EXHIBIT 10.20
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of this first day of October, 1998 by and
between Reliv World Corporation, a corporation organized and existing under the
laws of the State of Illinois, U.S.A. ("Reliv"), Reliv Europe, Inc., a
corporation organized and existing under the laws of the State of Illinois,
U.S.A. ("Reliv Europe") (Reliv World and Reliv Europe sometimes hereinafter
referred to as "Purchasers") and Global Nutrition, Inc., a corporation organized
and existing under the laws of the British Virgin Islands ("Global Nutrition").
WHEREAS, Global Nutrition is the sole owner of one share of capital
stock of Reliv UK, Ltd. a corporation organized and existing under the laws of
the United Kingdom ("Reliv UK"); and
WHEREAS, Reliv UK has only one class of authorized shares, such class
being common stock;
WHEREAS, Reliv World is the holder of all of the issued and outstanding
shares of capital stock of Reliv Europe;
WHEREAS, the parties desire to enter into an agreement pursuant to
which (i) Global Nutrition shall transfer to Reliv Europe the one outstanding
share of capital stock of Reliv UK (ii) Reliv Europe shall issue and deliver to
Global Nutrition shares of its capital stock.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties, and of the terms, covenants and conditions
hereinafter contained, the parties hereto agree as follows:
1. Definitions
1.1 "Assets". As used in this Agreement, the term "Assets"
shall mean the assets of Reliv UK (as of the Closing) as follows:
1.1.1 the business of Reliv UK as a going concern, the
goodwill pertaining thereto and all of Reliv UK's right, title and interest and
to the name Reliv UK and all other names used by Reliv UK, as well as all logos
relating thereto;
1.1.2 all items of inventory owned by Reliv UK including,
without limitation, all raw materials, work-in-progress and finished goods of
Reliv UK (all of which are collectively referred to hereinafter as "Inventory");
1.1.3 all vehicles, machinery, equipment (including equipment
which has previously been fully depreciated by Reliv UK and equipment loaned to
customers), furniture, fixtures and non-inventory supplies of Reliv UK
(including containers, packaging and shipping
material, tools and spare parts and other similar tangible personal property
owned by Reliv UK, which are listed on Exhibit 1.1.3, all of which are
collectively referred to hereinafter as the "Equipment");
1.1.4 all of Reliv UK's right, title and interest in and to
the United Kingdom and foreign rights of Reliv UK currently owned or used by
Reliv UK (and the rights proposed to be used) in the conduct of the business of
Reliv UK, with respect to patents, patents pending, copyrights, formulae,
licenses, trademarks, trademark rights, trade names, service marks, service mark
rights, trade secrets, shop rights, know-how, technical information, techniques,
discoveries, designs, proprietary rights and non-public information of Reliv UK
and registrations, reissues and extensions thereof and applications and licenses
therefor (all of such rights being collectively referred to hereinafter as the
"Rights");
1.1.5 all books and records of Reliv UK including all in-house
mailing lists, rented mailing lists, and other customer and supplier lists,
trade correspondence, production and purchase records, promotional literature,
data storage tapes and computer disks, computer software, order forms, accounts
payable records (including invoices, correspondence and all related documents);
1.1.6 all contracts, agreements and orders for goods and
services of Reliv UK;
1.1.7 all trade receivables of Reliv UK ("Accounts
Receivable") and all advance payments, prepaid items, rights to offset and
credits of all kinds of Reliv UK;
1.1.8 all real property owned or leased by Reliv UK together
with all fixtures attached thereto; and
1.1.9 all other assets of Reliv UK.
1.2 "Commitments" shall mean all agreements, indentures, mortgages,
plans, policies, arrangements, and other instruments, including all amendments
thereto (or where they are verbal, written summaries of the material terms
thereof), fixed or contingent.
2. Sale and Delivery of Reliv UK Share.
2.1 Reliv UK Share. Subject to and on the terms and conditions hereof
in reliance on the representations and warranties of Reliv World and Reliv
Europe and in consideration of the issuance to Global Nutrition of 250,000
shares of common stock of Reliv Europe, and the covenants of Reliv World and
Reliv Europe herein, Global Nutrition agrees to sell, assign, transfer and
deliver to Reliv Europe at the Closing one share of Reliv UK (the "Share"),
together with all books and records of Reliv UK.
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2.2 No Encumbrances. The Share sold to Reliv Europe hereunder shall be
fully paid and non-assessable, and shall be free and clear of any and all
contracts, commitments, agreements, liens, claims, charges, restrictions or
encumbrances of any kind or nature whatsoever, whether or not of record other
than restrictions imposed by federal and applicable state securities laws.
2.3 Delivery of Possession. At the Closing, Global Nutrition shall
deliver to Reliv Europe possession of the certificate representing the Share.
The certificate representing the Share shall be duly endorsed in blank or
accompanied by duly executed stock powers.
2.4 Instruments of Transfer. At the Closing, Global Nutrition shall
deliver, or cause to be delivered, to Reliv Europe such duly executed
instruments as may be reasonably requested by Reliv Europe, including, without
limitation, powers of attorney, in form and substance reasonably satisfactory to
Reliv Europe and its counsel, for the consummation of the transactions
contemplated under this Agreement, for the vesting in Reliv Europe of all of
Global Nutrition's right, title and interest in and to the Share.
