EXHIBIT 10.52
CONTRIBUTION AND STOCK ACQUISITION AGREEMENT
CONTRIBUTION AND STOCK ACQUISITION AGREEMENT effective as of
January 1,
2005 by and among DTLL, Inc.,
a Minnesota corporation (the "Corporation"), and
GS Pharma, Inc.
("GSPI").
W I T N E S S E T H:
WHEREAS,
the Corporation desires to obtain from GSPI assignment of
an
exclusive license agreement
attached hereto as Exhibit 1 (the "License") in
consideration of 12,500,000
shares of common stock of the Corporation on the
terms and conditions
contained herein;
NOW,
THEREFORE, the parties hereto, intending to be bound hereby, do
agree
as follows:
Authorized and Outstanding
Capital Stock. The Corporation's Articles of
Incorporation (the
"Articles") provide for, among other things, (a)
50,000,000
shares of common stock, par
value $0.01 per share, and (b) 50,000,000 shares of
undesignated stock. As of the
date of this Agreement, 825,693 shares of common
stock are issued and
outstanding, no shares of undesignated stock have been
designated, no shares of
undesignated stock are issued or outstanding, and
611,329 shares of common
stock are reserved for issuance (as reported on Exhibit
2, attached), and no shares
of undesignated stock are reserved for issuance.
Issuance of Stock;
Closing.
Issuance of Stock. Subject to
the terms and conditions hereof, the Corporation
has authorized the issuance
to GSPI at the Closing (as such term is defined in
Section 2.4 hereof) of
12,500,000 shares of common stock (the "Stock") which
will represent approximately
94% of the shares of common stock issued and
outstanding immediately
following the Closing.
Agreement to Assign License.
Subject to the terms and conditions hereof, GSPI
agrees to assign all of its
rights in the License to the Corporation.
Delivery of the
Stock.
(a)
At the Closing,
or as soon as possible thereafter, the Corporation
shall deliver to GSPI a certificate or certificates, registered
in
the name of GSPI, representing the total number of shares of
Stock.
(b)
Delivery of such
certificates shall be made against receipt by the
Corporation of the assignment of the License ("License
Assignment")
in the form attached hereto as Exhibit 2.3.
Closing. The assignment of
the License and the issuance of the Stock
contemplated by this
Agreement (the "Closing") shall take place at the
offices
of GelStat Corporation, 1650
West 82nd Street, Suite 1200, Bloomington, MN
55431, simultaneously with
the execution and delivery of this Agreement (the
"Closing Date") or, if a
physical stock certificate cannot be delivered
simultaneous with the
closing, said stock certificate shall be issued as soon
as
practical thereafter, with
evidence of the proper authorizations and
instructions, satisfactory to
GSPI, being evidenced at the closing.
Representations and
Warranties of the Corporation.
The Corporation represents and warrants to GSPI to the best of
its
actual knowledge (and the
actual knowledge of its key officers) that except as
expressly set forth in the
Disclosure Schedule attached hereto and made a part
hereof (the "Disclosure
Schedule"), the following representations and warranties
are true and correct as of
the date hereof.
<PAGE>
Organization; Power and
Authority; Qualifications. The Corporation is a
corporation duly organized,
validly existing and in good standing under the laws
of the State of Minnesota and
has all requisite corporate power and authority to
own, lease and operate its
properties, to carry on its business as presently
conducted and as proposed to
be conducted and to carry out the transactions
contemplated by this
Agreement and any Agreement incorporated herein by
reference to the extent such
agreement requires action by the Corporation (as
hereinafter defined) (each, a
"Transaction Document" and collectively, the
"Transaction Documents"). The
Corporation is qualified to transact business as a
foreign corporation in those
jurisdictions listed on Schedule 3.1(a) of the
Disclosure Schedule, which
jurisdictions constitute all such jurisdictions where
the failure to be so
qualified or licensed would have a material adverse
effect
on the Corporation. A true,
correct and complete copy of the Articles and the
Bylaws (the "Bylaws") of the
Corporation, in each case, as amended to, and as in
effect on, the date hereof,
are attached hereto as Exhibits 3.1.1 and 3.1.2,
respectively.
