Exhibit 10.7
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is
being entered into by and between CalbaTech, Inc., a Nevada
corporation ("CTI" or "CalbaTech"), Molecula Research Laboratories,
LLC, a Virginia LLC ("Molecula" or "Acquired Corporation") and the
unitholders of Molecula that shall agree to exchange their
stockholdings in accordance with the terms hereof. This Agreement
shall become effective as of the latter date written in conjunction
with the signatures affixed hereto (the "Effective Date").
WHEREAS, CTI is a corporation organized and existing under the
laws of the State of Nevada, with its principal business office
located at ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
and Molecula is a corporation organized and existing under the laws
of the State of Virginia, with its principal business office located
at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. CTI and Molecula
are collectively referred to herein as the "Constituent Corporations";
WHEREAS, the authorized capital stock of CTI consists of two
hundred million (200,000,000) shares of common stock, par value of
one tenth of one cent ($0.001) per share, of which there are
approximately twelve million four hundred thousand (12,400,000)
shares are presently issued and outstanding;
WHEREAS, the authorized capital stock of Molecula consists of
one hundred thousand (100,000) shares of common stock, par value of
one tenth of one cent ($0.001) per share, of which one hundred
thousand (100,000) shares are presently issued and outstanding and
held by the unitholders of Molecula;
WHEREAS, pursuant to the terms of this Agreement, CTI will
acquire all of the issued and outstanding units of Molecula's units
from the unitholders of Molecula in exchange for 500,000 shares of
CTI's common stock in a transaction intended to be a tax-free
reorganization under Section 368 of the Internal Revenue Code of
1986, as amended (the "Code"), and the parties intend that this
Agreement shall constitute a plan of reorganization for the purposes
of Section 368 of the Code, such that immediately following such
exchange, Molecula will become a wholly-owned subsidiary of CTI. The
foregoing exchange and issuance, together with the other transactions
contemplated herein, are collectively referred to herein as the "Transaction";
WHEREAS, the respective Boards of Directors of CTI and Molecula,
as well as their respective shareholders and unitholders, where
necessary, deem it desirable and in their best interests that the
Constituent Corporations enter into this Agreement and consummate the
Transaction pursuant to the terms and conditions contained herein;
and
NOW, THEREFORE, in consideration of the promises and mutual
agreements, provisions and covenants herein contained, the receipt
and sufficiency of which is hereby acknowledged and agreed, the
parties agree as follows:
On September 30, 2003, or on such other date that the parties
shall agree (the "Closing"):
6. Molecula unitholders will transfer all Molecula units to CTI;
7. CTI will issue five hundred thousand (500,000) shares (the
"Shares") of its common stock to the Molecula unitholders pro
rata in accordance with their respective percentage ownership
of the Molecula units. No fractional shares shall be issued;
8. CTI will also agree to make available, over the next twelve
months, at times agreeable to both Molecula and CTI, such
operational capital as to equal an amount no greater than two
hundred thousand dollars ($200,000) and no less than one
hundred thousand dollars ($100,000). Such amount may be
reduced in whole or in part in agreement by the Constituent
Parties and may be satisfied through in-kind contributions by
CTI;
9. CTI will offer to ▇▇▇▇ ▇▇▇▇▇▇ a position on the Scientific
Advisory Board of CalbaTech, Inc. and such position shall be
consistent with the same terms and conditions for all current
members of the Scientific Advisory Board, which is to include
one hundred thousand free trading shares of CTI.
