Exhibit 10.1
SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement (this
"Agreement") is made and entered into on August 19, 2009, by and
among Equinox International Inc., a Nevada corporation (the
"Company"), and the parties identified on the signature page of
this Agreement (each a “Biostem Shareholder” and
together the "Biostem Shareholders") as the shareholders of Biostem
US Inc., a Nevada corporation (“Biostem”). The
Company and the Biostem Shareholders are at times herein referred
to individually as a “Party” and collectively as the
“Parties.”
RECITALS:
A. The Biostem Shareholders are the
record and beneficial owners of Seventy-five Thousand (75,000)
shares, being all of the issued and outstanding shares of capital
stock of Biostem (the "Biostem Shares").
B. The Biostem Shareholders desire to
sell to the Company, and the Company desires to purchase from the
Biostem Shareholders, the Biostem Shares, on the terms and subject
to the conditions of this Agreement.
C. Biostem owns and has the exclusive
right to commercialize the technology (the “Proprietary
Technology”) more particularly described in the attached
SCHEDULE A of this Agreement.
D. In order to simplify the
negotiation of this Agreement and the consummation of the
transactions contemplated hereby, the Biostem Shareholders have
each appointed John Santino (the “Shareholder
Representative”) their attorney-in-fact to negotiate and
execute this Agreement in their behalf, with authority in effect
until such time as the Company shall have received from any Biostem
Shareholder a written revocation of their appointment of the
Shareholder Representative; provided, however, that the Shareholder
Representative shall not be deemed for any purpose a beneficial
owner of any Biostem Shares represented by any such appointment
under Rule 13d-3 under the Securities Exchange Act of 1934, solely
by reason of the fact that the Shareholder Representative has
executed this Agreement in such capacity.
NOW, THEREFORE, for and in consideration
of the premises and the mutual promises and undertakings contained
herein, and for other good and valuable consideration, and subject
to the terms and conditions of this Agreement, the parties hereto
agree as follows.
1.
THE EXCHANGE.
1.1 Sale and Purchase of the Biostem
Shares. On the terms and subject to conditions of this Agreement,
at the Closing (as defined below), the Biostem Shareholders shall
sell, transfer, assign, convey and deliver all of the Biostem
Shares to the Company, free and clear of all adverse claims,
security interests, liens, claims and encumbrances (other than
restrictions under applicable securities laws or as expressly
agreed to herein by the Company), and the Company shall purchase,
accept and
acquire all of the Biostem Shares from
the Biostem Shareholders. At Closing, the Company shall receive
good and merchantable title to the Biostem Shares.
1.2 Issuance of Exchange Shares. In full
payment for the Biostem Shares, the Company shall issue and deliver
to the Biostem Shareholders, prorata, Twenty Million, Four Hundred
Thousand (20,400,000) unregistered common shares of the Company
(the "Exchange Shares"). The Exchange Shares, will, when issued, be
validly issued, fully paid, and non assessable; and the sale,
issuance and delivery of the Exchange Shares on the terms herein
contemplated will be authorized by all requisite corporate action
of the Company; and the Exchange Shares will not be subject to any
preemptive rights, options or similar rights on the part of any
shareholder or creditor of the Company or any other person. The
Exchange Shares will be issued at Closing (as defined below)
pursuant to an exemption from registration under the Securities Act
of 1933, as amended (the “Securities Act”) pursuant to
Section 4(2) of the Securities Act. Upon issuance, the Exchange
Shares will be considered “restricted” shares and may
not be transferred or re-sold unless an exemption for such transfer
is available or the resale is covered by a registration statement
filed under the Securities Act. The sale and transfer of the
Biostem Shares in consideration for the issuance of the Exchange
Shares is referred to herein as the "Exchange."
1.3 Restrictive Legend on Shares. When
issued, the certificates evidencing the Exchange Shares will bear a
restrictive legend substantially in the following form:
"The shares represented by this
Certificate have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), and are "restricted
securities" as that term is defined in Rule 144 under the
Securities Act. These shares may not be offered for sale, sold or
otherwise transferred except pursuant to an effective registration
statement under the Securities Act, or pursuant to an exemption
from registration under the Securities Act."
1.4 Closing. Unless this Agreement shall
have been terminated and the transactions herein contemplated shall
have been abandoned, and subject to the satisfaction or waiver of
the conditions set forth in Section 5, the closing of the Exchange
(the "Closing") will take place at 10:00 a.m. on the business
day after satisfaction of the conditions set forth in Section 5 (or
as soon as practicable thereafter following satisfaction or waiver
of the conditions set forth in Section 5) (the "Closing Date"), at
the offices of Biostem, unless another date, time or place is
agreed to in writing by the Parties hereto.
1.5 Appointment of Officers and
Directors. At Closing, three directors selected by Biostem shall be
appointed as additional directors of the Company and the current
sole director of the Company shall thereafter resign. The
officers of the Company shall, after the Closing, be as determined
by the reconsituted board of directors of the Company, after giving
effect to the addition of the directors selected by Biostem to the
Company’s board of directors.
