TRANSITIONAL AGREEMENT
This
Transitional Agreement (this “Agreement”) is entered into this February 13, 2006
by and between Bluestar Health, Inc., a Colorado corporation (“Bluestar” or the
“Company”), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual (“▇▇▇▇▇▇▇”), and Gold Leaf Homes,
Inc., a Texas corporation (“Gold Leaf’). Each of Bluestar, ▇▇▇▇▇▇▇, and Gold
Leaf shall be referred to as a “Party” and collectively as the
“Parties.”
RECITALS
WHEREAS,
Bluestar, Gold Leaf, and ▇▇▇ ▇▇▇▇▇▇ (“▇▇▇▇▇▇”) are parties to that certain Asset
Purchase Agreement of even date herewith (the “Asset Purchase
Agreement”);
WHEREAS,
in connection with the Asset Purchase Agreement, the Parties have agreed to
the
additional terms and conditions set forth herein.
NOW,
THEREFORE, FOR good and adequate consideration, the receipt and sufficiency
of
which are hereby agreed and acknowledged, the Parties agree as
follows:
AGREEMENT
1. ▇▇▇▇▇▇▇
shall receive a bonus of 3% of the revenues of each company or assets acquired
by the Company during the term of this Agreement, payable quarterly in either
(i) cash or (ii) common stock of the Company, at Consultant’s discretion. If
paid in common stock of the Company, the stock will be valued at the three
(3)
day average closing bid price of the Company’s common stock for the three (3)
days immediately preceding the end of the applicable quarter.
2. ▇▇▇▇▇▇▇
will sell to Gold Leaf a total of two hundred fifty thousand (250,000) shares
of
common stock of the Company (the “Shares”). As
consideration for the Shares, Gold Leaf shall pay the total purchase price
of
$150,000 (the “Purchase Price”). The
Purchase Price shall be paid $60,000 at the Closing (as defined in the Asset
Purchase Agreement) (the “Initial Payment”), and the balance payable, without
interest, as follows: (a) $20,000 is due on the first of each month for four
(4)
consecutive months, beginning March 1, 2006, and (b) $10,000 is due on July
1,
2006 (the “Subsequent Payments”).
3. The
Company agrees that for the term of this Agreement:
(a) the
Company will not issue shares
of
its common stock that will be registered on a Form S-8 for a period of twelve
(12) months without ▇▇▇▇▇▇▇’▇ written consent;
(b) the
Company will not issue preferred stock or effectuate a reverse stock split
without ▇▇▇▇▇▇▇ written consent;
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(c) the
Company will increase revenues in 2006 by at least 10% over 2005
numbers;
(d) the
Company will complete at least one acquisition of another company in the same
or
a related industry to the Company in 2006;
(e) the
Company will remove the restrictive legend on any shares of Company stock owned
by ▇▇▇▇▇▇▇ or his assigns as soon as possible in compliance with Federal and
state securities laws and upon request by ▇▇▇▇▇▇▇.
In
the
event all of the items listed above are not completed as outlined, then ▇▇▇▇▇▇▇
shall have the right to demand transfer of all the shares of the Company’s stock
held in escrow pursuant to that certain Escrow Agreement of even date herewith
be transferred to him or his assigns.
4. Representations
of ▇▇▇▇▇▇▇ and Gold Leaf.
(a) ▇▇▇▇▇▇▇
hereby represents and warrants that:
(i) ▇▇▇▇▇▇▇
has title in and to the Shares free and clear of all liens, security interests,
pledges, encumbrances, charges, restrictions, demands and claims, of any kind
and nature whatsoever.
(ii) ▇▇▇▇▇▇▇
shall transfer title, in and to the Shares, to Gold Leaf free and clear of
all
liens, security interests, pledges, encumbrances, charges, restrictions, demands
and claims, of any kind and nature whatsoever, whether direct or indirect or
contingent.
(iii) ▇▇▇▇▇▇▇
has the full right, power and authority to enter into this Agreement and to
carry out and consummate the transaction contemplated herein. This Agreement
constitutes the legal, valid and binding obligation of ▇▇▇▇▇▇▇.
(b) Gold
Leaf
hereby represents and warrants that:
(i) Gold
Leaf
has the full right, power and authority to enter into this Agreement and to
carry out and consummate the transaction contemplated herein. This Agreement
constitutes the legal, valid and binding obligation of Gold Leaf.
(ii) Gold
Leaf
acknowledges that investment in the Shares involves substantial risks and is
suitable only for persons of adequate financial means who can bear the economic
risk of an investment in the Shares for an indefinite period of time. Gold
Leaf
further represents that it:
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(1)
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has
adequate means of providing for its current needs and possible personal
contingencies, has no need for liquidity in its investment in the
Shares,
is able to bear the substantial economic risks of an investment in
the
Shares for an indefinite period, and, at the present time, can afford
a
complete loss of its investment;
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(2)
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does
not have an overall commitment to investments which are not readily
marketable that is disproportionate to its net worth, and that its
investment in the Shares will not cause such overall commitment to
become
excessive;
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(3)
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has
such knowledge and experience in financial, tax and business matters
that
it is capable of evaluating the merits and risks of an investment
in the
Shares;
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(4)
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has
been given the opportunity to ask questions of and to receive answers
from
persons acting on Bluestar’s behalf concerning the terms and conditions of
this transaction and also has been given the opportunity to obtain
any
additional information which ▇▇▇▇▇▇▇ possesses or can acquire without
unreasonable effort or expense. As a result, Gold
Leaf
is
cognizant of the financial condition, capitalization, and the operations
of Bluestar, has available full information concerning their affairs
and
has been able to evaluate the merits and risks of the investment
in the
Shares.
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(5)
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Gold
Leaf
further acknowledges that the Shares are restricted securities
under Rule
144 of the Act, and, therefore, when transferred by ▇▇▇▇▇▇▇ to
Gold
Leaf
will contain a restrictive legend substantially similar to the
following:
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THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER
THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
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5. This
Agreement shall last for a period of two (2) years from the date of Closing
(as
defined in the Asset Purchase Agreement).
6. This
Agreement and the rights of the parties hereunder shall be governed by and
construed in accordance with the laws of the State of Texas, including all
matters of construction, validity, performance, and enforcement and without
giving effect to the principles of conflict of laws.
7. The
Parties submit to the jurisdiction of the Courts of the State of Texas or a
Federal Court empanelled in the State of Texas, County of ▇▇▇▇▇▇, for the
resolution of all legal disputes arising under the terms of this Agreement,
including, but not limited to, enforcement of any arbitration
award.
8. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which shall together constitute one and the
same
instrument.
9. Except
as
otherwise provided herein, if a dispute should arise between the parties
including, but not limited to arbitration, the prevailing party shall be
reimbursed by the nonprevailing party for all reasonable expenses incurred
in
resolving such dispute, including reasonable attorneys' fees exclusive of such
amount of attorneys' fees as shall be a premium for result or for risk of loss
under a continency fee arrangement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement, as of the
date
first written hereinabove.
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“Company”
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“▇▇▇▇▇▇▇”
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Bluestar
Health, Inc.
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/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇
▇▇▇▇▇▇▇
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▇▇▇▇▇▇
▇▇▇▇▇▇▇, an individual
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Its: President
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“Gold
Leaf”
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/s/
▇▇▇ ▇▇▇▇▇▇
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By: ▇▇▇
▇▇▇▇▇▇
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Its: President
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