ACQUISITION AGREEMENT

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ACQUISITION AGREEMENT

           This ACQUISITION AGREEMENT is entered into and made effective as of the 24th day of January, 2011 by and between Stanford Management Ltd.,  a Delaware Corporation ("SFML" or “Buyer”); Organ Transport Systems, Inc., a Nevada Corporation ("OTS”); and Healthcare of Today, Inc, a California Corporation (“Healthcare” or “HOTI”), the sole Shareholder of OTS (“Seller”).

WHEREAS, Seller is the one hundred (100) percent controlling shareholder of OTS, and upon the terms and conditions set forth below, Seller desires to transfer all of the shares of OTS owned by Seller to Buyer, such that, following such transaction, OTS will be a wholly-owned subsidiary of Buyer; and

           WHEREAS, for United States federal income tax purposes, the Parties to this Agreement intend that the transactions described in this Agreement shall qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and that this Agreement shall be, and is hereby, adopted as a “plan of reorganization” for purposes of Section 368(a) of the Code.

           NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained in this Agreement, the Parties hereto agree as follows:

1.    SALE AND PURCHASE OF SHARES.

1.1           PURCHASE.  Subject to the terms and conditions herein set forth, SFML hereby agrees to purchase and Seller hereby agrees to sell one hundred percent (100%) of the issued and outstanding shares of OTS (“OTS Shares”) to SFML.

1.2 CONSIDERATION.  The consideration for one hundred percent (100%) of the outstanding shares of OTS shall be:

1.2.1         Share Consideration.  The share consideration to be issued to HOTI  upon the Closing of the acquisition for one hundred percent (100%) of the outstanding shares of OTS on a fully diluted basis shall be that number of  shares of common stock of SFML that is equal to sixty (60) percent of the resulting common shares of SFML issued and outstanding on a fully diluted basis at and as a result of the Closing (“SFML Common Shares”). As an example, if SFML has 52,170,000 shares of common stock issued and outstanding at the time of Closing, then the SFML Common Shares issued to HOTI at Closing would be 78,255,000 common shares.

1.2.2  Anti-Dilution. The SFML Common Shares issued to HOTI at Closing shall be granted anti-dilution protection, such that, in the event that additional shares of stock of SFML are issued at any time in the future for any reason, then additional shares shall be issued to HOTI, at no additional. Cost or expense to HOTI,  in an amount equal to the number of shares required so that the resulting share ownership and voting power of HOTI shall at all times remain at sixty (60) percent of the shares outstanding and the total vote of all shares entitled to vote.

2.  REPRESENTATIONS AND WARRANTIES

2.1           REPRESENTATIONS AND WARRANTIES OF OTS.  OTS represents and warrants as follows:

a)        CORPORATE ORGANIZATION AND GOOD STANDING.  OTS is duly organized, validly existing, and in good standing under the laws of the State of Nevada and is qualified to do business as a foreign corporation in each jurisdiction, if any, in which its property or business requires such qualification.

b)         CORPORATE AUTHORITY.  OTS has all requisite corporate power and authority to own, operate and lease its properties, to carry on its business as it is now being conducted and to execute, deliver, perform and conclude the transactions contemplated by this Agreement and all other agreements and instruments related to this Agreement.

c)        AUTHORIZATION.  Execution of this Agreement has been duly authorized and approved by OTS and  the Seller.

   d)           CAPITALIZATION.

 

(1)    The authorized capital stock of OTS consists of 50,000,000 shares of OTS Common Stock $0.001 par value. At December 15, 2010, (i) 18,717,746 shares of OTS Common Stock were issued and outstanding, all of which are duly authorized, validly issued, fully paid and non-assessable and none of which were issued in violation of any preemptive rights; (ii) no shares of OTS were reserved for issuance upon the exercise of outstanding options, warrants or other rights to purchase shares; and (iii) no shares of OTS stock were held in the treasury of OTS.  Except as set forth above, as of the date hereof, no shares or other voting securities of OTS are issued, reserved for issuance or outstanding and no shares or other voting securities of OTS shall be issued or become outstanding after the date hereof. & #160;There are no bonds, debentures, notes or other indebtedness or securities of OTS that have the right to vote (or that are convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of OTS may vote, other than (i) a convertible note to Musculoskeletal Transplant Foundation with a balance of $822,217 as of December 31, 2009, plus accrued interest year to date 2010, convertible into OTS common shares at $1.00 per share and (ii) convertible notes to various OTS management.  All shares of OTS subject to issuance as described above shall, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, be duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights. At Closing, the convertible notes referenced above shall be converted into two (2) year convertible notes of SFML on the same general terms, except that none of the notes issued by SFML may be converted into commo n stock of SFML for a period of one (1) year after Closing.