Authorization of the
Transaction Documents, No Conflicts, etc. The execution,
delivery and performance by
the Corporation of the Transaction Documents, have
been duly authorized by all
requisite corporate action by the Corporation and
each such Transaction
Document constitutes a valid and binding obligation of
the
Corporation, enforceable
against the Corporation in accordance with its terms,
subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws
now or hereafter in effect relating to or limiting
creditors' rights generally,
and general principles of equity, whether such
enforceability is considered
in a proceeding at law or in equity. The execution,
delivery and performance by
the Corporation of the Transaction Documents and the
consummation of the
transactions contemplated thereby and compliance by the
Corporation with the
provisions thereof and the issuance by the Corporation
of
the Stock, will
not:
(a)
violate any
provision of law, statute, rule or regulation, or any
ruling, writ, injunction, order, judgment or decree of any
court,
administrative agency or other governmental body applicable to
the
Corporation or any of its properties or assets where such
violation,
conflict, breach or default would have a material adverse effect
on
the operations, financial condition or prospects of the
Corporation,
or
(b)
conflict with or
result in any breach of any of the terms,
conditions or provisions of, or constitute (with due notice or
lapse
of time, or both) a default (or give rise to any right
of
termination, cancellation or acceleration) under, or result in
the
creation of any Encumbrance (as defined in Section 3.10 hereof)
upon
any of the properties or assets of the Corporation under
its
Articles or Bylaws, or any note, indenture, mortgage,
lease
agreement or other contract, agreement or instrument to which
the
Corporation is a party or by which any of its properties or
assets
are bound or affected where (other than in the case of the
Articles
and the Bylaws) such conflict, breach or default would have
a
material adverse effect on the operations, financial condition
or
prospects of the Corporation.
Authorization of the Stock.
The authorization, issuance, and delivery of the
Stock has been duly
authorized by all requisite corporate action of the
Corporation, and when issued,
sold and delivered in accordance with this
Agreement for the
consideration stated herein, the Stock will be validly
issued
and outstanding, fully paid
and nonassessable with no personal liability
attaching to the ownership
thereof, and not subject to: (a) preemptive or any
other similar rights of the
stockholders of the Corporation or others or (b) any
other restriction on transfer
other than restrictions on transfer under
applicable state and federal
laws. The terms, designations, powers, preferences
and relative, participating,
optional and other special rights, and the
qualifications, limitations
and restrictions, of the Stock are as stated in the
Articles.
<PAGE>
No Governmental Consent or
Approval Required. No consent, approval or
authorization of, or
declaration to or filing with, any governmental or
regulatory authority is
required for the valid authorization, execution and
delivery by the Corporation
of the Transaction Documents or for the consummation
of the transactions
contemplated thereby or for the valid authorization,
issuance and delivery by the
Corporation of the Stock hereunder, other than (i)
those consents, approvals,
authorizations, declarations or filings which have
been obtained or made, as the
case may be, (ii) the filing of the Certificate
with the Minnesota Secretary
of State, (iii) the filing of a Form D with the
Securities and Exchange
Commission (the "SEC"), and (iv) filings pursuant to
state securities laws in
connection with the issuance of the Stock. Except as
set forth in Section 3.4 of
the Disclosure Schedule, no other third-party
consents or approvals are
required for the valid authorization, execution and
delivery by the Corporation
of the Transaction Documents or for the consummation
of the transactions
contemplated thereby or for the valid authorization,
issuance and delivery by the
Corporation of the Stock hereunder.
Subsidiaries; Equity
Investments. Except as set forth in Section 3.5 of the
Disclosure Schedule, the
Corporation does not own or control, directly or
indirectly, any capital stock
or other proprietary interest or participation in
any corporation, association,
trust, partnership, association or other entity.
Capitalization.
(a)
The authorized
capital stock of the Corporation immediately upon the
consummation at the Closing of the transactions contemplated
hereby
shall be as set forth in Section 1 of the Agreement and the
related
Exhibit 2.
(b)
Section 3.6(b)
of the Disclosure Schedule contains a list of all
outstanding warrants, options, agreements, convertible securities
or
other commitments pursuant to which the Corporation is or may
become
obligated to issue any shares of the capital stock or
other
securities of the Corporation, which list names all persons
entitled
to receive such shares or other securities immediately prior to
the
consummation at the Closing of the transactions contemplated by
the
Transaction Documents and the shares of capital stock or
other
securities required to be issued thereunder. Except as set forth
in
such Section 3.6(b) or as contemplated by the Transaction
Documents,
there are no preemptive or similar rights to purchase or
otherwise
acquire shares of the capital stock of the Corporation pursuant
to
any provision of law, the Articles or Bylaws or any agreement
to
which the Corporation is a party; and, there are no
agreements,
restrictions or encumbrances (such as a right of first
refusal,
right of first offer, proxy, voting trust, voting agreement,
etc.)
with respect to the sale or voting of any shares of capital stock
of
the Corporation (whether outstanding or issuable upon conversion
or
exercise of outstanding securities). The Corporation has not
been
and will not be, in violation of the Securities Act or
any
applicable state securities or "blue sky" laws in connection
with
the issuance of any shares of capital stock or other
securities,
including the issuance of the Stock pursuant to this
Agreement.