3. Purchase Consideration. Subject to and on the terms and conditions
hereof, in reliance on the representations and warranties of Global Nutrition
herein, and in consideration of the sale and transfer of the Share, Reliv World
and Reliv Europe each agree as follows:
3.1 Reliv Europe Shares. Reliv Europe shall issue and deliver to Global
Nutrition at the Closing 250,000 shares of common stock of Reliv Europe ("Reliv
Europe Shares"). The Reliv Europe Shares, when issued and delivered hereunder,
shall be duly authorized, validly issued, fully paid and non-assessable and
shall be unregistered under the Securities Act of 1933, as amended and shall
contain the legend set forth in Section 5.38 hereof.
3.2 Payments. Commencing in January, 1998 for the month of December,
1997 and for a period of 120 consecutive months thereafter, Reliv Europe shall
pay to Global Nutrition an amount equal to one and one-half percent (1.5%) of
the Retail Sales of Reliv UK, subject to the following terms:
3.2.1 "Retail Sales" shall mean the gross amount of Consumable
Product sold by Reliv UK in the month multiplied by the suggested retail selling
price thereof;
3.2.2 "Consumable Product" shall mean all products which are
intended for use or consumption and shall not include distributor manuals,
distributor kits or promotional materials;
3.2.3 On or before the 15th day of each month succeeding a
month for which a payment is due hereunder, Reliv Europe shall determine the
amount of Retail Sales of Reliv UK for such month, shall provide to Global
Nutrition a report setting forth the amount of such Retail Sales and shall
deliver to Global Nutrition a check payable to Global Nutrition in the amount
due hereunder.
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4. Closing.
4.1 Date and Location. The closing of the transaction provided for
herein shall be held on October 1, 1998 at the offices of Reliv International,
Chesterfield, Missouri, or at such other time and place as the parties shall
agree ("Closing Date"). All Closing transactions shall be deemed to take place
simultaneously, and no Closing transaction shall be deemed consummated until all
transactions to take place at the Closing have been consummated.
5. Representations and Warranties of Sellers. Global Nutrition
represents and warrants to Reliv World and Reliv Europe as follows, each of
which representation and warranty is material and is being relied upon by them
and each of which is true and correct as at the date hereof and shall be true
and correct as of the Closing, with the same effect as if each such
representation and warranty had been made at and as of the Closing:
5.1 Title to Shares, Authority. Global Nutrition is the sole owner of,
and has good and marketable title to, the Share, free and clear of any and all
contracts, commitments, agreements, liens, claims or encumbrances, whether or
not of record. Global Nutrition has all requisite capacity, power and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
5.2 Capital Stock
(a) Reliv UK has authorized capital stock consisting of one
share of common stock, without par value, of which one share
is issued and outstanding, and which is duly authorized,
validly issued, fully paid, nonassessable, free of preemptive
rights, and was issued in compliance with all applicable laws.
(b) There are no outstanding offers, options, warrants,
rights, calls, commitments, obligations (verbal or written),
conversion rights, plans or other agreements (conditional or
unconditional) of any character providing for, requiring or
permitting the offer, sale, purchase or issuance of any shares
of capital stock of Reliv UK or any other securities (as such
term is defined in the Securities Act of 1933, as amended).
Except as set forth in paragraph 5.2(a), there are no equity
securities of Reliv UK that are reserved for issuance or are
outstanding.
(c) The Share is owned by Global Nutrition free and clear of
all liens, charges, encumbrances or claims of any kind
whatsoever.
5.3 Incorporation Documents. True and correct copies of the
incorporation documents and by-laws of Reliv UK, together with all amendments
thereto, have been delivered to Reliv International.
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5.4 Organization and Good Standing. Reliv UK is a corporation duly
organized, validly existing and in good standing under the laws of the United
Kingdom and is qualified to conduct business in the United Kingdom and Reliv UK
has the full corporate power and authority to own or lease its properties and
operate its properties and Assets, and to carry on its business as presently
being conducted.
5.5 Subsidiaries, Divisions and Affiliates. There are no subsidiaries,
divisions or affiliates of Reliv UK. The business of Reliv UK has been conducted
solely by Reliv UK and not through any affiliates, joint venture or other
entity, person or under any other name.
5.6 No Outstanding Obligations. There are no contracts, options or
other agreements or understandings pursuant to which Reliv UK is or may be
obligated to issue shares of its capital, and there are no obligations of Reliv
UK outstanding which may be convened into any shares of capital of such
corporation and, except as disclosed herein, there are no other shares of Reliv
UK issued or outstanding.
5.7 Equity Investments. Reliv UK does not own or have any rights to any
equity interest, directly or indirectly, in any corporation, partnership, joint
venture, firm or other entity.
5.8 Validity of Agreement. The execution, delivery and performance of
this Agreement has been duly and validly executed and delivered by Global
Nutrition. This Agreement constitutes a valid and binding obligation of Global
Nutrition enforceable in accordance with its terms, except that such enforcement
may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally.