 

(b) (2)           OTS has no contract or other obligation to repurchase, redeem or otherwise acquire any shares of OTS stock, or make any

 

investment (in the form of a loan, capital contribution or otherwise) in any other Person.  There are no outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable or convertible securities or other commitments or agreements of any character relating to the issued or unissued shares or other securities of OTS.  None of the outstanding equity securities or other securities of OTS was issued in violation of the Securities Act of 1933 or any other legal requirement.

 

e)        LITIGATION.  To the knowledge of OTS, there are no pending, threatened, or existing litigation, bankruptcy, criminal, civil, or regulatory proceeding or investigation, threatened or contemplated against Company.

f)	FINANCIAL STATEMENTS.

 

(i) Seller has furnished or made available to Buyer, or will make available to Buyer prior to the Closing Date, true and complete copies of the audited financial statements of OTS for  its past two fiscal years (the “Buyer Financial Statements”), and Seller shall furnish or make available to Buyer true and complete copies of OTS's financial statements for all monthly periods ending after its most recent fiscal year up to and including the Closing Date.

 

                                                 (ii) The OTS Financial Statements were prepared in accordance with  GAAP or the equivalent applied on a basis consistent throughout the periods indicated (except as otherwise stated in such financial statements, including the related notes, and except that, in the case of unaudited statements for the subsequent quarterly periods referenced above, such unaudited statements fairly present in all material respects the consolidated financial condition and the results of operations of Buyer as at the respective dates thereof and for the perio ds indicated therein (subject, in the case of unaudited statements, to year-end audit adjustments).

 

g) ABSENCE OF CERTAIN CHANGES OR EVENTS.  Since the end of its most recent fiscal year and to the date of this Agreement, (i) OTS has, in all material respects, conducted its business in the ordinary course consistent with past practice; (ii) there has not occurred any change, event or condition that is or would reasonably be expected to result in a material adverse effect; and (iii)  OTS has not taken and will not take any of the actions that OTS has agreed not to take from the date hereof through the Closing.

 

h) UNDISCLOSED LIABILITIES.  OTS has no material obligations or liabilities of any nature (whether accrued, matured or unmatured, fixed or contingent or otherwise) other than (i) those set forth or adequately provided for in the consolidated balance sheet (and the related notes thereto) of OTS as of the end of the most recent fiscal year  included in the OTS Financial Statements, (ii) those incurred in the ordinary course of business consistent with past practice since the end of the most recent fiscal year  and (iii) those incurred in connection with the execution of this Agreement.

 

i) LEGAL PROCEEDINGS.  OTS is not a party to any, and there is no pending or, to the knowledge of OTS, threatened, legal, administrative, arbitral or other proceeding, claim, action or governmental or regulatory investigation of any nature against OTS,

 

or any of its officers or directors which, if decided adversely to OTS, would, individually or in the aggregate, be material to OTS.  There is no injunction, order, judgment or decree imposed upon OTS, or any of its officers or directors, or the assets of OTS.

 

j) TAXES AND TAX RETURNS.

 

(c) (i) OTS has filed or caused to be filed all  federal, state, foreign and local tax returns required to be filed with any tax authority; (ii) all such tax returns are true, accurate, and complete in all material respects; (iii) OTS has paid or caused to be paid all taxes that are due and payable by any of such companies, other than taxes which are being contested in good faith and are adequately reserved against or provided for (in accordance with  GAAP) in the OTS Financial Statements, and (iv) OTS does not have any material liability for taxes for any current or prior tax periods in excess of the amount reserved or provided for in the OTS Financial Statement s (but excluding, for this Clause (iv) only, any liability reflected thereon for deferred taxes to reflect timing differences between tax and financial accounting methods).

 

(d) No national, state, local or foreign audits, examinations, investigations, or other formal proceedings are pending or, to OTS’s knowledge, threatened with regard to any taxes or tax returns of OTS.  No issue has arisen in any examination of the OTS by any tax authority that if raised with respect to any other period not so examined would result in a material deficiency for any other period not so examined, if upheld.  Any adjustment of income taxes of OTS made in any examination that is required to be reported to the appropriate national, state, local or foreign tax authorities has been so reported.

