SHAREEXCHANGE AGREEMENT

SHARE EXCHANGE AGREEMENT, dated as of January 30, 2009 (this “Agreement”) by and among Bioneutral Group, Inc. (formerly, Moonshine Creations, Inc.), a Nevada corporation (“Moonshine”), the controlling shareholder of Moonshine set forth on Schedule I hereto (the “Moonshine Controlling Stockholder”), Bioneutral Laboratories Corporation USA, a Delaware corporation (“Bioneutral”) and the shareholders of Bioneutral set forth on Schedule II hereto (the “Bioneutral Shareholders”).

 

WHEREAS, the Bioneutral Shareholders own 100% of the issued and outstanding ordinary shares of Bioneutral, such shares being hereinafter referred to as the “Bioneutral Shares”; and

 

WHEREAS, (i) the Bioneutral Shareholders and Bioneutral believe it is in their respective best interests for the Bioneutral Shareholders to exchange all of the Bioneutral Shares for 45,000,000 newly-issued shares (the “Moonshine Shares”) of common stock, $0.00001 par value per share (“Common Stock”), which, shall constitute 64.69% of the issued and outstanding shares of Moonshine Common Stock immediately after the closing of the transactions contemplated herein, and (ii) Moonshine believes it is in its best interest and the best interest of its stockholders to acquire the Bioneutral Shares in exchange for the Moonshine Shares, all upon the terms and subject to the conditions set forth in this Agreement (the “Share Exchange”); and

 

WHEREAS, it is the intention of the parties that: (i) the Share Exchange shall qualify as a tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”); and (ii) the Share Exchange shall qualify as a transaction in securities exempt from registration or qualification under the Securities Act of 1933, as amended and in effect on the date of this Agreement (the “Securities Act”); and

 

NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set forth herein, the parties hereto agree as follows:

Section 1.1 Agreement to Exchange Bioneutral Shares for Moonshine Shares.  On the Closing Date (as hereinafter defined) and upon the terms and subject to the conditions set forth in this Agreement, the Bioneutral Shareholders shall assign, transfer, convey and deliver the Bioneutral Shares to Moonshine. In consideration and exchange for the Bioneutral Shares, Moonshine shall issue, transfer, convey and deliver the Moonshine Shares to the Bioneutral Shareholders.

 

Section 1.2 Withholding.  Moonshine shall be entitled to deduct and withhold from the Moonshine Shares otherwise issuable pursuant to this Agreement to the Bioneutral Shareholders such amounts as it is required to deduct and withhold with respect to the making of such

Section 1.3 payment under the Internal Revenue Code of 1986, as amended, or any provision of state, local, provincial or foreign tax law.  To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Bioneutral Shareholders in respect of which such deduction and withholding was made.

 

Section 1.4 Closing and Actions at Closing. The closing of the Share Exchange (the “Closing”) shall take place at 10:00 a.m. E.D.T. on the day the conditions to closing set forth in Articles V and VI herein have been satisfied or waived, or at such other time and date as the parties hereto shall agree in writing (the “Closing Date”), at the offices of Anslow & Jaclin LLP, 195 Route 9 South, Suite 204, Manalapan, New Jersey 07726.

 

Section 1.5 Directors of Moonshine at Closing Date.  On the Closing Date, Raj Pamani, Stephen Browand, Jack Jacobs, Suresh Relwani, Harold Unger and Telly Zachariades shall be appointed to the board of directors of Moonshine (the “Moonshine Board”) and Victoria Callanan shall resign from the Moonshine Board.

 

Section 1.6 Officers of Moonshine at Closing Date.  On the Closing Date, Victoria Callanan shall resign from each officer position held at Moonshine and immediately thereafter, the Moonshine Board shall appoint Stephen Browand to serve as Chief Executive Officer and President, James Crone to serve at Chief Financial Officer and Dr. Andy Kielbania to serve as Chief Scientist and Secretary.

Moonshine represents, warrants and agrees that all of the statements in the following subsections of this Article II are true and complete as of the date hereof.  The disclosure schedule attached hereto as Schedules 2.1 through 2.25, if applicable, (the “Moonshine Disclosure Schedules”) are divided into sections that correspond to the sections of this Article II.  The Moonshine Disclosure Schedules comprise lists of all exceptions to the truth and accuracy in all material respects of, and of all disclosures or descriptions required by, the representations and warranties set forth in this Article II.

 

Section 2.1 Corporate Organization

 

a. Moonshine is a corporation duly organized, validly existing and in good standing under the laws of Nevada, and has all requisite corporate power and authority to own its properties and assets and governmental licenses, authorizations, consents and approvals to conduct its business as now conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its activities makes such qualification and being in good standing necessary, except where the failure to be so qualified and in good standing will not have a Material Adverse Effect on the activities, business, operations, properties, assets, condition or results of operation of Moonshine. “Material Adverse Effect” means, when used with respect to Moonshine, any event, occurrence, fact, condition, change or

b. effect, which, individually or in the aggregate, would reasonably be expected to be materially adverse to the business, operations, properties, assets, condition (financial or otherwise), or operating results of Moonshine, or materially impair the ability of Moonshine to perform its obligations under this Agreement, excluding any change, effect or circumstance resulting from (i) the announcement, pendency or consummation of the transactions contemplated by this Agreement, or (ii) changes in the United States securities markets generally.

 

c. Copies of the certificate of incorporation and by-laws of Moonshine with all amendments thereto, as of the date hereof (the “Moonshine Charter Documents”), have been furnished to the Bioneutral Shareholders and to Bioneutral, and such copies are accurate and complete as of the date hereof.  The minute books of Moonshine are current as required by law, contain the minutes of all meetings of the Moonshine Board and stockholders of Moonshine from its date of incorporation to the date of this Agreement, and adequately reflect all material actions taken by the Moonshine Board and stockholders of Moonshine.  Moonshine is not in violation of any of the provisions of the Moonshine Charter Documents.

 

Section 2.2 Capitalization of Moonshine.

 

a. The authorized capital stock of Moonshine consists of 210,000,000 shares: 200,000,000 shares are authorized as Common Stock, of which 169,065,000 shares are issued and outstanding immediately prior to the Share Exchange and 10,000,000 shares are authorized as preferred stock, of which no shares are issued and outstanding immediately prior to the Share Exchange.

 

b. All of the issued and outstanding shares of Common Stock of Moonshine immediately prior to the Share Exchange are duly authorized, validly issued, fully paid and non-assessable, have been issued in compliance with all applicable U.S. federal and state securities laws and state corporate laws, and have been issued free of preemptive rights of any security holder.  Except with respect to securities to be issued to the Bioneutral Shareholders pursuant to the terms hereof, as of the date of this Agreement there are no outstanding or authorized options, warrants, agreements, commitments, conversion rights, preemptive rights or other rights to subscribe for, purchase or otherwise acquire or receive  any shares of Moonshine’s capital stock, nor are there or will there be any outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights, pre-emptive rights or rights of first refusal with respect to Moonshine or any Common Stock, or any voting trusts, proxies or other agreements, understandings or restrictions with respect to the voting of  Moonshine’s capital stock. Except with respect to securities to be issued pursuant to this Agreement, there are no registration or anti-dilution rights, and there is no voting trust, proxy, rights plan, anti-takeover plan or other agreement or understanding to which Moonshine is a party or by which it is bound with respect to any equity security of any class of Moonshine. Moonshine is not a party to, and it has no knowledge of, any agreement restricting the transfer of any shares of the capital stock of Moonshine. The issuance of all of the shares of Moonshine described in this Section 2.2 have been, or will be, as applicable, in compliance with U.S. federal and state securities laws and state corporate laws and no stockholder of Moonshine has any right to rescind or bring any other

c. claim against Moonshine for failure to comply with the Securities Act of 1933, as amended (the “Securities Act”), or state securities laws.