5.9 Effect of Agreement. The execution, delivery and performance of
this Agreement by Global Nutrition and consummation by Global Nutrition of the
transactions contemplated hereby, will not, with or without the giving of notice
and the lapse of time, or both, (a) violate any provision of law, statute, rule,
regulation or executive order to which Reliv UK, or Global Nutrition,
respectively, is subject; (b) violate any judgment, order, writ or decree of any
court applicable to Reliv UK, or Global Nutrition, respectively, or (c) result
in the breach of or conflict with any term, covenant, condition or provision or
result in the modification or termination or constitute a default under, or
result in the creation or imposition of any lien, security interest, charge or
encumbrance upon any of the Assets pursuant to, any corporate charter, by-law,
commitment, contract or other agreement or instrument, including any of the
Commitments, to which Reliv UK or Global Nutrition is a party or by which any of
the Assets is or may be bound or affected or from which Reliv UK or Global
Nutrition derive benefit, which breach, conflict, modification, termination,
default or encumbrance described in this clause (c) would be material to the
business of Reliv UK or any of its Assets.
5.10 Restrictions: Burdensome Agreements. Neither Reliv UK nor Global
Nutrition is a party to any contract, commitment or agreement, nor is any of
them, the Reliv UK Share or any of the Assets subject to, or bound or affected
by, any provision of the articles of incorporation,
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by-laws, or other corporate restriction, or any order, judgment, decree, law,
statute, ordinance, rule, regulation or other restriction of any kind or
character, which would, individually or in the aggregate, materially adversely
affect Reliv UK's business, the Reliv UK Share or any of the Assets.
5.11 Governmental and Other Consents. No consent, authorization or
approval of; or exemption by, any governmental, public or self-regulatory body
or authority is required in connection with the execution, delivery and
performance by Global Nutrition of this Agreement or by Global Nutrition of any
of the instruments or agreements herein referred to, or the taking of any action
hereby contemplated.
5.12 Financial Statements. Except as disclosed in Exhibit 5.12 or as
otherwise disclosed herein, the interim financial statements for Reliv UK for
the period ended June 30, 1997 (the "Reliv UK Financial Statements"), present
fairly the financial position of such company as of the date to which they
relate and have been prepared in accordance with generally accepted accounting
principles, consistently applied, and to the best of Global Nutrition's
knowledge, all items that could have a material effect on the willingness of a
prospective purchaser to acquire Reliv UK have been disclosed in the Reliv UK
Financial Statements or in the Exhibits to this Agreement.
5.13 Undisclosed Liabilities. As of June 30, 1997, Reliv UK had no
liability, and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
Reliv UK giving rise to any liability, except for (a) liabilities set forth on
the face of the balance sheet of Reliv UK dated June 30, 1997, and (b)
liabilities which have arisen after the most recent fiscal month end in the
ordinary course of business, none of which results from, arises out of, relates
to, is in the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law.
5.14 Compliance with Laws. Reliv UK has complied, and is currently in
compliance, with all applicable laws, statutes and ordinances, rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges of national, local, and foreign governments, and all agencies thereof
and no action, suit proceeding, hearing, investigation, charge, complaint,
claim, demand, or notice has been filed or commenced against any of them
alleging any failure so to comply.
5.15 Books and Records. The books of account and other financial and
corporate records of Reliv UK are in all material respects complete, correct and
up to date, with all necessary signatures, and are in all material respect
accurately reflected in the Reliv UK Financial Statements.
5.16 Taxes. Except as reflected in the Reliv UK Financial Statements or
in respect of taxes accruing with respect to fiscal year 1997 or thereafter: (a)
Reliv UK has duly filed on a timely basis all tax returns required to be filed
by it, and has paid all assessments and
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reassessments, and all other taxes, governmental charges, penalties, interests
and fines due and payable by it on or before the date hereof and which are
claimed by any governmental authority to be due and owing; (b) Reliv UK and its
shareholders have been assessed for all taxes imposed by the United Kingdom
Government in respect of all of its tax years up to and including the tax year
ended December 31, 1996; and (c) there are no actions, suits, proceedings,
investigations or claims threatened or pending against Reliv UK with respect to
taxes, governmental charges or assessments or any other matters under discussion
with any governmental authority relating to taxes, governmental charges or
assessments asserted by any such authority.
5.17 No Consents Required. After the change in ownership of Reliv UK,
each of the Commitments included in the Assets does not require the consent of
the other parties thereto and, with respect to any of the Commitments which do
require the consent of the other parties thereto, Reliv UK has obtained such
consent and has provided or will provide Purchasers with copies thereof.
5.18 Permits, Licenses, etc. There are no permits, licenses, orders or
approvals of governmental or administrative authorities required to permit Reliv
UK to carry on its business as currently conducted.
5.19 Marketable Tide: No Liens. Reliv UK owns and has good and
marketable title to all of the personal property and assets, tangible or
intangible, as reflected on the Reliv UK Financial Statements (except for assets
disposed of in the ordinary course of business since the respective dates of the
Reliv UK Financial Statements), free and clear of all contracts of sale, liens,
mortgages, pledges, security interests, charges, restrictions, prior
assignments, encumbrances and claims of every kind.
5.20 No Untrue Statements. Neither this Agreement nor any documents,
certificates or statements furnished to Purchasers by or on behalf of Global
Nutrition in connection herewith contains any untrue statement of a material
fact or omits to state a material fact (materiality being determined in relation
to Reliv UK taken as a whole) necessary in order to make the statements
contained herein and therein not misleading. There is no fact known to Global
Nutrition, which materially adversely affects, or in the future may materially
adversely affect, the business, properties, assets, prospects or financial
condition of Reliv UK which has not been set forth in this Agreement or the
exhibits hereto or otherwise disclosed in writing to Purchasers including by
means of the financial statements for Reliv UK.
