Exhibit 2.1
SHARE EXCHANGE AGREEMENT
THIS AGREEMENT is made effective as of the ____ day of August, 2013
AMONG:
MIAMI DAYS CORP., a State of Nevada corporation with an office at ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
("PUBCO")
AND:
LIFE STEM GENETICS, INC., a State of South Dakota corporation with an
office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("PRIVECO")
AND:
THE UNDERSIGNED SHAREHOLDERS OF PRIVECO AS LISTED ON SCHEDULE 1
ATTACHED HERETO
(the "SELLING SHAREHOLDERS")
WHEREAS:
A. the Selling Shareholders are the registered and beneficial owners of all
1,100,000 issued and outstanding common shares in the capital stock of
Priveco;
B. Pubco and Priveco have entered into a letter of intent dated August 29,
2013 pursuant to which Pubco has agreed to issue 2,032,500 common shares in
the capital stock of Pubco as of the Closing Date (as defined herein) to
the Selling Shareholders as consideration for the purchase by Pubco of all
1,100,000 of the issued and outstanding common shares of Priveco held by
the Selling Shareholders on the Closing Date; and
C. upon the terms and subject to the conditions set forth in this Agreement,
the Selling Shareholders have agreed to sell all 1,100,000 of the issued
and outstanding common shares of Priveco held by the Selling Shareholders
to Pubco in exchange for common shares of Pubco.
THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration (the receipt and sufficiency
of which are hereby acknowledged), the parties covenant and agree as follows:
1. DEFINITIONS
1.1 Definitions. The following terms have the following meanings, unless the
context indicates otherwise:
-2-
(a) "AGREEMENT" shall mean this Agreement, and all the exhibits, schedules
and other documents attached to or referred to in this Agreement, and
all amendments and supplements, if any, to this Agreement;
(b) "CLOSING" shall mean the completion of the Transaction, in accordance
with Section 7 hereof, at which the Closing Documents shall be
exchanged by the parties, except for those documents or other items
specifically required to be exchanged at a later time;
(c) "CLOSING DATE" shall mean a date mutually agreed upon by the parties
hereto in writing and in accordance with Section 10.6 following the
satisfaction or waiver by Pubco and Priveco of the conditions
precedent set out in Sections 5.1 and 5.2 respectively;
(d) "CLOSING DOCUMENTS" shall mean the papers, instruments and documents
required to be executed and delivered at the Closing pursuant to this
Agreement;
(e) "EXCHANGE ACT" shall mean the United States SECURITIES EXCHANGE ACT OF
1934, as amended;
(f) "LIABILITIES" shall include any direct or indirect indebtedness,
guaranty, endorsement, claim, loss, damage, deficiency, cost, expense,
obligation or responsibility, fixed or unfixed, known or unknown,
asserted ▇▇▇▇▇▇ or inchoate, liquidated or unliquidated, secured or
unsecured;
(g) "PRIVECO ACCOUNTING DATE" shall mean June 30, 2013;
(h) "PRIVECO FINANCIAL STATEMENTS" shall mean the audited balance sheet of
Priveco dated as of the Priveco Accounting Date, together with related
statements of income, cash flows, and changes in shareholder's equity;
(i) "PRIVECO SHARES" shall mean the 1,100,000 Class A common shares of
Priveco held by the Selling Shareholders, being all of the issued and
outstanding common shares of Priveco beneficially held, either
directly or indirectly, by the Selling Shareholders;
(j) "PUBCO FINANCING" shall have the meaning defined in section 6.1(a)
hereof;
(k) "PUBCO SHARES" shall mean the 2,032,500 fully paid and non-assessable
common shares of Pubco, to be issued to the Selling Shareholders by
Pubco on the Closing.
(l) "SEC" shall mean the Securities and Exchange Commission;
(m) "SECURITIES ACT" shall mean the United States SECURITIES ACT OF 1933,
as amended;
(n) "TAXES" shall include international, federal, state, provincial and
local income taxes, capital gains tax, value-added taxes, franchise,
personal property and real property taxes, levies, assessments,
tariffs, duties (including any customs duty), business license or
other fees, sales, use and any other taxes relating to the assets of
the designated party or the business of the designated party for all
periods up to and including the Closing Date, together with any
related charge or amount, including interest, fines, penalties and
additions to tax, if any, arising out of tax assessments; and
-3-
(o) "TRANSACTION" shall mean the purchase of the Priveco Shares by Pubco
from the Selling Shareholders in consideration for the issuance of the
Pubco Shares.
1.2 Schedules. The following schedules are attached to and form part of this
Agreement:
Schedule 1 - Selling Shareholders
Schedule 2A - Certificate of Non-U.S. Shareholder
Schedule 2B - Certificate of U.S. Shareholder
Schedule 3 - Directors and Officers of Priveco
Schedule 4 - Directors and Officers of Pubco
Schedule 5 Priveco Material Leases, Subleases, Claims, Capital
Expenditures, Taxes and Other Property Interests
Schedule 6 - Priveco Intellectual Property
Schedule 7 - Priveco Material Contracts
Schedule 8 - Priveco Employment Agreements and Arrangements
Schedule 9 - Subsidiaries
1.3 Currency. All references to currency referred to in this Agreement are in
United States Dollars (US$), unless expressly stated otherwise.
2. THE OFFER, PURCHASE AND SALE OF SHARES
2.1 Offer, Purchase and Sale of Shares. Subject to the terms and conditions of
this Agreement, the Selling Shareholders hereby covenant and agree to sell,
assign and transfer to Pubco, and Pubco hereby covenants and agrees to
purchase from the Selling Shareholders all of the Priveco Shares held by
the Selling Shareholders.
2.2 Consideration. As consideration for the sale of the Priveco Shares by the
Selling Shareholders to Pubco, Pubco shall allot and issue the Pubco Shares
to the Selling Shareholders or their nominees in the amount set out
opposite each Selling Shareholder's name in 0. The Selling Shareholders
acknowledge and agree that the Pubco Shares are being issued pursuant to an
exemption from the prospectus and registration requirements of the
Securities Act. As required by applicable securities law, the Selling
Shareholders agree to abide by all applicable resale restrictions and hold
periods imposed by all applicable securities legislation. All certificates
representing the Pubco Shares issued on Closing will be endorsed with the
following legend pursuant to the Securities Act in order to reflect the
fact that the Pubco Shares will be issued to the Selling Shareholders
pursuant to an exemption from the registration requirements of the
Securities Act:
For Selling Shareholders not resident in the United States:
"THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE
TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN)
PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT").
NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE
1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY
NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS
DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION
-4-
STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. "UNITED
STATES" AND "U.S. PERSON" ARE AS DEFINED BY REGULATION S UNDER THE 1933
ACT."
For Selling Shareholders resident in the United States:
"NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR ANY
U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED
OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN)
OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT
AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. "UNITED STATES" AND "U.S.
PERSON" ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT."
2.3 Share Exchange Procedure. Each Selling Shareholder may exchange his, her or
its certificate representing the Priveco Shares by delivering such
certificate to Pubco duly executed and endorsed in blank (or accompanied by
duly executed stock powers duly endorsed in blank), in each case in proper
form for transfer, with signatures guaranteed, and, if applicable, with all
stock transfer and any other required documentary stamps affixed thereto
and with appropriate instructions to allow the transfer agent to issue
certificates for the Pubco Shares to the holder thereof, together with, as
applicable:
(a) if the Selling Shareholder is not resident in the United States, a
Certificate of Non-U.S. Shareholder (the "CERTIFICATE OF NON-U.S.
SHAREHOLDER"), a copy of which is set out in 0A; or
(b) if the Selling Shareholder is resident in the United States, a
Certificate of U.S. Shareholder (the "CERTIFICATE OF U.S.
SHAREHOLDER"), a copy of which is set out in Schedule 2B.
2.4 Fractional Shares. Notwithstanding any other provision of this Agreement,
no certificate for fractional shares of the Pubco Shares will be issued in
the Transaction. In lieu of any such fractional shares the Selling
Shareholders would otherwise be entitled to receive upon surrender of
certificates representing the Priveco Shares for exchange pursuant to this
Agreement, the Selling Shareholders will be entitled to have such fraction
rounded up to the nearest whole number of Pubco Shares and will receive
from Pubco a stock certificate representing same.
-5-
2.5 Restricted Securities. The Selling Shareholders acknowledge that the Pubco
Shares issued pursuant to the terms and conditions set forth in this
Agreement will have such hold periods as are required under applicable
securities laws and as a result may not be sold, transferred or otherwise
disposed, except pursuant to an effective registration statement under the
Securities Act, or pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and in each
case only in accordance with all applicable securities laws.
3. REPRESENTATIONS AND WARRANTIES OF PRIVECO AND THE SELLING SHAREHOLDERS
Priveco and the Selling Shareholders, jointly and severally, represent and
warrant to Pubco, and acknowledge that Pubco is relying upon such
representations and warranties, in connection with the execution, delivery
and performance of this Agreement, notwithstanding any investigation made
by or on behalf of Pubco, as follows:
3.1 Organization and Good Standing. Priveco is a corporation duly organized,
validly existing and in good standing under the laws of the State of South
Dakota and has the requisite corporate power and authority to own, lease
and to carry on its business as now being conducted. Priveco is duly
qualified to do business and is in good standing as a corporation in each
of the jurisdictions in which Priveco owns property, leases property, does
business, or is otherwise required to do so, where the failure to be so
qualified would have a material adverse effect on the business of Priveco
taken as a whole.
3.2 Authority. Priveco has all requisite corporate power and authority to
execute and deliver this Agreement and any other document contemplated by
this Agreement (collectively, the "PRIVECO DOCUMENTS") to be signed by
Priveco and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of each of the
Priveco Documents by Priveco and the consummation of the transactions
contemplated hereby have been duly authorized by Priveco's board of
directors. No other corporate or shareholder proceedings on the part of
Priveco is necessary to authorize such documents or to consummate the
transactions contemplated hereby. This Agreement has been, and the other
Priveco Documents when executed and delivered by Priveco as contemplated by
this Agreement will be, duly executed and delivered by Priveco and this
Agreement is, and the other Priveco Documents when executed and delivered
by Priveco as contemplated hereby will be, valid and binding obligations of
Priveco enforceable in accordance with their respective terms except:
(a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting
enforcement of creditors' rights generally;
(b) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies; and
(c) as limited by public policy.
3.3 Capitalization of Priveco. The entire authorized capital stock and other
equity securities of Priveco consists of unlimited Class A common shares,
and unlimited Class B common non-voting shares, each with no par value per
share (the "PRIVECO COMMON STOCK"). As of the date of this Agreement, there
are 1,100,000 Class A common shares of Priveco Common Stock issued and
outstanding. All of the issued and outstanding shares of Priveco Common
Stock have been duly authorized, are validly issued, were not issued in
violation of any pre-emptive rights and are fully paid and non-assessable,
are not subject to pre-emptive rights and were issued in full compliance
-6-
with the laws of the State of South Dakota. There are no outstanding
options, warrants, subscriptions, conversion rights, or other rights,
agreements, or commitments obligating Priveco to issue any additional
common shares of Priveco Common Stock, or any other securities convertible
into, exchangeable for, or evidencing the right to subscribe for or acquire
from Priveco any common shares of Priveco Common Stock. There are no
agreements purporting to restrict the transfer of the Priveco Common Stock,
no voting agreements, shareholders' agreements, voting trusts, or other
arrangements restricting or affecting the voting of the Priveco Common
Stock.