 

Section 2.3 Subsidiaries and Equity Investments.  Moonshine does not directly or indirectly own any capital stock or other securities of, or any beneficial ownership interest in, or hold any equity or similar interest, or have any investment in any corporation, limited liability company, partnership, limited partnership, joint venture or other company, person or other entity.

 

Section 2.4 Authorization, Validity and Enforceability of Agreements.  Moonshine has all corporate power and authority to execute and deliver this Agreement and all agreements, instruments and other documents to be executed and delivered in connection with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”) to perform its obligations hereunder and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement and each of the Transaction Documents by Moonshine and the consummation by Moonshine of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action of Moonshine, and no other corporate proceedings on the part of Moonshine are necessary to authorize this Agreement or the Transaction Documents or to consummate the transactions contemplated hereby and thereby. This Agreement constitutes the valid and legally binding obligation of Moonshine and is enforceable in accordance with its terms, except as such enforcement may be limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally. Moonshine does not need to give any notice to, make any filings with, or obtain any authorization, consent or approval of any government or governmental agency or other person in order for it to consummate the transactions contemplated by this Agreement, other than filings that may be required or permitted under states securities laws, the Securities Act and/or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) resulting from the issuance of the Moonshine Shares.

 

Section 2.5 No Conflict or Violation.  Neither the execution and delivery of this Agreement or the Transaction Documents by Moonshine, nor the consummation by Moonshine of the transactions contemplated hereby will: (i) contravene, conflict with, or violate any provision of the Moonshine Charter Documents; (ii) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency, court, administrative panel or other tribunal to which Moonshine is subject, (iii) conflict with, result in a breach of, constitute a default (or an event or condition which, with notice or lapse of time or both, would constitute a default) under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which Moonshine is a party or by which it is bound, or to which any of its assets or properties are subject; or (iv) result in or require the creation or imposition of any encumbrance of any nature upon or with respect to any of Moonshine’s assets, including without limitation the Moonshine Shares.

 

Section 2.6 Agreements.  Moonshine is not a party to or bound by any contracts, including, but not limited to, any:

a. plan providing for employee benefits of any nature, including any severance payments;

 

b. lease with respect to any property or equipment;

 

c. contract, agreement, understanding or commitment for any future expenditure in excess of $5,000 in the aggregate;

 

d. contract or commitment pursuant to which it has assumed, guaranteed, endorsed, or otherwise become liable for any obligation of any other person, entity or organization; or

 

e. agreement with any person relating to the dividend, purchase or sale of securities, that has not been settled by the delivery or payment of securities when due, and which remains unsettled upon the date of this Agreement, except with respect to the Moonshine Shares.

 

Section 2.8 Litigation.  There is no action, suit, proceeding or investigation (“Action”) pending or, to the knowledge of Moonshine, currently threatened against Moonshine or any of its affiliates, that may affect the validity of this Agreement or the Transaction Documents or the right of Moonshine to enter into this Agreement and the Transaction Documents or to consummate the transactions contemplated hereby or thereby.  There is no Action pending or, to the knowledge of Moonshine, currently threatened against Moonshine or any of its affiliates, before any court or by or before any governmental body or any arbitration board or tribunal, nor is there any judgment, decree, injunction or order of any court, governmental department, commission, agency, instrumentality or arbitrator against Moonshine or any of its affiliates.  Neither Moonshine nor any of its affiliates is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality.  There is no Action by Moonshine or any of its affiliates relating to Moonshine currently pending or which Moonshine or any of its affiliates intends to initiate.

 

Section 2.9 Compliance with Laws.  Moonshine has been and is in compliance with, and has not received any notice of any violation of any, applicable law, order, ordinance, regulation or rule of any kind whatsoever, including without limitation the Securities Act, the Exchange Act, the applicable rules and regulations of the SEC or the applicable securities laws and rules and regulations of any state.

 

Section 2.10 Financial Statements; SEC Filings.

 

a. Moonshine’s financial statements (the “Financial Statements”) contained in its periodic reports filed with the SEC have been prepared in accordance with generally accepted accounting principles applicable in the United States of America (“U.S. GAAP”) applied on a consistent basis throughout the periods indicated, except that those Financial Statements that are not audited do not contain all footnotes required by U.S. GAAP. The Financial Statements fairly present the financial condition and operating results of Moonshine as of the dates, and for the periods, indicated therein, subject to normal year-end audit adjustments.

b. Except as set forth in the Financial Statements, Moonshine has no material liabilities (contingent or otherwise). Moonshine is not a guarantor or indemnitor of any indebtedness of any other person, entity or organization.  Moonshine maintains a standard system of accounting established and administered in accordance with U.S. GAAP.

 

c. Moonshine has timely made all filings with the SEC that it has been required to make under the Securities Act and the Exchange Act (the “Public Reports”).  Each of the Public Reports has complied in all material respects with the applicable provisions of the Securities Act, the Exchange Act, and the Sarbanes/Oxley Act of 2002 (the “Sarbanes/Oxley Act”) and/or regulations promulgated thereunder.  None of the Public Reports, as of their respective dates, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements made therein not misleading.  There is no event, fact or circumstance that would cause any certification signed by any officer of Moonshine in connection with any Public Report pursuant to the Sarbanes/Oxley Act to be untrue, inaccurate or incorrect in any respect.  There is no revocation order, suspension order, injunction or other proceeding or law affecting the trading of Moonshine’s Common Stock.

 

Section 2.11 Books, Financial Records and Internal Controls.  All the accounts, books, registers, ledgers, Moonshine Board minutes and financial and other records of whatsoever kind of Moonshine have been fully, properly and accurately kept and completed; there are no material inaccuracies or discrepancies of any kind contained or reflected therein; and they give and reflect a true and fair view of the financial, contractual and legal position of Moonshine. Moonshine maintains a system of internal accounting controls sufficient, in the judgment of Moonshine, to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate actions are taken with respect to any differences.

 

Section 2.12 Employee Benefit Plans.  Moonshine does not have any “Employee Benefit Plan” as defined in the U.S. Employee Retirement Income Security Act of 1974 or similar plans under any applicable laws.

 

Section 2.13 Tax Returns, Payments and Elections.  Moonshine has filed all Tax (as defined below) returns, statements, reports, declarations and other forms and documents (including, without limitation, estimated tax returns and reports and material information returns and reports) (“Tax Returns”) required pursuant to applicable law to be filed with any Tax Authority (as defined below).  All such Tax Returns are accurate, complete and correct in all material respects, and Moonshine has timely paid all Taxes due and adequate provisions have been and are reflected in Moonshine’s Financial Statements for all current taxes and other charges to which Moonshine is subject and which are not currently due and payable. None of Moonshine’s federal income tax returns have been audited by the Internal Revenue Service. Moonshine has no knowledge of any additional assessments, adjustments or contingent tax liability (whether federal or state) of any nature whatsoever, whether pending or threatened

Section 2.14 against Moonshine for any period, nor of any basis for any such assessment, adjustment or contingency. Moonshine has withheld or collected from each payment made to each of its employees, if applicable, the amount of all Taxes (including, but not limited to, United States income taxes and other foreign taxes) required to be withheld or collected therefrom, and has paid the same to the proper Tax Authority.  For purposes of this Agreement, the following terms have the following meanings:  “Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means any and all taxes including, without limitation, (x) any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, value added, net worth, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount imposed by any United States, local or foreign governmental authority or regulatory body responsible for the imposition of any such tax (domestic or foreign) (a “Tax Authority”), (y) any liability for the payment of any amounts of the type described in (x) as a result of being a member of an affiliated, consolidated, combined or unitary group for any taxable period or as the result of being a transferee or successor thereof, and (z) any liability for the payment of any amounts of the type described in (x) or (y) as a result of any express or implied obligation to indemnify any other person.

