Exhibit 10.28
SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement (the "AGREEMENT") dated as of November 16,
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2006 is by and between Deer Valley Corporation, a Florida corporation (the
"COMPANY"), having a principal place of business at 0000 Xxxxxxxxxx Xxxx., Xxxxx
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000, Xxxxx, XX 00000 and Vicis Capital Master Fund (the "SHAREHOLDER") having an
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address at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
WHEREAS, the Shareholder is the holder of 750,000 shares of Common Stock,
par value $0.01 per share, of the Company (the "COMMON STOCK");
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WHEREAS, Shareholder wishes to exchange the Common Stock for 750,000 shares
of the Company's Series E Convertible Preferred Stock, $.01 Par Value ("SERIES E
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PREFERRED STOCK"), and a Series F Common Stock Purchase Warrants (the "SERIES F
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WARRANTS") in the form of EXHIBIT "A" attached hereto attached hereto.
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NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE 1
THE EXCHANGE
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Section 1.1 Transfer and Exchange. Subject to and in accordance with the
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terms and conditions of this Agreement, at the Closing (as hereinafter defined),
(a) the Shareholder shall tender and deliver the to the Company valid and
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marketable title to the Common Stock, free and clear of all liabilities,
obligations, claims, liens and encumbrances (except for those imposed by
applicable securities laws), by delivering to the Company one or more stock
certificates representing the Common Stock, duly endorsed in blank or
accompanied by one or more stock powers duly endorsed in blank, and in form for
transfer satisfactory to counsel for the Company, and (b) the Company shall
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issue to the Shareholder 750,000 shares of Series E Preferred Stock and the
Series F Warrants, duly authorized for issuance, and free and clear of all
liens, encumberances and restrictions of any kind (except for those imposed by
applicable securities laws).
Section 1.2 Closing. The closing of the transactions described in this
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Agreement shall take place at the offices of Xxxx Xxxx, P.A. 000 X. Xxxxxxxx
Xxxxxx, Xxxxx, Xxxxxxx 00000 at 9:00 a.m., Eastern Time, on November 16, 2006,
or on such other business day, and at such location, as may be agreed to by the
Company and the Shareholder (such closing, the "Closing" and such date and time,
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the "Closing Date").
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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Section 2.1 Organization and Authority. The Company is a corporation duly
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organized, validly existing, and in good standing under the laws of the State of
Florida. The Company has all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. All necessary action, corporate or otherwise, required to have been
taken by or on behalf of the Company by applicable law, its charter documents or
otherwise to authorize (a) the approval, execution and delivery on behalf of the
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Company of this Agreement and the agreements, certificates and other documents
contemplated hereby, including, without limitation, the issuance, sale and
delivery of the Series E Preferred Stock and the Series F Warrants and (b) the
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performance by the Company of its obligations under this Agreement, including,
without limitation, the issuance, sale and delivery of the Series E Preferred
Stock and the Series F Warrants, and the consummation of the transactions
contemplated by this Agreement hereof has been taken. This Agreement issued at
the Closing constitute valid and binding agreements of the Company, enforceable
against the Company in accordance with their respective terms, except (x) as the
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same may be limited by applicable bankruptcy, insolvency, moratorium or similar
laws of general application relating to or affecting creditors' rights and (y)
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for the limitations imposed by general principles of equity.
Section 2.2 The Exchanged Shares. Upon delivery to the Shareholder at the
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Closing of certificates representing the Series E Preferred Stock and Series F
Warrants, and upon receipt by the Company of the Common Stock in exchange
therefor, (a) good and valid title to the Series E Preferred Stock and Series F
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Warrants will pass to the Shareholder, free and clear of all liens and
restrictions of any kind (except for those imposed by applicable securities
laws) and (b) the Series E Preferred Stock and Series F Warrants will be duly
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authorized and validly issued, fully paid and nonassessable.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THESHAREHOLDER
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Section 3.1 Investment Representation. The Series E Preferred Stock and
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Series F Warrants are being acquired for the Shareholder's own account, for
investment and not with a view to, or for resale in connection with, a
distribution or public offering thereof within the meaning of the Securities Act
of 1933, as amended (the "SECURITIES ACT") or applicable state securities
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laws.
Section 3.2 Transfer Restrictions under Securities Laws. The Shareholder
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understands that none of the common stock issuable upon conversion or exercise
of the Series E Preferred Stock or Series F Warrants have been registered under
the Securities Act, or qualified under any state securities laws. The
Shareholder understands that the resale of the Series E Preferred Stock and
Series F Warrants or common stock issuable upon exercise of the Series E
Preferred Stock or Series F Warrants may be restricted indefinitely unless a
subsequent disposition thereof is registered under the Securities Act and
registered under any state securities law or is exempt from such registration.
Certificates representing the Series E Preferred Stock and Series F Warrants
shall be endorsed with the following legend, and any other legends required by
applicable securities laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND ARE "RESTRICTED SECURITIES" AS DEFINED IN
RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT
BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT
(I) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SHARES UNDER THE ACT, OR (II) IN COMPLIANCE WITH
RULE 144 OR (III) OTHERWISE PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS UNDER THE ACT.
