EX-10.1
COMMON STOCK PURCHASE AGREEMENT
This AGREEMENT, entered into as of the 14th day of June, 2006 (the
"Agreement"), by and among XXXXXX X. XXXXX, a resident of the State of New York
("Xxxxx"), R&R BIOTECH PARTNERS, LLC, a Delaware limited liability company
("Xxxxxx", and together with Xxxxx, the "Purchaser"), and AEROBIC CREATIONS,
INC., a Nevada corporation ("Seller" or the "Company").
WHEREAS, the Seller has authorized the sale and issuance of an
aggregate of eight million two hundred thousand (8,200,000) shares (the
"Shares") of Seller's common stock, $0.001 par value, ("Common Stock"),
representing approximately 82% of the issued and outstanding Common Stock as of
the Closing (as defined below); and
WHEREAS, Purchaser desires to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the Seller desires to issue and sell the Shares to Purchaser
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Purchaser and the Seller hereby agree as
follows:
ARTICLE 1
SALE AND PURCHASE OF THE SHARES
Section1.1 AUTHORIZATION OF SHARES. The Seller has authorized the sale
and issuance to Purchaser of the Shares.
Section 1.2 SALE AND PURCHASE. Subject to the terms and conditions
hereof, at the Closing (as hereinafter defined) the Seller hereby agrees to
issue and sell to Purchaser and Purchaser agrees to purchase from the Seller the
Shares for an aggregate purchase price of Fifty Thousand Dollars ($50,000) (the
"Purchase Price") according to the terms set forth in Section 2.2 below.
Section 1.3 ALLOCATION OF SHARES. The proportion of the Shares
purchased by each Purchaser shall be as set forth on the signature page hereto.
ARTICLE 2
CLOSING AND DELIVERY
Section 2.1 CLOSING DATE. Upon the terms and subject to the conditions
set forth herein, the consummation of the purchase and sale of the Shares (the
"Closing") shall be held at such date (the "Closing Date") and time as
determined at the mutual discretion of the Seller and the Purchaser; PROVIDED,
HOWEVER, that the Closing shall occur no later than ten (10) business days after
the conditions precedent contained in Article 7 herein have been satisfied
(which the parties hereto agree shall not be later than June 30, 2006 unless
extended as provided for herein). The Closing shall take place at the offices of
Purchaser's Counsel, Xxxxx Xxxxxxx Xxxx & Xxxxxx, LLP, 000 Xxxx Xxxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx 00000, or by the exchange of documents and instruments
by mail, courier, telecopy and wire transfer to the extent mutually acceptable
to the parties hereto.
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Section 2.2 DELIVERY AT CLOSING. At the Closing, subject to the terms
and conditions hereof, the Seller will deliver to Purchaser certificates
representing the Shares to be purchased at the Closing by Purchaser, against
payment of the Purchase Price by check or wire transfer made payable at the time
of Closing.
Section 2.3 APPLICATION OF CLOSING PROCEEDS. The Purchase Price shall
be paid and applied by the Seller as follows (and Purchaser shall take any and
all such actions as may be necessary to cause the Seller to pay and apply the
Purchase Price as follows): Payment of $50,000 to MBA Investors, Ltd., a Florida
corporation, as a finders fee in connection with the sale of the Shares.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth under the corresponding section of the disclosure
schedules (the "DISCLOSURE SCHEDULES") attached hereto as EXHIBIT A, which
Disclosure Schedules shall be deemed a part hereof, Seller hereby represents and
warrants to the Purchaser that:
Section 3.1 EXISTENCE AND POWER. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Nevada and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted, except where a failure to so possess would not result
in a Material Adverse Effect upon Seller. Seller has heretofore delivered to the
Purchaser true and complete copies of its Articles of Incorporation, as amended,
and By-laws, each as currently in effect.