Financial
Information.
(a)
The balance
sheet ("Balance Sheet") and the related statements of
income and retained earnings for Corporation as of the period
ended
September 30, 2004 (the "Financial Statements") as contained in
the
Corporation's report on Form 10-QSB filed with the SEC are
certified
to be true, complete and accurate in all material
respects.
(b)
The Financial
Statements and Balance Sheet (i) are in accordance
with the books and records of the Corporation, (ii) present
fairly
the financial condition and the results of operations of
the
Corporation as of the date and for the period indicated and
(iii)
have been prepared in accordance with generally accepted
accounting
principles consistently applied other than the absence of
(i)
accruals generally made in full year financial statements and
(ii)
notes to financial statements.
(c)
The books of
account, records and work papers of the Corporation up
to the date hereof are in all material respects complete
and
correct, have been maintained in accordance with good business
and
accounting practices and accurately reflect in all material
respects
the basis for the financial position and results of operations
of
the Corporation as set forth in the Financial
Statements.
<PAGE>
(d)
All receivables
listed in the Balance Sheet, including without
limitation the note receivable from Card Acquisition LLC,
are
collectible in full at maturity.
Absence of Undisclosed
Liabilities. Except as set forth in Section 3.8 of the
Disclosure Schedule, (a) the
Corporation has no material liability of any nature
(matured or unmatured, fixed
or contingent) which is not provided for or
disclosed on the Balance
Sheet and (b) all liability reserves established by the
Corporation and set forth on
the Balance Sheet were adequate in all material
respects for all such
liabilities at that date. There were no loss
contingencies
(as such term is used in
Statement of Financial Accounting Standards No. 5
issued by the Financial
Accounting Standards Board in March 1975) which were not
adequately provided for on
the Balance Sheet.
Absence of Changes. Except as
set forth in Section 3.9 of the Disclosure
Schedule since September 30,
2004, there has not been:
(a)
any material
adverse change in the financial condition, results of
operations, assets or liabilities of the Corporation;
(b)
any borrowing or
agreement to borrow funds or any liability or
obligation of any nature whatsoever (contingent or
otherwise)
incurred by the Corporation, other than current liabilities
or
obligations incurred in the ordinary course of business;
(c)
any mortgage,
pledge, transfer of a security interest in, or lien,
created by the Corporation, with respect to any of its
material
properties or assets, except for liens for taxes not yet due
or
payable;
(d)
any waiver or
cancellation by the Corporation of a valuable right or
claim of a material debt owed to it;
(e)
any declaration,
setting aside or payment or other distribution in
respect of any of the Corporation's capital stock, or any direct
or
indirect redemption, purchase or other acquisition of any stock
by
the Corporation, or any agreement or commitment
therefore;
(f)
any issuance of
any stock, bond or other security of the
Corporation, (including, without limitation, options, warrants
or
rights);
(g)
any sale,
assignment or transfer of any tangible or intangible
assets of the Corporation, except, with respect to tangible
assets,
in the ordinary course of business;
(h)
any loans or
guarantees made by the Corporation for the benefit of
any officer, director, employee, consultant or shareholder of
the
Corporation, or to any members of their immediate families or
any
agreement or commitment therefore (other than advances to
such
persons in the ordinary course of business in connection with
travel
and travel related expenses);
(i)
any damage,
destruction or loss (whether or not covered by
insurance) affecting the assets, properties, financial
condition,
results of operations or prospects or business of the
Corporation;
(j)
any material
change, direct or indirect, in the compensation paid or
payable to any officer, director, employee, consultant or agent
of
the Corporation;
(k)
any change in
the accounting methods, practices or policies followed
by the Corporation or any change in depreciation or
amortization
policies or rates theretofore adopted;
<PAGE>
(l)
any change or
material amendment to a material contract or
arrangement by which the Corporation or any of its assets
or
properties is bound or subject which is likely to
materially
adversely affect the business operations of the
Corporation;
(m)
any sale,
assignment, transfer or license of any Intellectual
Property (as hereinafter defined);
(n)
any receipt of
notice that there has been a loss of, or material
contract cancellation by, any material customer or supplier of
the
Corporation; or
(o)
any agreement or
commitment by the Corporation to take any of the
actions described in this Section 3.9.
Title to Assets, Properties
and Rights. The Corporation has good and marketable
title to all of its
properties, interests in properties and assets, real,
personal, intangible or
mixed, reflected on the Balance Sheet (or not so
reflected because not
required to be reflected but which are used or useful in
the business of the
Corporation), free and clear of all mortgages,
judgments,
claims, liens, security
interests, pledges, escrows, charges or other
encumbrances of any kind or
character whatsoever ("Encumbrances") except liens
for current taxes not yet due
and payable (or similar liens) and except for
liens that would not cause a
material adverse effect on the operations of the
Corporation. With respect to
the property and assets it leases, the Corporation
is in compliance with such
leases and holds a valid leasehold interest free of
any Encumbrances.