 

(e) There are no disputes pending with respect to, or claims or assessments asserted in writing for, any material amount of taxes upon Buyer, nor has OTS given or been requested in writing to give any currently effective waiver extending the statutory period of limitation applicable to any tax return for any period.

 

k) COMPLIANCE WITH APPLICABLE LAW AND REGULATORY MATTERS.

 

(f) OTS has complied with all applicable laws and regulations, and are not in violation of, and have not received any written notices of violation with respect to, any laws and regulations in connection with the conduct of their respective businesses or the ownership or operation of their respective businesses, assets and properties, except for such noncompliance and violations as would not, individually or in the aggregate, be material.

 

(g) OTS has all licenses, permits, certificates, franchises and other authorizations (collectively, the “Authorizations”) necessary for the ownership or use of its assets and properties and the conduct of its business, as currently conducted, and have complied with, and are not in violation of, any Authorization.  All such Authorizations are in full force and effect and there are no proceedings pending or, to the knowledge of OTS, threatened that seek the revocation, cancellation, suspension or adverse modification thereof.

 

l) There are no governmental orders applicable to OTS which have had a Material Adverse Effect on OTS.

 

               m)  MATERIAL CONTRACTS.  There are no material contracts of OTS currently in existence except as disclosed in a Schedule hereto.

 

n) ASSETS.  OTS owns, leases or has the right to use all the properties and assets necessary or currently used for the conduct of its businesses free and clear of all liens of any kind or character.  All items of equipment and other tangible assets owned by or leased to OTS and which are material to the operations and business of OTS are in good condition and repair (ordinary wear and tear excepted).  In the case of leased equipment and other tangible assets, OTS holds valid leasehold interests in such leased equipment and other tangible assets, free and clear of all liens of any kind or character.

 

o) Environmental Liability.  OTS is in compliance with all applicable environmental laws.  To the knowledge of OTS, there are no liabilities of OTS of any kind, whether accrued, contingent, absolute, determined, determinable or otherwise arising under or relating to any environmental law and, to the knowledge of OTS, there are no facts, conditions, situations or set of circumstances that could reasonably be expected to result in or be the basis for any such liability.

 

p) Insurance.  OTS has in full force and effect the insurance coverage with respect to its business.  There is no claim pending under any of such policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies.  All premiums due and payable under all such policies have been paid, and OTS is otherwise in compliance in all material respects with the terms of such policies.  OTS has no knowledge of any threatened termination of, or material premium increase with respect to, any of such policies.

 

q) INTELLECTUAL PROPERTY. OTS has no intellectual property except as disclosed in a Schedule to this Agreement.

 

r) INTERESTS OF OFFICERS AND DIRECTORS.  Except as disclosed herein, none of the officers or directors of OTS has any interest in any property, real or personal, tangible or intangible, including intellectual property, used in or developed by the business of OTS, or in any supplier, distributor or customer of OTS, or any other relationship, contract, agreement, arrangement or understanding with OTS, except  for the normal ownership interests of a shareholder and employee rights.

 

s) BROKER’S FEES.  OTS has not employed any broker or finder or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with the transactions contemplated by this Agreement.

 

t) CERTAIN BUSINESS PRACTICES.  No director, officer, agent or employee of OTS has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity on behalf of, or purportedly on behalf of, or for the business of OTS, or (ii) made any unlawful payments to officials or employees of governmental entities or to directors, officers or employees of foreign or domestic business enterprises.

 

2.2           REPRESENTATIONS AND WARRANTIES OF BUYER. The Buyer represents and warrants as follows:

     a)       CORPORATE ORGANIZATION AND GOOD STANDING.  Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, and is qualified to do business as a foreign corporation in each jurisdiction, if any, in which its property or business requires such qualification.

 

      b)              CORPORATE AUTHORITY.  Buyer has all requisite corporate power and authority to execute, deliver, perform and conclude the transactions contemplated by this Agreement and all other agreements and instruments related to this Agreement.

 

                      c)               NO VIOLATION.  Consummation of the acquisition contemplated herein will not constitute or result in a breach or default under any provision of any charter, bylaw, indenture, mortgage, lease, or agreement, or any order, judgment, decree, law, or regulation by which Buyer is bound.