5.21 Shares Held for Investment. Global Nutrition is acquiring the
Purchasers Shares hereunder solely for their own account, for investment, and
not with a view to the distribution or resale thereof. Global Nutrition
represent and warrant that they have no present intention of selling or
distributing any of the Purchasers Shares to be acquired hereunder and that they
are not under any present necessity or constraint to dispose of any such
Purchasers Shares to satisfy any existing or contemplated debt or undertaking.
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5.22 Restrictive Legend. Global Nutrition confirm their understanding,
and agree, that:
(a) Certificates for the Purchasers shares to be issued and
delivered to them hereunder will bear substantially the following
legend:
"The securities represented by this Certificate were issued
______________ without registration under the Securities Act of 1933,
as amended. No transfer, sale or distribution of these securities or
any interest therein may be made except under an effective registration
statement under said Act covering such securities unless the
Corporation has received an opinion of counsel satisfactory to it that
such transfer or sale does not require registration under said Act."
(b) Global Nutrition shall be bound by the terms of the
foregoing legend and agree that appropriate restrictions on transfer
will be noted on Purchasers' corporate records and the records of
Purchasers's transfer agent.
5.23 Knowledge of Reliv UK and Global Nutrition. As to each
representation and warranty made by Global Nutrition under this Section 5, any
fact or information known to Reliv UK or notice received by Reliv UK, shall be
imputed to Global Nutrition as if such fact or information were known to Global
Nutrition or such notice was received by Global Nutrition.
6. Representations and Warranties of Purchasers. Purchasers represent
and warrants to Global Nutrition that the following are true and correct as of
the date hereof:
6.1 Organization and Good Standing. Each of Reliv World and Reliv
Europe is a corporation duly organized, validly existing and in good standing
under the laws of the State of Illinois and is validly existing and in good
standing under its jurisdiction of incorporation and is qualified to do business
in the jurisdiction in which such qualification is required and has the full
corporate power and authority to own, lease and operate its property and
businesses. Reliv Europe is a newly organized corporation, has no assets or
liabilities or has not engaged in any business activity. Reliv World is a
wholly-owed subsidiary of Reliv International, Inc., an Illinois corporation.
6.2 Capitalization. Reliv Europe has an authorized capitalization of
10,000,000 shares all of which are designated as common stock, no par value.
Reliv Europe has 10,000 shares of common stock issued and outstanding all of
which shares are owned by Reliv World. Reliv Europe has entered into an
agreement with Reliv World pursuant to which (i) Reliv World, or its affiliates,
has or may advance sums to Reliv Europe or Reliv UK of such corporations in
exchange for the issuance to Reliv World of a convertible note of Reliv Europe
pursuant to which the principal and any accrued interest under such note is
convertible into common stock of the corporation at the price of Five Cents
($.05) per share, (ii) to the date of this Agreement, Reliv World, or its
affiliates, has advanced to Reliv Europe for convertible notes the aggregate
amount of $ ____________.
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6.3 Corporate Authorization. The execution and performance of this
Agreement and the issuance and delivery of the Reliv Europe Shares in accordance
with the provisions hereof have been duly authorized by all necessary corporate
action on the part of Purchasers and this Agreement constitutes a valid, binding
and enforceable obligation upon Purchasers except that such performance may be
limited by bankruptcy, insolvency, or other similar laws affecting the
enforcement of creditors' rights generally.
6.4 No Breach or Violation. The execution and performance of this
Agreement and compliance with the provisions hereof by Purchasers will not
violate, with or without the giving of notice or the passage of time, any
applicable law or regulation and will not conflict with, or result in the breach
of any of the terms, conditions or provisions of or constitute a default under,
any corporate charter, by-law, indenture, mortgage, agreement or other
instrument to which any of the Purchasers is bound.
7. Acknowledgments of Global Nutrition. Global Nutrition acknowledges
and agrees as follows:
7.1 Reliv International is a reporting company under the Securities and
Exchange Act of 1934 and Global Nutrition, and its representatives, have
received and reviewed all current reports of Reliv International filed with the
Securities Exchange Commission, including without limitation the Annual Report
on Form 10K for 1997, Quarterly Reports on Form lOQ for each of the first and
second quarters of 1998 and the Annual Report for 1997 and Proxy Materials for
the shareholders meeting in 1998.
7.2 Global Nutrition acknowledges, understands and agrees that (i) it
is the intention of Reliv Europe to conduct the business of Reliv UK at least
through December, 1998 and to provide funding for such purposes at the level
deemed appropriate by Reliv, (ii) Reliv International and Reliv Europe are
considering and investigating the possibility of conducting the business of
Reliv International in one or more countries in Europe, (iii) except as stated
herein, none of Purchasers makes, or has made, any commitment to provide
financing for or to organize, create, operate or maintain any business in Europe
or any other area.
8. Pre-Closing Covenants of Purchasers.
8.1 Satisfaction of Conditions by Purchasers. Purchasers hereby
covenant and agree with Global Nutrition, that, between the date of this
Agreement and the Closing Date or date of termination of this Agreement, as the
case may be, Purchasers shall use their best efforts to assure that the
conditions set forth in Section 13 hereof are satisfied by the Closing Date.