3.4 Title and Authority of Selling Shareholders. Each of the Selling
Shareholders is and will be as of the Closing, the registered and
beneficial owner of and will have good and marketable title to all of the
Priveco Common Stock held by him, her or it and will hold such free and
clear of all liens, charges and encumbrances whatsoever; and such Priveco
Common Stock held by such Selling Shareholders have been duly and validly
issued and are outstanding as fully paid and non-assessable common shares
in the capital stock of Priveco. Each of the Selling Shareholders has due
and sufficient right and authority to enter into this Agreement on the
terms and conditions herein set forth and to transfer the registered, legal
and beneficial title and ownership of the Priveco Common Stock held by it.
3.5 Shareholders of Priveco Common Stock. Schedule 1 contains a true and
complete list of the holders of all issued and outstanding shares of the
Priveco Common Stock including each holder's name, address and number of
Priveco Shares held.
3.6 Directors and Officers of Priveco. The duly elected or appointed directors
and the duly appointed officers of Priveco are as set out in 0.
3.7 Corporate Records of Priveco. The corporate records of Priveco, as required
to be maintained by it pursuant to all applicable laws, are accurate,
complete and current in all material respects, and the minute book of
Priveco is, in all material respects, correct and contains all records
required by all applicable laws, as applicable, in regards to all
proceedings, consents, actions and meetings of the shareholders and the
board of directors of Priveco.
3.8 Non-Contravention. Neither the execution, delivery and performance of this
Agreement, nor the consummation of the Transaction, will:
(a) conflict with, result in a violation of, cause a default under (with
or without notice, lapse of time or both) or give rise to a right of
termination, amendment, cancellation or acceleration of any obligation
contained in or the loss of any material benefit under, or result in
the creation of any lien, security interest, charge or encumbrance
upon any of the material properties or assets of Priveco or any of its
subsidiaries under any term, condition or provision of any loan or
credit agreement, note, debenture, bond, mortgage, indenture, lease or
other agreement, instrument, permit, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Priveco or
any of its subsidiaries, or any of their respective material property
or assets;
(b) violate any provision of the constating documents of Priveco, any of
its subsidiaries or any applicable laws; or
(c) violate any order, writ, injunction, decree, statute, rule, or
regulation of any court or governmental or regulatory authority
applicable to Priveco, any of its subsidiaries or any of their
respective material property or assets.
-7-
3.9 Actions and Proceedings. To the best knowledge of Priveco, there is no
basis for and there is no action, suit, judgment, claim, demand or
proceeding outstanding or pending, or threatened against or affecting
Priveco, any of its subsidiaries or which involves any of the business, or
the properties or assets of Priveco or any of its subsidiaries that, if
adversely resolved or determined, would have a material adverse effect on
the business, operations, assets, properties, prospects, or conditions of
Priveco and its subsidiaries taken as a whole (a "PRIVECO MATERIAL ADVERSE
EFFECT"). There is no reasonable basis for any claim or action that, based
upon the likelihood of its being asserted and its success if asserted,
would have such a Priveco Material Adverse Effect.
3.10 Compliance.
(a) To the best knowledge of Priveco, Priveco and each of its subsidiaries
is in compliance with, is not in default or violation in any material
respect under, and has not been charged with or received any notice at
any time of any material violation of any statute, law, ordinance,
regulation, rule, decree or other applicable regulation to the
business or operations of Priveco and its subsidiaries;
(b) To the best knowledge of Priveco, neither Priveco nor any of its
subsidiaries is subject to any judgment, order or decree entered in
any lawsuit or proceeding applicable to its business and operations
that would constitute a Priveco Material Adverse Effect;
(c) Each of Priveco and, if any, its subsidiaries has duly filed all
reports and returns required to be filed by it with governmental
authorities and has obtained all governmental permits and other
governmental consents, except as may be required after the execution
of this Agreement. All of such permits and consents are in full force
and effect, and no proceedings for the suspension or cancellation of
any of them, and no investigation relating to any of them, is pending
or to the best knowledge of Priveco, threatened, and none of them will
be adversely affected by the consummation of the Transaction; and
(d) Each of Priveco and its subsidiaries has operated in material
compliance with all laws, rules, statutes, ordinances, orders and
regulations applicable to its business. Neither Priveco nor any of its
subsidiaries has received any notice of any violation thereof, nor is
Priveco aware of any valid basis therefore.
3.11 Filings, Consents and Approvals. No filing or registration with, no notice
to and no permit, authorization, consent, or approval of any public or
governmental body or authority or other person or entity is necessary for
the consummation by Priveco or any of its subsidiaries of the Transaction
contemplated by this Agreement or to enable Pubco to continue to conduct
Priveco's business after the Closing Date in a manner which is consistent
with that in which the business is presently conducted.
3.12 Absence of Undisclosed Liabilities. Neither Priveco nor any of its
subsidiaries has any material Liabilities or obligations either direct or
indirect, matured or unmatured, absolute, contingent or otherwise that
exceed $5,000, which have either been disclosed or:
(a) will be set forth in the Priveco Financial Statements;
(b) did not arise in the regular and ordinary course of business under any
agreement, contract, commitment, lease or plan specifically disclosed
in writing to Pubco; or
-8-
(c) have not been incurred in amounts and pursuant to practices consistent
with past business practice, in or as a result of the regular and
ordinary course of its business since the date of the last Priveco
Financial Statements.
3.13 Tax Matters.
(a) As of the date hereof:
(i) each of Priveco and its subsidiaries has timely filed all tax
returns in connection with any Taxes which are required to be
filed on or prior to the date hereof, taking into account any
extensions of the filing deadlines which have been validly
granted to Priveco or its subsidiaries, and
(ii) all such returns are true and correct in all material respects;
(b) each of Priveco and its subsidiaries has paid all Taxes that have
become or are due with respect to any period ended on or prior to the
date hereof, and has established an adequate reserve therefore on its
balance sheets for those Taxes not yet due and payable, except for any
Taxes the non-payment of which will not have a Priveco Material
Adverse Effect;
(c) neither Priveco nor any of its subsidiaries is presently under or has
received notice of, any contemplated investigation or audit by
regulatory or governmental agency of body or any foreign or state
taxing authority concerning any fiscal year or period ended prior to
the date hereof;
(d) all Taxes required to be withheld on or prior to the date hereof from
employees for income Taxes, social security Taxes, unemployment Taxes
and other similar withholding Taxes have been properly withheld and,
if required on or prior to the date hereof, have been deposited with
the appropriate governmental agency; and
(e) to the best knowledge of Priveco, the Priveco Financial Statements
will contain full provision for all Taxes including any deferred Taxes
that may be assessed to Priveco or its subsidiaries for the accounting
period ended on the Priveco Accounting Date or for any prior period in
respect of any transaction, event or omission occurring, or any profit
earned, on or prior to the Priveco Accounting Date or for any profit
earned by Priveco on or prior to the Priveco Accounting Date or for
which Priveco is accountable up to such date and all contingent
Liabilities for Taxes have been provided for or disclosed in the
Priveco Financial Statements.
3.14 Absence of Changes. Since the Priveco Accounting Date, neither Priveco or
any of its subsidiaries has:
(a) incurred any Liabilities, other than Liabilities incurred in the
ordinary course of business consistent with past practice, or
discharged or satisfied any lien or encumbrance, or paid any
Liabilities, other than in the ordinary course of business consistent
with past practice, or failed to pay or discharge when due any
Liabilities of which the failure to pay or discharge has caused or
will cause any material damage or risk of material loss to it or any
of its assets or properties;
(b) sold, encumbered, assigned or transferred any material fixed assets or
properties except for ordinary course business transactions consistent
with past practice;
-9-
(c) created, incurred, assumed or guaranteed any indebtedness for money
borrowed, or mortgaged, pledged or subjected any of the material
assets or properties of Priveco or its subsidiaries to any mortgage,
lien, pledge, security interest, conditional sales contract or other
encumbrance of any nature whatsoever;
(d) made or suffered any amendment or termination of any material
agreement, contract, commitment, lease or plan to which it is a party
or by which it is bound, or cancelled, modified or waived any
substantial debts or claims held by it or waived any rights of
substantial value, other than in the ordinary course of business;
(e) declared, set aside or paid any dividend or made or agreed to make any
other distribution or payment in respect of its capital shares or
redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or acquire any of its capital shares or equity securities;
(f) suffered any damage, destruction or loss, whether or not covered by
insurance, that materially and adversely effects its business,
operations, assets, properties or prospects;
(g) suffered any material adverse change in its business, operations,
assets, properties, prospects or condition (financial or otherwise);
(h) received notice or had knowledge of any actual or threatened labour
trouble, termination, resignation, strike or other occurrence, event
or condition of any similar character which has had or might have an
adverse effect on its business, operations, assets, properties or
prospects;
(i) made commitments or agreements for capital expenditures or capital
additions or betterments exceeding in the aggregate $5,000;
(j) other than in the ordinary course of business, increased the salaries
or other compensation of, or made any advance (excluding advances for
ordinary and necessary business expenses) or loan to, any of its
employees or directors or made any increase in, or any addition to,
other benefits to which any of its employees or directors may be
entitled;
(k) entered into any transaction other than in the ordinary course of
business consistent with past practice; or
(l) agreed, whether in writing or orally, to do any of the foregoing.
3.15 Absence of Certain Changes or Events. Since the Priveco Accounting Date,
there will have not been:
(a) a Priveco Material Adverse Effect; or
(b) any material change by Priveco in its accounting methods, principles
or practices.
3.16 Subsidiaries. Except as set forth on 0, Priveco does not have any
subsidiaries or agreements of any nature to acquire any subsidiary or to
acquire or lease any other business operations. Each subsidiary of Priveco
is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has the requisite
corporate power and authority to own, lease and to carry on its business as
now being conducted. Each subsidiary of Priveco is duly qualified to do
business and is in good standing as a corporation in each of the
-10-
jurisdictions in which Priveco owns property, leases property, does
business, or is otherwise required to do so, where the failure to be so
qualified would have a material adverse effect on the business of Priveco
and its subsidiaries taken as a whole. Priveco owns all of the shares of
each subsidiary of Priveco and there are no outstanding options, warrants,
subscriptions, conversion rights, or other rights, agreements, or
commitments obligating any subsidiary of Priveco to issue any additional
common shares of such subsidiary, or any other securities convertible into,
exchangeable for, or evidencing the right to subscribe for or acquire from
any subsidiary of Priveco any shares of such subsidiary.
