Exhibit 10.1
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT") NOR REGISTERED UNDER ANY STATE
SECURITIES LAWS AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE
144, UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933
ACT THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
AGREEMENT FOR THE EXCHANGE OF COMMON STOCK
Agreement made this 16th day of July, 2008, by and between Domark
International, Inc., a Nevada corporation, OTCBB DOMK (the "Issuer"), and
Javaco, Inc. an Ohio corporation (the "Company"), and Xxxxxx Xxxxxxx, Xxxxx
Xxxxxx, the shareholders of Company, (collectively, the "Shareholders").
In consideration of the mutual promises, covenants, and representations
contained herein, and other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. TERMS.
Subject to the terms and conditions of this Agreement, the Issuer agrees:
i. that the total common shares issued and outstanding of the Issuer at
Closing shall be no Preferred Shares, and Seventeen Million shares of
common stock.
ii. that the Issuer at Closing shall issue to the Shareholders, Seven
Hundred Fifty Thousand shares (750,000) of common stock of Issuer,
$.0001 par value, in exchange for 100% of the issued and outstanding
shares of Company, such that Company shall become a wholly owned
subsidiary of the Issuer.
In addition to the consideration as set forth above, Shareholders will
receive common stock purchase warrants to purchase common stock of
Issuer according to the following schedule: an aggregate of 20,000
shares at a strike price of $3 per share expiring 12-31-08, an
aggregate of 20,000 shares at a strike price of $4.00 per share
expiring 12-31-09, and an aggregate of 40,000 shares at a strike price
of $5.00 per share expiring 12-31-10.
iii. that the Issuer requires the Company to.
a) Agree to the announcement of the transaction with the SEC on form
8K within 5 days of the Closing if applicable.
b) Execute any and all documentation to reflect the intent of the
parties that Company become a wholly owned subsidiary of ISSUER.
iv. that this transaction is subject to delivery by the Issuer of all
required documents pre and post closing to effectuate the transaction
v. that Issuer shall take all necessary corporate actions so that at
closing, all actions required of Issuer will be in accordance with the
Bylaws of Issuer.
2.REPRESENTATIONS OF ISSUER Issuer is in good standing under the laws of Nevada,
and has all necessary corporate powers to own properties and carry on a
business, and is duly qualified to do business and is in good standing in
Nevada. All actions taken by the incorporators, directors and shareholders of
Issuer have been valid and in accordance with the laws of the State of Nevada.
i. CAPITAL. The authorized capital stock of Issuer consists of 2,000,000,
shares of preferred stock, $.0001 par value of which no Shares are
issued and outstanding, and (200,000,000) shares of common stock,
$.0001 par value, of which Seventeen Million shares (17,000,000) are
issued and outstanding. All outstanding shares are fully paid and
non-assessable, free of pre-emptive rights. At the Closing, there will
be no outstanding subscriptions, options, rights, warrants,
convertible securities, or other agreements or commitments obligating
Issuer to issue or to transfer from treasury any additional shares of
its common capital stock, except as may be disclosed in the Issuer SEC
filings.
ii. SEC REPORTS. Issuer has filed all required forms, reports, statements,
schedules and other documents with the Securities and Exchange
Commission ("SEC") (collectively, the "Issuer SEC Reports"). The
financial statements, including all related notes and schedules,
contained in the Issuer SEC Reports (or incorporated by reference
therein) fairly present the consolidated financial position of Issuer
as at the respective dates thereof and the consolidated results of
operations and cash flows of Issuer for the periods indicated in
accordance with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except
for changes in accounting principles disclosed in the notes thereto)
and subject in the case of interim financial statements to normal
year-end adjustments and the absence of notes. For purposes of this
Agreement, the balance sheet of Issuer as of last filing date, is
referred to as the "Issuer Balance Sheet" and the date thereof is
referred to as the "Issuer Balance Sheet Date".
iii. ABSENCE OF CHANGES. Since the Issuer Balance Sheet Date, there has not
been any change in the financial condition or operations of Issuer,
except changes in the ordinary course of business, which changes have
not in the aggregate been materially adverse to Issuer.
iv. LIABILITIES. Issuer does not have any debt, liability, or obligation
of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that is not reflected on the Issuers
Balance Sheet. Issuer is not aware of any pending, threatened, or
asserted claims, lawsuits or contingencies involving Issuer or its
common stock. There is no material dispute of any kind between Issuer
and any third party, and no such dispute will exist at Closing not
fully disclosed to Company.