8.2 Confidentiality. Prior to the Closing, Purchasers will use their
best efforts to keep confidential any and all information furnished to it by
Reliv UK or Global Nutrition in the course of negotiations. If for any reason
the Closing shall not occur, Purchasers will continue to use
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their best efforts to keep such information confidential, to the extent that it
is protectable by law, and will not use it and will return to Global Nutrition
all documents or other written material regarding this transaction that were
obtained during the course of negotiations (including all drafts of all
documents).
9. Post-Closing Covenants.
9.1 Global Nutrition: Further Assurances. After the Closing hereunder,
Global Nutrition shall, at the request of Purchasers, execute, acknowledge and
deliver to Purchasers, without further consideration, all such further
assignments, conveyances, endorsements, deeds, powers of attorney, consents and
other documents and take such other action as Purchasers may reasonably request
(a) to transfer to and fully vest in Purchasers, and protect Purchaser's right,
title and interest in and to, all of the Reliv UK Shares, and Reliv UK's right
title and interest in and to the Assets and (b) otherwise to consummate the
transactions contemplated by this Agreement.
9.2 Purchasers.
9.2.1 Reliv World (or its affiliates) has or shall advance to
Reliv Europe (including Reliv UK), as needed for the operations of
Reliv UK from time to time, such advances to be evidenced by
convertible notes of Reliv Europe bearing interest at the prime rate
and convertible into common stock of Reliv Europe at the price of Five
Cents ($.05) per share; the parties acknowledge that, as of the date of
this Agreement, Reliv World has advanced to or for Reliv Europe the
aggregate amount of $___________ for such purposes and that Reliv World
shall not be obligated to advance further sums to Reliv Europe or Reliv
UK.
9.2.2 Reliv International shall enter into distributor and
license agreements with Reliv Europe generally consistent with the
distributor and license program of Reliv International.
10. Conditions Precedent to the Obligations of Purchasers.
The obligations of Purchasers pursuant to this Agreement are subject to
the satisfaction at the Closing of each of the following conditions, any or all
of which conditions may be waived by Purchasers in its sole discretion:
10.1 Accuracy of Representations and Warranties. All representations
and warranties made by Global Nutrition (contained in this Agreement, any
Exhibit hereto, or any certificate or instrument delivered to Purchasers or its
representatives by the Global Nutrition or their representatives) shall be true
on and as of the Closing Date with the same force and effect as though made on
and as of the Closing Date (i.e., with respect to a representation that a state
of facts exists on or as of the date hereof; it is a condition that such state
of acts exists on or as of
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the Closing Date; and with respect to a representation that a state of facts has
or has not changed between a date prior to the date hereof and the date hereof;
it is a condition that such state of facts has or has not changed between such
prior date and the Closing Date), except as affected by the transactions
contemplated hereby.
10.2 Performance of Agreements. Global Nutrition shall have performed
and complied with and shall have caused Reliv UK to perform and comply with all
covenants, obligations and agreements to be performed or complied with by them
on or before the Closing Date pursuant to this Agreement.
10.3 Litigation, etc.
10.3.1 Except as set forth on Exhibit 5.22, no claim, action,
suit, proceeding, arbitration, investigation or hearing or notice of
hearing shall be pending or, insofar as is known to Global Nutrition,
threatened against or affecting Reliv UK or Global Nutrition or any of
the Assets, which (a) might result either in an action to enjoin or
prevent the consummation of the transactions contemplated by this
Agreement; or (b) in the reasonable judgment of Purchasers would
materially adversely affect the business of Reliv UK or the ability of
Purchasers to consummate the transactions contemplated by this
Agreement or to own the Assets or to operate the business of Reliv UK.
10.3.2 Reliv UK shall not be in violation of any law, statute,
ordinance, regulation or executive order, the enforcement of which
would, individually or in the aggregate, materially adversely affect
the Assets or the business of Reliv UK; or which would, individually or
in the aggregate, materially adversely affect the ability of Purchasers
to consummate the transactions contemplated by this Agreement or to own
the Assets or to operate the business of Reliv UK.
10.3.3 No law, regulation or decree shall have been proposed,
adopted or promulgated, or have become effective, the enforcement of
which would materially adversely affect the ability of Purchasers to
consummate the transactions contemplated by this Agreement or to own
the Assets or to operate any such business.
10.4 Approvals and Consents. Reliv UK shall have obtained, and
Purchasers shall have received copies of all of the approvals and consents
referred to in Section 5.27, each of which approvals and consents shall be in
full force and effect and reasonably satisfactory in form and substance to
Purchasers and their counsel.
10.5 Material Adverse Change. Purchasers shall confirm to its sole
satisfaction that there have been no material adverse changes in the financial
condition, business, operations, assets, liabilities, management or prospects of
Reliv UK.
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10.6 Actions Proceedings, etc. All actions, proceedings, instruments
and documents required to carry out the transactions contemplated by this
Agreement shall have been reasonably satisfactory to Purchasers, such approval
not to be unreasonably withheld.
10.7 Licenses, Permits, Consents, etc. Purchasers shall have received
evidence, in form and substance reasonably satisfactory to counsel for
Purchasers, that such licenses, permits, consents, authorizations or orders of
governmental authorities as are necessary to the consummation of the
transactions contemplated by this Agreement and the continued operation of the
business of Reliv UK have been obtained.