Section 3.2 AUTHORIZATION; NO AGREEMENTS. Subject to the satisfaction
of the terms and conditions set forth herein, the execution, delivery and
performance by Seller of this Agreement, the performance of its obligations
hereunder, and the consummation of the transactions contemplated hereby are
within the Seller's powers. This Agreement has been duly and validly executed
and delivered by the Seller and is a legal, valid and binding obligation of the
Seller, enforceable against it in accordance with its terms. The execution,
delivery and performance by the Seller of this Agreement does not violate any
contractual restriction contained in any agreement which binds or affects or
purports to bind or affect the Seller. The Seller is not a party to any
agreement, written or oral, creating rights in respect of any of such Shares in
any third party or relating to the voting of its Common Stock. Seller is not a
party to any outstanding or authorized options, warrants, rights, calls,
commitments, conversion rights, rights of exchange or other agreements of any
character, contingent or otherwise, providing for the purchase, issuance or sale
of any of the Shares, and there are no restrictions of any kind on the transfer
of any of the Shares other than (a) restrictions on transfer imposed by the
Securities Act of 1933, as amended (the "Securities Act") and (b) restrictions
on transfer imposed by applicable state securities or "blue sky" laws.
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Section 3.3 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock, with a $0.001 par value per share; there are 1,800,000
shares of Common Stock issued and outstanding as of the Closing Date, and there
are approximately 22 shareholders of record holding the Common Stock. There are
no shares of preferred stock authorized, issued or outstanding. All of the
issued and outstanding shares of capital stock of the Seller have been duly
authorized and validly issued and are fully paid and nonassesasable. All of the
issued and outstanding shares of capital stock of the Seller have been offered,
issued and sold by the Seller in compliance with all applicable federal and
state securities laws. No securities of the Seller are entitled to preemptive or
similar rights, and no Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions
contemplated hereby. Except as a result of the purchase and sale of the Shares,
there are no outstanding options, warrants, script rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Seller is or may become
bound to issue additional shares of Common Stock, or securities or rights
convertible or exchangeable into shares of Common Stock. The issuance and sale
of the Shares will not obligate the Seller to issue shares of Common Stock or
other securities to any Person (other than the Purchaser) and shall not result
in a right of any holder of Seller securities to adjust the exercise,
conversion, exchange or reset price under such securities.
(b) There are no outstanding obligations, contingent or otherwise, of
Seller to redeem, purchase or otherwise acquire any capital stock or other
securities of Seller.
(c) There are no shareholder agreements, voting trusts or other
agreements or understandings to which Seller is a party or by which it is bound
relating to the voting of any shares of the capital stock of Seller.
(d) Subject to the satisfaction of the terms and conditions set forth
herein, the Shares shall be duly authorized for issuance, when delivered in
accordance with the terms of this Agreement, and shall be validly issued, fully
paid and non-assessable and the sale thereof shall not be subject to any
preemptive or other similar right.
Section 3.4 SUBSIDIARIES. Seller has no subsidiaries and does not own
or control, directly or indirectly, any shares of capital stock of any other
corporation or any interest in any partnership, limited liability company, joint
venture or other non-corporate business enterprise.
Section 3.5 FINANCIAL STATEMENTS.
a) SEC REPORTS; FINANCIAL STATEMENTS. The Seller has filed all reports
required to be filed by it under the Securities Act and the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), including pursuant to Section
13(a) or 15(d) thereof, since January 1, 2005 (the foregoing materials being
collectively referred to herein as the "SEC Reports") on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. The Seller has identified
and made available to the Purchaser a copy of all SEC Reports filed within the
10 days preceding the date hereof. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of
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the Securities and Exchange Commission (the "Commission") promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of the Seller included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
("GAAP"), except as may be otherwise specified in such financial statements or
the notes thereto, and fairly present in all material respects the financial
position of the Seller and its consolidated subsidiaries as of and for the dates
thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, year-end audit
adjustments.