ARTICLE I
EXCHANGE OF INTEREST
3. Shareholder and Unitholder Approval.
The Closing is contingent upon, among other things, the approval
of the Transaction by the unitholders of Molecula. As long as more
than Fifty-One Percent (51%) of the units of Molecula approve the
Transaction, then CTI shall issue to those shareholders approving the
Transaction the appropriate pro-rata percentage commensurate with
approval, of the 500,000 shares of CTI contemplated in the
Transaction. By example, if Sixty Percent (60%) of the Molecula
unitholders approve the Transaction, then CTI shall issue 180,000
shares of CTI and have no duty to issue the remaining 120,000 shares
of the 300,000 shares contemplated by this Transaction. It is
understood by Molecula that at least 80% of all of the unitholders of
Molecula may need to approve the Transaction by executing consents in
form and substance satisfactory to CTI in order for the Transaction
as contemplated to be a tax-free reorganization as provided for under
Section 368 of the Code. In the event that CTI is in receipt of
written consent of no less than Ninety Percent (90%) of the
unitholdings of Molecula within sixty (60) days of the execution of
this Agreement, it is agreed that CTI shall have no further
continuing duty to the non-consenting unitholders of record of Molecula.
4. Filings After Shareholder Approval.
As soon as practicable after all conditions to the obligations
of the parties to this Agreement to effect the exchange of interest
shall have been satisfied or otherwise waived in writing, CTI shall
file with the Nevada Secretary of State the documents, where
necessary or required by Nevada Law, and take such other and future
actions as may be required by Nevada law to make the exchange of
interest effective. Notwithstanding any duties imposed hereby, the
Transaction shall become effective upon Closing.
ARTICLE II
NAME AND CONTINUED CORPORATE EXISTENCE
OF ACQUIRED CORPORATION
The corporate name of Molecula, the Acquired Corporation, whose
corporate existence is to survive this exchange of interest and
continue thereafter, and its identity, existence, purposes, powers,
objects, franchises, rights and immunities shall continue unaffected
and unimpaired by the exchange of interest.
ARTICLE III
DIRECTORS AND OFFICERS
OF ACQUIRED CORPORATION
2. Directors.
Upon Closing, CTI agrees to take such corporate actions as are
necessary to approve the current members of the MOLECULA board of
directors until such time as a unitholder meeting is held.
2. Officers.
The current officers of the Molecula shall remain in place as in
their current status.
ARTICLE IV
TERMS OF THE EXCHANGE OF SHARES
At Closing, CTI will issue the Shares to Molecula's unitholders
and Molecula and its unitholders shall take such steps as are
necessary to transfer all shares of Molecula's capital units to CTI.
The Shares issued shall be unregistered shares and the resale or
other transfer thereof shall be subject to the restrictions set forth
in SEC Rule 144.
ARTICLE V
OTHER TERMS OF PAYMENT
CTI will also agree to make available, over the next twelve
months, at times agreeable to both Molecula and CTI, such operational
capital as to equal an amount no greater than two hundred thousand
dollars ($200,000) and no less than one hundred thousand dollars.
Such amount may be reduced in whole or in part in agreement by the
Constituent Parties and may be satisfied through in-kind
contributions by CTI.
ARTICLE VI
ASSETS AND LIABILITIES
On the Closing, all property, real, personal and mixed, and all
debts due to either of the Constituent Corporations on whatever
account, as well for stock subscriptions as all other choses in
action, and all and every other interest of or belonging to either of
Constituent Corporations shall remain with each of the Constituent
Corporations, and the title to any real estate or any interest,
whether vested by deed or otherwise, in either of the Constituent
Corporations shall not revert or be in any way impaired by reason of
the exchange. It is understood and agreed to by Molecula that CTI is
not, under any circumstances, assuming the existing debts,
liabilities and/or obligations of Molecula. The parties respectively
agree that from time to time, when requested by either party or by
its successors or assigns, they will execute and deliver or cause to
be executed and delivered all deeds and instruments, and will take or
cause to be taken all further or other action, as either party may
deem necessary or desirable in order to vest in and confirm to each
of the respective parties or its successors or assigns title to and
possession of all the property and rights and otherwise carry out the
intent and purposes of this Agreement.