3.17 Personal Property. Each of Priveco and its subsidiaries possesses, and has
good and marketable title of all property necessary for the continued
operation of the business of Priveco and its subsidiaries as presently
conducted and as represented to Pubco. All such property is used in the
business of Priveco and its subsidiaries. All such property is in
reasonably good operating condition (normal wear and tear excepted), and is
reasonably fit for the purposes for which such property is presently used.
All material equipment, furniture, fixtures and other tangible personal
property and assets owned or leased by Priveco and its subsidiaries is
owned by Priveco or its subsidiaries free and clear of all liens, security
interests, charges, encumbrances, and other adverse claims, except as
disclosed in 0.
3.18 Intellectual Property
(a) Intellectual Property Assets. Priveco and its subsidiaries own or hold
an interest in all intellectual property assets necessary for the
operation of the business of Priveco and its subsidiaries as it is
currently conducted (collectively, the "INTELLECTUAL PROPERTY
ASSETS"), including:
(i) all functional business names, trading names, registered and
unregistered trademarks, service marks, and applications
(collectively, the "MARKS");
(ii) all patents, patent applications, and inventions, methods,
processes and discoveries that may be patentable (collectively,
the "PATENTS");
(iii)all copyrights in both published works and unpublished works
(collectively, the "COPYRIGHTS"); and
(iv) all know-how, trade secrets, confidential information, customer
lists, software, technical information, data, process technology,
plans, drawings, and blue prints owned, used, or licensed by
Priveco and its subsidiaries as licensee or licensor
(collectively, the "TRADE SECRETS").
(b) Agreements. Schedule 6 contains a complete and accurate list and
summary description, including any royalties paid or received by
Priveco and its subsidiaries, of all contracts and agreements relating
to the Intellectual Property Assets to which Priveco and its
subsidiaries is a party or by which Priveco and its subsidiaries is
bound, except for any license implied by the sale of a product and
perpetual, paid-up licenses for commonly available software programs
with a value of less than $500 under which Priveco or its subsidiaries
is the licensee. To the best knowledge of Priveco, there are no
outstanding or threatened disputes or disagreements with respect to
any such agreement.
(c) Intellectual Property and Know-How Necessary for the Business. Except
as set forth in Schedule 6, Priveco and its subsidiaries is the owner
of all right, title, and interest in and to each of the Intellectual
-11-
Property Assets, free and clear of all liens, security interests,
charges, encumbrances, and other adverse claims, and has the right to
use without payment to a third party of all the Intellectual Property
Assets. Except as set forth in Schedule 6, all former and current
employees and contractors of Priveco and its subsidiaries have
executed written contracts, agreements or other undertakings with
Priveco and its subsidiaries that assign all rights to any inventions,
improvements, discoveries, or information relating to the business of
Priveco and its subsidiaries. No employee, director, officer or
shareholder of Priveco or any of its subsidiaries owns directly or
indirectly in whole or in part, any Intellectual Property Asset which
Priveco or any of its subsidiaries is presently using or which is
necessary for the conduct of its business. To the best knowledge of
Priveco, no employee or contractor of Priveco or its subsidiaries has
entered into any contract or agreement that restricts or limits in any
way the scope or type of work in which the employee may be engaged or
requires the employee to transfer, assign, or disclose information
concerning his work to anyone other than Priveco or its subsidiaries.
(d) Patents. Except as set out in Schedule 6, neither Priveco nor any of
its subsidiaries holds any right, title or interest in and to any
Patent and Priveco has not filed any patent application with any third
party. To the best knowledge of Priveco, none of the products
manufactured and sold, nor any process or know-how used, by Priveco or
any of its subsidiaries infringes or is alleged to infringe any patent
or other proprietary night of any other person or entity.
(e) Trademarks. Except as set out in Schedule 6, neither Priveco nor any
of its subsidiaries holds any right, title or interest in and to any
▇▇▇▇ and Priveco has not registered or filed any application to
register any ▇▇▇▇ with any third party. To the best knowledge of
Priveco, none of the Marks, if any, used by Priveco or any of its
subsidiaries infringes or is alleged to infringe any trade name,
trademark, or service ▇▇▇▇ of any third party.
(f) Copyrights. Schedule 6 contains a complete and accurate list and
summary description of all Copyrights. Priveco and its subsidiaries is
the owner of all right, title, and interest in and to each of the
Copyrights, free and clear of all liens, security interests, charges,
encumbrances, and other adverse claims. If applicable, all registered
Copyrights are currently in compliance with formal legal requirements,
are valid and enforceable, and are not subject to any maintenance fees
or taxes or actions falling due within ninety days after the Closing
Date. To the best knowledge of Priveco, no Copyright is infringed or
has been challenged or threatened in any way and none of the subject
matter of any of the Copyrights infringes or is alleged to infringe
any copyright of any third party or is a derivative work based on the
work of a third party. All works encompassed by the Copyrights have
been marked with the proper copyright notice.
(g) Trade Secrets. Each of Priveco and its subsidiaries has taken all
reasonable precautions to protect the secrecy, confidentiality, and
value of its Trade Secrets. Each of Priveco and its subsidiaries has
good title and an absolute right to use the Trade Secrets. The Trade
Secrets are not part of the public knowledge or literature, and to the
best knowledge of Priveco, have not been used, divulged, or
appropriated either for the benefit of any person or entity or to the
detriment of Priveco or any of its subsidiaries. No Trade Secret is
subject to any adverse claim or has been challenged or threatened in
any way.
3.19 Employees and Consultants. All employees and consultants of Priveco and its
subsidiaries have been paid all salaries, wages, income and any other sum
due and owing to them by Priveco or its subsidiaries, as at the end of the
-12-
most recent completed pay period, or such amounts have been accrued, as
indicated on the Priveco Financial Statements. Neither Priveco nor any of
its subsidiaries is aware of any labor conflict with any employees that
might reasonably be expected to have a Priveco Material Adverse Effect. To
the best knowledge of Priveco, no employee of Priveco or any of its
subsidiaries is in violation of any term of any employment contract,
non-disclosure agreement, non-competition agreement or any other contract
or agreement relating to the relationship of such employee with Priveco or
its subsidiaries or any other nature of the business conducted or to be
conducted by Priveco its subsidiaries.
3.20 Real Property. Neither Priveco nor any of its subsidiaries owns any real
property. Each of the material leases, subleases, claims or other real
property interests (collectively, the "LEASES") to which Priveco or any of
its subsidiaries is a party or is bound, as set out in 0, is legal, valid,
binding, enforceable and in full force and effect in all material respects.
All rental and other payments required to be paid by Priveco and its
subsidiaries pursuant to any such Leases have been duly paid and no event
has occurred which, upon the passing of time, the giving of notice, or
both, would constitute a breach or default by any party under any of the
Leases. The Leases will continue to be legal, valid, binding, enforceable
and in full force and effect on identical terms following the Closing Date.
Neither Priveco nor any of its subsidiaries has assigned, transferred,
conveyed, mortgaged, deeded in trust, or encumbered any interest in the
Leases or the leasehold property pursuant thereto.
3.21 Material Contracts and Transactions. Schedule 7 attached hereto lists each
material contract, agreement, license, permit, arrangement, commitment,
instrument or contract to which Priveco or any of its subsidiaries is a
party (each, a "CONTRACT"). Each Contract is in full force and effect, and
there exists no material breach or violation of or default by Priveco or
any of its subsidiaries under any Contract, or any event that with notice
or the lapse of time, or both, will create a material breach or violation
thereof or default under any Contract by Priveco or any of its
subsidiaries. The continuation, validity, and effectiveness of each
Contract will in no way be affected by the consummation of the Transaction
contemplated by this Agreement. There exists no actual or threatened
termination, cancellation, or limitation of, or any amendment,
modification, or change to any Contract.
3.22 Certain Transactions. Neither Priveco nor any of its subsidiaries is a
guarantor or indemnitor of any indebtedness of any third party, including
any person, firm or corporation.
3.23 No Brokers. Neither Priveco nor any of its subsidiaries has incurred any
independent obligation or liability to any party for any brokerage fees,
agent's commissions, or finder's fees in connection with the Transaction
contemplated by this Agreement.
3.24 Completeness of Disclosure. No representation or warranty by Priveco in
this Agreement nor any certificate, schedule, statement, document or
instrument furnished or to be furnished to Pubco pursuant hereto contains
or will contain any untrue statement of a material fact or omits or will
omit to state a material fact required to be stated herein or therein or
necessary to make any statement herein or therein not materially
misleading.
Notwithstanding section 10.1 hereof, the representations and warranties
contained in this Section 3 shall survive the Closing indefinitely.
-13-
4. REPRESENTATIONS AND WARRANTIES OF PUBCO
Pubco represents and warrants to Priveco and the Selling Shareholders and
acknowledges that Priveco and the Selling Shareholders are relying upon such
representations and warranties in connection with the execution, delivery and
performance of this Agreement, notwithstanding any investigation made by or on
behalf of Priveco or the Selling Shareholders, as follows:
4.1 Organization and Good Standing. Pubco is duly incorporated, organized,
validly existing and in good standing under the laws of the State of Nevada
and has all requisite corporate power and authority to own, lease and to
carry on its business as now being conducted. Pubco is qualified to do
business and is in good standing as a foreign corporation in each of the
jurisdictions in which it owns property, leases property, does business, or
is otherwise required to do so, where the failure to be so qualified would
have a material adverse effect on the businesses, operations, or financial
condition of Pubco.
4.2 Authority. Pubco has all requisite corporate power and authority to execute
and deliver this Agreement and any other document contemplated by this
Agreement (collectively, the "PUBCO DOCUMENTS") to be signed by Pubco and
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of each of the Pubco
Documents by Pubco and the consummation by Pubco of the transactions
contemplated hereby have been duly authorized by its board of directors and
no other corporate or shareholder proceedings on the part of Pubco is
necessary to authorize such documents or to consummate the transactions
contemplated hereby. This Agreement has been, and the other Pubco Documents
when executed and delivered by Pubco as contemplated by this Agreement will
be, duly executed and delivered by Pubco and this Agreement is, and the
other Pubco Documents when executed and delivered by Pubco, as contemplated
hereby will be, valid and binding obligations of Pubco enforceable in
accordance with their respective terms, except:
(a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting
enforcement of creditors' rights generally;
(b) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies; and
(c) as limited by public policy.
4.3 Capitalization of Pubco. The entire authorized capital stock and other
equity securities of Pubco consists of 75,000,000 shares of common stock
with a par value of $0.001 (the "PUBCO COMMON STOCK"). As of the date of
this Agreement, there are 5,355,000 shares of Pubco Common Stock issued and
outstanding. All of the issued and outstanding shares of Pubco Common Stock
have been duly authorized, are validly issued, were not issued in violation
of any pre-emptive rights and are fully paid and non-assessable, are not
subject to pre-emptive rights and were issued in full compliance with all
federal, state, and local laws, rules and regulations. Except as
contemplated by this Agreement, there are no outstanding options, warrants,
subscriptions, phantom shares, conversion rights, or other rights,
agreements, or commitments obligating Pubco to issue any additional shares
of Pubco Common Stock, other than a share exchange agreement to be entered
into among Pubco and or any other securities convertible into, exchangeable
for, or evidencing the right to subscribe for or acquire from Pubco any
shares of Pubco Common Stock as of the date of this Agreement. There are no
agreements purporting to restrict the transfer of the Pubco Common Stock,
no voting agreements, voting trusts, or other arrangements restricting or
affecting the voting of the Pubco Common Stock.