 

     d)   REPORTING STATUS. Buyer is a fully reporting public company under Section 15(d) of the Securities and Exchange Act of 1934, and is current on its filing obligations under Section 15.  Buyer has filed all required periodic reports with the Securities & Exchange Commission (the "Commission") on Forms 10-Q and 10-K through the fiscal year ended August 31, 2010, and all required Form 8-K reports, all such reports are true and correct in all material respects and contain no misrepresentation of a material fact or omission of a material fact.  The common shares of Buyer are quoted  on the OTC Markets OTCqb under the symbol "SFML".  At the time of Closing, Buyer will be quoted on the FINRA OTC BB.  Buyer has not received and there are no o utstanding Commission Staff comment letters, stop orders or other regulatory actions, and no letters, comments, investigations or other actions pending or threatened by the Commission or by the Financial Industry Regulatory Authority (FINRA) against or relating to Buyer and there are no outstanding fees, fines or other amounts due to FINRA, the SEC, PCAOB or any other regulatory agency..

 

      e)    CAPITALIZATION.

 

(i) On the date of this Agreement, 500,000,000 shares of $0.001 par value common stock are authorized and 52,170,000 shares of common stock of Buyer are issued and outstanding, all of the shares of common stock issued are duly authorized, validly issued, fully paid and non-assessable and none were issued in violation of any preemptive rights.  There is no class of preferred  stock of Buyer. (ii) no shares of Buyer are reserved for issuance upon the exercise of outstanding options, warrants or other rights to purchase shares; and (iii) no shares of Buyer stock are held in the treasury of Buyer.  Except as set forth above, as of the date hereof, no shares or other voting securities of Buyer are issued, reserved for issuance or outstanding and no shares or other voting securities of Buyer shall be issued or become outstanding after the date hereof, save for those Shares to be issued pursuant to this Agreement.  There are no bonds, debentures, notes or other indebtedness or securities of Buyer that have the right to vote (or that are convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of Buyer may vote.  All shares of Buyer subject to issuance as described above shall, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, be duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights.

 

(ii) Buyer has no contract or other obligation to repurchase, redeem or otherwise acquire any shares of Buyer stock, or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person.  There are no outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable or convertible securities or other commitments or agreements of any character relating to the issued or unissued shares or other securities of Buyer.  None of the outstanding equity securities or other securities of Buyer was issued in violation of the Securities Act of 1933 or any other legal requirement.

 

u)	AUTHORITY; NO VIOLATION.

 

                                    (i) Buyer has full corporate power and authority to execute and deliver this Agreement and to comply with the terms hereof and consummate the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by Buyer.  Assuming due authorization, execution and delivery by the other Parties, this Agreement constitutes the valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as such enforcement may be limited by (i) the effect of bankruptcy, insolvency, reorganization, receivership, conservatorship, arrangement, moratorium o r other similar laws affecting or relating to the rights of creditors generally, or (ii) the rules governing the availability of specific performance, injunctive relief or other equitable remedies and general principles of equity, regardless of whether considered in a proceeding in equity or at law, or (iii) the specific terms and conditions of this Agreement.

 

(ii) Neither the execution and delivery of this Agreement by Buyer nor the consummation by Buyer of the transactions contemplated hereby, nor compliance by Buyer with any of the terms or provisions hereof, will (A) violate any provision of the Certificate of Registration or Constitution or the certificates of registration or constitution, or other charter or organizational documents, of Buyer or (B) violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to Buyer or any of its properties or assets, the violation of which would have a material adverse effect, or (C) violate, conflict with, result in a breach of any provision of or the loss of any material benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) unde r, result in the termination of any or all rights or benefits or a right of termination or cancellation under, accelerate the performance required by or rights or obligations under, increase any rate of interest payable or result in the creation of any lien upon any of the respective properties or assets of Buyer under, any authorization or of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement, contract, or other instrument or obligation to which is a party, or by which its properties, assets or business activities may be bound or affected.

 

v)	FINANCIAL STATEMENTS.

 

             (i) Buyer has furnished or made available to Seller, or will make available to Seller prior to the Closing Date, true and complete copies of the audited financial statements of Buyer for the past two fiscal years (the “Buyer Financial Statements”), and Buyer shall furnish or make available to Seller true and complete copies of Buyer's financial statements for all monthly periods ending after its most recent fiscal year up to and including the Closing Date.