ARTICLE VII
CONDUCT OF BUSINESS BY MOLECULA
Prior to Closing, Molecula shall conduct its business in its
usual and ordinary manner, and shall not enter into any transaction
other than in the usual and ordinary course of such business. It is
understood and agreed to that Molecula shall continue to seek
acquisitions, both tangible and intangible, as well as seek other
sources of debt or equity funding that are in the best interest of
Molecula, and as such, these activities are considered within its
usual and ordinary course of business. Without limiting the
generality of the above, Molecula shall not, except as otherwise
consented to in writing by CTI or as otherwise provided in this Agreement:
1. Amend its certificate of incorporation or its bylaws;
2. Declare or pay any dividend or make any other distribution upon
or with respect to its capital stock;
3. Repurchase any of its outstanding stock or by any other means
transfer any of its funds to its shareholders either selectively or
rateably, in return for value or otherwise, except as salary or other
compensation in the ordinary or normal course of business;
4. Undertake or incur any obligations or liabilities except current
obligations or liabilities in the ordinary course of business and
except for liabilities for fees and expenses in connection with the
negotiation and consummation of the Transaction in amounts to be
determined after the Effective Date;
5. Mortgage, pledge, subject to lien or otherwise encumber any
realty or any tangible or intangible personal property;
6. Sell, assign or otherwise transfer any tangible assets of
whatever kind, or cancel any claims, except in the ordinary course of
business;
7. Sell, assign, or otherwise transfer any trademark, trade name,
patent or other intangible asset;
8. Default in performance of any material provision of any material
contract or other obligation; or
9. Waive any right of any substantial value.
ARTICLE VIII
WARRANTIES OF THE CONSTITUENT CORPORATIONS
3. Representations and Warranties of Molecula.
Molecula covenants, represents and warrants to CTI that:
a. It is, on the date of this Agreement and will be up to and
including the Closing: (i) a limited liability company duly organized
and existing and in good standing under the laws of the jurisdiction
of the State of Virginia; and (ii) duly authorized under its
articles, and under applicable laws, to engage in the business
carried on by it;
b. Its Board of Directors has and its shareholders have authorized
and approved the execution and delivery of this Agreement, and the
performance of the Transaction contemplated by this Agreement;
c. To the best of Molecula's knowledge, it has complied with, and
is not in violation of any applicable Federal, State, or local
statutes, laws, and regulations affecting its properties or the
operation of its business;
d. Except as contemplated by this Agreement, Molecula is not
involved as a defendant or plaintiff in any suit, action,
arbitration, or legal, administrative or other proceeding, which to
its best knowledge, would affect the company or its business, assets,
or financial condition in a negative manner; or, governmental
investigation which is pending; to the best of its knowledge,
threatened against or affecting the company or its business assets or
financial condition; and is not in default with respect to any order,
writ, injunction or decree of any Federal, State, local/foreign
court, department, agency, or instrumentality applicable to it;
e. Except as contemplated by this Agreement, the execution and
delivery of this Agreement and its performance in the time and manner
contemplated will not cause, constitute, or conflict with, or result
in: (i) a breach or violation of any provisions of or constitute a
default under any license, mortgage, article of incorporation, bylaw,
other similar agreement to which the company is a party, or by which
it may be bound, nor will any consents or authorizations of any party
other than those required; (ii) any event that would permit any party
to any agreement or instrument to terminate it or to accelerate the
maturity of any indebtedness or other obligation of the company; or,
(iii) an event that would result in the creation or imposition of any
lien, charge, encumbrance on any asset;
f. All federal, state and local tax returns required to be filed by
it on or before the Closing will have been filed, and all taxes shown
to be required to be paid on or before the Closing will have been
paid, unless such taxes outstanding have been disclosed to CTI; and
g. All leases now held by it are now and will be on the Closing in
good standing and not voidable or void by reason of any default whatsoever.