10.8 Documentation of Rights. Reliv UK shall have delivered to
Purchasers true and complete copies of all of the documentation held by Reliv UK
relating to each of the Rights.
10.9 Officers' Financial Certificate. Purchasers shall have received a
certificate from Global Nutrition dated as of the Closing Date, satisfactory in
form and substance to Purchasers and its counsel, certifying that the Reliv UK
Financial Statements are true and correct and accurately present the financial
position of Reliv UK during that interim period.
10.10 Waiver and Release of Claims. Global Nutrition and each
shareholder, officer, employee and agent of Global Nutrition shall have executed
and delivered to Purchasers a waiver and release of any and all claims or rights
of such persons against or in Reliv UK in form satisfactory to Purchasers;
11. Options For Redemption of Reliv Europe Shares.
11.1 At any time, or from time to time, after the date of the Closing,
Reliv Europe shall have the option to purchase and redeem from Global Nutrition
25,000 shares of such corporation's shares at the purchase price of Five Cents
($.05) per share.
11.2 At any time after the Reliv Europe Shares shall have attained and
shall then have an Aggregate Value in excess of $465,000, Global Nutrition shall
have the right and option with respect to the shares achieving such Per Share
Value to sell all or any portion thereof to the issuing corporation, and the
issuing corporation shall have the right and option to purchase and redeem all
or any portion thereof at a price per share equal to the Per Share Value. The
option provided in this paragraph 11.2 for Reliv Europe shall be in addition to,
and with respect to the shares other than, the shares subject to the option
provided in paragraph 11.1.
11.3 The following provisions shall apply with respect to the options
provided in this paragraph 11;
11.3.1 "Per Share Value" shall mean an amount equal to seven
times the average annual net income of the entity, determined in
accordance with generally accepted
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accounting principles consistently applied, for two consecutive years
divided by the number of shares issued and outstanding at the time the
valuation determination is made.
11.3.2 "Aggregate Value" shall mean the Per Share Value
multiplied by the number of shares of common stock of the entity owned
by Global Nutrition.
11.4 The parties agree that the foregoing option rights shall be
incorporated in an option agreement among the parties not inconsistent with the
terms of this paragraph 11.
12. Conditions Precedent to the Obligations of the Global Nutrition.
The obligations of Global Nutrition under this Agreement are subject to
the satisfaction at the Closing of each of the following conditions, any or all
of which conditions may be waived by Global Nutrition in their sole discretion:
12.1 Accuracy of Representations and Warranties. All representations
warranties made by Purchasers in this Agreement shall be true as of the Closing
Date the same force and effect as though made on and as of the Closing Date.
12.2 Performance of Agreements. Purchasers shall have performed and
complied in all material respects with all covenants, obligations and agreements
to be performed or complied with by it on or before the Closing Date pursuant to
this Agreement.
13. Indemnification and Additional Remedies.
13.1 Indemnity by Global Nutrition. Global Nutrition shall indemnify
and hold Purchasers and their respective officers, directors and agents (each
individually referred to as a "Buyer Indemnified Party") fully harmless, on an
after-tax basis, from and against all claims, actions, suits, proceedings,
demands, judgments, losses, costs, damages, fines, taxes, penalties, expenses
and liabilities, including interest which may be imposed in connection
therewith, court costs and reasonable fees and disbursements of professionals,
(all such items being individually or collectively referred to herein as
"Losses") which may be suffered or incurred, directly or indirectly, by
Purchasers or any of their respective officers, directors or agents arising out
of as a result of or relating in any manner whatsoever to, or in connection
with:
(a) any breach of any representation, warranty or covenant on
either Seller's part contained in this Agreement;
(b) any breach or non-fulfillment of any covenant given or
made by Global Nutrition in this Agreement or any contract, document or
certificate delivered by Global Nutrition pursuant to this Agreement or
any schedule hereto;
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(c) any taxes of any kind whatsoever, or expenses, interest or
penalties relating thereto, including those that arise out of or result
from the transactions contemplated by this Agreement;
(d) any act or omission to act by Reliv UK prior to the
Closing; and
(e) any action, demand or claim by any third party against or
affecting Purchasers which, if successful, would give rise to a breach
of any of the representations, warranties or covenants of Global
Nutrition contained herein.
13.2 Indemnification by Purchasers. Purchasers shall indemnify and hold
Global Nutrition and each of its shareholders, officers, directors, employees
and agents ("Seller Indemnified Party") fully harmless, on an after-tax basis,
from and against all Losses which may be suffered or incurred, directly or
indirectly, by each Seller Indemnified Party arising out of (or as a result of
or relating in any manner whatsoever to, or in connection with:
(a) any misrepresentation or breach of any warranty on
Purchasers' part contained in this Agreement;
(b) any breach or non-fulfillment of any covenant given or
made by Purchasers in this Agreement or any contract, document or
certificate delivered by Purchasers pursuant to this Agreement or any
Exhibit hereto; and
(c) any action, demand or claim by any third party against or
affecting Global Nutrition which, if successful, would give rise to a
breach of any of the representations, warranties or covenants of
Purchasers contained herein.
13.3 Survival of Indemnification. Where Purchasers make a written claim
or claims pursuant to this section within the time periods applicable to such
claim or claims, the right to indemnification in respect of such claim or claims
shall continue in full force and effect until the claim is finally settled or
adjudicated and all payments to be made in respect of any settlement or
adjudication have been made.