The Company may instruct its transfer agent not to register the transfer of the
Series E Preferred Stock or Series F Warrants, unless the conditions specified
in the foregoing legend are satisfied.
Section 3.3 Accredited Investor Status. The Shareholder is an "Accredited
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Investor" as that term is defined in Rule 501 of Regulation D promulgated under
the Securities Act. The Shareholder is able to bear the economic risk of
acquiring the Series E Preferred Stock and Series F Warrants pursuant to the
terms of this Agreement, including a complete loss of the Shareholder's
investment in the Series E Preferred Stock and Series F Warrants.
Section 3.4 Authority. The Shareholder has all requisite power and
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authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. All necessary action, corporate or otherwise,
required to have been taken by or on behalf of the Shareholder by applicable
law, its charter documents or otherwise to authorize (a) the approval, execution
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and delivery on behalf of it of this Agreement and (b) the performance by it of
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obligations under this Agreement and the agreements, certificates and other
documents contemplated hereby, and the consummation of the transactions
contemplated hereby and thereby has been taken. This Agreement constitutes a
valid and binding agreement of the Shareholder, enforceable against it in
accordance with its terms.
Section 3.5 No Conflicts. Neither the execution and delivery of this
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Agreement nor the consummation and performance of the transactions contemplated
hereby to be performed or satisfied on the part of the Shareholder is prevented,
limited by, conflicts with, or will result in, a breach of the terms,
conditions, or provisions of any agreement to which the Shareholder is a party
or any law, rule, regulation, or order of any court or government agency.
Section 3.6 Good Title to Common Stock. The Shareholder is the lawful owner
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of the Common Stock and the Shareholder has good title thereto, free and clear
of all liens, claims and encumbrances of any kind.
Regulation M. Without any specific knowledge of the activities of the
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Company which may impact such analysis, to the best of its knowledge and
believe, neither the Shareholder nor any "affiliated purchaser" (as such term is
defined in Regulation M under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT")) is on the date hereof engaged in a distribution, as such
term is used in Regulation M, of any securities of the Company.
ARTICLE 4
MISCELLANEOUS
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Section 4.1 Binding Effect; Benefit. This Agreement shall be binding upon
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and shall inure to the benefit of the parties hereto and their respective
permitted successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, express or implied, is
intended to confer on any person other than the parties hereto or their
respective permitted successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section 4.2 Entire Agreement. This Agreement, the exhibits and schedules
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hereto and any documents delivered by the parties in connection herewith
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings (oral and
written) among the parties with respect thereto.
Section 4.3 Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Florida without regard to
its rules of conflict of laws. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of Florida and of the United States of America located in the State
of Florida (the "Florida Courts") for any litigation arising out of or relating
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to this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the Florida Courts
and agrees not to plead or claim that such litigation brought in any Florida
Court has been brought in an inconvenient forum.
Section 4.4 Remedies; Specific Performance. The Company and the Shareholder
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may take all steps necessary or advisable to protect and enforce their rights
hereunder, whether by action, suit or proceeding at law or in equity, for the
specific performance of any covenant, condition or agreement contained herein,
or in aid of the execution of any power herein granted, or for the enforcement
of any other appropriate legal or equitable remedy or otherwise as the Company
or the Shareholder shall deem necessary or advisable. No right or remedy
hereunder shall be exclusive of any other right, power or remedy, but shall be
cumulative and in addition to any other right or remedy hereunder or now or
hereafter existing by law or in equity and the exercise by a party hereto of any
one or more of such rights, powers or remedies shall not preclude the
simultaneous exercise of any or all of such other rights, powers or remedies.
Any failure to insist upon the strict performance of any provision hereof or to
exercise any option, right, power or remedy contained herein shall not
constitute a waiver or relinquishment thereof for the future.
Section 4.5 Counterparts. This Agreement may be executed by the parties
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hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
Section 4.6 Headings. Headings of the Sections of this Agreement are for
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the convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
Section 4.7 Interpretation. In this Agreement, unless the context otherwise
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requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa.
Section 4.8 Incorporation of Exhibits and Schedules. All exhibits and
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schedules hereto are hereby incorporated herein and made a part hereof for all
purposes as if fully set forth herein.
Section 4.9 Severability. Any term or provision of this Agreement which is
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invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement.
Section 4.10 Attorneys' Fees and Court Actions. If a legal action is
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initiated by any party to this Agreement against another, arising out of or
relating to the alleged performance or non-performance of any right or
obligation established hereunder, or any dispute concerning the same, any and
all fees, costs and expenses reasonably incurred by each prevailing party or its
legal counsel in investigating, preparing for, prosecuting, defending against,
or providing evidence, producing documents or taking any other action in respect
of, such action shall be the joint and several obligation of, and shall be paid
or reimbursed by, the nonprevailing party.
IN WITNESS WHEREOF, the Company and Shareholder have caused this Agreement
to be executed and delivered by their respective officers, thereunto duly
authorized.
DEER VALLEY CORPORATION
By:
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Xxxxxxx X. Xxxxxxx, President and CEO
VICIS CAPITAL MASTER FUND
By: Vicis Capital, LLC
By:
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Xxxx Xxxxxxxx, Managing Director