(b) Except as set forth in its Form 10-KSB for the fiscal year ended
December 31, 2005, (i) Seller has not been engaged in any business activity
since at least December 31, 2004; (ii) there has been no event, occurrence or
development that has had or that is reasonably expected to result in a Material
Adverse Effect; (iii) the Seller has not incurred any material liabilities
outside the ordinary course of business (contingent or otherwise) or amended of
any material term of any outstanding security; (iv) the Seller has not altered
its method of accounting or the identity of its auditors; (v) the Seller has not
declared or made any dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock; (vi) the Seller has not issued any equity
securities to any officer, director or Affiliate of the Seller; (vii) the Seller
has not made any loan, advance or capital contributions to or investment in any
Person; (viii) the Seller has not entered into any transaction or commitment
made, or any contract or agreement entered into, relating to its business or any
of its assets (including the acquisition or disposition of, or creation of a
lien on, any assets) or any relinquishment by Seller of any contract or other
right; (ix) the Seller has not granted any severance or termination pay to any
current or former director, officer or employee of Seller, or increased the
benefits payable under any existing severance or termination pay policies or
employment agreements or entered into any employment, deferred compensation or
other similar agreement (or any amendment to any such existing agreement) with
any current or former director, officer or employee of Seller; (x) the Seller
has not established, adopted or amended (except as required by applicable law)
any collective bargaining, bonus, profit sharing, thrift, pension, retirement,
deferred compensation, compensation, stock option, restricted stock or other
benefit plan or arrangement covering any current or former director, officer or
employee of Seller; (xi) the Seller has not increased the compensation, bonus or
other benefits payable or otherwise made available to any current or former
director, officer or employee of Seller; (xii) the Seller has not made any tax
election or any settlement or compromise of any tax liability, in either case
that is material to Seller or entered into any transaction by the Seller not in
the ordinary course of business.
Section 3.6 NO LIABILITIES OR DEBTS. As of the Closing Date, there will
be no liabilities or debts of Seller of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there will be
no existing condition, situation or set of circumstances which could reasonably
be expected to result in such a liability or debt. As of the Closing Date, the
Seller will not be a guarantor of any indebtedness of any other person, firm or
corporation.
Section 3.7 LITIGATION. There is no action, suit, investigation, audit
or proceeding pending against, or to the best knowledge of Seller threatened
against or affecting, Seller or any of its assets or properties before any court
or arbitrator or any governmental body, agency or official. The Seller is not
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subject to any outstanding judgment, order or decree. Neither the Seller, nor,
to the knowledge of the Seller, any officer, key employee or 5% stockholder of
the Seller in his, her or its capacity as such, is in default with respect to
any order, writ, injunction, decree, ruling or decision of any court,
commission, board or any other government agency. The Commission has not issued
any stop order or other order suspending the effectiveness of any registration
statement filed by the Seller under the Exchange Act or the Securities Act.
Section 3.8 TAXES. Seller has (i) duly filed with the appropriate
taxing authorities all tax returns required to be filed by or with respect to
its business, or are properly on extension and all such duly filed tax returns
are true, correct and complete in all material respects and (ii) paid in full or
made adequate provisions for on its balance sheet (in accordance with GAAP) all
Taxes shown to be due on such tax returns. There are no liens for taxes upon the
assets of Seller except for statutory liens for current taxes not yet due and
payable or which may thereafter be paid without penalty or are being contested
in good faith. Seller has not received any notice of audit, is not undergoing
any audit of its tax returns, or has received any notice of deficiency or
assessment from any taxing authority with respect to liability for taxes which
has not been fully paid or finally settled. There have been no waivers of
statutes of limitations by Seller with respect to any tax returns. Seller has
not filed a request with the Internal Revenue Service for changes in accounting
methods within the last three years which change would effect the accounting for
tax purposes, directly or indirectly, of its business. Seller has not executed
an extension or waiver of any statute of limitations on the assessment or
collection of any taxes due (excluding such statutes that relate to years
currently under examination by the Internal Revenue Service or other applicable
taxing authorities) that is currently in effect.
Section 3.9 INTERNAL ACCOUNTING CONTROLS; XXXXXXXX-XXXXX ACT OF 2002.
To the best of its knowledge, the Seller is in compliance with the requirements
of the Xxxxxxxx-Xxxxx Act of 2002 applicable to it as of the date hereof. The
Seller 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. The Seller has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Seller and
designed such disclosures controls and procedures to ensure that material
information relating to the Seller, is made known to the certifying officers by
others within those entities, particularly during the period in which the
Seller's Form 10-KSB or 10-QSB, as the case may be, is being prepared. The
Seller's certifying officers have evaluated the effectiveness of the Seller's
controls and procedures as of the date of its most recently filed periodic
report (such date, the "Evaluation Date"). The Seller presented in its most
recently filed periodic report 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 the Seller's internal controls (as such term is
defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the
Seller's knowledge, in other factors that could significantly affect the
Seller's internal controls. Seller's auditors, at all relevant times, have been
duly registered in good standing with the Public Company Accounting Oversight
Board.
