fully with Purchaser's examination and to make a full
and
complete disclosure to Bluestar and Xxxxxxx of all facts regarding the financial
condition and business operations of Company.
Not
Solicit
4.11
Not
negotiate with any person or entity, or solicit or entertain any proposal
concerning any acquisition in any form of Company.
Resist
Brokers
4.12
Assist and cooperate with Bluestar and Xxxxxxx in resisting any claim of any
broker, investment banker, or third party for any brokerage fee, finder's fee,
or commission against Bluestar and Xxxxxxx or Company in connection with the
transactions contemplated by this Agreement.
Cooperate
in Publicity
4.13
Coordinate any written publicity regarding this transaction with Bluestar and
Xxxxxxx.
Payment
of Liabilities and Waiver of Claims
4.14
Not
do, or agree to do, any of the following acts:
(a)
Pay
any obligation or liability, fixed or contingent, other than current
liabilities.
(b)
Waive
or compromise any right or claim.
(c)
Without full payment, cancel any note, loan, or other obligation owing to
Company.
Maintain
Existing Agreements
4.15
Not
modify, amend, cancel, or terminate any of Company's existing contracts or
agreements, or agree to do so.
Obtain
Consents
4.16
As
soon as reasonably practical after the execution of this Agreement and in any
event before the Closing Date, obtain the written consents of all persons
described in Exhibit K and furnish to Bluestar and Xxxxxxx copies of the
consents.
Provide
Sales and Use Tax Certificates
4.17
Furnish to Bluestar and Xxxxxxx clearance certificates from the appropriate
agencies in all states where Company is qualified to do business and any related
certificates that Bluestar and Xxxxxxx may reasonably request as evidence that
all sales, use, and other tax liabilities of Company (other than income tax
liabilities) accruing before the Closing Date have been fully satisfied or
provided for by Company.
Provide
UCC Clearances
4.18.
Deliver to Bluestar and Xxxxxxx a Business and Commerce Code search report
issued by the Secretary of State in each state where Company owns personal
property and dated as of a date not more than twenty (20) days before the
Closing Date. The report must indicate that there are no filings under the
UCC
on file with the Secretary of State that name Company as debtor or otherwise
indicate any lien on the assets and properties of Company, except for the liens
otherwise disclosed in this Agreement.
ARTICLE
5
CONDITIONS
TO BLUESTAR AND XXXXXXX'X OBLIGATION TO CLOSE
The
obligation of Bluestar and Xxxxxxx to Close under this Agreement is subject
to
each of the following conditions (any one of which may, at the option of
Purchaser, be waived in writing by Purchaser) existing on the Closing Date,
or
such earlier date as the context may require.
Representations
and Warranties
5.01.
Each of the representations and warranties of Gold Leaf and Shareholders in
this
Agreement, the disclosures contained in the exhibits to this Agreement, and
all
other information delivered under this Agreement shall be true in all material
respects at and as of the Closing Date as though each representation, warranty,
and disclosure were made and delivered at and as of the Closing
Date.
Compliance
With Conditions
5.02.
Company and Shareholders shall each comply with and perform all agreements,
covenants, and conditions in this Agreement required to be performed and
complied with by each of them. All requisite action (corporate and other) in
order to consummate this Agreement shall be properly taken by Company and
Shareholders. Shareholders shall deliver to Purchaser a compliance certificate
verifying and warranting Shareholders and Company's compliance.
Suit
or Proceeding
5.03.
No
suit or proceeding, legal or administrative, relating to any of the transactions
contemplated by this Agreement shall be overtly threatened or commenced that,
in
the discretion of Purchaser and its counsel and/or Xxxxxxx and his counsel,
would make it inadvisable for Bluestar and/or Xxxxxxx to Close this
transaction.
Government
Approvals and Filings
5.04.
All
necessary government approvals and filings regarding this transaction shall
be
received or made prior to the Closing Date in substantially the form applied
for
to the reasonable satisfaction of Bluestar and its counsel and/or Xxxxxxx and
his counsel. Any applicable waiting period for the approvals and filings shall
be expired.
Corporate
and Stockholder Action
5.05.
