EXCHANGE AGREEMENT
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This EXCHANGE AGREEMENT made and entered into this 19th day of May
2004, by and between the stockholders (hereinafter Stockholders) of LYNDOCH
ESTATE WINES PTY LTD, an Australian corporation, (hereinafter Australian), with
its principal place of business at Xxxxx 0, 00 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx
Xxxxxxxxx 0000 and LANS FIDELITY CORP., a Nevada corporation, (hereinafter
"Corp"), with its principal place of business at 0000 X Xx Xxxxx Xxxx, Xxxxx
000, Xxxxxxxxx, Xxxxxxxxxx.00000.
WITNESSETH:
WHEREAS, Corp is a public corporation with 35 registered stockholders
owning of record or beneficially 1,535,000 shares of the corporation's common
stock, par value $0.001 per share; and
WHEREAS, Shareholders desire to obtain equity and management control of
Corp through the exchange for all of the issued and outstanding stock in
Australian for 4,500,000 of Corp common shares so that Australian will become a
wholly owned subsidiary of Corp.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises, agreements and covenants herein contained, the parties hereto hereby
agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
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Shareholders hereby represents and warrants to Corp that:
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(a) Australian, on the date hereof and at the Closing date
hereinafter provided, owns free and clear of all liens, charges and
encumbrances, all of those assets appearing on the audited financial statements
for the year ended June 30, 2003 which are marked Exhibit ", and which are
attached hereto and Incorporated herein by this reference.
(b) Australian has good and marketable title to all of the
property and assets, Set forth in Exhibit ".
(c) Australian has no obligations, liabilities or commitments,
contingent or otherwise, of a material nature which are not provided for with
respect to those assets listed on Exhibit A.
(d) Since June 30, 2003, Australian has had no change in the
nature of the business of Australian, nor in the financial condition of the
assets being conveyed, other than changes in the usual and ordinary course of
business, none of which has been materially adverse and Australian has not
incurred any obligations or liabilities or made any commitments other than in
the usual and ordinary course of business.
(e) Australian is not a defendant, nor a plaintiff against
whom a claim has been asserted, in any litigation, pending or threatened, nor
has any material claim or investigation been made or asserted against
Australian, nor a plaintiff against whom a counterclaim has been asserted, in
any litigation, pending or threatened, nor are there any proceedings threatened
or pending before any federal, state or municipal government, or any department,
board, body or agency thereof, involving Australian.
(f) Australian is not in default in any material respect under
any agreement to which it is a party, nor in the payment of any of its
obligations.
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2. REPRESENTATIONS AND WARRANTIES OF CORP
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Corp represents and warrants to Shareholders that:
(a) Corp is a corporation duly organized and validly existing
and in good standing under the laws of the State of Nevada and is not qualified
to transact business in any other state. Corp has the corporate power to carry
on its business as now being conducted.
(b) Corp has an authorized capitalization of 100,000,000
shares, of which there are issued and outstanding 1,535,000 shares of common
stock, par value $0.001 per share, owned of record or beneficially by no less
than 35 registered shareholders. There are 10,000,000 shares of preferred stock
authorized, none of which are issued or outstanding. There are 1,000,000 options
outstanding, each option having the right to purchase one common share under
terms detailed in Exhibit D. There is no other authorized or outstanding equity
or debt securities of Corp of any class, kind or character, and there are no
other outstanding subscriptions, options, warrants or other agreements or
commitments obligating Corp to issue any additional shares of its capital stock
of any class, or any options or rights with respect thereto, or any securities
convertible into any shares of stock of any class.
(c) Certified copies of the Articles of Incorporation and
By-Laws of Corp, which have been heretofore furnished by Corp, are true and
correct copies, including all amendments thereto.
(d) Corp has delivered to Shareholders its unaudited financial
statements which are attached hereto as Exhibit B for the periods ended December
31, 2003 and 2002. Such financial statements reflect zero liabilities and zero
assets. The financial statements of Corp accurately set forth the financial
condition of Corp as of the dates specified, prepared in conformity with
generally accepted accounting principles consistently applied.
(e) Corp has good and marketable title to its entire property
and assets subject to no mortgage, pledge, lien or other encumbrance except as
disclosed in the financial statements attached as Exhibit B.
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(f) As of the date of the financial statements, Corp has no
obligations, liabilities, or commitments, contingent or otherwise, of a material
nature, except as set forth in the financial statements attached as Exhibit B.