Section 3.10 SOLVENCY; INDEBTEDNESS. Assuming satisfaction of the terms
and conditions set forth herein, based on the financial condition of the Seller
as of the Closing Date, the fair saleable value of the Seller's assets exceeds
the amount that will be required to be paid on or in respect of the Seller's
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existing debts and other liabilities (including known contingent liabilities) as
they mature. The Seller does not intend to incur debts beyond its ability to pay
such debts as they mature. The Seller has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one (1) year from the Closing Date. The SEC Reports set forth as of the
dates thereof all outstanding secured and unsecured Indebtedness of the Seller,
or for which the Seller has commitments. The Seller is not in default with
respect to any Indebtedness. At the Closing, there will be no outstanding
liabilities, obligations or indebtedness of the Seller whatsoever.
Section 3.11 NO BROKERS. Except MBA Investors, Ltd., a Florida
corporation, (the "Finder"), Seller has not retained any broker or finder in
connection with any of the transactions contemplated by this Agreement, and
Seller has not incurred or agreed to pay, or taken any other action that would
entitle any Person to receive, any brokerage fee, finder's fee or other similar
fee or commission with respect to any of the transactions contemplated by this
Agreement. Seller shall be responsible for compensating the Finder in an amount
equal to $50,000, payable in cash at the Closing. Seller shall indemnify and
hold Purchasers harmless from any fees, cost, and liabilities of any kind
incurred by Purchasers in connection therewith.
Section 3.12 DISCLOSURE. All disclosure provided to the Purchaser
regarding the Seller, its business and the transactions contemplated hereby,
including the Disclosure Schedules to this Agreement, furnished by or on behalf
of the Seller with respect to the representations and warranties made herein are
true and correct with respect to such representations and warranties 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 made therein, in light of the
circumstances under which they were made, not misleading. The Seller
acknowledges and agrees that the Purchaser has not made, nor is the Purchaser
making, any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth herein.
Section 3.13 NO DISAGREEMENTS WITH ACCOUNTANTS AND LAWYERS. There are
no disagreements of any kind presently existing, or reasonably anticipated by
the Seller to arise, between the accountants, and lawyers formerly or presently
employed by the Seller and the Seller is current with respect to any fees owed
to its accountants and lawyers.
Section 3.14 NO CONFLICTS. Subject to the satisfaction of the terms and
conditions set forth herein, the execution, delivery and performance of this
Agreement and the transactions contemplated hereby do not and will not: (i)
conflict with or violate any provision of the Seller's Certificate or Articles
of Incorporation, By-laws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of any agreement, credit facility, debt or other
instrument (evidencing a Seller debt or otherwise) or other understanding to
which the Seller is a party or by which any property or asset of the Seller is
bound or affected or (iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Seller is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Seller is bound or affected.
Section 3.15 FILINGS, CONSENTS AND APPROVALS. Seller is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or
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other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance of this Agreement.
Section 3.16 COMPLIANCE. To the knowledge of the Seller, the Seller:
(i) is not in default under or in violation of (and no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in
a default by the Seller under), nor has the Seller received notice of a claim
that it is in default under or that it is in violation of, any indenture, loan
or credit agreement or any other agreement or instrument to which it is a party
or by which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is not in violation of any order of any court,
arbitrator or governmental body and (iii) is not and has not been in violation
of any statute, rule or regulation of any governmental authority.
Section 3.17 TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. Except as
required to be set forth in the SEC Reports, and as accurately described
therein, none of the officers or directors of the Seller and, to the knowledge
of the Seller, none of the Affiliates or employees of the Seller is presently a
party to any transaction with the Seller (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Seller, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner.
Section 3.18 ASSETS. Except as set forth in the SEC Reports, the Seller
has no material assets including, without limitation, goodwill, assets, real
property, tangible personal property, intangible personal property, rights and
benefits under contracts, and cash. All Seller leases for real or personal
property are in good standing, valid and effective in accordance with their
respective terms, and there is not under any of such leases, any existing
material default or event of default (or event which with notice or lapse of
time, or both, would constitute a material default).
Section 3.19 INVESTMENT COMPANY/INVESTMENT ADVISOR. The business of the
Seller does not require it to be registered as an investment company or
investment advisor, as such terms are defined under the Investment Company Act
and the Investment Advisors Act of 1940.