All
corporate and stockholder action necessary to consummate the transactions
contemplated in this Agreement shall be properly taken by Xxxxxx and Company.
Bluestar and Xxxxxxx shall receive copies of all appropriate resolutions of
Company's and Seller's board of directors and shareholders relating to this
Agreement. The resolutions shall be certified by their respective corporate
secretaries.
Consents
of Others
5.06.
Bluestar and Xxxxxxx shall receive written consents from all required persons
and/or entities.
Effectiveness
of Amendment
5.07. An
amendment to the Articles of Incorporation of Bluestar shall have been filed
and
effective with the State of Colorado as of the Closing which (i) changes the
name of Bluestar to a name chosen by Gold Leaf and (ii) increases the authorized
common stock of Bluestar from 40,000,000 shares, par value $0.001, to
100,000,000 shares, par value $0.001 (the “Amendment”).
ARTICLE
6
CONDITIONS
TO GOLD LEAF'S OBLIGATION TO CLOSE
The
obligation of Gold Leaf to Close under this Agreement is subject to each of
the
following conditions (any one of which at the option of Gold Leaf may be waived
in writing by Shareholders) existing on the Closing Date.
Corporate
Action
6.01.
Bluestar shall take appropriate corporate action regarding this transaction,
which shall be evidenced by resolutions of its board of directors and
shareholders and certified by Bluestar's corporate secretary, authorizing
Bluestar to enter into and complete this transaction.
Government
Approvals
6.02.
All
necessary government approvals regarding this transaction shall be received
prior to the Closing Date, in substantially the form applied for and to the
reasonable satisfaction of Bluestar and its counsel.
Effectiveness
of Amendment
6.03.
The
Amendment shall have been filed and effective with the State of Colorado as
of
the Closing.
ARTICLE
7
PARTIES'
OBLIGATIONS AT THE CLOSING
Seller's
Obligations at the Closing
7.01.
At
the Closing, Shareholders shall deliver or cause to be delivered to Bluestar
and
Xxxxxxx instruments of assignment and transfer of all of the issued and
outstanding capital stock of Company, free and clear of all liens, claims,
and
encumbrances in form and substance satisfactory to Bluestar's counsel and
Xxxxxxx’x counsel. Simultaneously with the consummation of the transfer,
Shareholders shall put Purchaser in full possession and enjoyment of all
properties and assets of Company.
Shareholders,
at any time before or after the Closing Date, shall execute, acknowledge, and
deliver to Bluestar and Xxxxxxx any further deeds, assignments, conveyances,
other assurances, documents, and instruments of transfer reasonably requested
by
Bluestar and/or Xxxxxxx. Shareholders shall also take any other action
consistent with the terms of this Agreement that may be reasonably requested
by
Bluestar and Xxxxxxx for the purpose of assigning, transferring, granting,
conveying, and confirming to Bluestar or reducing to possession any or all
property and assets to be conveyed and transferred by this Agreement. If
requested by Bluestar and/or Xxxxxxx, Shareholder further agrees to prosecute
or
otherwise enforce in its own name for the benefit of Bluestar any claims,
rights, or benefits of Company that are transferred to Bluestar by this
Agreement and that require prosecution or enforcement in Gold Leaf's name.
Any
prosecution or enforcement of claims, rights, or benefits under this paragraph
shall be solely at Bluestar's expense, unless the prosecution or enforcement
is
made necessary by a breach of this Agreement by Shareholders.
Bluestar
and Xxxxxxx'x Obligations at Closing
7.02.
At
the Closing, Bluestar shall deliver to Shareholders the Bluestar Common Shares
to which Shareholders are entitled, fully paid and non-assessable and subject
to
no liens, security interests, pledges, encumbrances, charges, restrictions,
demands or claims in any other party whatsoever, except as set forth in the
legend on the certificate(s), which legend shall provide substantially as
follows:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATR HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED FO FOR A PERIOD OF ONE YEAR FROM THE ISSUANCE THEREOF EXCEPT
(i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY
APPLICABLE STATE LAWS OR (ii) UPON THE EXPRESS WRITTEN AGREEMENT OF THE COMPANY
AND COMPLIANCE, TO THE EXTENT APPLICABLE, WITH RULE 144 UNDER THE ACT (OR ANY
SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF
SECURITIES).