 

Section 2.15 No Debt Obligations.  Upon the Closing Date, Moonshine will have no debt, obligations or liabilities of any kind whatsoever other than with respect to the transactions contemplated hereby.  Moonshine is not a guarantor of any indebtedness of any other person, entity or corporation.

 

Section 2.16 No Broker Fees.    No brokers, finders or financial advisory fees or commissions will be payable by or to Moonshine or any of their affiliates with respect to the transactions contemplated by this Agreement.

 

Section 2.17 No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or anticipated by Moonshine to arise, between Moonshine and any accountants and/or lawyers formerly or presently engaged by Moonshine.  Moonshine is current with respect to fees owed to its accountants and lawyers.

 

Section 2.18 Disclosure.  This Agreement and any certificate attached hereto or delivered in accordance with the terms hereby by or on behalf of Moonshine in connection with the transactions contemplated by this Agreement do not contain any untrue statement of a material fact or omit any material fact necessary in order to make the statements contained herein and/or therein not misleading.

 

Section 2.19 Absence of Undisclosed Liabilities. Since the date of the filing of its annual report on Form 10-K/A for the year ended October 31, 2008, except as specifically disclosed in the Public Reports or in connection with this Share Exchange: (A) there has been no event, occurrence or development that has resulted in or could result in a Material Adverse Effect; (B) Moonshine has not incurred any liabilities, obligations, claims or losses, contingent or otherwise, including debt obligations, other than professional fees; (C)  Moonshine has not

Section 2.20 declared or made any dividend or distribution of cash or property to its shareholders, purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, or issued any equity securities other than with respect to transactions contemplated hereby; (D) Moonshine has not made any loan, advance or capital contribution to or investment in any person or entity; (E) Moonshine has not discharged or satisfied any lien or encumbrance or paid any obligation or liability (absolute or contingent), other than current liabilities paid in the ordinary course of business; (F) Moonshine has not suffered any substantial losses or waived any rights of material value, whether or not in the ordinary course of business, or suffered the loss of any material amount of prospective business; and (G) except for the Share Exchange, Moonshine has not entered into any other transaction other than in the ordinary course of business, or entered into any other material transaction, whether or not in the ordinary course of business.

 

Section 2.21 No Repayment Requirements.  Other than the repayment obligations that are either being paid, released, withdrawn or otherwise disposed of on the Closing Date, there are no outstanding contractual obligations (contingent or otherwise) of Moonshine to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, Moonshine or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other person.

 

Section 2.22 Duly Authorized.  The issuance of the Moonshine Shares has been duly authorized and, upon delivery to the Bioneutral Shareholders of certificates therefor in accordance with the terms of this Agreement, the Moonshine Shares will be validly issued in compliance with all applicable U.S. federal and state securities and corporate laws, fully paid, and nonassessable, will have the rights, preferences and privileges specified, will be free of preemptive rights, and will be free and clear of all liens and restrictions, other than liens created by the Bioneutral Shareholders and restrictions on transfer imposed by this Share Exchange and any applicable securities laws and the regulations and rules promulgated thereunder.

 

Section 2.23 No Integrated Offering.  Moonshine does not have any registration statement pending before the Commission or currently under the Commission’s review and, except as contemplated under the Transaction Documents, Moonshine has not offered or sold any of its equity securities or debt securities convertible into shares of Common Stock since October 31, 2008.

 

Section 2.24 Employees.

 

a. Moonshine has no employees.

 

b. Other than Victoria Callanan, Moonshine does not have any officers or directors. No director or officer of Moonshine is a party to, or is otherwise bound by, any contract (including any confidentiality, non-competition or proprietary rights agreement) with any other person that in any way adversely affects or will materially affect (a) the performance of his duties as a director or officer of Moonshine or (b) the ability of Moonshine to conduct its business.

c. Interested Party Transactions.  No officer, director or principal stockholder of Moonshine or any affiliate or “associate” (as such term is defined in Rule 405 as promulgated by the SEC under the Securities Act) of any such person, has or has had, either directly or indirectly, (1) an interest in any person which (a) furnishes or sells services or products which are furnished or sold or are proposed to be furnished or sold by Moonshine, or (b) purchases from or sells or furnishes to, or proposes to purchase from, sell to or furnish Moonshine any goods or services; or (2) a beneficial interest in any contract or agreement to which Moonshine is a party or by which it may be bound or affected.

 

Section 2.25 Intellectual Property.  Moonshine does not own, use or license any Intellectual Property in its activities as presently conducted.

 

Section 2.26 No Undisclosed Events or Circumstances.  No event or circumstance has occurred or exists with respect to Moonshine or its respective businesses, properties, prospects, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by Moonshine but which has not been so publicly announced or disclosed. Moonshine has not provided to Bioneutral, or the Bioneutral Shareholders, any material non-public information or other information which, according to applicable law, rule or regulation, was required to have been disclosed publicly by Moonshine but which has not been so disclosed, other than with respect to the transactions contemplated by this Agreement.

 

Section 2.27 Disclosure.  This Agreement, the schedules hereto and any certificate attached hereto or delivered in accordance with the terms hereof by or on behalf of Moonshine in connection with the transactions contemplated by this Agreement, when taken together, do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained herein and/or therein not misleading.

Bioneutral represents, warrants and agrees that all of the statements in the following subsections of this Article III, pertaining to Bioneutral, are true and complete as of the date hereof.  The disclosure schedules attached hereto as Schedules 3.1 through 3.23 (the “Bioneutral Disclosure Schedules”) are divided into sections that correspond to the sections of this Article III.  The Bioneutral Disclosure Schedules comprise lists of all exceptions to the truth and accuracy in all material respects of, and of all disclosures or descriptions required by, the representations and warranties set forth in this Article III.

 

Section 3.1 Corporate Organization of the Bioneutral.

 

a. Corporate Organization of Bioneutral.  Bioneutral is a corporation organized under the laws of the state of Delaware and is validly existing and in good standing under the laws of the Delaware; and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned to be conducted.

a. Capitalization of Bioneutral.  Bioneutral has authorized capital consisting of ___________ common shares, par value $0.___ per share, of which __________ shares, constituting all of the Bioneutral Shares, are issued and outstanding.  All of the Bioneutral Shares are owned of record by the Bioneutral Shareholders.  The Bioneutral Shares are the sole outstanding shares of capital stock of Bioneutral and there are no other outstanding shares of capital stock or voting securities and no outstanding commitments to issue any shares of capital stock or voting securities.  The Bioneutral Shares have been duly authorized, validly issued, fully paid and non-assessable, are free of any liens or encumbrances, and are not subject to preemptive rights or rights of first refusal created by statute, organizational documents or any agreement to which Bioneutral is a party or by which it is bound.  There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require Bioneutral to issue, sell or otherwise cause to become outstanding any of its respective authorized but unissued shares of capital stock, or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock.  There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining to the capital stock of Bioneutral.  None of the outstanding shares of capital stock of Bioneutral have been issued in violation of any rights of any Person or in violation of any Law.

 

Section 3.3 Subsidiaries and Equity Investments.  Bioneutral neither directly nor indirectly, owns any capital stock or other securities of, or has any beneficial ownership interest in, or hold any equity or similar interest, or have any investment in any corporation, limited liability company, partnership, limited partnership, joint venture or other company, person or other entity.