Section 3.20 LISTING ON THE OTC-BB. The Common Stock is approved for
quotation and/or listing on the Over-The-Counter Bulletin Board (the "OTCBB")
and the Seller has and continues to satisfy all of the requirements of the OTCBB
for such listing and for the quotation and trading of its Common Stock
thereunder. Seller has not been informed, nor does it have knowledge, that the
NASD or any other applicable regulatory agency has or is reasonably anticipated
to take action to cause the Seller's Common Stock to cease being quoted on the
OTCBB.
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ARTICLE 4
REPRESENTATIONS OF THE PURCHASERS
Each Purchaser represents and warrants to the Seller, as follows:
Section 4.1 EXECUTION AND DELIVERY. The execution, delivery and
performance by the Purchaser of this Agreement is within the Purchaser's powers
and does not violate any contractual restriction contained in any agreement
which binds or affects or purports to bind or affect the Purchaser. Purchaser's
financial resources are sufficient to enable it to purchase the Shares upon the
satisfaction of the terms and conditions set forth herein, and Purchaser has
provided Seller with such evidence thereof as was reasonably requested by
Seller.
Section 4.2 BINDING EFFECT. This Agreement, when executed and delivered
by the Purchaser shall be irrevocable and will constitute the legal, valid and
binding obligations of the Purchaser enforceable against the Purchaser in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, moratorium and other laws of general application affecting
enforcement of creditors' rights generally or general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
Section 4.3 INVESTMENT PURPOSE. The Purchaser hereby represents that
he/it is purchasing the Shares for his/its own account, with the intention of
holding the Shares, with no present intention of dividing or allowing others to
participate in this investment or of reselling or otherwise participating,
directly or indirectly, in a distribution of the Shares, and shall not make any
sale, transfer, or pledge thereof without registration under the Securities Act
and any applicable securities laws of any state unless an exemption from
registration is available under those laws. The Shares delivered to Purchaser
shall bear a restrictive legend indicating that they have not been registered
under the Securities Act of 1933 and are "restricted securities" as that term is
defined in Rule 144 under the Act.
Section 4.4 INVESTMENT REPRESENTATION. The Purchaser represents that
he/it has adequate means of providing for his/its current needs and has no need
for liquidity in this investment in the Shares. Purchaser represents that he/it
is an "accredited investor" as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act. Purchaser has no reason to anticipate any
material change in its financial condition for the foreseeable future. Purchaser
is financially able to bear the economic risk of this investment, including the
ability to hold the Shares indefinitely or to afford a complete loss of his, her
or its investment in the Shares.
Section 4.5 INVESTMENT EXPERIENCE. The Purchaser has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Shares.
Section 4.6 OPPORTUNITY TO ASK QUESTIONS. The Purchaser has had a full
and fair opportunity to make inquiries about the terms and conditions of this
Agreement, to discuss the same and all related matters with his own independent
counsel, his own accountants and tax advisers. The Purchaser has been given the
opportunity to ask questions of, and receive answers from Seller concerning the
terms and conditions of this Agreement and to obtain such additional written
information about Seller to the extent Seller possesses such information or can
acquire it without unreasonable effort or expense. Notwithstanding the
foregoing, Purchaser has had the opportunity to conduct its own independent
investigation. The Purchaser acknowledges and agrees that the Seller has not
made, nor is the Seller
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making, any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth herein.
Section 4.7 BROKERS. Purchaser has not retained any broker or finder in
connection with any of the transactions contemplated by this Agreement, and
Purchaser has not incurred or agreed to pay, or taken any other action that
would entitle any Person to receive, any brokerage fee, finder's fee or other
similar fee or commission with respect to any of the transactions contemplated
by this Agreement.
ARTICLE 5
COVENANTS OF THE COMPANY
Section 5.1 PUBLIC SELLER STATUS. The Seller shall make any and all
required filings under the Exchange Act so that it remains a reporting company
under the Exchange Act and its Common Stock continues to be a publicly-traded
security. The Seller shall, to the best of its ability, cause its Common Stock
to continue to be approved for listing on the OTCBB.
Section 5.2 PIGGY-BACK REGISTRATION. If at any time following the
Closing Date, the Seller shall determine to prepare and file with the Commission
a registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities (a
"Registration Statement"), other than on Form S-4 or Form S-8 (each as
promulgated under the Securities Act), then the Seller shall send to Purchaser a
written notice of such determination and, if within fifteen (15) days after the
date of such notice, Purchaser shall so request in writing, the Seller shall
include in such Registration Statement all or any part of such Shares. If the
Registration Statement is being filed pursuant to a third-party written
agreement obligating the Seller to file same (a "Registration Agreement"),
Purchaser requesting to be included in such Registration Statement shall be
entitled to receive all notices and documents sent by the Seller to the
third-party whose securities are being registered pursuant to such Registration
Agreement.