13.4 Indemnification Procedure - Third Party Claims.
(a) In the case of claims or demands made by a third party
with respect to which indemnification is due, the party seeking
indemnification shall give prompt written notice, and in any event
within 20 days, to the other party of any such claims or demands made
upon it, provided that in the event of a failure to give such notice,
such failure shall not preclude the party seeking indemnification to
obtain such indemnification but its right to indemnification may be
reduced to the extent that such delay prejudiced the defense of the
claim or demand or increased the amount of liability or cost of defense
and provided that, notwithstanding anything else herein contained, no
claim for indemnity in respect of
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the breach of any representation or warranty contained herein may be
made unless notice of such claim has been given prior to the expiry of
the survival period applicable to such representation and warranty.
(b) A party given notice of a claim or demand in respect of
which indemnification is sought (hereinafter referred to as the
"Indemnifying Party" in this section) by the other party (hereinafter
referred to as the "Indemnified Party" in this section) shall have the
right, by notice to the Indemnified Party given not later than 30 days
after receipt of the notice described in Section 13.4(a) to assume the
control of the defense, compromise or settlement of the claim or
demand, provided that such assumption shall, by its terms, be without
cost to the Indemnified Party and provided the Indemnifying Party
acknowledges in writing its obligation to indemnify the Indemnified
Party in accordance with the terms contained herein in respect of that
claim or demand.
(c) Upon the assumption of control of any claim or demand by
the Indemnifying Party, the Indemnifying Party shall diligently proceed
with the defense, compromise or settlement of the claim or demand as
its sole expense, including, if necessary, employment of counsel
reasonably satisfactory to the Indemnified Party and, in connection
therewith, the Indemnified Party shall cooperate fully, but at the
expense of the Indemnifying Party with respect to any out-of-pocket
expenses incurred, to make available to the Indemnifying Party all
pertinent information and witnesses under the Indemnified Party's
control, make such assignments and take such other steps as in the
opinion of counsel for the Indemnifying Party are reasonably necessary
to enable the Indemnifying Party to conduct such defense. The
Indemnified Party shall also have the right to participate in the
negotiation, settlement or defense of any claim or demand at its own
expense.
(d) The final determination of any claim or demand pursuant to
this section, including all related costs and expenses, will be binding
and conclusive upon the parties as to the validity or invalidity, as
the case may be, of such claim or demand against the Indemnifying Party
hereunder.
(e) Should the Indemnifying Party fail to give notice to the
Indemnified Party as provided in Section 13.4(b), the Indemnified Party
shall be entitled to make such settlement of the claim or demand as in
its sole discretion may appear advisable, and such settlement or any
other final determination of the claim or demand shall be binding upon
the Indemnifying Party.
13.5 Subrogation. If the Indemnified Party receives payment or other
indemnification from the Indemnifying Party hereunder, the Indemnifying Party
shall be subrogated to the extent of such payment or indemnification to all
rights in respect of the subject matter of such claim to which the Indemnified
Party may be entitled, to institute appropriate action for the recovery
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thereof and the Indemnified Party agrees reasonably to assist and cooperate with
the Indemnifying Party at no expense to the Indemnified Party in enforcing such
rights.
14. Miscellaneous.
14.1 Nature and Survival of Representations, Warranties, Covenants and
Indemnification. All statements contained in this Agreement or in any exhibit or
document delivered in connection with this Agreement shall be deemed
representations and warranties by such party hereunder. All representations,
warranties, covenants and indemnities made in this Agreement or pursuant hereto
shall survive the Closing hereunder until five years from the date of Closing
except (a) with respect to any claim, written notice of which shall have been
delivered to Purchasers or Global Nutrition, as the case may be, prior to a date
five years from the date of Closing, such claim shall survive the termination of
such period and shall survive for as long as such claims is unsettled, and (b)
with respect to any litigation which shall have been commenced to resolve such
claim on or prior to such date.
14.2 Entire Agreement: Amendment. This Agreement and the documents
referred to herein constitute the entire Agreement among the parties hereto with
respect to the subject matter hereof and supersedes all prior written or oral
warranties, representations, inducements, understandings, commitments,
agreements or contracts. No amendment to or modification of the terms or
conditions hereof shall be binding unless it is in writing and signed by the
party against whom the amendment or modification is charged. No party hereto
shall be bound by or charged with any written or oral arguments,
representations, warranties, statements, promises or understandings not
specifically set forth in this Agreement or in any Exhibit hereto or in
certificates and instruments to be delivered pursuant hereto on or before the
Closing.
14.3 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given, delivered and received
(a) when delivered, if delivered personally, (b) four days after mailing, when
sent by registered or certified mail, return receipt requested and postage
prepaid, (c) the next business day after delivery to a private courier service,
when delivered to a private courier service providing documented overnight
service, and (d) on the date of delivery if delivered by telescope, receipt
confirmed, provided that a confirmation copy is sent on the next business day by
registered or certified mail, return receipt requested and postage prepaid, in
each case addressed as follows:
If to Purchasers:
Reliv International, Inc.
152 Chesterfield Industrial Boulevard
Chesterfield, MO 63005
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If to Global Nutrition:
Global Nutrition, Inc.