 

Section 3.4 Authorization, Validity and Enforceability of Agreements.  Bioneutral has all corporate power and authority to execute and deliver this Agreement and the Transaction Documents, to perform its obligations hereunder and to consummate the transactions contemplated hereby and thereby.  This Agreement and the Transaction Documents constitutes the valid and legally binding obligation of Bioneutral and is enforceable in accordance with its terms, except as such enforcement may be limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditor’s rights generally.  Bioneutral does not need to give any notice to, make any filings with, or obtain any authorization, consent or approval of any government or governmental agency or other person in order for Bioneutral to consummate the transactions contemplated by this Agreement and the Transaction Documents, other than filings that may be required under United States law, state securities laws, the Securities Act and/or the Exchange Act resulting from the transfer and exchange of the Bioneutral Shares.  The execution and delivery of this Agreement and the Transaction Documents by Bioneutral and the consummation by Bioneutral of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action of Bioneutral, and no other corporate proceedings on the part of Bioneutral are necessary to

Section 3.5 authorize this Agreement and the Transaction Documents or to consummate the transactions contemplated hereby or thereby.

 

Section 3.6 No Conflict or Violation.  Neither the execution and delivery of this Agreement or the Transaction Documents by Bioneutral, nor the consummation by Bioneutral of the transactions contemplated hereby or thereby will: (i) violate any provision of Bioneutral  Charter Documents, (ii) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency, court, administrative panel or other tribunal to which Bioneutral is subject,  (iii) conflict with, result in a breach of or (with or without notice or lapse of time or both), constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which Bioneutral is a party or by which any of them is bound, or to which any of their assets is subject; or (iv) result in or require the creation or imposition of any encumbrance of any nature upon or with respect to any of Bioneutral’s assets.

 

Section 3.7 Compliance with Laws and Other Instruments. Except as would not have a Material Adverse Effect on Bioneutral, the business and operations of Bioneutral have been and are being conducted in accordance with all applicable foreign, federal, state and local laws, rules and regulations and all applicable orders, injunctions, decrees, writs, judgments, determinations and awards of all courts and governmental agencies and instrumentalities.  Except as would not have a Material Adverse Effect on Bioneutral, Bioneutral is not, and is not alleged to be, in violation of, or (with or without notice or lapse of time or both) in default under, or in breach of, any term or provision of the Bioneutral Charter Documents or of any indenture, loan or credit agreement, note, deed of trust, mortgage, security agreement or other material agreement, lease, license or other instrument, commitment, obligation or arrangement to which Bioneutral is a party or by which any of the Bioneutral’ properties, assets or rights are bound or affected. No other party to any material contract, agreement, lease, license, commitment, instrument or other obligation to which Bioneutral is a party are (with or without notice or lapse of time or both) in default thereunder or in breach of any term thereof.  Bioneutral is not subject to any obligation or restriction of any kind or character, nor are there, to the knowledge of Bioneutral, any event or circumstance relating to Bioneutral that materially and adversely affects in any way its business, properties, assets or prospects or that would prevent or make burdensome its performance of or compliance with all or any part of this Agreement or the Transaction Documents, or the consummation of the transactions contemplated hereby or thereby.  “Material Adverse Effect” means, when used with respect to Bioneutral, any event, occurrence, change, effect or circumstance which, individually or in the aggregate, (a) has a material adverse effect on the business, assets, financial condition, results of operations of Bioneutral, in each case taken as a whole or (b) materially impair the ability of Bioneutral to perform its obligations under this Agreement, excluding any change, effect or circumstance resulting from (i) the announcement, pendency or consummation of the transactions contemplated by this Agreement, (ii) changes in the United States securities markets generally, or (iii) changes in general economic, currency exchange rate, political or regulatory conditions in industries in which Bioneutral operates.

Section 3.8 Brokers’ Fees. Neither Bioneutral nor any of its agents or employees has employed or engaged any broker or finder or incurred any liability for any brokerage fees, commissions or finders’ fees in connection with the transactions contemplated by this Agreement.

 

Section 3.9 Title to and Condition of Properties.  Bioneutral owns or holds under valid leases or other rights to use all real property, plants, machinery and equipment necessary for the conduct of the business of Bioneutral as presently conducted, except where the failure to own or hold such property, plants, machinery and equipment would not have a Material Adverse Effect. The material buildings, plants, machinery and equipment necessary for the conduct of the business of Bioneutral as presently conducted are structurally sound, are in good operating condition and repair and are adequate for the uses to which they are being put, in each case, taken as a whole, and none of such buildings, plants, machinery or equipment are in need of maintenance or repairs, except for ordinary, routine maintenance and repairs that are not material in nature or cost.

 

Section 3.10 Absence of Undisclosed Liabilities.  Bioneutral has no debt, obligation or liability (whether accrued, absolute, contingent, liquidated or otherwise, whether due or to become due) arising out of any transaction entered into at or prior to the Closing Date or any act or omission at or prior to the Closing Date, except to the extent set forth on or reserved against on its Audited Financial Statements (as hereinafter defined). Bioneutral has not incurred any liabilities or obligations under agreements entered into, except in the usual and ordinary course of business, since September 30, 2008.

 

Section 3.11 Changes.  Bioneutral has not, since September 30, 2008:

 

a. Ordinary Course of Business.  Entered into any transaction with third parties other than in the usual and ordinary course of business, except for this Agreement and the other documents to be entered into in connection with the transactions contemplated by this Agreement;

 

b. Adverse Changes.  Suffered or experienced any change in, or affecting, its condition (financial or otherwise), properties, assets, liabilities, business, operations or results of operations other than changes, events or conditions in the usual and ordinary course of their business, none of which would have a Material Adverse Effect;

 

c. Loans.  Made any loans or advances or extended credit to any Person (for purposes of this Agreement, “Person” means all natural persons, corporations, business trusts, associations, companies, partnerships, limited liability companies, joint ventures and other entities, governments, agencies and political subdivisions) other than travel advances and reimbursement of expenses made to employees, officers and directors in the ordinary course of business;

 

d. Liens.  Created or permitted to exist any material Lien on any property or asset of Bioneutral, other than (a) Liens for taxes not yet payable or in respect of which the validity thereof is being contested in good faith by appropriate proceedings and for the payment of which the relevant party has made adequate reserves; (b) Liens in respect of pledges or

e. deposits under workmen’s compensation laws or similar legislation, carriers, warehousemen, mechanics, laborers and materialmen and similar Liens, if the obligations secured by such Liens are not then delinquent or are being contested in good faith by appropriate proceedings conducted and for the payment of which the relevant party has made adequate reserves; (c) statutory Liens incidental to the conduct of the business of the relevant party which were not incurred in connection with the borrowing of money or the obtaining of advances or credits and that do not in the aggregate materially detract from the value of its property or materially impair the use thereof in the operation of its business; and (d) Liens that would not have a Material Adverse Effect (“Permitted Liens”);

 

f. Capital Stock.  Except for the conversion of the Debentures as of the Closing Date, Bioneutral has not issued, sold, disposed of or encumbered, or authorized the issuance, sale, disposition or encumbrance of, or granted or issued any option to acquire any shares of their capital stock or any other of their securities or any equity security of any class of any of Bioneutral, or altered the term of any of their outstanding securities or made any change in their outstanding shares of capital stock or their capitalization, whether by reason of reclassification, recapitalization, stock split, combination, exchange or readjustment of shares, stock dividend or otherwise;

 

g. Dividends.  Declared, set aside, made or paid any dividend or other distribution to any of their stockholders;

 

h. Material Bioneutral Contracts.  Terminated or modified any and all agreements, contracts, arrangements, leases, commitments or otherwise, of Bioneutral, of the type and nature that is required to be filed with the SEC (each a “Material Bioneutral Contract”), except for termination upon expiration in accordance with the terms thereof;

 

i. Claims.  Released, waived or cancelled any claims or rights relating to or affecting any of Bioneutral in excess of US$15,000 in the aggregate or instituted or settled any Action involving in excess of US$15,000 in the aggregate;

 

j. Discharged Liabilities.  Paid, discharged or satisfied any claim, obligation or liability in excess of US$15,000 in the aggregate, except for liabilities incurred prior to the date of this Agreement in the ordinary course of business;

 

k. Indebtedness.  Created, incurred, assumed or otherwise become liable for any indebtedness in excess of US$5,000 in the aggregate, other than professional fees;

 

l. Guarantees.  Guaranteed or endorsed any obligation or net worth of any Person;

 

m. Acquisitions.  Acquired the capital stock or other securities or any ownership interest in, or substantially all of the assets of, any other Person;

 

n. Accounting.  Changed their method of accounting or the accounting principles or practices utilized in the preparation of their Financial Statements;

o. Agreements.  Entered into any agreement, or otherwise obligated themselves, to do any of the foregoing.