4. Representations and Warranties of CTI.
CTI covenants, represents and warrants to Molecula that:
a. It is on the date of this Agreement, and will be on Closing
Date: (i) a corporation duly organized and existing and in good
standing under the laws of the jurisdiction of the State of Nevada;
and (ii) duly authorized under its articles, and under applicable
laws, to engage in the business carried on by it;
b. Its Board of Directors has authorized and approved the execution
and delivery of this Agreement, and the performance of the
Transaction contemplated by this Agreement;
c. It has complied with, and is not in violation of any applicable
Federal, State, or local statutes, laws, and regulations affecting
its properties or the operation of its business.
d. It is not involved as a defendant or plaintiff in any suit,
action, arbitration, or legal, administrative or other proceeding,
which to its best knowledge, would affect the company or its
business, assets, or financial condition in a negative manner; or,
governmental investigation which is pending; to the best of its
knowledge, threatened against or affecting the company or its
business assets or financial condition; and is not in default with
respect to any order, writ, injunction or decree of any Federal,
State, local/foreign court, department, agency, or instrumentality
applicable to it;
e. The execution and delivery of this Agreement and its performance
in the time and manner contemplated will not cause, constitute, or
conflict with, or result in any of the following: (1) a breach or
violation of any provisions of or constitute a default under any
license, indenture, mortgage instrument, article of incorporation,
bylaw, other agreement or instrument to which the company is a party,
or by which it may be bound, nor will any consents or authorizations
of any party other than those required, (2) any event that would
permit any party to any agreement or instrument to terminate it or to
accelerate the maturity of any indebtedness or other obligation of
the company, or, (3) an event that would result in the creation or
imposition of any lien, charge, encumbrance on any asset;
f. It is a fully reporting company under the Securities Exchange
Act of 1934, and is current in all its reporting requirements;
g. CTI's common stock is listed and trading on the Over the Counter
Bulletin Board (under the trading symbol "CLBE") and no restrictions
have been imposed on the trading of these shares by the National
Association of Securities Dealers, Inc. or any other regulatory body;
and
h. As contemplated by the provisions provided in Article V, and in
adherence to a mutually agreeable schedule as agreed upon by the
Constituent Corporations post-consummation of this Transaction, in
the event that CTI is unable to perform as to the terms and
conditions of Article V and the anticipated mutually agreeable
schedule, Molecula shall have the right to rescind this Transaction
with the understanding that any and all Shares of CTI that have
transferred to Molecula shall remain the property of Molecula.
ARTICLE IX
CONSUMMATION OF EXCHANGE
If the exchange contemplated is completed, all expenses incurred
in consummating the plan of exchange shall, except as otherwise
agreed in writing between the Constituent Corporations, be borne by
the party incurring the expense.
ARTICLE X
MISCELLANEOUS
1. Access to Books and Records.
Molecula shall, before Closing, afford to the officers and
authorized representatives of CTI free and full access to its books
and records, and the officers of Molecula will furnish CTI with
financial and operating data and other information as to the business
and properties of Molecula as CTI shall from time to time reasonably
request. CTI shall, before Closing, afford to the officers and
authorized representatives of Molecula free and full access to its
books and records, and the officers of CTI will furnish Molecula with
financial and operating data and other information as to the business
and properties of CTI as Molecula shall from time to time reasonably
request. CTI and Molecula agree that, unless and until the merger
contemplated by this Agreement has been consummated, CTI and Molecula
and their officers and representatives will hold in strict confidence
all data and information obtained from one another as long as it is
not in the public domain, and if the merger provided for is not
consummated as contemplated, CTI and Molecula will each return to the
other party all data as the other party may reasonably request.
2. Rights Cumulative; Waivers.
The rights of each of the parties under this Agreement are
cumulative. The rights of each of the parties hereunder shall not be
capable of being waived or varied other than by an express waiver or
variation in writing. Any failure to exercise or any delay in
exercising any of such rights shall not operate as a waiver or
variation of that or any other such right. Any defective or partial
exercise of any of such rights shall not preclude any other or
further exercise of that or any other such right. No act or course
of conduct or negotiation on the part of any party shall in any way
preclude such party from exercising any such right or constitute a
suspension or any variation of any such right.