1.6 Further Assurances. The Biostem
Shareholders agree to execute all documents and instruments and to
take or to cause to be taken all actions which the Company deems
necessary or appropriate to complete the transactions contemplated
by this Agreement, whether on, before or after the
Closing.
1.7 Public Filing. Upon execution and or
Closing of this Agreement, the Company shall prepare and file such
documents as are necessary to comply with all applicable U.S.
Securities Laws and regulations, including a current report on Form
8-K and preliminary and definitive information statements. The
parties agree to cooperate in the preparation of such
filings.
2.
OTHER AGREEMENTS OF THE
PARTIES.
2.1 Biostem Shareholders to Provide
Financial Records. The Biostem Shareholders as soon as
possible after Closing (but no later than seventy (70) days after
the Closing) shall provide financial records, including audited
financial statements of Biostem since the date of inception
(collectively referred to herein as the “Financial
Data”).
3.
REPRESENTATIONS AND WARRANTIES OF THE
BIOSTEM SHAREHOLDERS.
The Biostem Shareholders hereby represent
and warrant to the Company that the following are true and correct
as of the Closing:
3.1 Organization and Standing. Biostem is
and on the Closing Date will be duly organized, validly existing
and in good standing under the laws of the State of Nevada, with
all requisite power and authority to carry on the business in which
it is engaged, to hold the Proprietary Technology and other assets
it may own, and is duly qualified and licensed to do business and
is in good standing in all jurisdictions where the nature of its
business makes such qualification necessary.
3.2 Capitalization. The authorized
capital of Biostem consists of Seventy-five Thousand (75,000)
common shares, par value $1.00, of which 75,000 Biostem Shares have
been issued and are outstanding. Other than the Biostem
Shares to be conveyed to the Company pursuant to this Agreement, no
other shares of capital stock have been issued. All of the issued
and outstanding Biostem Shares have been duly authorized, validly
issued, and are fully paid and non assessable. Biostem does not
have outstanding any option, warrant or similar instrument that
entitles its holder to acquire shares of Biostem, and Biostem is
not a party to or bound by any agreement, instrument, arrangement,
contract, obligation, commitment or understanding of any character,
whether written or oral, express or implied, whereby Biostem is
bound to issue shares of its capital stock or any instrument or
right convertible into or exchangeable for shares of its capital
stock, nor relating to the sale, assignment, encumbrance,
conveyance, transfer or delivery of any capital stock of Biostem of
any type or class.
3.3 Litigation. There are no claims,
actions, suits, proceedings or investigations pending or threatened
against or affecting Biostem or any of its properties or assets in
any court or by or before any governmental department, commission,
board, bureau, agency or other instrumentality, domestic or
foreign, or arbitration tribunal or other forum which, if
determined adversely to Biostem, would materially affect its
business, prospects, properties or financial condition, or
Biostem's right to exploit its Proprietary Technology, whether now
or in the future. There are no judgments, decrees, injunctions,
writs, orders or other mandates outstanding to which Biostem is a
party or by which it is bound or affected.
3.4 Estoppel. All statements of the
Biostem Shareholders made in this Agreement, or in any Schedule
hereto, or in any document or certificate executed and delivered
herewith, are true, correct and complete as of the date of this
Agreement and will be so as of the Closing.
3.5 Compliance with Laws and Permits.
Biostem has complied in all material respects with its
organizational documents, including its articles of incorporation
and bylaws (each as amended to date), all applicable laws,
regulations and rules, all applicable orders, judgments, writs,
decrees or injunctions of any local or county governments or any
department, agency or other instrumentality thereof, domestic
(United States), applicable to its business or properties, and has
not done or omitted to do any act or acts which singly or in the
aggregate are in violation of any of the foregoing. Biostem has,
except as noted herein, obtained all licenses and permits necessary
to exploit its Proprietary Technology and carry on its business, is
not in violation of any such license or permit, and has not
received any notification that any revocation or limitation thereof
is pending or threatened.
3.6 No Undisclosed Material Liabilities.
Biostem has not incurred any liabilities or obligations whatever
(whether direct, indirect, accrued, contingent, absolute, secured
or unsecured or otherwise), including liabilities as mortgagor,
guarantor or surety or otherwise for debts or the obligations of
others and tax liabilities due or to become due. There is no basis
for any material claim against Biostem or any of its assets.
Biostem has no creditors or agreement with another third party
whose prior consent might be required by law to effect any sale of
its Proprietary Technology.
3.7 Material Transactions and Adverse
Changes. Except as has been heretofore disclosed in writing to the
Company, Biostem has not, and as of the Closing will not have: (i)
suffered any material adverse change in its assets taken as a
whole; (ii) suffered any damage or destruction in the nature of a
casualty loss to any one or more of its assets, whether or not
covered by insurance, which singly or in the aggregate are
materially adverse to the business or prospects of Biostem; (iii)
made any change in any method of accounting or accounting practice,
including the revaluation of any of its assets; or (iv) agreed in
writing or otherwise to take any action prohibited by this
Agreement.