-14-
4.4 Directors and Officers of Pubco. The duly elected or appointed directors
and the duly appointed officers of Pubco are as listed on Schedule 4.
4.5 Corporate Records of Pubco. The corporate records of Pubco, as required to
be maintained by it pursuant to the laws of the State of Nevada are
accurate, complete and current in all material respects, and the minute
book of Pubco is, in all material respects, correct and contains all
material records required by the law of the State of Nevada in regards to
all proceedings, consents, actions and meetings of the shareholders and the
board of directors of Pubco.
4.6 Non-Contravention. Neither the execution, delivery and performance of this
Agreement, nor the consummation of the Transaction, will:
(a) conflict with, result in a violation of, cause a default under (with
or without notice, lapse of time or both) or give rise to a right of
termination, amendment, cancellation or acceleration of any obligation
contained in or the loss of any material benefit under, or result in
the creation of any lien, security interest, charge or encumbrance
upon any of the material properties or assets of Pubco under any term,
condition or provision of any loan or credit agreement, note,
debenture, bond, mortgage, indenture, lease or other agreement,
instrument, permit, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Pubco or any of its
material property or assets;
(b) violate any provision of the applicable incorporation or charter
documents of Pubco; or
(c) violate any order, writ, injunction, decree, statute, rule, or
regulation of any court or governmental or regulatory authority
applicable to Pubco or any of its material property or assets.
4.7 Validity of Pubco Common Stock Issuable upon the Transaction. The Pubco
Shares to be issued to the Selling Shareholders upon consummation of the
Transaction in accordance with this Agreement will, upon issuance, have
been duly and validly authorized and, when so issued in accordance with the
terms of this Agreement, will be duly and validly issued, fully paid and
non-assessable.
4.8 Actions and Proceedings. To the best knowledge of Pubco, there is no claim,
charge, arbitration, grievance, action, suit, investigation or proceeding
by or before any court, arbiter, administrative agency or other
governmental authority now pending or, to the best knowledge of Pubco,
threatened against Pubco which involves any of the business, or the
properties or assets of Pubco that, if adversely resolved or determined,
would have a material adverse effect on the business, operations, assets,
properties, prospects or conditions of Pubco taken as a whole (a "PUBCO
MATERIAL ADVERSE Effect"). There is no reasonable basis for any claim or
action that, based upon the likelihood of its being asserted and its
success if asserted, would have such a Pubco Material Adverse Effect.
4.9 Compliance.
(a) To the best knowledge of Pubco, Pubco is in compliance with, is not in
default or violation in any material respect under, and has not been
charged with or received any notice at any time of any material
violation of any statute, law, ordinance, regulation, rule, decree or
other applicable regulation to the business or operations of Pubco;
-15-
(b) To the best knowledge of Pubco, Pubco is not subject to any judgment,
order or decree entered in any lawsuit or proceeding applicable to its
business and operations that would constitute a Pubco Material Adverse
Effect;
(c) Pubco has duly filed all reports and returns required to be filed by
it with governmental authorities and has obtained all governmental
permits and other governmental consents, except as may be required
after the execution of this Agreement. All of such permits and
consents are in full force and effect, and no proceedings for the
suspension or cancellation of any of them, and no investigation
relating to any of them, is pending or to the best knowledge of Pubco,
threatened, and none of them will be affected in a material adverse
manner by the consummation of the Transaction; and
(d) Pubco has operated in material compliance with all laws, rules,
statutes, ordinances, orders and regulations applicable to its
business. Pubco has not received any notice of any violation thereof,
nor is Pubco aware of any valid basis therefore.
4.10 Filings, Consents and Approvals. No filing or registration with, no notice
to and no permit, authorization, consent, or approval of any public or
governmental body or authority or other person or entity is necessary for
the consummation by Pubco of the Transaction contemplated by this Agreement
to continue to conduct its business after the Closing Date in a manner
which is consistent with that in which it is presently conducted.
4.11 Absence of Undisclosed Liabilities. Pubco has no material Liabilities or
obligations either direct or indirect, matured or unmatured, absolute,
contingent or otherwise, which:
(a) did not arise in the regular and ordinary course of business under any
agreement, contract, commitment, lease or plan specifically disclosed
in writing to Priveco; or
(b) have not been incurred in amounts and pursuant to practices consistent
with past business practice, in or as a result of the regular and
ordinary course of its business.
4.12 Tax Matters.
(a) As of the date hereof:
(i) Pubco has timely filed all tax returns in connection with any
Taxes which are required to be filed on or prior to the date
hereof, taking into account any extensions of the filing
deadlines which have been validly granted to them, and
(ii) all such returns are true and correct in all material respects;
(b) Pubco has paid all Taxes that have become or are due with respect to
any period ended on or prior to the date hereof;
(c) Pubco is not presently under and has not received notice of, any
contemplated investigation or audit by the Internal Revenue Service or
any foreign or state taxing authority concerning any fiscal year or
period ended prior to the date hereof; and
(d) All Taxes required to be withheld on or prior to the date hereof from
employees for income Taxes, social security Taxes, unemployment Taxes
-16-
and other similar withholding Taxes have been properly withheld and,
if required on or prior to the date hereof, have been deposited with
the appropriate governmental agency.
4.13 Absence of Changes. Except as contemplated in this Agreement, Pubco has
not:
(a) incurred any Liabilities, other than Liabilities incurred in the
ordinary course of business consistent with past practice, or
discharged or satisfied any lien or encumbrance, or paid any
Liabilities, other than in the ordinary course of business consistent
with past practice, or failed to pay or discharge when due any
Liabilities of which the failure to pay or discharge has caused or
will cause any material damage or risk of material loss to it or any
of its assets or properties;
(b) sold, encumbered, assigned or transferred any material fixed assets or
properties;
(c) created, incurred, assumed or guaranteed any indebtedness for money
borrowed, or mortgaged, pledged or subjected any of the material
assets or properties of Pubco to any mortgage, lien, pledge, security
interest, conditional sales contract or other encumbrance of any
nature whatsoever;
(d) made or suffered any amendment or termination of any material
agreement, contract, commitment, lease or plan to which it is a party
or by which it is bound, or cancelled, modified or waived any
substantial debts or claims held by it or waived any rights of
substantial value, other than in the ordinary course of business;
(e) declared, set aside or paid any dividend or made or agreed to make any
other distribution or payment in respect of its capital shares or
redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or acquire any of its capital shares or equity securities;
(f) suffered any damage, destruction or loss, whether or not covered by
insurance, that materially and adversely effects its business,
operations, assets, properties or prospects;
(g) suffered any material adverse change in its business, operations,
assets, properties, prospects or condition (financial or otherwise);
(h) received notice or had knowledge of any actual or threatened labor
trouble, termination, resignation, strike or other occurrence, event
or condition of any similar character which has had or might have an
adverse effect on its business, operations, assets, properties or
prospects;
(i) made commitments or agreements for capital expenditures or capital
additions or betterments exceeding in the aggregate $5,000;
(j) other than in the ordinary course of business, increased the salaries
or other compensation of, or made any advance (excluding advances for
ordinary and necessary business expenses) or loan to, any of its
employees or directors or made any increase in, or any addition to,
other benefits to which any of its employees or directors may be
entitled;
(k) entered into any transaction other than in the ordinary course of
business consistent with past practice; or
(l) agreed, whether in writing or orally, to do any of the foregoing.
-17-
4.14 Absence of Certain Changes or Events. There has not been:
(a) a Pubco Material Adverse Effect; or
(b) any material change by Pubco in its accounting methods, principles or
practices.
4.15 Subsidiaries. Except as disclosed in this Agreement, Pubco does not have
any subsidiaries or agreements of any nature to acquire any subsidiary or
to acquire or lease any other business operations.
4.16 Personal Property. There are no material equipment, furniture, fixtures and
other tangible personal property and assets owned or leased by Pubco.
4.17 Employees and Consultants. Pubco does not have any employees or
consultants.
4.18 Material Contracts and Transactions. Other than as expressly contemplated
by this Agreement, there are no material contracts, agreements, licenses,
permits, arrangements, commitments, instruments, understandings or
contracts, whether written or oral, express or implied, contingent, fixed
or otherwise, to which Pubco is a party except as disclosed in writing to
Priveco.
4.19 No Brokers. Pubco has not incurred any obligation or liability to any party
for any brokerage fees, agent's commissions, or finder's fees in connection
with the Transaction contemplated by this Agreement.
4.20 Completeness of Disclosure. No representation or warranty by Pubco in this
Agreement nor any certificate, schedule, statement, document or instrument
furnished or to be furnished to Priveco pursuant hereto contains or will
contain any untrue statement of a material fact or omits or will omit to
state a material fact required to be stated herein or therein or necessary
to make any statement herein or therein not materially misleading.
5. CLOSING CONDITIONS
5.1 Conditions Precedent to Closing by Pubco. The obligation of Pubco to
consummate the Transaction is subject to the satisfaction or written waiver
of the conditions set forth below by a date mutually agreed upon by the
parties hereto in writing and in accordance with Section 10.6. The Closing
of the Transaction contemplated by this Agreement will be deemed to mean a
waiver of all conditions to Closing. These conditions precedent are for the
benefit of Pubco and may be waived by Pubco in its sole discretion.
(a) Representations and Warranties. The representations and warranties of
Priveco and the Selling Shareholders set forth in this Agreement will
be true, correct and complete in all respects as of the Closing Date,
as though made on and as of the Closing Date and Priveco will have
delivered to Pubco a certificate dated as of the Closing Date, to the
effect that the representations and warranties made by Priveco in this
Agreement are true and correct.
(b) Performance. All of the covenants and obligations that Priveco and the
Selling Shareholders are required to perform or to comply with
pursuant to this Agreement at or prior to the Closing must have been
performed and complied with in all material respects.
-18-
(c) Transaction Documents. This Agreement, the Priveco Documents, the
Priveco Financial Statements and all other documents necessary or
reasonably required to consummate the Transaction, all in form and
substance reasonably satisfactory to Pubco, will have been executed
and delivered to Pubco.
(d) Third Party Consents. Pubco will have received duly executed copies of
all third party consents and approvals contemplated by this Agreement,
in form and substance reasonably satisfactory to Pubco.
(e) No Liabilities. The Priveco Financial Statements will be free of any
material liabilities as of the Priveco Accounting Date, other than as
stated in the Priveco financial statements.