 

Section 3.12 Material Bioneutral Contracts.  Bioneutral has made available to Moonshine, prior to the date of this Agreement, true, correct and complete copies of each Material Bioneutral Contract.

 

a. No Defaults.  Each Material Bioneutral Contract is a valid and binding agreement of Bioneutral and is in full force and effect.  Except as would not have a Material Adverse Effect, Bioneutral is not in breach or default of any Material Bioneutral Contract to which it is a party and no other party to any Material Bioneutral Contract is in breach or default thereof.  Except as would not have a Material Adverse Effect, no event has occurred or circumstance exists that (with or without notice or lapse of time) would (a) contravene, conflict with or result in a violation or breach of, or become a default or event of default under, any provision of any Material Bioneutral Contract or (b) permit Bioneutral or any other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any Material Bioneutral Contract.  Bioneutral has not received notice of the pending or threatened cancellation, revocation or termination of any Material Bioneutral Contract to which they are a party.  There are no renegotiations of, or attempts to renegotiate, or outstanding rights to renegotiate any material terms of any Material Bioneutral Contract.

 

Section 3.13 Material Assets.  The Financial Statements of Bioneutral reflect the material properties and assets (real and personal) owned or leased by Bioneutral.

 

Section 3.14 Litigation; Orders.  There are no Actions (whether U.S. or non-U.S. federal, state, local or foreign) pending or, to the knowledge of Bioneutral, threatened against or affecting Bioneutral or any of Bioneutral properties, assets, business or employees. To the knowledge of Bioneutral, there are no facts that might result in or form the basis for any such Action.  Bioneutral is not subject to any Orders.

 

Section 3.15 Licenses.  Except as would not have a Material Adverse Effect, Bioneutral possesses from the appropriate federal or national, state or provincial, municipal or local government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, political subdivision, commission, court, tribunal, official, arbitrator or arbitral body, in each case whether U.S. or non-U.S. (“Governmental Authority”), all licenses, permits, authorizations, approvals, franchises and rights that are necessary for Bioneutral to engage in its business as currently conducted and to permit Bioneutral to own and use its properties and assets in the manner in which it currently owns and uses such properties and assets (collectively, “Bioneutral Permits”).  Bioneutral has not received notice from any Governmental Authority or other Person that they are lacking any license, permit, authorization, approval, franchise or right necessary for Bioneutral to engage in its business as currently conducted and to permit Bioneutral to own and use its properties and assets in the manner in which it currently owns and uses such properties and assets.  Except as would not have a Material Adverse Effect, the Bioneutral Permits are valid and in full force and effect.  Except as would not have a Material Adverse Effect, no event has

Section 3.16 occurred or circumstance exists that may (with or without notice or lapse of time):  (a) constitute or result, directly or indirectly, in a violation of or a failure to comply with any Bioneutral Permit; or (b) result, directly or indirectly, in the revocation, withdrawal, suspension, cancellation or termination of, or any modification to, any Bioneutral Permit.  Bioneutral has not received notice from any Governmental Authority or any other Person regarding:  (a) any actual, alleged, possible or potential contravention of any Bioneutral Permit; or (b) any actual, proposed, possible or potential revocation, withdrawal, suspension, cancellation, termination of, or modification to, any Bioneutral Permit.  All applications required to have been filed for the renewal of the Bioneutral Permits have been duly filed on a timely basis with the appropriate Persons, and all other filings required to have been made with respect to the Bioneutral Permits have been duly made on a timely basis with the appropriate Persons.  All Bioneutral Permits are renewable by their terms or in the ordinary course of business without the need to comply with any special qualification procedures or to pay any amounts other than routine fees or similar charges, all of which have, to the extent due, been duly paid.

 

Section 3.17 Interested Party Transactions.  Except as previously disclosed, no officer, director or stockholder of Bioneutral or any affiliate or “associate” (as such term is defined in Rule 405 promulgated by the SEC under the Securities Act) of any such Person, have or have had, either directly or indirectly, (1) an interest in any Person which (a) furnishes or sells services or products which are furnished or sold or are proposed to be furnished or sold by Bioneutral, or (b) purchases from or sells or furnishes to, or proposes to purchase from, sell to or furnish to Bioneutral any goods or services; or (2) a beneficial interest in any contract or agreement to which Bioneutral is a party or by which they may be bound or affected.

 

Section 3.18 Governmental Inquiries.  Bioneutral has provided to Moonshine a copy of each material written inspection report, questionnaire, inquiry, demand or request for information received by Bioneutral from any Governmental Authority, and Bioneutral response thereto, and each material written statement, report or other document filed Bioneutral with any Governmental Authority.

 

Section 3.19 Intellectual Property.  Except as previously disclosed to Moonshine, Bioneutral does not own, use or license any Intellectual Property in their business as presently conducted.  For purposes of this Agreement, “Intellectual Property” means all industrial and intellectual property, including, without limitation, all U.S. and non-U.S. patents, patent applications, patent rights, trademarks, trademark applications, common law trademarks, Internet domain names, trade names, service marks, service mark applications, common law service marks, and the goodwill associated therewith, copyrights, in both published and unpublished works, whether registered or unregistered, copyright applications, franchises, licenses, know-how, trade secrets, technical data, designs, customer lists, confidential and proprietary information, processes and formulae, all computer software programs or applications, layouts, inventions, development tools and all documentation and media constituting, describing or relating to the above, including manuals, memoranda, and records, whether such intellectual property has been created, applied for or obtained anywhere throughout the world. No Intellectual Property of Bioneutral has been or is now involved in any dispute, opposition, invalidation or cancellation proceeding, and no such action has been threatened.  No Intellectual Property, wherever situated or registered, of Bioneutral, to the knowledge of Bioneutral is

Section 3.20 infringed, or has been challenged or, to the knowledge of Bioneutral, threatened in any way, and no Intellectual Property of Bioneutral to the knowledge of Bioneutral interferes with the Intellectual Property of any other Person, and no Intellectual Property of Bioneutral is alleged to infringe or interfere with the Intellectual Property of any other Person. Except as would not have a Material Adverse Effect, Bioneutral has not taken any action that would result in the voiding or invalidation of any of its Intellectual Property.

 

Section 3.21 Stock Option Plans; Employee Benefits.

 

a. Except for the Employee Stock Incentive Plan to be approved contemporaneously with this Share Exchange, Bioneutral does not have stock option plans providing for the grant by Bioneutral of stock options or shares of Common Stock to directors, officers or employees.

 

b. Except as previously disclosed to Moonshine, Bioneutral does not have employee benefit plans or arrangements covering their present and former employees or providing benefits to such persons in respect of services provided to Bioneutral.

 

c. Neither the consummation of the transactions contemplated hereby alone, nor in combination with another event, with respect to each director, officer, employee and consultant of Bioneutral, will result in (a) any payment (including, without limitation, severance, unemployment compensation or bonus payments) becoming due from Bioneutral, (b) any increase in the amount of compensation or benefits payable to any such individual or (c) any acceleration of the vesting or timing of payment of compensation payable to any such individual.  No agreement, arrangement or other contract of Bioneutral provides benefits or payments contingent upon, triggered by, or increased as a result of a change in the ownership or effective control of Bioneutral.