(g) Since the date of the aforementioned financial statements,
there has been no change in the nature of the business of Corp, nor in its
financial condition or property, other than changes in the usual and ordinary
course of business, none of which has been materially adverse, and Corp has
incurred no obligations or liabilities or made any commitments other than in the
usual and ordinary course of business, none of which singularly or collectively
are material, except as disclosed in Exhibit B.
(h) Corp is not a party to any employment contract with any
officer, director, or stockholder, or to any lease, agreement or other
commitment, nor to any pension, insurance, profit sharing, stock purchase or
bonus plan, except as disclosed in Exhibit B.
(i) Corp is not a defendant, nor a plaintiff against whom a
counterclaim has been asserted, in any litigation, pending or threatened, nor
has any claim or investigation been made or asserted against Corp, nor are there
any proceedings threatened or pending before any federal, state or municipal
government, or any department, board, body or agency thereof, involving Corp,
except as disclosed in Exhibit B.
(j) Corp is not in default under any agreement to which it is
a party, nor in the payment of any of its obligations.
(k) Between the date of the financial statements and the
closing, Corp will not have (i) paid or declared any dividends on or made any
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distributions in respect of, or issued, purchased or redeemed, any of the
outstanding shares of its Corp stock, or issued any additional shares of its
Corp stock, or (ii) made or authorized any changes in its Articles of
Incorporation, or in any amendment thereto, or in its By-Laws, or (iii) made any
commitments or disbursements or incurred any obligations or liabilities which
are not in the usual and ordinary course of business, or (iv) mortgaged or
pledged or subjected to any lien, charge or other encumbrance any of its assets,
tangible or intangible, or (v) sold, leased, or transferred or contracted to
sell, lease or transfer any assets, tangible or intangible, or entered into any
other transactions, or (vi) made any loan or advance to any stockholder of Corp,
or to any other person, firm, or corporation, or (vii) made any change in any
existing employment agreement or increased the compensation payable or made any
arrangement for the payment of any bonus to any officer, director, employee or
agent, except as set forth in Exhibit B hereof.
(l) This Exchange Agreement has been duly executed by Corp, by
its President who has been duly authorized to do so by the Board of Directors,
and the execution and performance of this Exchange Agreement will not violate,
or result in a breach of, or constitute a default in its Articles of
Incorporation, any agreement, instrument, judgment, order or decree to which
Corp is a party, or to which Corp or any of its properties are subject, nor will
such execution and performance constitute a violation of or conflict with any
fiduciary duty to which Corp is subject, to the best of Corp knowledge.
(m) Corp has timely filed or timely filed necessary extensions
with the appropriate governmental authorities, all tax and other returns
required to be filed by it. Such returns are true and complete and all taxes
shown thereon to be due have been paid.
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(n) Corp is not in default with respect to any order, writ,
injunction, or decree of any court of federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
and there are no actions, suits, claims, proceedings or investigations pending,
or to the knowledge of Corp, threatened against or affecting Corp, at law or in
equity, or before or by any federal, state, municipal, or other governmental
court, department, commission, board, bureau, agency or instrumentality,
domestic or foreign. Corp has complied in all material respects with all laws,
regulations and orders applicable to its business.
(o) No representation or warranty in this section, nor
statement in any document, certificate or schedule furnished or to be furnished
pursuant to this Exchange Agreement by Corp, or in connection with the
transactions contemplated hereby, contains or contained any untrue statement of
a material fact, nor does or will omit to state a material fact necessary to
make any statement of fact contained herein or therein not misleading.
3. DATE AND TIME OF CLOSING The Closing shall be held on Friday, May
28, 2004, at 10:00 a.m. local time, at 0000 X Xx Xxxxx Xxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxxxx, or at such other time and place as may be mutually agreed
upon between the parties in writing.
4. EXCHANGE OF SHARES OF STOCK The mode of carrying into effect the
exchange of stock provided for in this Exchange Agreement shall be as follows:
(a) Corp shall call a Special Meeting of the Board of
Directors to be held on May 21, 2004, at 10:00 a.m. local time, at 1026 W El
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Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxx 00000, for the following purposes:
(i) Ratify, approve and carry out the terms and conditions contained in this
Exchange Agreement; (ii) to effect the delivery of 4,500,000 shares of Corp
common stock and 1,000,000 shares of preferred Series "A" stock, in exchange for
the conveyance of all of the outstanding capital stock of Australian being
conveyed to Corp, which shall thereafter own the assets subject to the
liabilities listed on Exhibit A attached hereto. (iii) To elect Xxxx Xxxx as the
Director to comprise the entire Board.