(f) Employment Agreements. Pubco will have received from Priveco copies of
all agreements or arrangements that evidence the employment of all of
the hourly and salaried employees of Priveco as set out on Schedule 8
attached hereto, which constitute all of the employees reasonably
necessary to operate the business of Priveco substantially as
presently operated.
(g) No Material Adverse Change. No Priveco Material Adverse Effect will
have occurred since the date of this Agreement.
(h) No Action. No suit, action, or proceeding will be pending or
threatened which would:
(i) prevent the consummation of any of the transactions contemplated
by this Agreement; or
(ii) cause the Transaction to be rescinded following consummation.
(i) Outstanding Shares. Priveco will have no more than 1,100,000 shares of
Priveco Common Stock issued and outstanding on the Closing Date.
(j) Due Diligence Review of Financial Statements. Pubco and its
accountants will be reasonably satisfied with their due diligence
investigation and review of the Priveco Financial Statements.
(k) Due Diligence Generally. Pubco and its solicitors will be reasonably
satisfied with their due diligence investigation of Priveco that is
reasonable and customary in a transaction of a similar nature to that
contemplated by the Transaction, including:
(i) materials, documents and information in the possession and
control of Priveco and the Selling Shareholders which are
reasonably germane to the Transaction;
(ii) a physical inspection of the assets of Priveco by Pubco or its
representatives; and
(iii) title to the material assets of Priveco.
(l) Compliance with Securities Laws. Pubco will have received evidence
satisfactory to Pubco that the Pubco Shares issuable in the
Transaction will be issuable without registration pursuant to the
Securities Act in reliance on an exemption from the registration
requirements of the Securities Act provided by Regulation S and/or
Regulation D.
-19-
In order to establish the availability of the safe harbor from the
registration requirements of the Securities Act for the issuance of
the Pubco Shares to each Selling Shareholder or their nominees,
Priveco will deliver to Pubco on Closing, the applicable Certificate
duly executed by each Selling Shareholder.
5.2 Conditions Precedent to Closing by Priveco. The obligation of Priveco and
the Selling Shareholders to consummate the Transaction is subject to the
satisfaction or written waiver of the conditions set forth below by a date
mutually agreed upon by the parties hereto in writing and in accordance
with Section 10.6. The Closing of the Transaction will be deemed to mean a
waiver of all conditions to Closing. These conditions precedent are for the
benefit of Priveco and the Selling Shareholders and may be waived by
Priveco and the Selling Shareholders in their discretion.
(a) Representations and Warranties. The representations and warranties of
Pubco set forth in this Agreement will be true, correct and complete
in all respects as of the Closing Date, as though made on and as of
the Closing Date and Pubco will have delivered to Priveco a
certificate dated the Closing Date, to the effect that the
representations and warranties made by Pubco in this Agreement are
true and correct.
(b) Performance. All of the covenants and obligations that Pubco are
required to perform or to comply with pursuant to this Agreement at or
prior to the Closing must have been performed and complied with in all
material respects. Pubco must have delivered each of the documents
required to be delivered by it pursuant to this Agreement.
(c) Transaction Documents. This Agreement, the Pubco Documents and all
other documents necessary or reasonably required to consummate the
Transaction, all in form and substance reasonably satisfactory to
Priveco, will have been executed and delivered by Pubco.
(d) No Material Adverse Change. No Pubco Material Adverse Effect will have
occurred since the date of this Agreement.
(e) No Action. No suit, action, or proceeding will be pending or
threatened before any governmental or regulatory authority wherein an
unfavorable judgment, order, decree, stipulation, injunction or charge
would:
(i) prevent the consummation of any of the transactions contemplated
by this Agreement; or
(ii) cause the Transaction to be rescinded following consummation.
(f) Outstanding Shares. On the Closing Date, Pubco will have 3,387,500
common shares issued and outstanding in the capital stock of Pubco,
consisting of:
(i) 2,032,500 Pubco Shares issued pursuant to this Agreement; and
(ii) 1,355,000 common shares of the capital stock of Pubco held by the
current shareholders of Pubco.
-20-
(g) Due Diligence Generally. Priveco will be reasonably satisfied with
their due diligence investigation of Pubco that is reasonable and
customary in a transaction of a similar nature to that contemplated by
the Transaction.
6. ADDITIONAL COVENANTS OF THE PARTIES
6.1 Financings. Pubco shall provide a financing of $500,000 (the "PUBCO
FINANCING") that shall close no later than 60 days from the Closing Date
and on mutually agreeable terms by the parties;
6.2 Notification of Financial Liabilities. Priveco and Pubco will immediately
notify the other in accordance with Section 10.6 hereof, if either party
receives any advice or notification from its independent certified public
accounts that the other party has used any improper accounting practice
that would have the effect of not reflecting or incorrectly reflecting in
the books, records, and accounts of such party, any properties, assets,
Liabilities, revenues, or expenses. Notwithstanding any statement to the
contrary in this Agreement, this covenant will survive Closing and continue
in full force and effect.
6.3 Access and Investigation. Between the date of this Agreement and the
Closing Date, Priveco, on the one hand, and Pubco, on the other hand, will,
and will cause each of their respective representatives to:
(a) afford the other and its representatives full and free access to its
personnel, properties, assets, contracts, books and records, and other
documents and data;
(b) furnish the other and its representatives with copies of all such
contracts, books and records, and other existing documents and data as
required by this Agreement and as the other may otherwise reasonably
request; and
(c) furnish the other and its representatives with such additional
financial, operating, and other data and information as the other may
reasonably request.
All of such access, investigation and communication by a party and its
representatives will be conducted during normal business hours and in a
manner designed not to interfere unduly with the normal business operations
of the other party. Each party will instruct its auditors to co-operate
with the other party and its representatives in connection with such
investigations.
6.4 Confidentiality. All information regarding the business of Priveco
including, without limitation, financial information that Priveco provides
to Pubco during Pubco's due diligence investigation of Priveco will be kept
in strict confidence by Pubco and will not be used (except in connection
with due diligence), dealt with, exploited or commercialized by Pubco or
disclosed to any third party (other than Pubco's professional accounting
and legal advisors) without the prior written consent of Priveco. If the
Transaction contemplated by this Agreement does not proceed for any reason,
then upon receipt of a written request from Priveco, Pubco will immediately
return to Priveco (or as directed by Priveco) any information received
regarding Priveco's business. Likewise, all information regarding the
business of Pubco including, without limitation, financial information that
Pubco provides to Priveco during its due diligence investigation of Pubco
will be kept in strict confidence by Priveco and will not be used (except
in connection with due diligence), dealt with, exploited or commercialized
by Priveco or disclosed to any third party (other than Priveco's
professional accounting and legal advisors) without Pubco's prior written
consent. If the Transaction contemplated by this Agreement does not proceed
-21-
for any reason, then upon receipt of a written request from Pubco, Priveco
will immediately return to Pubco (or as directed by Pubco) any information
received regarding Pubco's business.
6.5 Notification. Between the date of this Agreement and the Closing Date, each
of the parties to this Agreement will promptly notify the other parties in
writing if it becomes aware of any fact or condition that causes or
constitutes a material breach of any of its representations and warranties
as of the date of this Agreement, if it becomes aware of the occurrence
after the date of this Agreement of any fact or condition that would cause
or constitute a material breach of any such representation or warranty had
such representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. Should any such fact or condition
require any change in the Schedules relating to such party, such party will
promptly deliver to the other parties a supplement to the Schedules
specifying such change. During the same period, each party will promptly
notify the other parties of the occurrence of any material breach of any of
its covenants in this Agreement or of the occurrence of any event that may
make the satisfaction of such conditions impossible or unlikely.
6.6 Exclusivity. Until such time, if any, as this Agreement is terminated
pursuant to the terms of this Agreement, Priveco and Pubco will not,
directly or indirectly, solicit, initiate, entertain or accept any
inquiries or proposals from, discuss or negotiate with, provide any
non-public information to, or consider the merits of any unsolicited
inquiries or proposals from, any person or entity relating to any
transaction involving the sale of the business or assets (other than in the
ordinary course of business), or any of the capital stock of Priveco or
Pubco, as applicable, or any merger, consolidation, business combination,
or similar transaction other than as contemplated by this Agreement.
6.7 Conduct of Priveco and Pubco Business Prior to Closing. From the date of
this Agreement to the Closing Date, and except to the extent that Pubco
otherwise consents in writing, Priveco will operate its business
substantially as presently operated and only in the ordinary course and in
compliance with all applicable laws, and use its best efforts to preserve
intact its good reputation and present business organization and to
preserve its relationships with persons having business dealings with it.
Likewise, from the date of this Agreement to the Closing Date, and except
to the extent that Priveco otherwise consents in writing, Pubco will
operate its business substantially as presently operated and only in the
ordinary course and in compliance with all applicable laws, and use its
best efforts to preserve intact its good reputation and present business
organization and to preserve its relationships with persons having business
dealings with it.
6.8 Certain Acts Prohibited - Priveco. Except as expressly contemplated by this
Agreement or for purposes in furtherance of this Agreement, between the
date of this Agreement and the Closing Date, Priveco will not, without the
prior written consent of Pubco:
(a) amend its Certificate of Incorporation, Articles of Incorporation or
other incorporation documents;
(b) incur any liability or obligation other than in the ordinary course of
business or encumber or permit the encumbrance of any properties or
assets of Priveco except in the ordinary course of business;
(c) dispose of or contract to dispose of any Priveco property or assets,
including the Intellectual Property Assets, except in the ordinary
course of business consistent with past practice;
-22-
(d) issue, deliver, sell, pledge or otherwise encumber or subject to any
lien any shares of the Priveco Common Stock, or any rights, warrants
or options to acquire, any such shares, voting securities or
convertible securities;
(e)
(i) declare, set aside or pay any dividends on, or make any other
distributions in respect of the Priveco Common Stock, or
(ii) split, combine or reclassify any Priveco Common Stock or issue or
authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of Priveco Common Stock; or
(f) materially increase benefits or compensation expenses of Priveco,
other than as contemplated by the terms of any employment agreement in
existence on the date of this Agreement, increase the cash
compensation of any director, executive officer or other key employee
or pay any benefit or amount not required by a plan or arrangement as
in effect on the date of this Agreement to any such person.
6.9 Certain Acts Prohibited - Pubco. Except as expressly contemplated by this
Agreement, between the date of this Agreement and the Closing Date, Pubco
will not, without the prior written consent of Priveco:
(a) incur any liability or obligation or encumber or permit the
encumbrance of any properties or assets of Pubco except in the
ordinary course of business consistent with past practice;
(b) dispose of or contract to dispose of any Pubco property or assets
except in the ordinary course of business consistent with past
practice;
(c) declare, set aside or pay any dividends on, or make any other
distributions in respect of the Pubco Common Stock; or
(d) materially increase benefits or compensation expenses of Pubco,
increase the cash compensation of any director, executive officer or
other key employee or pay any benefit or amount to any such person.