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ARTICLE 6
COVENANTS OF THE PARTIES
The parties hereto agree that:
Section 6.1 PUBLIC ANNOUNCEMENTS. Except as required by applicable law,
the Seller and the Purchaser shall consult with each other before issuing any
press release or making any public statement with respect to this Agreement or
the transactions contemplated hereby and will not issue any such press release
or make any such public statement prior to such consultation and without the
consent of the other parties.
Section 6.2 NOTICES OF CERTAIN EVENTS. In addition to any other notice
required to be given by the terms of this Agreement, each of the parties shall
promptly notify the other party hereto of:
(a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with any of the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings commenced
or, to its knowledge threatened against, relating to or involving or otherwise
affecting such party that, if pending on the date of this Agreement, would have
been required to have been disclosed pursuant to Section 3 or Section 4 (as the
case may be) or that relate to the consummation of the transactions contemplated
by this Agreement.
Section 6.3 ACCESS TO INFORMATION. Following the date hereof, until
consummation of all transactions contemplated hereby, the Seller shall give to
the Purchaser, their counsel, financial advisers, auditors and other authorized
representatives reasonable access to the offices, properties, books and records,
financial and other data and information as the Purchaser and his
representatives may reasonably request.
Section 6.4 PROXY STATEMENT. If deemed advisable by the Seller and its
counsel, Purchaser will cooperate with Seller in preparing and filing with the
SEC the notice required by Rule 14f-1 promulgated under the Securities Exchange
Act of 1934 relating to a change in majority of directors of the Company.
Section 6.5 SELLER'S BUSINESS. Except as contemplated by this Agreement
and in connection with the Subsidiary Sale, Seller will not, without the prior
written consent of Purchaser, (i) make any material change in the type or nature
of its business, or in the nature of its operations, (ii) create or suffer to
exist any debt, other than that currently shown in the SEC Reports, (iii) issue
any capital stock or (iv) enter into any new agreements of any kind or undertake
any new obligations or liabilities.
Section 6.6 CONSENTS OF THIRD PARTIES. Each of the Parties will give
any notices to third parties, and will use its reasonable best efforts to obtain
any third party consents, that the other Parties reasonably may request in
connection with this Agreement. Each of the Parties will give any notices to,
make any filings with, and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters in this Agreement.
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ARTICLE 7
CONDITIONS PRECEDENT
Section 7.1 CONDITIONS OF OBLIGATIONS OF THE PURCHASER. The obligations
of the Purchaser are subject to the satisfaction of the following conditions,
any or all of which may be waived in whole or in part by Purchaser:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Seller set forth in this Agreement shall be true and correct
in all material respects as of the Closing Date, as though made on and as of
such date.
(b) COMPLIANCE CERTIFICATE. The Chief Executive Officer of Seller shall
deliver to the Purchaser at the Closing a certificate certifying: (i) that there
has been no material adverse change in the business, affairs, prospects,
operations, properties, assets or conditions of the Seller since the date of
this Agreement; (ii) that attached thereto is a true and complete copy of
Seller's Articles of Incorporation, as amended, as in effect at the Closing;
(iii) that attached thereto is a true and complete copy of its By-laws as in
effect at the Closing; and (iv) each of the representations and warranties of
the Seller set forth in this Agreement are true and correct in all material
respects as of the Closing Date as though made on and as of the Closing Date.
(c) GOOD STANDING CERTIFICATE. The Seller shall have furnished the
Purchaser with good standing and existence certificates for Seller from the
State of Nevada.
(d) CERTIFIED LIST OF RECORD HOLDERS. The Purchaser shall have received
a current certified list from the Seller's transfer agent of the holders of
record of Seller's Common Stock.
(e) BOARD OF DIRECTORS RESOLUTIONS. The Purchaser shall have received
executed resolutions of the Board of Directors of Seller approving this
Agreement and the transactions contemplated herein.
(f) PERFORMANCE. The Seller shall have materially performed and
materially complied with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or
before the Closing.
