STOCK EXCHANGE AGREEMENT
This STOCK EXCHANGE AGREEMENT (hereinafter referred to as the "Agreement")
entered into as of this 28th day of March, 2002, is by and between InterNatural
Pharmaceuticals, Inc. (hereinafter referred to as "INAT") and Neurochemical
Research Corp. (hereinafter referred to as "NRC").
WITNESSETH
WHEREAS, INAT is a Nevada corporation with authorized capital stock of
140,000,000 shares of $0.001 par value common stock, of which 10,920,247 shares
of common stock were issued and outstanding as of December 31, 2001.
WHEREAS, NRC is a Tennessee corporation with authorized capital stock of
100,000,000 shares of $0.001 par value Common Stock, of which 10,062,234 shares
were issued and outstanding as of March 1, 2002.
WHEREAS, INAT desires to exchange 2,000,000 post 5:1 forward split shares of
unissued common stock of INAT with 2,000,000 post 1:6 reverse split shares of
unissued common stock of NRC, on the terms and conditions set forth herein.
NOW THEREFORE in consideration of the foregoing and the mutual covenants,
promises, representations and warranties contained herein, the parties hereto
agree as follows:
ARTICLE I
EXCHANGE
1.1 Exchange of Stock. At the Closing Date in accordance with the provisions of
this Agreement and applicable law, INAT will issue to NRC 2,000,000 post 5:1
forward split shares of unissued common stock of INAT ("INAT Shares") and NRC
will issue to INAT 2,000,000 post 1:6 reverse split shares of unissued common
stock of NRC ("NRC Shares").
1.2 Execution of Stock Purchase Agreement. It shall be a condition precedent to
Closing hereunder that INAT, NRC and NRC's majority shareholder group shall have
executed a Stock Purchase Agreement with Promissory Note in the form attached
hereto as Exhibit A and incorporated herein by this reference. The share
exchange contemplated by this Agreement shall become effective after the Closing
of the said Stock Purchase Agreement with Promissory Note.
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ARTICLE II
CONSIDERATION
2.1 Exchange. In consideration for INAT issuing INAT Shares to NRC, NRC agrees
to issue the NRC Shares to INAT.
2.2 Investment Intent. INAT and NRC represent and warrant that they are
acquiring the NRC Shares and INAT Shares, respectively, for investment purposes
only and not with a view towards resale or redistribution in violation of state
and federal securities laws. Upon request, INAT agrees to deliver to NRC, and
NRC to INAT, at the closing, or after, a letter setting forth an agreement that
said Shares are being acquired for investment purposes only and will not be sold
except in compliance with the Securities Act of 1933, as amended, and the Rules
and Regulations promulgated thereunder.
2.3 Delivery. At Closing, INAT shall deliver to NRC certificates for the INAT
shares, duly endorsed in negotiable form, with signatures guaranteed, free and
clear from all claims and encumbrances. Similarly, at Closing, NRC shall deliver
certificates for the NRC shares, duly endorsed in negotiable form, with
signatures guaranteed, free and clear from all claims and encumbrances.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NRC
NRC represents and warrants to INAT as follows:
3.1 Organization. NRC is a corporation duly incorporated, validly existing and,
at the closing, in good standing under the laws of the State of Tennessee and
has the corporate power and authority to own or lease its properties and to
carry on business as now being conducted.
3.2 Capitalization. As of the closing date, the authorized capital stock of NRC
shall consist of 100,000,000 shares of $0.001 par value common stock, of which
10,062,234 are issued and outstanding. All said shares are validly issued, fully
paid and non-assessable.
3.3 Financial Statements. NRC has furnished to INAT unaudited financial
statements as of June 30, 2001. Said financial statements contain the balance
sheet of NRC. All of said financial statements,
(i) are in accordance with NRC's books and records,
(ii) present fairly and financial position of NRC as of such dates, and its
results of operations and changes in financial position for the
respective periods indicated,
(iii) have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, and (iv) consistent with
prior business practice, contain adequate reserves for all known or
contingent liabilities, losses and refunds with respect to services or
products already rendered or sold.