6.10 Public Announcements. Pubco and Priveco each agree that they will not
release or issue any reports or statements or make any public announcements
relating to this Agreement or the Transaction contemplated herein without
the prior written consent of the other party, except as may be required
upon written advice of counsel to comply with applicable laws or regulatory
requirements after consulting with the other party hereto and seeking their
reasonable consent to such announcement.
6.11 Employment Agreements. Between the date of this Agreement and the Closing
Date, Priveco will have made necessary arrangements to employ all of the
hourly and salaried employees of Priveco reasonably necessary to operate
such business substantially as presently operated. Priveco agrees to
provide copies of all such agreements and arrangements that evidence such
employment at or prior to Closing.
-23-
7. CLOSING
7.1 Closing. The Closing shall take place on the Closing Date at the offices of
the lawyers for Pubco or at such other location as agreed to by the
parties. Notwithstanding the location of the Closing, each party agrees
that the Closing may be completed by the exchange of undertakings between
the respective legal counsel for Priveco and Pubco, provided such
undertakings are satisfactory to each party's respective legal counsel.
7.2 Closing Deliveries of Priveco and the Selling Shareholders. At Closing,
Priveco and the Selling Shareholders will deliver or cause to be delivered
the following, fully executed and in the form and substance reasonably
satisfactory to Pubco:
(a) copies of all resolutions and/or consent actions adopted by or on
behalf of the board of directors of Priveco evidencing approval of
this Agreement and the Transaction;
(b) if any of the Selling Shareholders appoint any person, by power of
attorney or equivalent, to execute this Agreement or any other
agreement, document, instrument or certificate contemplated by this
agreement, on behalf of the Selling Shareholder, a valid and binding
power of attorney or equivalent from such Selling Shareholder;
(c) share certificates, if issued, representing the Priveco Shares as
required by Section 2.3 of this Agreement;
(d) all certificates and other documents required by Sections 2.3 and 5.1
of this Agreement;
(e) the Priveco Documents and any other necessary documents, each duly
executed by Priveco, as required to give effect to the Transaction;
and
(f) copies of all agreements and arrangements required by Section 6.11 of
this Agreement.
7.3 Closing Deliveries of Pubco. At Closing, Pubco will deliver or cause to be
delivered the following, fully executed and in the form and substance
reasonably satisfactory to Priveco:
(a) copies of all resolutions and/or consent actions adopted by or on
behalf of the board of directors of Pubco evidencing approval of this
Agreement and the Transaction;
(b) all certificates and other documents required by Section 5.2 of this
Agreement;
(c) all certificates, stock powers, and other documents required for the
cancellation of 4,000,000 Pubco common shares to comply with Section
5.2(f) herein; and
(d) the Pubco Documents and any other necessary documents, each duly
executed by Pubco, as required to give effect to the Transaction.
7.4 Delivery of Financial Statements. Prior to the Closing Date, Priveco will
have delivered to Pubco the Priveco Financial Statements for the period
ended on the Priveco Accounting Date.
7.5 Additional Closing Delivery of Pubco. At Closing, Pubco will deliver or
cause to be delivered the share certificates representing the Pubco Shares.
-24-
8. TERMINATION
8.1 Termination. This Agreement may be terminated at any time prior to the
Closing Date contemplated hereby by:
(a) mutual agreement of Pubco and Priveco;
(b) Pubco, if there has been a material breach by Priveco or any of the
Selling Shareholders of any material representation, warranty,
covenant or agreement set forth in this Agreement on the part of
Priveco or the Selling Shareholders that is not cured, to the
reasonable satisfaction of Pubco, within ten business days after
notice of such breach is given by Pubco (except that no cure period
will be provided for a breach by Priveco or the Selling Shareholders
that by its nature cannot be cured);
(c) Priveco, if there has been a material breach by Pubco of any material
representation, warranty, covenant or agreement set forth in this
Agreement on the part of Pubco that is not cured by the breaching
party, to the reasonable satisfaction of Priveco, within ten business
days after notice of such breach is given by Priveco (except that no
cure period will be provided for a breach by Pubco that by its nature
cannot be cured);
(d) Pubco or Priveco, if the Transaction is not closed by September 19,
2013, unless the parties hereto agree to extend such date in writing;
or
(e) Pubco or Priveco if any permanent injunction or other order of a
governmental entity of competent authority preventing the consummation
of the Transaction contemplated by this Agreement has become final and
non-appealable.
8.2 Effect of Termination. In the event of the termination of this Agreement as
provided in Section 8.1, this Agreement will be of no further force or
effect, provided, however, that no termination of this Agreement will
relieve any party of liability for any breaches of this Agreement that are
based on a wrongful refusal or failure to perform any obligations.
9. INDEMNIFICATION, REMEDIES, SURVIVAL
9.1 Certain Definitions. For the purposes of this Article 9, the terms "LOSS"
and "LOSSES" mean any and all demands, claims, actions or causes of action,
assessments, losses, damages, Liabilities, costs, and expenses, including
without limitation, interest, penalties, fines and reasonable attorneys,
accountants and other professional fees and expenses, but excluding any
indirect, consequential or punitive damages suffered by Pubco or Priveco
including damages for lost profits or lost business opportunities.
9.2 Agreement of Priveco to Indemnify. Priveco will indemnify, defend, and hold
harmless, to the full extent of the law, Pubco and its shareholders from,
against, and in respect of any and all Losses asserted against, relating
to, imposed upon, or incurred by Pubco and its shareholders by reason of,
resulting from, based upon or arising out of:
(a) the breach by Priveco of any representation or warranty of Priveco
contained in or made pursuant to this Agreement, any Priveco Document
or any certificate or other instrument delivered pursuant to this
Agreement; or
-25-
(b) the breach or partial breach by Priveco of any covenant or agreement
of Priveco made in or pursuant to this Agreement, any Priveco Document
or any certificate or other instrument delivered pursuant to this
Agreement.
9.3 Agreement of the Selling Shareholders to Indemnify. The Selling
Shareholders will indemnify, defend, and hold harmless, to the full extent
of the law, Pubco and its shareholders from, against, and in respect of any
and all Losses asserted against, relating to, imposed upon, or incurred by
Pubco and its shareholders by reason of, resulting from, based upon or
arising out of:
(a) any breach by the Selling Shareholders of Section 2.2 of this
Agreement; or
(b) any misstatement, misrepresentation or breach of the representations
and warranties made by the Selling Shareholders contained in or made
pursuant to the Certificate executed by each Selling Shareholder or
their nominee as part of the share exchange procedure detailed in
Section 2.3 of this Agreement.
9.4 Agreement of Pubco to Indemnify. Pubco will indemnify, defend, and hold
harmless, to the full extent of the law, Priveco and the Selling
Shareholders from, against, for, and in respect of any and all Losses
asserted against, relating to, imposed upon, or incurred by Priveco and the
Selling Shareholders by reason of, resulting from, based upon or arising
out of:
(a) the breach by Pubco of any representation or warranty of Pubco
contained in or made pursuant to this Agreement, any Pubco Document or
any certificate or other instrument delivered pursuant to this
Agreement; or
(b) the breach or partial breach by Pubco of any covenant or agreement of
Pubco made in or pursuant to this Agreement, any Pubco Document or any
certificate or other instrument delivered pursuant to this Agreement.
10. MISCELLANEOUS PROVISIONS
10.1 Effectiveness of Representations; Survival. Each party is entitled to rely
on the representations, warranties and agreements of each of the other
parties and all such representation, warranties and agreement will be
effective regardless of any investigation that any party has undertaken or
failed to undertake. Unless otherwise stated in this Agreement, and except
for instances of fraud, the representations, warranties and agreements will
survive the Closing Date and continue in full force and effect until one
year after the Closing Date.
10.2 Further Assurances. Each of the parties hereto will co-operate with the
others and execute and deliver to the other parties hereto such other
instruments and documents and take such other actions as may be reasonably
requested from time to time by any other party hereto as necessary to carry
out, evidence, and confirm the intended purposes of this Agreement.
10.3 Amendment. This Agreement may not be amended except by an instrument in
writing signed by each of the parties.
10.4 Expenses. Pubco will bear all costs incurred in connection with the
preparation, execution and performance of this Agreement and the
Transaction contemplated hereby, including all fees and expenses of agents,
representatives, legal and accountants.
-26-
10.5 Entire Agreement. This Agreement, the schedules attached hereto and the
other documents in connection with this transaction contain the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior arrangements and understandings, both written and oral,
expressed or implied, with respect thereto. Any preceding correspondence or
offers are expressly superseded and terminated by this Agreement.
10.6 Notices. All notices and other communications required or permitted under
to this Agreement must be in writing and will be deemed given if sent by
personal delivery, faxed with electronic confirmation of delivery,
internationally-recognized express courier or registered or certified mail
(return receipt requested), postage prepaid, to the parties at the
addresses (or at such other address for a party as will be specified by
like notice) on the first page of this Agreement.
All such notices and other communications will be deemed to have been
received:
(a) in the case of personal delivery, on the date of such delivery;
(b) in the case of a fax, when the party sending such fax has received
electronic confirmation of its delivery;
(c) in the case of delivery by internationally-recognized express courier,
on the business day following dispatch; and
(d) in the case of mailing, on the fifth business day following mailing.
10.7 Headings. The headings contained in this Agreement are for convenience
purposes only and will not affect in any way the meaning or interpretation
of this Agreement.
10.8 Benefits. This Agreement is and will only be construed as for the benefit
of or enforceable by those persons party to this Agreement.
10.9 Assignment. This Agreement may not be assigned (except by operation of law)
by any party without the consent of the other parties.
10.10 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Nevada applicable to contracts
made and to be performed therein.
10.11 Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rule
of strict construction will be applied against any party.
10.12 Gender. All references to any party will be read with such changes in
number and gender as the context or reference requires.
10.13 Business Days. If the last or appointed day for the taking of any action
required or the expiration of any rights granted herein shall be a
Saturday, Sunday or a legal holiday in the State of Nevada, then such
action may be taken or right may be exercised on the next succeeding day
which is not a Saturday, Sunday or such a legal holiday.
10.14 Counterparts. This Agreement may be executed in one or more counterparts,
all of which will be considered one and the same agreement and will become
effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
-27-
10.15 Fax and PDF Execution. This Agreement may be executed by delivery of
executed signature pages by fax or PDF document via Email and such
execution will be effective for all purposes.
10.16 Schedules and Exhibits. The schedules and exhibits are attached to this
Agreement and incorporated herein.
[THIS PART LEFT INTENTIONALLY BLANK]
-28-
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
MIAMI DAYS CORP.
Per:
------------------------------------------
Name:
Title:
LIFE STEM GENETICS, INC.