 

Section 3.22 Environmental and Safety Matters.  Except as would not have a Material Adverse Effect:

 

a. Bioneutral has at all times been and is in compliance with all Environmental Laws (as defined below) applicable to Bioneutral.

 

b. There are no Actions pending or threatened against Bioneutral alleging the violation of any Environmental Law (as defined below) or Environmental Permit applicable to Bioneutral or alleging that Bioneutral is a potentially responsible party for any environmental site contamination.

 

c. Neither this Agreement nor the consummation of the transactions contemplated by this Agreement shall impose any obligations to notify or obtain the consent of any Governmental Authority or third Persons under any Law or other requirement relating to the environment, natural resources, or public or employee health and safety (“Environmental Laws”) applicable to Bioneutral.

 

Section 3.23 Board Recommendation.  The Board of Directors of Bioneutral, at a meeting duly called and held has determined that this Agreement and the transactions

Section 3.24 contemplated by this Agreement are advisable and in the best interests the Bioneutral Shareholders.

 

Section 3.25 Financial Statements.      Attached as Schedule 3.21 are Bioneutral’s audited consolidated financial statements for the periods ended December 31, 2006 and 2007, including, in each case, the notes thereto (the “Company Audited Financial Statements”) and the unaudited consolidated financial statements for the nine months ended September 30, 2008 (the “Company Unaudited Financial Statements”). The Company Audited Financial Statements and the Company Unaudited Financial Statements (a) are in accordance with the books and records of Bioneutral; (b) present fairly the financial condition and the results of operations, changes in stockholder’s equity and cash flow of Bioneutral for the periods therein specified; and (c) have been prepared in accordance with GAAP applied on a consistent basis during the periods concerned.

 

Section 3.26 Tax Returns, Payments and Elections.  Bioneutral has filed all Tax Returns, required pursuant to applicable law to be filed with any Tax Authority. All such Tax Returns are accurate, complete and correct in all material respects, and Bioneutral has timely paid all Taxes due.  Bioneutral has withheld or collected from each payment made to each of its employees, if applicable, the amount of all Taxes (including foreign taxes) required to be withheld or collected therefrom, and has paid the same to the proper Tax Authority.

 

Section 3.27 Disclosure.  This Agreement, the schedules hereto and any certificate attached hereto or delivered in accordance with the terms hereof by or on behalf of Bioneutral or the Bioneutral Shareholders in connection with the transactions contemplated by this Agreement, when taken together, do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained herein and/or therein not misleading.

 

 

 

The Bioneutral Shareholders hereby represents and warrants to Moonshine:

 

Section 4.1 Authority.  The Bioneutral Shareholders have the right, power, authority and capacity to execute and deliver this Agreement and each of the Transaction Documents to which the Bioneutral Shareholders are a party, to consummate the transactions contemplated by this Agreement and each of the Transaction Documents to which the Bioneutral Shareholders are a party, and to perform the Bioneutral Shareholders obligations under this Agreement and each of the Transaction Documents to which the Bioneutral Shareholders are a party.  This Agreement has been, and each of the Transaction Documents to which the Bioneutral Shareholders are a party will be, duly and validly authorized and approved, executed and delivered by the Bioneutral Shareholders.  Assuming this Agreement and the Transaction Documents have been duly and validly authorized, executed and delivered by the parties thereto other than the Bioneutral Shareholders, this Agreement is, and each of the Transaction Documents to which the Bioneutral Shareholders are a party have been, duly authorized, executed and delivered by the

Section 4.2 Bioneutral Shareholders and constitutes the legal, valid and binding obligation of the Bioneutral Shareholders, enforceable against the Bioneutral Shareholders in accordance with their respective terms, except as such enforcement is limited by general equitable principles, or by bankruptcy, insolvency and other similar Laws affecting the enforcement of creditors rights generally.

 

Section 4.3 No Conflict.  Neither the execution or delivery by the Bioneutral Shareholders of this Agreement or any Transaction Document to which the Bioneutral Shareholders is a party, nor the consummation or performance by the Bioneutral Shareholders of the transactions contemplated hereby or thereby will, directly or indirectly, (a) contravene, conflict with, or result in a violation of any provision of the Organizational Documents of the Bioneutral Shareholders (if the Bioneutral Shareholder is not a natural person); (b) contravene, conflict with, constitute a default (or an event or condition which, with notice or lapse of time or both, would constitute a default) under, or result in the termination or acceleration of, any agreement or instrument to which the Bioneutral Shareholders is a party or by which the properties or assets of the Bioneutral Shareholders are bound; or (c) contravene, conflict with, or result in a violation of, any Law or Order to which the Bioneutral Shareholders, or any of the properties or assets of the Bioneutral Shareholders, may be subject.

 

Section 4.4 Litigation.  There is no pending Action against the Bioneutral Shareholders that involves the Bioneutral Shares or that challenges, or may have the effect of preventing, delaying or making illegal, or otherwise interfering with, any of the transactions contemplated by this Agreement or the business of Bioneutral and, to the knowledge of the Bioneutral Shareholders, no such Action has been threatened, and no event or circumstance exists that is reasonably likely to give rise to or serve as a basis for the commencement of any such Action.

 

Section 4.5 Acknowledgment.  The Bioneutral Shareholders understand and agree that the Moonshine Shares to be issued pursuant to this Agreement have not been registered under the Securities Act or the securities laws of any state of the U.S. and that the issuance of the Moonshine Shares is being effected in reliance upon an exemption from registration afforded either under Section 4(2) of the Securities Act for transactions by an issuer not involving a public offering or Regulation D promulgated thereunder or Regulation S for offers and sales of securities outside the U.S.

 

i Status.  By its execution of this Agreement, the Bioneutral Shareholders represent and warrant to Moonshine as indicated on Exhibit A, that each are accredited investors, as defined in Regulation D promulgated under the Securities Act. The Bioneutral Shareholders understand that the Moonshine Shares are being offered and sold to the Bioneutral Shareholders in reliance upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Bioneutral Shareholders set forth in this Agreement, in order that Moonshine may determine the applicability and availability of the exemptions from registration of the Moonshine Shares on which Moonshine is relying.

 

ii Additional Representations and Warranties. The Bioneutral Shareholders further makes the representations and warranties to Moonshine set forth on Exhibit B.

iii Stock Legends.  The Bioneutral Shareholders hereby agree with Moonshine as follows:

 

b. Securities Act Legend Accredited Investors.  The certificates evidencing the Moonshine Shares issued to the Bioneutral Shareholders will bear the following legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, OR (3) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT, AND BASED ON AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT THE PROVISIONS OF REGULATION S HAVE BEEN SATISFIED.

 

c. Other Legends.  The certificates representing such Moonshine Shares, and each certificate issued in transfer thereof, will also bear any other legend required under any applicable law, including, without limitation, any U.S. state corporate and state securities law, or contract.

 

d. Opinion.  The Bioneutral Shareholders shall not transfer any or all of the Moonshine Shares pursuant to Rule 144, under the Securities Act, Regulation S or absent an effective registration statement under the Securities Act and applicable state securities law covering the disposition of the Moonshine Shares, without first providing Moonshine with an opinion of counsel (which counsel and opinion are reasonably satisfactory to Moonshine) to the effect that such transfer will be made in compliance with Rule 144, under the Securities Act, Regulation S or will be exempt from the registration and the prospectus delivery requirements of the Securities Act and the registration or qualification requirements of any applicable U.S. state securities laws.

 

Section 4.6 Ownership of Shares.  The Bioneutral Shareholders is both the record and beneficial owner of the Bioneutral Shares.  The Bioneutral Shareholders are not the record or beneficial owner of any other shares of Bioneutral.  The Bioneutral Shareholders have and shall

Section 4.7 transfer at the Closing, good and marketable title to the Bioneutral Shares, free and clear of all liens, claims, charges, encumbrances, pledges, mortgages, security interests, options, rights to acquire, proxies, voting trusts or similar agreements, restrictions on transfer or adverse claims of any nature whatsoever.