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3.4 Authorization. NRC has the power to enter into this Agreement, and this
Agreement, when duly executed and delivered, will constitute the valid and
binding obligation of NRC. Other than approval by the Board of Directors and/or
shareholders of NRC, no proceedings are necessary to authorize this Agreement or
the transactions completed hereby. This Agreement constitutes the legal, valid
and binding obligation of NRC enforceable in accordance with its terms.
3.5 Effect of Agreement. The execution and delivery by NRC of this Agreement and
the consummation of the transactions herein contemplated,
(i) will not conflict with, or result in a breach of the terms of, or
constitute any default under or violation of, any law or regulation of
any governmental authority, or the Articles of Incorporation or
By-Laws of NRC, or any material agreement or instrument to which NRC
is a party or by which it is bound or is subject;
(ii) nor will it give to others any interest or rights, including rights of
termination, acceleration or cancellation, in or with respect to any
of the properties, assets, agreements, leases, or business of NRC
3.6 Minutes Book. The records of meetings and other corporate actions of NRC
(including any committees of the Board) which are contained in the Minute books
of NRC contain complete and accurate records of the matters reflected in such
minutes.
3.7 Litigation; Claims. NRC is not a party to, and there are not any claims,
actions, suits, investigations or proceedings pending or threatened against NRC
or its business, at law or in equity, or before or by any governmental
department, commission, board, bureau, agency, or instrumentality, domestic or
foreign, which if determined adversely would have a material effect on the
business or financial condition of NRC or the ability of NRC to carry on its
business. The consummation of the transactions herein contemplated will not
conflict with or result in the breach or violation of any judgment, order, writ,
injunction or decree of any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign.
3.8 Nature of Representations. NRC has taken reasonable care to ensure that all
disclosures and facts are true and accurate, and that there are no other
material facts, the omission of which would make misleading any statement
herein. Further, to the best of NRC's knowledge, no representation, warranty or
agreement made by NRC in this agreement or any of the Schedules
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or any other Exhibits hereto and no statement made in the Schedules or any such
Exhibit, list, certificate or schedule or other instrument or disclosure
furnished by them in connection with the transactions herein contemplated
contains, or will contain, any untrue statement of a material fact necessary to
make any statement, representation, warranty or agreement not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INAT
INAT represents and warrants to NRC as follows:
4.1 Organization. INAT is a corporation duly incorporated, validly existing and,
at the closing, in good standing under the laws of the State of Nevada has the
corporate power and authority to own or lease its properties and to carry on
business as now being conducted.
4.2 Authorization. INAT have the full power and authority to enter into this
Agreement and to carry out its obligations hereunder. Other than approval by the
Board of Directors and/or shareholders of INAT, no proceedings on the part of
INAT are necessary to authorize this Agreement or the transactions completed
hereby. This Agreement constitutes the legal, valid and binding obligation of
INAT enforceable in accordance with its terms.
4.3 Capitalization. The authorized capital stock of INAT consists of one class
of shares of stock, the total number of shares authorized is 140,000,000 shares
of $0.001 par value common stock of which 10,920,247 are presently issued and
outstanding. All said shares are validly issued, fully paid and non-assessable.
4.4 Financial Statements. INAT has furnished to NRC unaudited financial
statements as of December 31, 2001 (the "Financial Statements). Said Financial
Statements contain the balance sheet of INAT. All of said Financial Statements,
(i) are in accordance with INAT's books and records,
(ii) present fairly and financial position of INAT as of such dates, and
its results of operations and changes in financial position for the
respective periods indicated,
(iii) have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, and
(iv) consistent with prior business practice, contain adequate reserves for
all known or contingent liabilities, losses and refunds with respect
to services or products already rendered or sold.
