AGREEMENT OF PURCHASE AND SALE OF SHARES
This agreement of purchase and sale is made in two original copies
between:
XXXXX AND XXXXXXX XXXXXX (the "Vendor")
and
SCOTTSDALE SCIENTIFIC, INC. (the "Purchaser")
Whereas the Vendor owns all of the issued shares of
NUTRICOLOGY, INC. (the "Corporation")
IT IS AGREED AS FOLLOWS:
1.01 SUBJECT MATTER
The Purchaser agrees to buy and the Vendor agrees to sell to the Purchaser
all of the shares owned by the Vendor in the Corporation (the "Shares").
2.01 PURCHASE PRICE
The purchase price payable for all the Shares shall be 9,800,000 common
shares of Scottsdale Scientific, Inc. It is understood and agreed that the
purchase price of the Shares is based on the financial position of the
Corporation shown in the balance sheet produced by the Vendor for the
Corporation and appended as Schedule A.
3.01 TERMS OF PAYMENT
The Vendor acknowledges receiving 9,800,000 common shares of Scottsdale
Scientific, Inc., representing 67.6% of the total issued and outstanding shares
of Scottsdale Scientific, Inc., from the Purchaser on execution of this
agreement.
4.01 CONDITIONS, REPRESENTATIONS, AND WARRANTIES
In addition to anything else in this agreement, the following are
conditions of completing this agreement in favor of the Purchaser:
(a) that the Vendor owns all the issued shares of the Corporation;
(b) that the Shares are fully paid-up and non-assessable;
(c) that no agreement or option exists pursuant to which the Corporation is
or may be obliged to issue further shares of its authorized capital;
(d) that the Shares are sold free and clear of all liens, encumbrances, and
charges;
(e) that any consent required for the transfer of the Shares in accordance
with the Purchaser's direction is given;
(f) that the Corporation is duly incorporated, validly subsisting, and in
good standing under the laws of its jurisdiction of incorporation;
(g) that the Corporation is not party to any collective agreement with a
labor union;
(h) that the Vendor give the Purchaser and all duly authorized
representatives of the Purchaser full and complete access during normal business
hours to the business premises and corporate, business, accounting, tax, and
employment records of the Corporation for the purpose of investigating the
business and affairs of the Corporation;
(i) that the Vendor supply or deliver on closing all of the closing
documents.
4.02 CONFIDENTIALITY
The Purchaser agrees that, unless and until the purchase of the Shares
contemplated in this agreement is completed, the Purchaser shall keep
confidential all information obtained by the Purchaser from the Vendor or the
Corporation about the Vendor and the business and affairs of the Corporation.
4.03 REPRESENTATIONS AND WARRANTIES OF VENDOR
The following representations and warranties are made and given by the
Vendor to the Purchaser and expressly survive the closing of this agreement. The
representations are true as of the date of this agreement and will be true as of
the date of closing when they shall continue as warranties according to their
terms:
(a) the Articles of Incorporation and all amendments to the Articles of
Incorporation of the Corporation are as stated in Schedule B;
(b) the issued share capital of the Corporation is as stated in Schedule C;
(c) the balance sheet appended in Schedule A and the financial statements
for the last three complete fiscal years of the Corporation produced by the
Vendor appended in Schedule D have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis and are fair and
accurate;
(d) the Corporation owns the assets recorded in the balance sheet appended
in Schedule A free and clear of liens, charges, and encumbrances except as noted
in Schedule E;
(e) the Corporation has properly reported and is not in arrears of payment
of any direct or indirect taxes or of any employee -related statutory deductions
or remittances;
(f) the corporate, business, accounting, tax, and employment records of the
Corporation are complete in all material respects;
(g) the business of the Corporation will not be adversely affected in any
material respect in any way, whether by the Vendor or by any other person or
cause whatsoever, up to the closing and the Vendor will not do anything before
or after closing to prejudice the goodwill of the Corporation;
(h) the Corporation will carry on business as usual until closing except
that it will not declare any dividends or make any other distributions of
capital or retained earnings or undertake or compromise any major contractual
liabilities without the express written consent of the Purchaser;
(i) there are no outstanding legal actions or judgments against the
Corporation and the Corporation is not in default of any agreement to which the
Corporation is a party and all such agreements are in good standing and the
Corporation is entitled to all stated benefits in such agreements;
(j) the Vendor has made full and fair disclosure in all material respects
of any matter that could reasonably be expected to affect the Purchaser's
decision to purchase the shares on the terms set out in this agreement;
(k) the Vendor will execute such assignments, consents, clearances, or
assurances after closing, prepared at the Purchaser's expense, as the Purchaser
considers necessary or desirable to assure the Purchaser of the proper and
effective completion of this agreement.