Section 4.8 Pre-emptive Rights.  At Closing, no Bioneutral Shareholder has any pre-emptive rights or any other rights to acquire any shares of Bioneutral that have not been waived or exercised.

The obligations of Bioneutral and the Bioneutral Shareholders to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by Bioneutral and the Bioneutral Shareholders at their sole discretion:

 

Section 5.1 Representations and Warranties of Moonshine.  All representations and warranties made by Moonshine in this Agreement shall be true and correct in all material respects on and as of the Closing Date, except insofar as the representations and warranties relate expressly and solely to a particular date or period, in which case, subject to the limitations applicable to the particular date or period, they will be true and correct in all material respects on and as of the Closing Date with respect to such date or period.

 

Section 5.2 Agreements and Covenants. Moonshine shall have performed and complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by, on or prior to the Closing Date.

 

Section 5.3 Consents and Approvals.  All consents, waivers, authorizations and approvals of any governmental or regulatory authority, domestic or foreign, and of any other person, firm or corporation, required in connection with the execution, delivery and performance of this Agreement shall be in full force and effect on the Closing Date.

 

Section 5.4 No Violation of Orders.  No preliminary or permanent injunction or other order issued by any court or governmental or regulatory authority, domestic or foreign, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any government or governmental or regulatory authority, which declares this Agreement invalid in any respect or prevents the consummation of the transactions contemplated hereby, or which materially and adversely affects the assets, properties, operations, prospects, net income or financial condition of Moonshine shall be in effect; and no action or proceeding before any court or governmental or regulatory authority, domestic or foreign, shall have been instituted or threatened by any government or governmental or regulatory authority, domestic or foreign, or by any other person, or entity which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement.

Section 5.5 Other Closing Documents.  Bioneutral shall have received such certificates, instruments and documents in confirmation of the representations and warranties of Moonshine, Moonshine’s performance of its obligations hereunder, and/or in furtherance of the transactions contemplated by this Agreement as the Bioneutral Shareholders and/or their respective counsel may reasonably request.

 

Section 5.6 Increase Authorized Shares.  Moonshine shall have obtained shareholder and director approval to increase the number of authorized shares of common stock from 100,000,000 shares to 200,000,000 and file with the Secretary of State for the State of Nevada an Amendment to the Articles of Incorporation increasing its authorized shares to 200,000,000 shares of Common Stock.

 

Section 5.7 Name Change.  Moonshine shall have obtained shareholder and director approval to change its name from Moonshine Creations, Inc. to Bioneutral Group, Inc. and to file with the Secretary of State for the State of Nevada an Amendment to the Articles of Incorporation changing its name to Bioneutral Group, Inc.  Further, Moonshine shall obtain a new CUSIP number and notify FINRA of the name change and request a new symbol for the name change.

 

Section 5.8 Forward Split.  Moonshine shall have obtained director approval to conduct a forward stock split of 30-to-1.  Further, Moonshine shall notify FINRA of the forward split.

 

Section 5.9 Adoption of Stock Incentive Plan.  Moonshine shall have adopted a Stock Incentive Plan whereby the Directors have the discretion to issue up to 5,000,000 shares of Company Common Stock to certain employees, officers and/or directors.

 

Section 5.10 Conversion of Bioneutral Debenture.  Moonshine shall convert the debentures that were issued to certain investors in January 2009 into common stock at a conversion price of $1.00 per share.

 

Section 5.11 Documents.  Moonshine must have caused the following documents to be delivered to Bioneutral and the Bioneutral Shareholders:

 

a. share certificates evidencing the Moonshine Shares registered in the name of the Bioneutral Shareholders;

e. this Agreement and each of the Transaction Documents to which Moonshine is a party, duly executed;

 

f. the resignation of Victoria Callanan as an officer of Moonshine as of the Closing Date;

 

g. the resignation of Victoria Callanan as director of Moonshine, such resignations to be effective on the Closing Date;

 

and

 

h. such other documents as Bioneutral may reasonably request for the purpose of (i) evidencing the accuracy of any representation or warranty of Moonshine, (ii) evidencing the performance by Moonshine of, or the compliance by Moonshine with, any covenant or obligation required to be performed or complied with by Moonshine, (iii) evidencing the satisfaction of any condition referred to in this Article V, or (iv) otherwise facilitating the consummation of any of the transactions contemplated by this Agreement and the Transaction Documents.

The obligations of Moonshine to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by Moonshine in its sole discretion:

 

Section 6.1 Representations and Warranties of Bioneutral and the Bioneutral Shareholders.  All representations and warranties made by Bioneutral and the Bioneutral Shareholders on behalf of themselves individually in this Agreement shall be true and correct on and as of the Closing Date except insofar as the representation and warranties relate expressly and solely to a particular date or period, in which case, subject to the limitations applicable to the particular date or period, they will be true and correct in all material respects on and as of the Closing Date with respect to such date or period.

 

Section 6.2 Agreements and Covenants.  Bioneutral and the Bioneutral Shareholders shall have performed and complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by each of them on or prior to the Closing Date.

 

Section 6.3 Consents and Approvals.  All consents, waivers, authorizations and approvals of any governmental or regulatory authority, domestic or foreign, and of any other person, firm or corporation, required in connection with the execution, delivery and performance

 

Section 6.4 of this Agreement shall have been duly obtained and shall be in full force and effect on the Closing Date.

 

Section 6.5 No Violation of Orders.  No preliminary or permanent injunction or other order issued by any court or other governmental or regulatory authority, domestic or foreign, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any government or governmental or regulatory authority, domestic or foreign, that declares this Agreement invalid or unenforceable in any respect or which prevents the consummation of the transactions contemplated hereby, or which materially and adversely affects the assets, properties, operations, prospects, net income or financial condition of Bioneutral and the Bioneutral Shareholders, taken as a whole, shall be in effect; and no action or proceeding before any court or government or regulatory authority, domestic or foreign, shall have been instituted or threatened by any government or governmental or regulatory authority, domestic or foreign, or by any other person, or entity which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement.

 

Section 6.6 Other Closing Documents.  Moonshine shall have received such certificates, instruments and documents in confirmation of the representations and warranties of the Bioneutral and the Bioneutral Shareholders, the performance of Bioneutral and the Bioneutral Shareholders respective obligations hereunder and/or in furtherance of the transactions contemplated by this Agreement as Moonshine or its counsel may reasonably request.

 

Section 6.7 Documents.  Bioneutral and the Bioneutral Shareholders must deliver to Moonshine at the Closing:

 

a. share certificates evidencing the number of Bioneutral Shares, along with executed share transfer forms transferring such Bioneutral Shares to Moonshine;

 

b. this Agreement and each of the Transaction Documents to which Bioneutral and the Bioneutral Shareholders are a party, duly executed;

 

c. such other documents as Moonshine may reasonably request for the purpose of (A) evidencing the accuracy of any of the representations and warranties of Bioneutral and the Bioneutral Shareholders , (B) evidencing the performance of, or compliance by Bioneutral and the Bioneutral Shareholders with, any covenant or obligation required to be performed or complied with by Bioneutral and the Bioneutral Shareholders, as the case may be, (C) evidencing the satisfaction of any condition referred to in this Article VI, or (D) otherwise facilitating the consummation or performance of any of the transactions contemplated by this Agreement and the other Transaction Documents.

 

Section 6.8 No Claim Regarding Stock Ownership or Consideration.  There must not have been made or threatened by any Person, any claim asserting that such Person (a) is the holder of, or has the right to acquire or to obtain beneficial ownership of the Bioneutral Shares, or any other stock, voting, equity, or ownership interest in, Bioneutral, or (b) is entitled to all or any portion of the Moonshine Shares.