ARTICLE
8
GOLD
LEAF
AND SHAREHOLDER'S OBLIGATIONS AFTER THE CLOSING
Access
to Records
8.01.
From and after the Closing Date, Gold Leaf and Shareholders shall allow Bluestar
and Xxxxxxx and their counsel, accountants, and other representatives access
to
records that are, after the Closing Date, in the custody or control of Gold
Leaf. Golf Leaf shall give access as Bluestar and Xxxxxxx reasonably require
in
order to comply with its obligations under law or when reasonably necessary
for
the business operations of Company.
ARTICLE
9
INDEMNIFICATION
Covenant
to Indemnify and Hold Harmless
9.01.
Gold Leaf and Shareholders covenant and agree to indemnify, defend, and hold
harmless Bluestar and Xxxxxxx from and against any and all claims, suits,
losses, judgments, damages, and liabilities including any investigation, legal,
and other expenses incurred in connection with and any amount paid in settlement
of any claim, action, suit, or proceeding (collectively called ''Losses''),
other than those Losses disclosed in this Agreement or any Exhibit delivered
pursuant to this Agreement, to which Bluestar or Company may become subject,
if
such Losses arise out of or are based upon any facts and circumstances (or
alleged facts and circumstances) that could result in or give rise to a
misrepresentation, breach of warranty, or breach of covenant by Gold Leaf and
Shareholders to Bluestar or Xxxxxxx in this Agreement. This right to
indemnification is in addition to any other right available to Bluestar and
Xxxxxxx, including the right to xxx Gold Leaf and Shareholders for a
misrepresentation, breach of warranty, or breach of covenant under this
Agreement.
Income
Taxes
9.02.
Without limiting the provisions of Paragraph 9.01, Golf Leaf and Shareholders
shall indemnify, defend, and hold harmless Bluestar and Xxxxxxx from and against
any Losses to which Bluestar may become subject insofar as such Losses arise
out
of or are based on any tax on or measured by the net income of Company in any
period on or before the Closing Date. The indemnifications provided in this
Paragraph 9.02 and in Paragraph 9.01, above, are cumulative and neither
provision shall limit or in any other way affect the right of Bluestar and
Xxxxxxx under the other provision.
Notification
and Defense of Claims or Actions
9.03.
When Bluestar or Xxxxxxx propose to assert the right to be indemnified under
this Article 9 with respect to third-party claims, actions, suits, or
proceedings, Bluestar or Xxxxxxx shall, within 30 days after the receipt of
notice of the commencement of the claim, action, suit, or proceeding, notify
Seller in writing, enclosing a copy of all papers served or received. On receipt
of the notice, Gold Leaf and Shareholders shall have the right to direct the
defense of the matter, but Bluestar and Xxxxxxx shall be entitled to participate
in the defense and, to the extent that Bluestar desires, to jointly direct
the
defense with Gold Leaf with counsel mutually satisfactory to Bluestar and
Seller, at Seller's expense. Purchaser shall also have the right to employ
its
own separate counsel in any such action. The fees and expenses of Purchaser's
counsel shall be paid by Purchaser unless: (a) the employment of the counsel
has
been authorized by Seller; (b) Purchaser has reasonably concluded that there
may
be a conflict of interest between Seller and Purchaser in the conduct of the
defense of such action; or (c) Seller has not, in fact, employed counsel
satisfactory to Purchaser to assume the defense of the action. In each of these
cases, the fees and expenses of Purchaser's counsel shall be paid by Seller.
Neither Seller nor Purchaser shall be liable for any settlement of any action
or
claim described in this Article 9 that is effected without their
consent.
Interest
9.06.
Any
indemnification required of Seller under this Article 9 shall include interest
on the amount of the indemnity from the time incurred to the date of payment
at
_________________ percent simple interest per annum.
ARTICLE
10
GENERAL
PROVISIONS
Survival
of Representations, Warranties, and Covenants
10.01.