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4.5 Effect of Agreement. The execution and delivery by INAT of this Agreement
and the consummation of the transactions herein contemplated, (i) will not
conflict with, or result in a breach of the terms of, or constitute a default
under or violation of, any law or regulation of any governmental authority, or
the Articles of Incorporation or By-Laws of INAT, or any material agreement or
instrument to which INAT is give to rise to any interests or rights, including
rights of termination, acceleration or cancellation, in or with respect to any
of the properties, assets, agreements, leases, or business of INAT.
4.6 Minutes Book. The records of meetings and other corporate actions of INAT
(including any committees of the Board) which are contained in the Minute books
of INAT contain complete and accurate records of the matters reflected in such
minutes.
4.7 Litigation; Claims. INAT is not a party to, and there are not any claims,
actions, suits, investigations or proceedings pending or threatened against INAT
or its business, at law or in equity, or before or by any governmental
department, commission, board, bureau, agency, or instrumentality, domestic or
foreign, which if determined adversely would have a material effect on the
business or financial condition of INAT or the ability of INAT to carry on its
business. The consummation of the transactions herein contemplated will not
conflict with or result in the breach or violation of any judgement, order,
writ, injunction or decree of any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign.
4.8 Nature of Representation. INAT have taken reasonable care to ensure that all
disclosures and facts are true and accurate and that there are no other material
facts, the omission of which would make misleading any statement herein.
Further, no representation, warranty or agreement made by INAT in this Agreement
or any of the Schedules or any other Exhibits hereto and no statement made in
the Schedules or any such Exhibit, list, certificate or schedule or other
instrument or disclosure furnished by them in connection with the transactions
herein contemplated contains, or will contain, any untrue statement of a
material fact necessary to make any statement, representation, warranty or
agreement not misleading.
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ARTICLE V
ACCESS TO INFORMATION
5.1 Access to Information. INAT shall afford representatives of NRC reasonable
access to officers, personnel, and professional representatives of INAT and such
of the financial, contractual and corporate records of INAT as shall be
reasonably necessary for NRC's investigations and appraisal of INAT. NRC shall
afford representatives of INAT reasonable access to officers, personnel, and
professional representatives of NRC and such of the financial, contractual and
corporate records of NRC as shall be reasonably necessary for INAT's
investigations and appraisal of NRC.
5.2 Effect of Investigations. Any such investigation by NRC of INAT, and of NRC
by INAT, shall not affect any of the representations and warranties hereunder
and shall not be conducted in such manner as to interfere unreasonably with the
operation of the business of INAT and NRC.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF NRC
The obligations of NRC under this Agreement are, at the option of NRC, subject
to the satisfaction, at and prior to the Closing Date, of the following
conditions:
6.1 Fulfillment of Covenants. All the terms, covenants and conditions of this
Agreement to be complied with and performed by INAT at or before the Closing
Date shall have been duly complied with and performed.
6.2 Accuracy of Representations and Warranties; Other, Documents. All of the
representations and warranties made by all parties to this Agreement shall be
true as of the Closing Date.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF INAT
The obligations of INAT under this Agreement are, at the option of INAT, subject
to the satisfaction,, at and prior to the Closing Date, of the following
conditions:
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7.1 Fulfillment of Covenants. All the terms, covenants and conditions of this
Agreement to be complied with and performed by NRC at or before the Closing Date
shall have been duly complied with and performed.
7.2 Accuracy of Representations and Warranties; Other Documents. All of the
representations and warranties made by all parties to this Agreement shall be
true as of the Closing Date.
ARTICLE VIII
CLOSING
8.1 Closing Date. The consummation of the exchange shall take place on March 28,
2002, at the offices of INAT or such other time or place as shall be mutually
agreed upon by the parties to this Agreement.
8.2 Actions to be Taken by Parties on the Closing Date. On the Closing Date,
each party shall deliver to the other all documents or agreements provided or
herein to be delivered on the Closing Date.
8.3 Other. Between the date hereof and the Closing Date, NRC will take no
actions, other than those reasonably required to consummate a closing, without
the prior written consent of INAT.