5. FINDERS FEES Both Corp and Shareholders agree that each party
represents to the other that it will pay any broker or agent, engaged by it for
the payment of any finders fees, and that neither Corp nor Australian shall be
liable for any finders fee of the other party.
6. NOTICES Any notice under this Exchange Agreement shall be deemed to
have been sufficiently given if sent by registered or certified mail, postage
prepaid, or other sufficient form of delivery addressed as follows:
If to Corp, to:
Xxxxxxx Xxxxxxxxx
0000 X Xx Xxxxx Xxxx,
Xxxxx 000, Xxxxxxxxx,
Xxxxxxxxxx.00000
If to Shareholders, to:
Xxxx Xxxx
Xxxxx 0, 00 Xxxxxxxxx Xxxxxx,
Xxxxxxxx,
Xxxxx Xxxxxxxxx 0000
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or to any other address or addresses which may hereafter be designated by the
parties.
7. FURTHER ASSURANCES Each party hereto hereby agrees to take any
further action necessary or desirable to carry out the provisions of this
Exchange Agreement.
8. COUNTERPARTS This Exchange Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be an original,
but all such counterparts shall constitute one and the same instrument.
9. MERGER CLAUSE This Exchange Agreement supersedes all prior
agreements and understandings between the parties and may not be changed or
terminated orally, and no attempted change, termination or waiver of any of the
provisions hereof shall be binding unless in writing and signed by the parties
hereto.
10. GOVERNING LAW This Exchange Agreement shall be governed by and
construed according to the laws of the State of Nevada.
IN WITNESS WHEREOF, the parties hereto have caused this Exchange
Agreement to be executed the day and year first above written.
LANS FIDELITY CORP
By_____________________________
Xxxxxxx Xxxxxxxxx
President
(Hereunto duly authorized)
Selling Shareholders
By_____________________________
Xxxx Xxxx
Holding all of the shares in Lyndoch Estate
Wines Pty Ltd
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Exhibit C
"Corp" Identification of Liabilities, Contingencies and Commitments at closing.
1. Obligations, Liabilities or commitments: None except as noted in 1(b)
2. Employment contracts with directors, officers or employees: None
3. Litigation pending or threatened: None
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EXHIBIT D
Option Agreements
Company hereby grant to Optionees the right to purchase all or any part of an
aggregate of 1,000,000 shares of Common Stock of the Company (the "Option
Shares") at an exercise price (the "Exercise Price") per share equal to the
greater of: (a) a 40% discount from the average closing bid price of the Common
Stock on a public exchange during the ten (10) trading days immediately prior to
exercise of the Option, or (b) $0.50 per share.
Exercisability of Option. The Option Shares subject to the Option shall become
purchasable by the Optionee, in whole or in part, at any time prior to the
expiration of the Option, which expiration shall occur on December 31, 2005 (the
"Expiration Date"). On the Expiration Date, this Option and all rights shall
expire and any Option Shares not purchased on or before the Expiration Date may
not thereafter be purchased hereunder.
3. Method of Exercise of Option; Payment of Exercise Price. The Option
shall be exercisable at any time and from time to time, prior to the Expiration
Date, by surrender to the Company of Notice, which shall state the Optionee's
election to exercise this Option and the number of Option Shares in respect of
which it is being exercised, and shall be accompanied by a check in the amount
of the Exercise Price. Within a reasonable time following payment of the full
Exercise Price by Optionee, the Company shall deliver to the Optionee a
certificate or certificates representing those shares. A certificate or
certificates for the shares as to which this Option shall have been so exercised
shall be registered in the name of the Optionee and shall be delivered to
Optionee at the address of Optionee specified in the Notice or at such other
address as Optionee shall set forth in its Notice.
4. Non-Assignability of Option. The Option may be exercised only by the
Optionee and shall not be sold, transferred, assigned, pledged, hypothecated or
otherwise disposed of in any way (whether by operation of law or otherwise)
without the Company's prior written consent except that Optionee may, solely in
connection with a transfer of all or substantially all of its assets to an
entity or entities controlled by Optionee ("Affiliate"), sell, transfer or
assign all its interest in this Agreement to such Affiliate but only after
giving the Company at least ten (10) days notice in writing of the proposed
sale, transfer or assignment. Any buyer, transferee, or assignee of this Option
shall be bound by and subject to each and every provision of this Agreement and
shall not sell, transfer, assign, pledge, hypothecate or otherwise dispose of
the Option in any way (whether by operation of law or otherwise).