Intellectual
Property.
(a)
Section 3.11(a)
contains a complete and accurate list of (i) all
material Intellectual Property (as hereinafter defined) owned by
the
Corporation and used, held for use, or intended to be used in
its
business, (ii) all material rights granted by the Corporation to
any
third party with respect to such Intellectual Property, and
(iii)
all material Intellectual Property which the Corporation has
a
license or other right to use and which is used, held for use,
or
intended to be used in its business.
(b)
The Corporation
owns and possesses all right, title and interest in
and to, has the exclusive right to use, has the right to
bring
actions for the infringement of, and, where necessary, has
made
timely and proper application for, all of the
Corporation's
Intellectual Property rights or has valid and subsisting licenses
to
use such Intellectual Property and none of such
Intellectual
Property has been abandoned.
(c)
No royalties or
fees are payable by the Corporation to other persons
by reason of the ownership or use of the Intellectual
Property.
(d)
No product,
service or process manufactured, marketed, sold or used,
or proposed to be manufactured, marketed, sold or used, by
the
Corporation violates, or will violate, any license or infringes,
or
will infringe, any Intellectual Property or assumed name of
another;
and there is no pending or threatened claim or litigation
against
the Corporation (nor does there exist any basis
therefore)
contesting the validity of or right to use any of the foregoing,
nor
has the Corporation received any notice that any of the
Intellectual
Property or the operation or proposed operation of the
Corporation's
business conflicts, or will conflict, with the asserted rights
of
others, nor does there exist any basis for any such conflict,
except
for liens that would not cause a material adverse effect on
the
operations, financial conditions or prospects of the
Corporation.
(e)
No person has in
the past violated or infringed upon, or is
currently violating or infringing upon, any of the
Corporation's
Intellectual Property.
(f)
As used herein,
the term "Intellectual Property" means all
industrial and intellectual property rights, including,
without
limitation, patents, patent applications, patent rights,
trademarks,
trademark applications, trade names, logos, service marks,
service
mark applications, copyrights, know-how, inventions, certificates
of
public convenience and necessity, franchises, licenses,
trade
secrets, industrial secrets, proprietary rights,
technology,
formulae, designs, methodologies, computer programs (including
all
source codes) and related documentation.
<PAGE>
Agreements. Except as set
forth in Section 3.12 of the Disclosure Schedule, the
Corporation is not a party to
any agreement, understanding, instrument or
contract, whether written or
oral contract not made in the ordinary course of
business and, whether or not
made in the ordinary course of business, the
Corporation is not party to
any written or oral:
(a)
contract with
any labor union;
(b)
contract for the
future purchase of fixed assets or for the future
purchase of materials, supplies or equipment in excess of
normal
operating requirements;
(c)
agreement or
indenture relating to the borrowing of money or to the
mortgaging, pledging or placement of a lien on any assets of
the
Corporation;
(d)
guaranty of any
obligation for borrowed money or otherwise;
(e)
lease or
agreement under which the Corporation is lessee of or
holds
or operates any property, real or personal, owned by any
other
party;
(f) lease or agreement under
which the Corporation is lessor of or
permits any third party to hold or operate any property, real
or
personal, owned or controlled by the Corporation;
(g)
agreement(s) or
other commitment(s) for capital expenditures
cumulatively in excess of $10,000.00;
(h)
contract,
agreement or commitment under which the Corporation is
obligated to pay any broker's fees, finder's fees or any
such
similar fees, to any third party;
(i)
contract,
agreement or commitment not otherwise specified herein
under which the Corporation has issued or may become obligated
to
issue, any shares of capital stock of the Corporation or
any
warrants, options, convertible securities or other
commitments
pursuant to which the Corporation is or may become obligated
to
issue any shares of its capital stock;
(j)
any contract(s),
agreement(s), arrangement(s) or understanding(s)
under which cumulatively the Corporation may be obligated to pay
or
be entitled to receive in excess of $10,000.00;
(k)
any other
contract, agreement, arrangement or understanding which
is
material to the business of the Corporation; or
(l)
any amounts
payable or that will become payable to each present or
former director, officer, consultant or employee of the
Corporation
pursuant to any agreement or understanding set forth in
Schedule
3.12 as a result of the execution and delivery of this Agreement
and
the other Transaction Documents and/or the consummation of
the
transactions contemplated hereby or thereby.
The Corporation has furnished
to GSPI or its counsel, true and correct copies of
all such agreemen