Per:
------------------------------------------
Name:
Title:
----------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
PRINCE MARKETING GROUP LIMITED
Per:
------------------------------------------
Name:
Title:
SCHEDULE 1
TO THE SHARE EXCHANGE AGREEMENT AMONG MIAMI DAYS CORP.,
LIFE STEM GENETICS, INC. AND THE SELLING SHAREHOLDERS AS SET OUT
IN THE SHARE EXCHANGE AGREEMENT
THE SELLING SHAREHOLDERS
Total Number of
Number of Priveco Pubco Shares to be
Shares held before issued by Pubco on
Name Closing Closing
---- ------- -------
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ 500,000 923,864
▇▇▇▇▇▇ ▇▇▇▇▇
824 Lausanne, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 500,000 923,864
Prince Marketing Group Limited
Belize 100,000 184,772
SCHEDULE 2A
TO THE SHARE EXCHANGE AGREEMENT AMONG MIAMI DAYS CORP., LIFE STEM
GENETICS, INC. AND THE SELLING SHAREHOLDERS AS SET OUT IN THE
SHARE EXCHANGE AGREEMENT
CERTIFICATE OF NON-U.S. SHAREHOLDER
In connection with the issuance of common stock (the "Pubco Shares" and,
together with the Pubco Shares, the "PUBCO SECURITIES") of Miami Days Corp., a
company incorporated pursuant to the laws of the State of Nevada ("Pubco"), to
the undersigned, pursuant to that certain Share Exchange Agreement dated , 2013
(the "AGREEMENT"), among Pubco, Life Stem Genetics, Inc., a company incorporated
pursuant to the laws of the State of South Dakota ("PRIVECO"), and the
shareholders of Priveco as set out in the Agreement (each, a "SELLING
SHAREHOLDER"), the undersigned hereby agrees, acknowledges, represents and
warrants that:
1. the undersigned is not a "U.S. Person" as such term is defined by Rule
902 of Regulation S under the United States Securities Act of 1933, as amended
("U.S. SECURITIES ACT") (the definition of which includes, but is not limited
to, an individual resident in the U.S. and an estate or trust of which any
executor or administrator or trust, respectively is a U.S. Person and any
partnership or corporation organized or incorporated under the laws of the
U.S.);
2. none of the Pubco Securities have been or will be registered under the
U.S. Securities Act, or under any state securities or "blue sky" laws of any
state of the United States, and may not be offered or sold in the United States
or, directly or indirectly, to U.S. Persons, as that term is defined in
Regulation S, except in accordance with the provisions of Regulation S or
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the U.S. Securities Act and in compliance with any
applicable state and foreign securities laws;
3. the undersigned understands and agrees that offers and sales of any of
the Pubco Securities prior to the expiration of a period of one year after the
date of original issuance of the Pubco Securities (the one year period
hereinafter referred to as the Distribution Compliance Period) shall only be
made in compliance with the safe harbor provisions set forth in Regulation S,
pursuant to the registration provisions of the U.S. Securities Act or an
exemption therefrom, and that all offers and sales after the Distribution
Compliance Period shall be made only in compliance with the registration
provisions of the U.S. Securities Act or an exemption therefrom and in each case
only in accordance with applicable state and foreign securities laws;
4. the undersigned understands and agrees not to engage in any hedging
transactions involving any of the Pubco Securities unless such transactions are
in compliance with the provisions of the U.S. Securities Act and in each case
only in accordance with applicable state and provincial securities laws;
5. the undersigned is acquiring the Pubco Securities for investment only
and not with a view to resale or distribution and, in particular, it has no
intention to distribute either directly or indirectly any of the Pubco
Securities in the United States or to U.S. Persons;
6. the undersigned has not acquired the Pubco Securities as a result of,
and will not itself engage in, any directed selling efforts (as defined in
Regulation S under the U.S. Securities Act) in the United States in respect of
the Pubco Securities which would include any activities undertaken for the
purpose of, or that could reasonably be expected to have the effect of,
-2-
conditioning the market in the United States for the resale of any of the Pubco
Securities; provided, however, that the undersigned may sell or otherwise
dispose of the Pubco Securities pursuant to registration thereof under the U.S.
Securities Act and any applicable state and provincial securities laws or under
an exemption from such registration requirements;
7. the statutory and regulatory basis for the exemption claimed for the
sale of the Pubco Securities, although in technical compliance with Regulation
S, would not be available if the offering is part of a plan or scheme to evade
the registration provisions of the U.S. Securities Act or any applicable state
and provincial securities laws;
8. the undersigned has not undertaken, and will have no obligation, to
register any of the Pubco Securities under the U.S. Securities Act;
9. Pubco is entitled to rely on the acknowledgements, agreements,
representations and warranties and the statements and answers of the Selling
Shareholders contained in the Agreement and those of the undersigned contained
in this Certificate, and the undersigned will hold harmless Pubco from any loss
or damage either one may suffer as a result of any such acknowledgements,
agreements, representations and/or warranties made by the Selling Shareholders
and/or the undersigned not being true and correct;
10. the undersigned has been advised to consult their own respective legal,
tax and other advisors with respect to the merits and risks of an investment in
the Pubco Securities and, with respect to applicable resale restrictions, is
solely responsible (and Pubco is not in any way responsible) for compliance with
applicable resale restrictions;
11. none of the Pubco Securities are listed on any stock exchange or
automated dealer quotation system and no representation has been made to the
undersigned that any of the Pubco Securities will become listed on any stock
exchange or automated dealer quotation system, except that currently certain
market makers make market in the common shares of Pubco on the OTC Bulletin
Board;
12. the undersigned is outside the United States when receiving and
executing this Agreement and is acquiring the Pubco Securities as principal for
their own account, for investment purposes only, and not with a view to, or for,
resale, distribution or fractionalization thereof, in whole or in part, and no
other person has a direct or indirect beneficial interest in the Pubco
Securities;
13. neither the SEC nor any other securities commission or similar
regulatory authority has reviewed or passed on the merits of the Pubco
Securities;
14. the Pubco Securities are not being acquired, directly or indirectly,
for the account or benefit of a U.S. Person or a person in the United States;
15. the undersigned acknowledges and agrees that Pubco shall refuse to
register any transfer of Pubco Securities not made in accordance with the
provisions of Regulation S, pursuant to registration under the U.S. Securities
Act, or pursuant to an available exemption from registration under the U.S.
Securities Act;
16. the undersigned understands and agrees that the Pubco Securities will
bear the following legend:
"THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE
TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN)
-3-
PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT").
NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER
THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE
UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT,
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH
CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN
ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. "UNITED STATES" AND
"U.S. PERSON" ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT."
17. the address of the undersigned included herein is the sole address of
the undersigned as of the date of this certificate.
IN WITNESS WHEREOF, I have executed this Certificate of Non-U.S. Shareholder.
Date: , 20
-------------------------------------- -------------------- ---
Signature
--------------------------------------
Print Name
--------------------------------------
Title (if applicable)
--------------------------------------
--------------------------------------
Address
SCHEDULE 2B
TO THE SHARE EXCHANGE AGREEMENT AMONG MIAMI DAYS CORP., LIFE STEM
GENETICS, INC. AND THE SELLING SHAREHOLDERS AS SET OUT IN THE
SHARE EXCHANGE AGREEMENT
CERTIFICATE OF U.S. SHAREHOLDER
In connection with the issuance of common stock ("PUBCO COMMON STOCK") of Miami
Days Corp., a company incorporated pursuant to the laws of the State of Nevada
("PUBCO"), to the undersigned, pursuant to that certain Share Exchange Agreement
dated , 2013 (the "AGREEMENT"), among Pubco, Life Stem Genetics, Inc., a company
incorporated pursuant to the laws of the State of South Dakota ("PRIVECO"), and
the shareholders of Priveco as set out in the Agreement (each, a "SELLING
SHAREHOLDER"), the undersigned hereby agrees, acknowledges, represents and
warrants that:
1. Acquired Entirely for Own Account.
The undersigned represents and warrants that he, she or it is acquiring the
Pubco Common Stock solely for the undersigned's own account for investment and
not with a view to or for sale or distribution of the Pubco Common Stock or any
portion thereof and without any present intention of selling, offering to sell
or otherwise disposing of or distributing the Pubco Common Stock or any portion
thereof in any transaction other than a transaction complying with the
registration requirements of the U.S. Securities Act of 1933, as amended (the
"SECURITIES ACT"), and applicable state and provincial securities laws, or
pursuant to an exemption therefrom. The undersigned also represents that the
entire legal and beneficial interest of the Pubco Common Stock that he, she or
it is acquiring is being acquired for, and will be held for, the undersigned's
account only, and neither in whole nor in part for any other person or entity.
2. Information Concerning Pubco.
The undersigned acknowledges that he, she or it has received all such
information as the undersigned deems necessary and appropriate to enable him,
her or it to evaluate the financial risk inherent in making an investment in the
Pubco Common Stock. The undersigned further acknowledges that he, she or it has
received satisfactory and complete information concerning the business and
financial condition of Pubco in response to all inquiries in respect thereof.
3. Economic Risk and Suitability.
The undersigned represents and warrants as follows:
(a) the undersigned realizes that the Pubco Common Stock involves a high
degree of risk and are a speculative investment, and that he, she or
it is able, without impairing the undersigned's financial condition,
to hold the Pubco Common Stock for an indefinite period of time;
(b) the undersigned recognizes that there is no assurance of future
profitable operations and that investment in Pubco involves
substantial risks, and that the undersigned has taken full cognizance
of and understands all of the risk factors related to the Pubco Common
Stock;
(c) the undersigned has carefully considered and has, to the extent the
undersigned believes such discussion necessary, discussed with the
undersigned's professional legal, tax and financial advisors the
-2-
suitability of an investment in Pubco for the particular tax and
financial situation of the undersigned and that the undersigned and/or
the undersigned's advisors have determined that the Pubco Common Stock
is a suitable investment for the undersigned;
(d) the financial condition and investment of the undersigned are such
that he, she or it is in a financial position to hold the Pubco Common
Stock for an indefinite period of time and to bear the economic risk
of, and withstand a complete loss of, the value of the Pubco Common
Stock;
(e) the undersigned alone, or with the assistance of professional
advisors, has such knowledge and experience in financial and business
matters that the undersigned is capable of evaluating the merits and
risks of acquiring the Pubco Common Stock, or has a pre-existing
personal or business relationship with Pubco or any of its officers,
directors, or controlling persons of a duration and nature that
enables the undersigned to be aware of the character, business acumen
and general business and financial circumstances of Pubco or such
other person;
(f) if the undersigned is a partnership, trust, corporation or other
entity: (1) it was not organized for the purpose of acquiring the
Pubco Common Stock (or all of its equity owners are "accredited
investors" as defined in Section 6 below); (2) it has the power and
authority to execute this Certificate and the person executing said
document on its behalf has the necessary power to do so; (3) its
principal place of business and principal office are located within
the state set forth in its address below; and (4) all of its trustees,
partners and/or shareholders, whichever the case may be, are bona fide
residents of said state;
(g) the undersigned understands that neither Pubco nor any of its officers
or directors has any obligation to register the Pubco Common Stock
under any federal or other applicable securities act or law;
(h) the undersigned has relied solely upon the advice of his or her
representatives, if any, and independent investigations made by the
undersigned and/or his or her the undersigned representatives, if any,
in making the decision to acquire the Pubco Common Stock and
acknowledges that no representations or agreements other than those
set forth in the Share Exchange Agreement have been made to the
undersigned in respect thereto;
(i) all information which the undersigned has provided concerning the
undersigned himself, herself or itself is correct and complete as of
the date set forth below, and if there should be any material change
in such information prior to the issuance of the Pubco Common Stock,
he, she or it will immediately provide such information to Pubco;
(j) the undersigned confirms that the undersigned has received no general
solicitation or general advertisement and has attended no seminar or
meeting (whose attendees have been invited by any general solicitation
or general advertisement) and has received no advertisement in any
newspaper, magazine, or similar media, broadcast on television or
radio regarding acquiring the Pubco Common Stock; and
(k) the undersigned is at least 21 years of age and is a citizen of the
United States residing at the address indicated below.