(g) RESIGNATION OF OFFICERS AND DIRECTORS. The officers and directors
or Seller shall have resigned from such positions effective immediately prior to
Closing, and Purchaser's designees for such positions shall have been duly
appointed.
(h) PURCHASE OF OTHER SHARES. On or before the Closing Date, Purchaser
shall purchase from certain shareholders of the Seller, an aggregate of
1,300,000 shares of Seller's issued and outstanding Common Stock held by them.
(i) NO INJUNCTION. There shall not be in effect, at the Closing Date,
any injunction or other binding order of any court or other tribunal having
jurisdiction over Seller that prohibits the sale of the Shares to Purchaser.
(j) LEGAL OPINION. Seller shall deliver an opinion of counsel that the
Shares, upon delivery to the Purchasers, will be duly authorized, validly
issued, fully paid and non-assessable.
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Section 7.2 CONDITIONS OF OBLIGATIONS OF THE SELLER. The obligations of
the Seller to effect the sale of the Shares are subject to the following
conditions, any or all of which may be waived in whole or in part by the Seller:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Purchaser set forth in this Agreement shall be true and
correct in all material respects as of the Closing Date.
(b) COMPLIANCE CERTIFICATE. An authorized officer of the Purchaser, if
not an individual, and Purchaser that is an individual, shall each deliver to
the Seller at the Closing a certificate certifying each of the representations
and warranties of such Purchaser set forth in this Agreement are true and
correct in all material respects as of the Closing Date as though made on and as
of the Closing Date.
(c) PERFORMANCE. The Purchaser shall have materially performed and
materially complied with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it or him
on or before the Closing.
(d) NO INJUNCTION. There shall not be in effect, at the Closing Date,
any injunction or other binding order of any court or other tribunal having
jurisdiction over Seller that prohibits the sale of the Shares to Purchaser.
ARTICLE 8
TERMINATION
Section 8.1 TERMINATION. This Agreement may be terminated and the
purchase and sale of the Shares may be abandoned at any time prior to the
Closing:
(a) by mutual written consent of the parties hereto;
(b) by either the Seller or the Purchaser if the Closing shall not have
occurred on or before June [30], 2006 (unless the failure to consummate the
transactions by such date shall be due to the action or failure to act of the
party seeking to terminate this Agreement);
(c) by the Purchaser if (i) Seller shall have failed to timely comply
in any material respect with any of the covenants, conditions, terms or
agreements contained in this Agreement to be complied with or performed by
Seller, which breach is not cured within ten (10) days if capable of cure; or
(ii) any representations and warranties of Seller contained in this Agreement
shall have been materially false when made or on and as of the Closing Date as
if made on and as of Closing Date (except to the extent it relates to a
particular date); or
(d) by Seller if (i) the Purchaser shall have failed to timely comply
in any material respect with any of the covenants, conditions, terms or
agreements contained in this Agreement to be complied with or performed by it,
which breach is not cured within ten (10) days if capable of cure; or (ii) any
representations and warranties of the Purchaser contained in this Agreement
shall have been materially false when made or on and as of the Closing Date.
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Section 8.2 EFFECT OF TERMINATION. In the event of the termination of
this Agreement pursuant to this Article 8, all further obligations of the
parties under this Agreement shall forthwith be terminated without any further
liability of any party to the other parties; provided, however, that nothing
contained in this Section 8.2 shall relieve any party from liability for any
breach of this Agreement. Upon termination of this Agreement for any reason,
Purchaser shall promptly cause to be returned to Seller all documents and
information obtained in connection with this Agreement and the transactions
contemplated by this Agreement and all documents and information obtained in
connection with Purchaser's investigation of the Seller's business, operations
and legal affairs, including any copies made by Purchaser of any such documents
or information.
ARTICLE 9
MISCELLANEOUS
Section 9.1 NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing and either delivered personally,
telecopied or sent by certified or registered mail, postage prepaid,
IF TO PURCHASERS:
Xxxxxx X. Xxxxx, Esq.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
and: R & R Biotech Partners LLC
0000 Xxxxxx xx Xxxxxxxx - 16th Floor
New York, N.Y. 10020
Attn: Xxxxxx X. Xxxxx, Chief Financial Officer
Fax: 000-000-0000
with a copy to:
---------------
Xxxxxxx Xxxx, Esq.