3.8 Taxes. All governmental taxes
applicable to Biostem, its assets and/or to the Biostem Shares
(including the transfer of such Biostem Shares), including any
income, excise, unemployment, occupational, franchise, ad valorem
and other taxes, duties, assessments or charges levied, assessed or
imposed upon Biostem have been duly paid (or will be paid as of the
Closing) or adequately disclosed to the Company and provided for,
and all required tax returns or reports concerning any such items
have been duly filed. Biostem has not waived any statute of
limitations with respect to any tax liability whatever for any
period prior to the date of this Agreement or agreed to any
extension of time with respect to a tax assessment or
liability.
3.9 Indebtedness to and from Affiliates.
Biostem is not indebted to any Biostem officer, director, employee
or shareholder, or any affiliate of such persons, as of the date of
this Agreement, and no money or property is owed to Biostem by any
Biostem officer, director, employee or shareholder or any affiliate
of such persons, and none will be owed as of the
Closing.
3.10 Documents Genuine. All originals
and/or copies of Biostem organizational documents, including
articles of incorporation and bylaws, each as amended to date, and
all minutes of meetings and written consents of directors and
shareholders in lieu of meetings of directors and/or shareholders
of Biostem, the Financial Data, and any and all other documents,
material, data, files, or information which have been or will be
furnished to the Company, are and will be true, complete, correct
and unmodified originals and/or copies of such documents,
information, data, files or material.
3.11 Employees and Salaries. Biostem will
have no employees at the Closing.
3.12 Authorization and Validity. The
execution, delivery and performance by the Biostem Shareholders of
and under this Agreement and any other agreements contemplated
hereby, and the consummation of the transactions contemplated
hereby and thereby, have been duly approved and authorized by the
Biostem Shareholders. This Agreement and any other agreement
contemplated hereby have been or will be as of the Closing duly
executed and delivered by the Biostem Shareholders and constitute
and will constitute the legal, valid and binding obligations of the
Biostem Shareholders, enforceable against them in accordance with
their respective terms, except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies.
3.13 Consents; Approvals; Conflict. No
consent, approval, authorization or order of any court or
governmental agency or other body is required for the Biostem
Shareholders to consummate the Exchange. Neither the execution,
delivery, consummation or performance of this Agreement shall
conflict with, or constitute a breach of any law or regulation and
no prior approval is necessary by or under, the Biostem articles of
incorporation, bylaws or any note, mortgage, indenture, deed of
trust, lease, obligation, or other agreement or instrument to which
Biostem or any Biostem Shareholder is a party.
3.14 Proprietary Technology. The Schedule
A attached to this Agreement sets forth a complete and accurate
description of the Proprietary Technology of Biostem.
3.15 Restrictive Covenants. Prior to the
consummation of the Exchange, Biostem shall conduct its business in
the ordinary and usual course without unusual commitments and in
compliance with all applicable laws, rules, and regulations.
Furthermore, Biostem will not, without the prior written consent of
the Company, (i) make any changes in its capital structure, (ii)
incur any liability or obligation other than current liabilities
incurred in the ordinary and usual course of business, (iii) incur
any material indebtedness for borrowed money, (iv) make any loans
or advances other than in the ordinary and usual course of
business, (v) declare or pay any dividend or make any other
distribution with respect to its capital stock, (vi) issue, sell,
or deliver or purchase or otherwise acquire for value any of its
stock or other securities, or (vii) mortgage, sell, pledge, or
subject to encumbrance any of its assets.
3.16 Disclaimer of Further Warranties.
Except as expressly set forth in this Agreement, the Company has
made no other representation or warranty to the Biostem
Shareholders in connection with the Exchange. The decision of the
Biostem Shareholders to enter into this Agreement is
based
upon their own independent judgment and
investigation and not on any representations or warranties of the
Company, other than those expressly stated herein.
3.17 Title to Biostem Shares. Each of the
Biostem Shareholders owns, of record and beneficially, the number
of Biostem Shares set out next to their name on the signature page
hereof, which shares are free and clear of all liens, claims,
rights or other encumbrances whatsoever and of all options and
similar rights of third persons, and no person has or will have any
right of first refusal, pre-emptive right, option or similar right
to acquire the Biostem Shares of such Biostem
Shareholder.
3.18 Full right and Legal Capacity. Each
Biostem Shareholder has the full right, power and legal capacity to
enter into this Agreement and sell and deliver their Biostem Shares
to the Company.
3.19 Solvency. No Biostem Shareholder is
now insolvent, nor will they be insolvent after selling and
delivering the Biostem Shares to the Company in exchange for the
Exchange Shares.
3.20 Acknowledgements Regarding the
Company and the Exchange Shar