Section 6.9 Completed Audited Financials. On the Closing Date, Bioneutral shall have provided to Moonshine the audited financial statements along with the relevant financial notes for the fiscal years December 31, 2006 and 2007 and the unaudited financial statements along with the relevant financial notes for the interim period ended September 30, 2008.

Section 7.1 Form 8-K.  Within four (4) business days following the Closing Date, Moonshine shall cause the Form 8-K (the “Super 8-K”) to be filed with the SEC.  The Super 8-K shall include the audited and unaudited financial statements of Bioneutral as well as all the information of Bioneutral and the Share Exchange as required by Regulation S-K.

 

Section 7.2 SEC Documents.  From and after the Closing Date, in the event the SEC notifies Moonshine of its intent to review any Public Report filed prior to the Closing Date or Moonshine receives any oral or written comments from the SEC with respect to any Public Report filed prior to the Closing Date, Moonshine shall promptly notify the Moonshine Controlling Stockholders and the Moonshine Controlling Stockholders shall reasonably cooperate with Moonshine in responding to any such oral or written comments.

 

Section 7.3 Registration Statement on Form S-8.  From and after the Closing Date, the Company, and any successor, shall not file a registration statement on Form S-8 to register any shares of Common Stock, including but not limited to, the 5,000,000 shares (or such other amount approved by the Board of Directors) issuable pursuant to the Bioneutral Group, Inc. 2009 Stock Incentive Plan approved in connection with this Share Exchange and dated as of even date herewith.

Section 8.1 Survival of Provisions.  The respective representations, warranties, covenants and agreements of each of the parties to this Agreement (except covenants and agreements which are expressly required to be performed and are performed in full on or before the Closing Date) shall expire on the first day of the twelve-month anniversary of the Closing Date (the “Survival Period”).  The right to indemnification, payment of damages or other remedy based on such representations, warranties, covenants, and obligations will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation.  The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of damages, or other remedy based on such representations, warranties, covenants, and obligations.

a. Indemnification Obligations in favor of the Controlling Stockholders of Moonshine. Notwithstanding the limitation set forth in Section 8.1, from and after the Closing Date until the expiration of the Survival Period,  Bioneutral and the Bioneutral Shareholders shall reimburse and hold harmless the Moonshine Controlling Stockholders (each such person and his heirs, executors, administrators, agents, successors and assigns is referred to herein as a “Moonshine Indemnified Party”) against and in respect of any and all damages, losses, settlement payments, in respect of deficiencies, liabilities, costs, expenses and claims suffered, sustained, incurred or required to be paid by any Moonshine Indemnified Party, and any and all actions, suits, claims, or legal, administrative, arbitration, governmental or other procedures or investigation against any Moonshine Indemnified Party, which arises or results from a third-party claim brought against a Moonshine Indemnified Party to the extent based on a breach of the representations and warranties with respect to the business, operations or assets of Bioneutral.  All claims of Moonshine pursuant to this Section 8.2 shall be brought by the Moonshine Controlling Stockholders on behalf of Moonshine and those Persons who were stockholders of Moonshine immediately prior to the Closing Date.

 

b. Indemnification in favor of Bioneutral and the Bioneutral Shareholders.  Notwithstanding the limitations set forth in Section 8.1 and in the last sentence of this Section 8.2(b), from and after the Closing Date until the expiration of the Survival Period, the Moonshine Controlling Stockholders will, severally and not jointly, indemnify and hold harmless Bioneutral, the Bioneutral Shareholders, and their respective officers, directors, agents, attorneys and employees, and each person, if any, who controls or may “control” (within the meaning  of the Securities Act) any of the forgoing persons or entities (hereinafter referred to individually as a “Bioneutral Indemnified Person”) from and against any and all losses, costs, damages, liabilities and expenses arising from claims, demands, actions, causes of action, including, without limitation, legal fees, (collectively, “Damages”) arising out of any (i) any breach of representation or warranty made by Moonshine or the Moonshine Controlling Stockholders in this Agreement, and in any certificate delivered by Moonshine or the Moonshine Controlling Stockholders pursuant to this Agreement, (ii) any breach by Moonshine or the Moonshine Controlling Stockholders of any covenant, obligation or other agreement made by Moonshine or the Moonshine Controlling Stockholders in this Agreement, and (iii) a third-party claim based on any acts or omissions by Moonshine or the Moonshine Controlling Stockholders since April 10, 2007 through and including the Closing Date. In no event shall any such indemnification payments exceed $100,000 in the aggregate from all Moonshine Controlling Stockholders.

Section 9.1 Publicity.  No party shall cause the publication of any press release or other announcement with respect to this Agreement or the transactions contemplated hereby without the consent of the other parties, unless a press release or announcement is required by law.  If any such announcement or other disclosure is required by law, the disclosing party agrees

 

Section 9.3 Successors and Assigns.  This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and assigns; provided, however, that no party shall assign or delegate any of the obligations created under this Agreement without the prior written consent of the other parties.

 

Section 9.4 Fees and Expenses.  Except as otherwise expressly provided in this Agreement, all legal and other fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees, costs or expenses.

 

Section 9.5 Notices.  All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been given or made if in writing and delivered personally or sent by registered or certified mail (postage prepaid, return receipt requested)or facsimile to the parties at the following addresses:

or to such other persons or at such other addresses as shall be furnished by any party by like notice to the others, and such notice or communication shall be deemed to have been given or made as of the date so delivered or mailed. No change in any of such addresses shall be effective

insofar as notices under this Section 9.4 are concerned unless such changed address is located in the United States of America (or, in the case of the Bioneutral Shareholders or Bioneutral, in the  United States of America) and notice of such change shall have been given to such other party hereto as provided in this Section 9.4.

 

Section 9.6 Entire Agreement.  This Agreement, together with the exhibits hereto, represents the entire agreement and understanding of the parties with reference to the transactions set forth herein and no representations or warranties have been made in connection with this Agreement other than those expressly set forth herein or in the exhibits, certificates and other documents delivered in accordance herewith.  This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings and agreements between the parties relating to the subject matter of this Agreement and all prior drafts of this Agreement, all of which are merged into this Agreement.  No prior drafts of this Agreement and no words or phrases from any such prior drafts shall be admissible into evidence in any action or suit involving this Agreement.

 

Section 9.7 Severability.  This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof.  Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible so as to be valid and enforceable.

 

Section 9.8 Titles and Headings.  The Article and Section headings contained in this Agreement are solely for convenience of reference and shall not affect the meaning or interpretation of this Agreement or of any term or provision hereof.

 

Section 9.9 Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement.

 

Section 9.10 Convenience of Forum; Consent to Jurisdiction.  The parties to this Agreement, acting for themselves and for their respective successors and assigns, without regard to domicile, citizenship or residence, hereby expressly and irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with this Agreement, and consent and subject themselves to the jurisdiction of, the courts of the State of New Jersey located in County of Essex, and/or the United States District Court located in the State of New Jersey, in respect of any matter arising under this Agreement. Service of process, notices and demands of such courts may be made upon any party to this Agreement by personal service at any place where it may be found or giving notice to such party as provided in Section 9.4.

 

Section 9.11 Enforcement of the Agreement.  The parties hereto agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement

Section 9.12 and to enforce specifically the terms and provisions hereto, this being in addition to any other remedy to which they are entitled at law or in equity.

 

Section 9.13 Governing Law.  This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the State of New Jersey without giving effect to the choice of law provisions thereof.

 

Section 9.14 Amendments and Waivers.  Except as otherwise provided herein, no amendment or waiver of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all of the parties hereto. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any such prior or subsequent occurrence.