4. Restricted Securities.
The undersigned acknowledges that Pubco has hereby disclosed to the
undersigned in writing:
(a) the Pubco Common Stock that the undersigned is acquiring have not been
registered under the Securities Act or the securities laws of any
state of the United States, and such securities must be held
indefinitely unless a transfer of them is subsequently registered
under the Securities Act or an exemption from such registration is
available; and
(b) Pubco will make a notation in its records of the above described
restrictions on transfer and of the legend described below.
5. Legends.
The undersigned agrees that the Pubco Common Stock will bear the following
legends:
"THESE SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED ("1933 ACT") OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE COMPANY, (II) OUTSIDE THE
UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
1933 ACT, (III) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION
UNDER THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER, OR (IV) IN
COMPLIANCE WITH ANOTHER EXEMPTION FROM REGISTRATION, IN EACH CASE AFTER
PROVIDING EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER MAY
BE MADE WITHOUT REGISTRATION UNDER THE 1933 ACT. HEDGING TRANSACTIONS
INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE 1933 ACT."
6. Suitable Investor.
IN ORDER TO ESTABLISH THE QUALIFICATION OF THE UNDERSIGNED TO ACQUIRE THE
PUBCO COMMON STOCK, THE INFORMATION REQUESTED IN EITHER SUBSECTION 6(A) OR (B)
BELOW MUST BE SUPPLIED.
(a) The undersigned is an ?ccredited investor," as defined in Securities
and Exchange Commission (the ?EC") Rule 501. An ?ccredited investor" is one who
meets any of the requirements set forth below. The undersigned represents and
warrants that the undersigned falls within the category (or categories) marked.
PLEASE INDICATE EACH CATEGORY OF ACCREDITED INVESTOR THAT YOU, THE UNDERSIGNED,
SATISFY, BY PLACING AN ?" ON THE APPROPRIATE LINE BELOW.
_____ Category 1. A bank, as defined in Section 3(a)(2) of the Securities Act,
whether acting in its individual or fiduciary capacity; or
_____ Category 2. A savings and loan association or other institution as
defined in Section 3(a) (5) (A) of the Securities Act,
whether acting in its individual or fiduciary capacity; or
_____ Category 3. A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934; or
_____ Category 4. An insurance company as defined in Section 2(13) of the
Securities Act; or
-3-
_____ Category 5. An investment company registered under the Investment Company
Act of 1940; or
_____ Category 6. A business development company as defined in Section 2(a)
(48) of the Investment Company Act of 1940; or
_____ Category 7. A small business investment company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of
the Small Business Investment Act of 1958; or
_____ Category 8. A plan established and maintained by a state, its political
subdivision or any agency or instrumentality of a state or
its political subdivisions, for the benefit of its employees,
with assets in excess of $5,000,000; or
_____ Category 9. An employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974 in which the
investment decision is made by a plan fiduciary, as defined
in Section 3(21) of such Act, which is either a bank, savings
and loan association, insurance company or registered
investment advisor, or an employee benefit plan with total
assets in excess of $5,000,000 or, if a self-directed plan,
the investment decisions are made solely by persons who are
accredited investors; or
_____ Category 10. A private business development company as defined in Section
202(a) (22) or the Investment Advisers Act of 1940; or
_____ Category 11. An organization described in Section 501(c)(3) of the
Internal Revenue Code, a corporation, a Massachusetts or
similar business trust, or a partnership, not formed for the
specific purpose of acquiring the Interest, with total assets
in excess of $5,000,000; or
_____ Category 12. A director or executive officer of Pubco; or
_____ Category 13. A natural person whose individual net worth, or joint net
worth with that person's spouse, not accounting for their
primary residence, at the time of this purchase exceeds
$1,000,000; or
_____ Category 14. A natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income
with that person's spouse in excess of $300,000 in each of
those years and has a reasonable expectation of reaching the
same income level in the current year; or
_____ Category 15. A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Interest,
whose purchase is directed by a sophisticated person as
described in SEC Rule 506(b)(2)(ii); or
_____ Category 16. An entity in which all of the equity owners are accredited
investors.
(b) The undersigned is not an accredited investor and meets the
requirements set forth below. PLEASE INDICATE THAT YOU, THE UNDERSIGNED, SATISFY
THESE REQUIREMENTS BY PLACING AN ?" ON THE LINE BELOW.
_____ The undersigned, either alone or with the undersigned's representative,
has such knowledge, skill and experience in business, financial and
investment matters so that the undersigned is capable of evaluating the
merits and risks of an investment in the Pubco Common Stock. To the
extent necessary, the undersigned has retained, at the undersigned's
own expense, and relied upon, appropriate professional advice regarding
-4-
the investment, tax and legal merits and consequences of owning the
Pubco Common Stock. In addition, the amount of the undersigned's
investment in the Pubco Common Stock does not exceed ten percent (10%)
of the undersigned's net worth. The undersigned agrees to furnish any
additional information requested to assure compliance with applicable
federal and state securities laws in connection with acquiring the
Pubco Common Stock.
7. Understandings.
The undersigned understands, acknowledges and agrees that:
(a) no federal or state agency has made any finding or determination as to
the accuracy or adequacy of the Disclosure Documents or as to the
fairness of the terms of this offering for investment nor any
recommendation or endorsement of the Pubco Common Stock;
(b) this offering is intended to be exempt from registration under the
Securities Act by virtue of Section 4(2) of the Securities Act, which
is in part dependent upon the truth, completeness and accuracy of the
statements made by the undersigned herein;
(c) the Pubco Common Stock are "restricted securities" in the U.S. under
the Securities Act. There can be no assurance that the undersigned
will be able to sell or dispose of the Pubco Common Stock. It is
understood that in order not to jeopardize this offering's exempt
status under Section 4(2) of the Act, any transferee may, at a
minimum, be required to fulfill the investor suitability requirements
thereunder;
(d) the representations, warranties and agreements of the undersigned
contained herein and in any other writing delivered in connection with
the transactions contemplated hereby shall be true and correct in all
respects on and as of the date the Pubco Common Stock is acquired as
if made on and as of such date; and
(e) THE PUBCO COMMON STOCK MAY NOT BE TRANSFERRED, RESOLD OR OTHERWISE
DISPOSED OF EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND ANY OTHER
APPLICABLE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE UNDERSIGNED SHOULD BE AWARE THAT THEY WILL BE REQUIRED
TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME.
IN WITNESS WHEREOF, I have executed this Certificate.
Date: , 20
-------------------------------------- -------------------- ---
Signature
--------------------------------------
Print Name
--------------------------------------
Title (if applicable)
--------------------------------------
--------------------------------------
Address
SCHEDULE 3
TO THE SHARE EXCHANGE AGREEMENT AMONG MIAMI DAYS CORP., LIFE STEM
GENETICS, INC. AND THE SELLING SHAREHOLDERS AS SET OUT IN THE
SHARE EXCHANGE AGREEMENT
DIRECTORS AND OFFICERS OF PRIVECO
DIRECTORS:
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
OFFICERS:
▇▇▇▇▇▇ ▇▇▇▇▇ - President, CEO
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - Vice President, Secretary
SCHEDULE 4
TO THE SHARE EXCHANGE AGREEMENT AMONG MIAMI DAYS CORP., LIFE STEM
GENETICS, INC. AND THE SELLING SHAREHOLDERS AS SET OUT IN THE
SHARE EXCHANGE AGREEMENT
DIRECTORS AND OFFICERS OF PUBCO
DIRECTORS:
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
OFFICERS:
▇▇▇▇▇▇ ▇▇▇▇▇ - President, CEO
▇▇▇▇▇ ▇▇▇▇▇ - Secretary, Treasurer
SCHEDULE 5
TO THE SHARE EXCHANGE AGREEMENT AMONG MIAMI DAYS CORP., LIFE STEM
GENETICS, INC. AND THE SELLING SHAREHOLDERS AS SET OUT IN THE
SHARE EXCHANGE AGREEMENT
PRIVECO MATERIAL LEASES, SUBLEASES, CLAIMS, CAPITAL EXPENDITURES,
TAXES AND OTHER PROPERTY INTERESTS
None.
SCHEDULE 6
TO THE SHARE EXCHANGE AGREEMENT AMONG MIAMI DAYS CORP., LIFE STEM
GENETICS, INC. AND THE SELLING SHAREHOLDERS AS SET OUT IN THE
SHARE EXCHANGE AGREEMENT
PRIVECO INTELLECTUAL PROPERTY
None
SCHEDULE 7
TO THE SHARE EXCHANGE AGREEMENT AMONG MIAMI DAYS CORP., LIFE STEM
GENETICS, INC. AND THE SELLING SHAREHOLDERS AS SET OUT IN THE
SHARE EXCHANGE AGREEMENT
PRIVECO MATERIAL CONTRACTS
1. Consulting Agreement with ▇▇▇▇▇ Vanden Bosch dated December 18, 2012 plus
amending agreement dated February 8, 2013;
2. Employment Agreement with ▇▇▇▇▇▇ ▇▇▇▇▇ dated January 1, 2013;
3. Facilitation Agreement with Prince Marketing Group Limited dated March 13,
2013;
4. Implementation and Management Agreement with Lexington Management Inc.,
dated for reference January 1, 2013.
SCHEDULE 8
TO THE SHARE EXCHANGE AGREEMENT AMONG MIAMI DAYS CORP., LIFE STEM
GENETICS, INC. AND THE SELLING SHAREHOLDERS AS SET OUT IN THE
SHARE EXCHANGE AGREEMENT
PRIVECO EMPLOYMENT AGREEMENTS AND ARRANGEMENTS
As of the date of this Agreement, the following hourly and salaried employees of
Priveco are reasonably necessary to operate the business of Priveco as
substantially presently operated:
See Schedule 7
SCHEDULE 9
TO THE SHARE EXCHANGE AGREEMENT AMONG MIAMI DAYS CORP., LIFE STEM
GENETICS, INC. AND THE SELLING SHAREHOLDERS AS SET OUT IN THE
SHARE EXCHANGE AGREEMENT
SUBSIDIARIES
PUBCO:
None.
PRIVECO:
None.