4.04 REPRESENTATIONS AND WARRANTIES OF PURCHASER
The following warranty is made and given by the Purchaser to the Vendor in
consideration of the closing of this agreement:
(a) the Purchaser will indemnify and save the Vendor harmless from claims
on any outstanding personal guarantees given by the Vendor for the contractual
obligations of the Corporation;
(b) Purchaser is a corporation duly organized, validly existing, and in
good standing under the laws of its jurisdiction of incorporation, with all
requisite power and authority to own, lease, license, and use its properties and
assets and to carry on the business in which it is now engaged and in which it
contemplates engaging;
(c) the shares of Purchaser Common Stock to be delivered to the Vendor
pursuant to this Agreement, when issued in accordance with the terms and
provisions of this Agreement, will be validly authorized, validly issued, fully
paid, and non-assessable.
(d) the Purchaser has all the requisite power and authority to execute,
deliver, and perform this Agreement. All necessary corporate proceedings of the
Purchaser have been duly taken to authorize the execution, delivery, and
performance of this Agreement by the Purchaser. This Agreement has been duly
authorized, executed, and delivered by the Purchaser, is the legal, valid, and
binding obligation of the Purchaser, and is enforceable as to them in accordance
with its terms;
(e) the Purchaser is acquiring the Nutricology' s Common Stock for its own
account (and not for the account of others) for investment and not with a view
to the distribution thereof. The Purchaser will not sell or otherwise dispose of
such shares (whether pursuant to a liquidating dividend or otherwise) without
registration under the Securities Act or an exemption therefrom, and the
certificate or certificates representing such shares may contain a legend to the
foregoing effect.
(f) the Purchaser (Scottsdale Scientific, Inc.) further warrants that it is
in compliance with all Federal law considerations of Section 5 of the Securities
Act of 1933, unless a specific exemption is available, and that the requirements
of that exemption are complied with.
(g) the Purchaser further warrants that all SEC regulatory provisions set
forth in Rule 145 of the Securities Act of 1933 have been complied with, if
applicable.
(h) the Purchaser further warrants that all reorganization transactions
that require shareholder approval, and involve the issuance or exchange of stock
or other securities, comply with the applicable California Corporations Code
concerning corporate securities.
(i) the Purchaser further warrants that it has complied with all 'Blue Sky'
regulations or any exemptions thereof, and registered said compliance or
exemption with the proper authorities in the Department of Corporations, State
of California.
(j) Purchaser further warrants that it has obtained under California
Corporate Securities Law (11CSL11) a proper permit, issued by California
Department of Corporations or is in the process of applying for such a permit
(referred to as a "qualification") or pursuant to a specific exemption from such
qualification requirement that is provided by the CSL or by a ruling by the
commissioner of the California Commission of Corporations (CSL ss.25140).