Morse, Zelnick, Rose and Lander, LLP
000 Xxxx Xxx. Xxxxx 0000
Xxx Xxxx, Xxx Xxxx, 00000
Fax: 000-000-0000
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IF TO SELLER:
Aerobic Creations, Inc.
000-00000 Xxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxx Xxxxxxxx
Xxxxxx, X0X 0X0
with a copy to:
---------------
Xxxxx X. Xxxxxxx, Esq.
Batcher, Xxxxxxx & Xxxxx, LLP
0000 Xxxxxx Xxxx, #000
Xxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
or such other address or fax number as such party may hereafter specify for the
purpose by notice to the other parties hereto. All such notices, requests and
other communications shall be deemed received on the date delivered personally
or by overnight delivery service or telecopied or, if mailed, five business days
after the date of mailing if received prior to 5 p.m. in the place of receipt
and such day is a business day in the place of receipt. Otherwise, any such
notice, request or communication shall be deemed not to have been received until
the next succeeding business day in the place of receipt.
Section 9.2 AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement with respect to transactions
contemplated hereby may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by the Seller
and Purchaser; or in the case of a waiver, by the party against whom the waiver
is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 9.3 FEES AND EXPENSES. Subject to Section 2.3 above, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
Section 9.4 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that Purchaser shall have the right
to assign this Agreement to an affiliate or assignee of Purchaser reasonably
acceptable to Seller and no other party hereto may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of each other party hereto, but any such transfer or assignment will not
relieve the appropriate party of its obligations hereunder.
Section 9.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the principles of conflicts of law thereof.
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Section 9.6 JURISDICTION. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought in
any federal or state court located in New York, New York, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 9.1 shall be deemed
effective service of process on such party. Each party hereto (including its
affiliates, agents, officers, directors and employees) hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
Section 9.7 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto. No provision of
this Agreement is intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
Section 9.8 ENTIRE AGREEMENT. This Agreement and the Exhibits and
Schedules hereto constitute the entire agreement between the parties with
respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof.
Section 9.9 CAPTIONS. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
Section 9.10 SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority 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
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any parties. Upon
such a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
Section 9.11 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof in addition to any other
remedy to which they are entitled at law or in equity.
Section 9.12 DEFINITION AND USAGE.
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For purposes of this Agreement:
"Affiliate" means, with respect to any Person, any other
Person, directly or indirectly controlling, controlled by, or under common
control with such Person.
"Indebtedness" shall mean (a) any liabilities for borrowed
money or amounts owed, (b) all guaranties, endorsements and other contingent
obligations, whether or not the same are or should be reflected in the Seller's
balance sheet or the notes thereto, except guaranties by endorsement of
negotiable instruments for deposit or collection in the ordinary course of
business, and (c) the present value of any lease payments under leases required
to be capitalized in accordance with GAAP.
"Material Adverse Effect" means any effect or change that is
or would be materially adverse to the business, operations, assets, prospects,
condition (financial or otherwise) or results of operations of the Company and
any of its subsidiaries, taken as a whole.
"Person" means an individual, corporation, partnership,
limited liability company, association, trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Taxes" means any and all federal, state, local, foreign or
other taxes of any kind (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect thereto) imposed by
any taxing authority, including, without limitation, taxes or other charges on
or with respect to income, franchises, windfall or other profits, gross
receipts, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation, or net worth, and taxes or
other charges in the nature of excise, withholding, ad valorem or value added.
Section 9.13 EXPIRATION OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
Except for the covenants set forth in Section 5 above, all covenants,
representations and warranties set forth in this Agreement shall terminate and
expire, and shall cease to be of any force or effect, on the Closing Date, and
all liability of the parties hereto with respect to such covenants shall
thereupon be extinguished.
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IN WITNESS WHEREOF, Purchaser and Seller have caused this Stock
Purchase Agreement to be executed as of as of the day and year first above
written.
SELLER:
AEROBIC CREATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer and Sole Director
PURCHASERS: PORTION OF THE PURCHASED SHARES
XXXXXX X. XXXXX 20%
/s/ Xxxxxx X. Xxxxx
--------------------------------------------
Xxxxxx X. Xxxxx
R&R BIOTECH PARTNERS, LLC 80%
By: /s/ Xxxxxx Xxxxx
--------------------------------------------
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
17