5. Limitation of Optionee's Rights. Except as otherwise provided in Section
6 below, Optionee shall not have any of the rights or privileges of a
shareholder of the Company in respect of any Option Shares issuable upon
exercise of this Option unless and until those shares have been paid for in full
and upon such payment in full Optionee shall be deemed to be the record
Optionee.
6. Anti-Dilution Provisions. If the Company shall pay a dividend in shares
of its Common Stock, subdivide (split) its outstanding shares of Common Stock,
combine (reverse split) its outstanding shares of Common Stock, issue by
reclassification of its shares of Common Stock any shares or other securities of
the Company, or distribute to holders of its Common Stock any securities of the
Company or of another entity, the number of shares of Common Stock or other
securities the Optionee is entitled to purchase pursuant to this Option
immediately prior thereto shall be adjusted so that the Optionee shall be
entitled to receive upon exercise the number of shares of Common Stock or other
securities which it would have owned or would have been entitled to receive
after the happening of any of the events described above had this Option been
exercised immediately prior to the happening of such event, and the Exercise
Price shall be correspondingly adjusted; provided, however, that no adjustment
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in the number of shares and/or the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
such number and/or price; and provided further, however, that any adjustments
which by reason of this Section 6 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. An adjustment made
pursuant to this Section 6 shall become effective immediately after the record
date in the case of the stock dividend or other distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or reclassification. The Optionee shall be entitled to participate
in any subscription or other rights offering made to holders of the Company's
Common Stock to the extent it would have been entitled had this Option been
exercised in the full number of shares as to which this Option remains
unexercised immediately prior to the record date for such rights offering. If
the Company is consolidated or merged with or into another Company or if all or
substantially all of its assets are conveyed to another Company, this Option
shall thereafter be exercisable for the purchase of the kind and number of
shares of stock or other securities or property, if any, receivable upon such
consolidation, merger or conveyance by an Optionee of the number of shares of
Common Stock of the Company which could have been purchased on the exercise of
this Option immediately prior to such consolidation, merger or conveyance; and,
in any such case, appropriate adjustment (as determined by the Board of
Directors) shall be made in the application of the provisions herein set forth
with respect to the rights and interests thereafter of the Optionee to the end
that the provisions set forth herein (Including provisions with respect to
changes in and other adjustments of the number of shares of Common Stock the
Optionee is entitled to purchase) shall thereafter be applicable, as nearly as
possible, in relation to any shares of Common Stock or other securities or other
property thereafter deliverable upon the exercise of this Option. Upon any
adjustment of the number of shares of Common Stock or other securities the
Optionee is entitled to purchase, and of any change in Exercise Price, then in
each such case the Company shall give written notice thereof to the then
registered holder of this Option at the address of such Optionee as shown on the
books of the Company, which notice shall state such change and set forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. Each such notice shall be accompanied by a statement of
the firm of independent certified public accountants retained to audit the
financial statements of the Company to the effect that such firm concurs in the
Company's calculation of the change.
7. Piggyback Registration Rights. If the Company at any time from the date
of the issuance of the Option through the Expiration Date, proposes to register
any of its securities under the Securities Act for sale to the public, whether
for its own account or for the account of other security holders or both (except
with respect to registration statements on Forms X-0, X-0 and any successor
forms thereto), each such time it will give written notice to such effect to the
Optionee at least 30 days prior to such filing. Upon the written request of the
Optionee received by the Company within 20 days after the giving of any such
notice by the Company to register any of shares of Common Stock, the Company
will cause the shares of Common Stock as to which registration shall have been
so requested to be Included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent required to
permit the sale or other disposition by the Optionee of such shares of Common
Stock so registered. Notwithstanding the foregoing, in the event that any
registration pursuant to this Section 7 shall be, in whole or in part, an
underwritten public offering of Common Stock, the number of shares of Common
Stock to be included in such an underwriting may be reduced (pro rata among the
requesting Optionees) and the other selling stockholders (based upon the number
of shares of Common Stock requested to be registered by them) if and to the
extent that the managing underwriter shall be of the good faith opinion that
such inclusion would adversely affect the success of such an underwriting,
provided, that such number of shares of Common Stock shall not be reduced if any
shares of Common Stock are to be included in such underwriting for the account
of any person other than the Company or requesting Optionees of shares of Common
Stock. In the event of such a reduction, the Company agrees to file a
registration statement for the resale of the shares underlying this Option not
included in such underwritten offering within ninety (90) days of the date that
the underwritten offering is declared effective by the Securities and Exchange
Commission. Notwithstanding the foregoing provisions, the Company may withdraw
any registration statement referred to in this Section 7 without thereby
incurring any liability to the Optionees of shares of Common Stock.
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