P.O. Box 415, St. James House
New St. James Place, St. Helier
Jersey JE4 8WH, Channel Islands
or to such other address as the recipient party may indicate by a notice
delivered to the sending party (such change of address notice to be deemed
given, delivered and received only upon actual receipt thereof by the recipient
of such notice).
14.4 Severability. Whenever possible, each paragraph of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law. If any paragraph of this Agreement shall be unenforceable or
invalid under applicable law, such paragraph shall be ineffective only to the
extent and duration of such unenforceability or invalidity and the remaining
substance of such paragraph and the remaining paragraphs of this Agreement shall
in such event continue to be binding and in full force and effect.
14.5 Waivers. No failure by any party to exercise any of such party's
rights hereunder or to insist upon strict compliance with respect to any
obligation hereunder, and no custom or practice of the parties at variance with
the terms hereof shall constitute a waiver by any party to demand exact
compliance with the terms hereof Waiver by any party of any particular default
by any other party shall not affect or impair such party's rights in respect of
any subsequent default of the same or of a different nature, nor shall any delay
or omission of any party to exercise any rights arising from any default by any
other party affect or impair such party's rights as to such default or any
subsequent default. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein or in any other documents. Any
party hereto may, at or before the Closing, waive any conditions to its
obligations hereunder which are not fulfilled.
14.6 Headings; Certain Terms. The section and other headings Agreement
are for reference purposes only and shall not be deemed to Agreement or to
affect the meaning or interpretation of this Agreement. Agreement, the term
"including" means "including, but not limited to" specified; the word "or" means
"and/or," and the word "person" means individual, corporation, trust,
partnership, joint venture, government authority, or any other entity.
14.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed, shall be deemed to be an original and
all of which together shall be deemed to be one and the same instrument.
14.8 Expenses. Except as and to the extent otherwise provided in this
Agreement, whether or not the transactions contemplated by this Agreement are
consummated, Reliv UK and
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Seller shall pay their own respective expenses and the fees and expenses of
their respective counsel and other experts.
14.9 Termination of Agreement. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time, but not later
than the Closing Date by mutual consent of the parties. In the event of the
termination of this Agreement by any party as above provided, without material
fault of any party, no party shall have any liability hereunder, including any
liability for damages. In the event that a condition precedent to a party's
obligation is not met, nothing contained herein shall be deemed to require any
party to terminate this Agreement rather than to waive such condition precedent
and proceed with the Closing.
14.10 Transaction Taxes. Global Nutrition shall pay any and all taxes
imposed upon the sale of the Reliv UK Shares and transfer of ownership of Reliv
UK pursuant to this Agreement.
14.11 Binding Effect: Benefits. This Agreement shall inure to the
benefit of the parties hereto and shall be binding upon the parties hereto and
their respective successors and permitted assigns. This Agreement may not be
assigned by Seller or Purchasers without the prior express written consent of
the other party. Except as otherwise set forth herein, nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto or their respective successors and permitted assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement.
14.12 Disclosures. Any disclosure by either party hereto pursuant to
any specific provision of this Agreement shall be deemed a disclosure for all
other purposes of this Agreement.
14.13 Section References. All references contained in this Agreement to
any section number are references to sections of this Agreement unless otherwise
specifically stated.
14.14 Brokers and Finders. Neither Purchasers nor Global Nutrition has
employed any broker, agent or finder or incurred any liability for any brokerage
fees, agents' commissions, finders fees or advisory fees in connection with the
transactions contemplated by this Agreement; and Global Nutrition on the one
hand, and Purchasers on the other hand, shall indemnify and hold each other
harmless in respect of any such obligation or liability based in any way on
agreements or arrangements or understandings claimed to have been made by any
thereof with any third party.
14.15 Public Announcements. No press release or other public statement
with respect to this Agreement or the transactions contemplated hereby shall be
issued by any party without that party having consulted with and obtained the
written consent of the other parties hereto; provided, however, notwithstanding
the foregoing, Purchasers, as a company subject to the U.S. securities laws and
regulations relating to publicly-held companies, may make such public
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statements at such time and in such form as may be required under such laws or
regulations as advised by its counsel.
14.16 No Strict 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 person.
14.17 Governing Law. The domestic law of the State of Missouri, U.S.A.,
and not any choice of law or conflict of law provision (whether of the State of
Missouri or any other jurisdiction) that would cause any other law to be
applied, will govern all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the obligations imposed
by this Agreement.
14.18 Jurisdiction. The parties agree that the state and federal courts
located in St. Louis County, Missouri, are proper and shall be the only forums
for the judicial resolution of any dispute between the parties arising
hereunder. No party shall attempt to change venue from any such court to a court
in another jurisdiction.
14.19 Number and Gender. Each defined term used in this Agreement has a
comparable meaning when used in its plural or singular form. Each
gender-specific term used herein will have a comparable meaning whether used in
a masculine, feminine or gender-neutral form.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
RELIV WORLD CORPORATION
By: /s/ Robert L. Montgomery
-----------------------------
Robert L. Montgomery, CEO
Attest:
- -----------------------------
Secretary
RELIV EUROPE, INC.
By:
-----------------------------
Authorized Officer
Attest:
- ------------------------------
Secretary
GLOBAL NUTRITION, INC.
By:
-----------------------------
Authorized Officer
Attest:
- -------------------------------
Secretary
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