3. Benefit; Successors Bound.
This Agreement and the terms, covenants, conditions, provisions,
obligations, undertakings, rights, and benefits hereof, shall be
binding upon, and shall inure to the benefit of, the undersigned
parties and their heirs, executors, administrators, representatives,
successors, and permitted assigns.
4. Entire Agreement.
This Agreement contains the entire agreement between the parties
with respect to the subject matter hereof. There are no promises,
agreements, conditions, undertakings, understandings, warranties,
covenants or representations, oral or written, express or implied,
between them with respect to this Agreement or the matters described
in this Agreement, except as set forth in this Agreement. Any such
negotiations, promises, or understandings shall not be used to
interpret or constitute this Agreement.
5. Assignment.
Neither this Agreement nor any other benefit to accrue hereunder
shall be assigned or transferred by either party, either in whole or
in part, without the written consent of the other party, and any
purported assignment in violation hereof shall be void.
6. Amendment.
This Agreement may be amended only by an instrument in writing
executed by all the parties hereto.
7. Severability.
Each part of this Agreement is intended to be severable. In the
event that any provision of this Agreement is found by any court or
other authority of competent jurisdiction to be illegal or
unenforceable, such provision shall be severed or modified to the
extent necessary to render it enforceable and as so severed or
modified, this Agreement shall continue in full force and effect.
8. Section Headings.
The Section headings in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9. Construction.
Unless the context otherwise requires, when used herein, the
singular shall be deemed to include the plural, the plural shall be
deemed to include each of the singular, and pronouns of one or no
gender shall be deemed to include the equivalent pronoun of the other
or no gender.
10. Further Assurances.
In addition to the instruments and documents to be made,
executed and delivered pursuant to this Agreement, the parties hereto
agree to make, execute and deliver or cause to be made, executed and
delivered, to the requesting party such other instruments and to take
such other actions as the requesting party may reasonably require to
carry out the terms of this Agreement and the transactions
contemplated hereby.
11. Notices.
Any notice which is required or desired under this Agreement
shall be given in writing and may be sent by personal delivery or by
mail by either the United States mail, postage prepaid, or by Federal
Express or similar generally recognized overnight carrier to the
Constituent Corporations at their respective addresses set forth in
the recitals to this Agreement, and to Molecula's unitholders, or to
such other address as a party may communicate in writing to the other
parties.
12. Arbitration, Venue, Governing Law.
This agreement shall be deemed to be made, governed by,
interpreted under and construed in all respects in accordance with
the commercial rules of Judicial Arbitration and Mediation Service
("JAMS"). This chosen jurisdiction is irrespective of the country or
place of domicile or residence of either party. In the event of
controversy arising out of the interpretation, construction,
performance or breach of this agreement, the parties hereby consent
to adjudication under the commercial rules of JAMS. Said venue of
the arbitration shall be in Orange County, California. Judgment on
the award rendered by the arbitrator may be entered in any federal or
state court in Orange County, California. The Laws of the State of
California shall govern all disputes regarding this matter. Any
provision herein which is later determined to be in violation of any
such laws shall be eliminated from the terms of this Agreement, and
the remainder of this Agreement shall continue in full force and effect.
13. Consents.
The person signing this Agreement on behalf of each party hereby
represents and warrants that he has the necessary power, consent and
authority to execute and deliver this Agreement on behalf of such party.
14. Execution in Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and all of which together
shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
CTI: MOLECULA RESEARCH LABORATORIES, LLC:
Dated:________________________ Dated:_______________________
By:___________________________ By:___________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Executive Officer ▇▇▇▇ ▇▇▇▇▇▇, Chief
Executive Officer