ARTICLE IX
INDEMNIFICATION AND ARBITRATION
9.1 Indemnification. Each of the parties agree to indemnify and hold harmless
the other against any and all damages, claims, losses, expenses, obligations and
liabilities (including reasonable attorney's fees) resulting from or related to
any breach of, or failure by each of the parties to perform any of their
representations, warranties, covenants, conditions or agreements in this
Agreement or in any schedule, certificate, exhibit or other document furnished,
or to be furnished under this Agreement.
9.2 Claims of Indemnification. Any claim for indemnification pursuant to this
Agreement, unless otherwise received by means of direct negotiation among the
parties upon reasonable oral notification by the party seeking indemnification
to all other parties, shall be made by writing of the nature and amount of the
claim to the other.
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ARTICLE X
GENERAL
10.1 Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable" the remainder of this Agreement or the application of
such term or provision to persons or circumstances other than those to which it
is held invalid or unenforceable, shall not be affected thereby, and each such
term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.
10.2 Waiver. No waiver of any breach of any covenant or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof, or of any other covenant or provision herein contained. No extension of
time for performance of any obligation or act shall be deemed and extension of
the time for performance of any other obligation or act.
10.3 Notices. All notices or other communications required or permitted
hereunder shall be in writing, and shall be sent by registered or certified
mail, postage prepaid, return receipt requested, and shall be deemed received
upon mailing thereof.
If to INAT
To: 4201 Wilshire Blvd., Suite 525 Los Angeles, CA 90010
If to NRC
To: Attention: Mr. Dan Tennant 3485 Sacramento Drive, #F San Luis Obispo, CA
93401
Notice of change of address shall be given by written notice in the manner
detailed in this subparagraph 10.3.
10.4 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the permitted successors and assigns of the parties
hereto.
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10.5 Professional Fees. In the event of the bringing of any action or suit by a
party hereto against another party hereunder by reason of any breach of any of
the covenants, agreements or provisions on the part of the other party arising
out of this Agreement, then in that event the prevailing party shall be entitled
to have and recover of and from the other party all costs and expenses of the
action or suit, including actual attorney's fees, accounting fees, and other
professional fees resulting therefrom.
10.6 Entire Agreement. This Agreement is the final statement of, and contains
the entire agreement between, the parties with respect to the subject matter
hereof and supersedes all prior understandings with respect thereto. This
Agreement may not be modified, changed, supplemented or terminated, nor may any
obligations hereunder be waived, except by written instrument signed by the
party to be charged or by his agent duly authorized in writing or as otherwise
expressly permitted herein. The parties do not intend to confer any benefit
hereunder on any person, firm or corporation other than the parties hereto.
10.7 Time of Essence. The parties hereby acknowledge and agree that time is
strictly of the essence with respect to each and every term, condition,
obligation and provision hereof and that failure to timely perform any of the
terms, conditions, obligations or provisions hereof by either party shall
constitute a material breach of and non-curable (but waivable) default under
this Agreement by the party so failing to perform.
10.8 Construction. Headings at the beginning of each paragraph and subparagraph
are solely for the convenience of the parties and are not a part of the
Agreement. Whenever required by the context of this Agreement, the singular
shall include the plural and the masculine shall include the feminine. This
Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same. Unless otherwise
indicated, all references to paragraphs and subparagraphs are to this Agreement.
In the event the date on which any party is required to take any action under
the terms of this Agreement is not a business day, the action shall be taken on
the next succeeding day.
10.9 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be an original and all of which taken together shall
constitute one instrument.
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10.10 Governing Law. The parties hereto expressly agree that this Agreement
shall be governed by, interpreted under, and construed and enforced in
accordance with the laws of the State of Nevada.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
first above here written.
Dated: March 27, 2002 Neurochemical Research Corp.
By: /s/ Carol Slavin
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President
Dated: March 28, 2002 InterNatural Pharmaceuticals, Inc.
By: /s/ Roy Rayo
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Corporate Secretary
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