The representations, warranties, covenants, and agreements of the parties
contained in this Agreement or contained in any writing delivered pursuant
to
this Agreement shall survive the Closing Date for the period of time set forth
in this Agreement.
Notices
10.02.
All notices that are required or that may be given pursuant to the terms of
this
Agreement shall be in writing and shall be sufficient in all respects if given
in writing and delivered personally or by registered or certified mail, return
receipt requested, postage prepaid as follows:
If
to
Gold Leaf Homes, Inc.:
Gold
Leaf
Homes, Inc.
Xxx
Xxxxxx
0000
XX
0000
Xxxxxxxx,
XX 00000
(000)
000-0000 - facsimile
If
to
Bluestar Health, Inc.:
Bluestar
Health, Inc
ATTN:
Xxxxxx Xxxxxxx
00000
Xxxxxxxxx Xxxxxxx
Xxxxx
Xxxx, Xxxxx 00000
(281)
207- 5486 - facsimile
If
to
Xxxxxx Xxxxxxx:
Xxxxxx
Xxxxxxx
00000
Xxxxxxxxx Xxxxxxx
Xxxxx
Xxxx, Xxxxx 00000
(281)
207
- 5486 facsimile
Assignment
of Agreement
10.03.
This Agreement shall be binding on and inure to the benefit of the parties
to
this Agreement and their respective successors and permitted assigns. This
Agreement may not be assigned by any other party without the written consent
of
all parties and any attempt to make an assignment without consent is
void.
Governing
Law
10.04.
This Agreement shall be construed and governed by the laws of the state of
Texas.
Amendments;
Waiver
10.05.
This Agreement may be amended only in writing by the mutual consent of all
of
the parties, evidenced by all necessary and proper corporate authority. No
waiver of any provision of this Agreement shall arise from any action or
inaction of any party, except an instrument in writing expressly waiving the
provision executed by the party entitled to the benefit of the
provision.
Entire
Agreement
10.06.
This Agreement, together with any documents and exhibits given or delivered
pursuant to this Agreement, constitutes the entire agreement between the parties
to this Agreement. No party shall be bound by any communications between them
on
the subject matter of this Agreement unless the communication is (a) in writing,
(b) bears a date contemporaneous with or subsequent to the date of this
Agreement, and (c) is agreed to by all parties to this Agreement. On execution
of this Agreement, all prior agreements or understandings between the parties
shall be null and void.
Reliance
Upon Representations and Warranties
10.07.
The parties mutually agree that, notwithstanding any right of Purchaser to
fully
investigate the affairs of Company and notwithstanding any knowledge of facts
determined or determinable by Purchaser pursuant to the investigation or right
to investigate, Purchaser may fully rely upon the representations, warranties,
and covenants made to Purchaser in this Agreement and on the accuracy of any
document, certificate, or exhibit given or delivered to Purchaser pursuant
to
this Agreement. Knowledge by an agent of Purchaser of any facts not otherwise
disclosed in this Agreement or in a document, certificate, or exhibit delivered
to Purchaser pursuant to this Agreement shall not constitute a defense by Seller
for indemnification of Purchaser under Article 9 or for any claim for
misrepresentation or breach of any warranty, agreement, or covenant under this
Agreement or any exhibit, certificate, or document delivered under this
Agreement.
Termination
of Agreement
10.08.
In
the event this Agreement is not Closed by November 15, 2005, then this Agreement
shall terminate on and as of that date. Any termination shall not affect in
any
manner any rights and remedies that any party to this Agreement may have at
the
time of termination.
Signed
on
_________________, _________________.
| GOLD LEAF HOMES, INC. | BLUESTAR HEALTH, INC. |
| By: __/s/ _ Xxx Xxxxxx _______ | By: __/s/ _ Xxxxxx Xxxxxxx _______ |
| Xxx Xxxxxx, President | Xxxxxx Xxxxxxx, CEO |
| By: __/s/ _ Xxx Xxxxxx _______ | By: __/s/ _ Xxxxxx Xxxxxxx _______ |
| Xxx Xxxxxx, Individually | Xxxxxx Xxxxxxx, Individually |
[exhibits]