(k) Purchaser further warrants that it has complied with CSL ss.25110,
which requires that a permit be obtained from the Department of Corporations to
offer or sell any security in California in an "issuer transaction" (which
includes share exchanges in business combination transactions), and CSL
ss.25120, which prohibits the offer or sale of securities "in an issuer
transaction in connection with any ... merger or consolidation ..." or any
changes in the "rights, preferences, privileges, or restrictions of or on any
outstanding securities", unless such a permit is obtained, or Purchaser is
exempt under CSL ss.25103(h) (Limited Offering Exemption for Mergers and
Corporate Asset Sales) .
5.01 RESIGNATIONS
Subsequent to the signing of the closing documents of this Agreement, a
Special Meeting of the Board of Directors will be called at which time the
resignations of four of the five man Board of Directors of Scottsdale
Scientific, Inc. will be accepted and Vendor will appoint four interim Directors
to serve on the five member board until new Director elections at the next
annual Shareholder's meeting of Scottsdale Scientific, Inc.
5.02 NON-COMPETITION
The Vendor covenants with the Purchaser that, in consideration of the
closing of this agreement, the Vendor will not operate a wholesale/retail
nutritional supplement business or in any way aid or assist any other person to
operate such a business in the City of San Francisco for a period of two years
from the date of closing.
6.01 CLOSING DOCUMENTS
The Vendor shall deliver to the Purchaser, in registrable form where
applicable, the following closing documents (the "Closing Documents"), prepared
or obtained at the Vendor's expense on or before closing:
(a) certificates of the Shares duly assigned in accordance with the
direction of the Purchaser together with satisfactory proof of the giving of any
consent required for the assignment;
(b) all the corporate, business, accounting, tax, and employment records
for the Corporation;
(c) such other assignments, consents, clearances, or assurances as the
Purchaser reasonably considers necessary or desirable to assure the Purchaser of
the proper and effective completion of this agreement.
7.01 CLOSING DATE
The purchase and sale in this agreement shall close on
_______________________, 1998.
8.01 NUMBER AND GENDER
In this agreement, the singular includes the plural and the masculine
includes the feminine and neuter and vice versa unless the context otherwise
requires.
8.02 HEADINGS
The capitalized headings in this agreement are only for convenience of
reference and do not form part of or affect the interpretation of this
agreement.
8.03 SEVERABILITY
If any provision or part of any provision in this agreement is void for any
reason, it shall be severed without affecting the validity of the balance of
this agreement.
8.04 EFFECT OF WAIVER
The failure of any party at any time or times to require performance of a
provision of the Agreement will in no manner affect the right to enforce the
same. The waiver by any party of any breach of any provision of the Agreement
will not be construed to be a waiver by any such party of any breach of any
other provision.
8.05 TIME IS OF THE ESSENCE
Time is of the essence of this agreement.
8.06 COMPLETE AGREEMENT
There are no representations, warranties, conditions, terms, or collateral
contracts affecting the transaction contemplated in this agreement except as set
out in this agreement.
8.07 MODIFICATION
This Agreement may not be modified, amended, altered, or supplemented
except upon the execution and delivery of a written agreement by each of the
parties.
8.08 BINDING NATURE
This agreement binds and benefits the parties and their respective heirs,
executors, administrators, personal representatives, successors, and assigns.
8.09 GOVERNING LAW
This agreement is governed by the laws of the State of California.
9.01 ACCEPTANCE
This agreement executed on behalf of the purchaser constitutes an offer to
purchase which can only be accepted by the Vendor by return of at least one
originally accepted copy of agreement to the Purchaser on or before
_____________________, 1998, failing which the offer becomes null and void.
DATED: February 3, 1998 /s/ Xxxxxxx Xxxxxx
---------------- -------------------
Dr. Xxxxxxx Xxxxxx
Authorized Signator by and for
Nutricology, Inc. as both an
Officer and Director
DATED: February 2, 1998 /s/ Xxxxxx X. Xxxxx
---------------- -------------------
Xx. Xxxxxx X. Xxxxx
Authorized Signator by and for
Scottsdale Scientific, Inc. as
both an Officer and Director