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v. ABILITY TO CARRY OUT OBLIGATIONS. Issuer has the right, power, and
authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by Issuer and
the performance by Issuer of its obligations hereunder will not cause,
constitute, or conflict with or result in (a) any breach or violation
or any of the provisions of or constitute a default under any license,
indenture, mortgage, charter, instrument, articles of incorporation,
bylaw, or other agreement or instrument to which Issuer is a party, or
by which it may be bound, nor will any consents or authorizations of
any party other than those hereto be required, (b) an event that would
cause Issuer to be liable to any party, or (c) an event that would
result in the creation or imposition of any lien, charge, encumbrance
on any asset of Issuer.
vi. FULL DISCLOSURE. None of the representations and warranties made by
the Issuer in this Agreement, contains any untrue statement of a
material fact, or omit any material fact the omission of which would
be misleading.
vii. CONTRACT AND LEASES. Issuer is currently carrying on its business and
is not a party to contracts, agreements, or lease other than those
items disclosed on the Issuer Balance Sheet. No person holds a power
of attorney from Issuer.
viii.COMPLIANCE WITH LAWS. To the best of its knowledge, Issuer has
complied with all federal, state, and local statutes, laws, and
regulations pertaining to Issuer. To the best of its knowledge, Issuer
has complied with all federal and state securities laws in connection
with the issuance, sale, and distribution of its securities.
ix. LITIGATION. Issuer is not (and has not been), except as may be
disclosed in the Issuers SEC filings, a party to any suit, action,
arbitration, or legal, administrative, or other proceeding, or pending
governmental investigation. To the best knowledge of the Issuer, there
is no basis for any such action or proceeding and no such action or
proceeding is threatened against Issuer, and Issuer is not subject to
or in default with respect to any order, writ, injunction, or decree
of any federal, state, local, or foreign court, department, agency, or
instrumentality. Issuer represents and warrants that there are no
outstanding judgments, lawsuits or material claims against the Issuer
as of the date of this agreement.
x. CONDUCT OF BUSINESS. From the Issuer Balance Sheet Date to the
Closing, Issuer has conducted its business in the normal course, and
has not (1) sold, pledged, or assigned any assets, other than in the
ordinary course of business; (2) amended its Certificate of
Incorporation or ByLaws; (3) declared dividends; (4) redeemed or sold
stock or other securities; (5) incurred any liabilities, other than in
the ordinary course of business; (6) acquired or disposed of any
assets, other than in the ordinary course of business; (7) entered
into any contract, other than in the ordinary course of business; (8)
guaranteed obligations of any third party; or (9) entered into any
other transaction, other than in the ordinary course of business.
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xi. DOCUMENTS. All minutes, consents, or other documents pertaining to
Issuer to be delivered at Closing shall be valid and in accordance
with the laws of the State of Nevada.
xii. TITLE. At the Closing all shares issued to Shareholders shall be
non-assessable; and (ii) free and clear of all liens, security
interests, pledges, charges, claims, encumbrances and restrictions of
any kind. There is no applicable local, state, or federal law, rule,
regulation, or decree which would, as a result of the issuance of the
Shares to Shareholders, impair, restrict, or delay Shareholders voting
rights with respect to the Issuer Shares.
xiii.BROKERS. Issuer has not retained any Broker or finder to which
compensation would be due in connection with this transaction.
3. REPRESENTATIONS AND WARRANTIES OF COMPANY. Company represents and warrants to
Issuer the following:
i. ORGANIZATION. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of Ohio, and it has all
necessary corporate powers to own properties and carry on a business,
and is duly qualified to do business and is in good standing in the
jurisdictions where qualification is required. All actions taken by
the incorporators, directors, and stockholders of Company have been
valid and in accordance with the laws of the State of Ohio.
ii. CAPITAL. The authorized capital stock of Company consists of 101
shares of common stock, of which 101 shares are issued and outstanding
(the "Shares"). The Shareholder is the sole record and beneficial
owner of the Shares and has sole management and dispositive power over
the Shares. The Shares were validly issued and are fully paid,
non-assessable and free of pre-emptive rights. At Closing, there will
be no outstanding subscriptions, options, rights, warrants,
convertible securities, or other agreements or commitments obligating
the Company to issue or to transfer from treasury any additional
shares of its capital stock.
iii. FINANCIAL STATEMENTS. Prior to Closing, Company shall deliver to
Issuer, audited financial statements acceptable to Issuer, for the
period ending 12-31-2006 and 12-31-2007 unaudited financial statements
for the quarters ended March 31, 2008 and June 30, 2008.
iv. ABSENCE OF CHANGES. Since December 31, 2007, there has not been any
change in the financial condition or operations of Company, except
changes in the ordinary course of business.
v. LIABILITIES. Company does not have any debt, liability, or obligation
of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that is not reflected on the
Financial Statements provided to Issuer at closing. Company is not
aware of any pending, threatened, or asserted claims, lawsuits or
contingencies involving its capital stock.
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vi. ABILITY TO CARRY OUT OBLIGATIONS. Company has the right, power, and
authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by Company and
the performance by Company of its obligations hereunder will not
cause, constitute, or conflict with or result in (a) any breach of
violation or any of the provisions of or constitute a default under
any license, indenture, mortgage, charter, instrument, articles of
incorporation, bylaw, or other agreement or instrument to which
Company is a party, or by which either of them may be bound, nor will
any consents or authorizations of any party other than those hereto be
required; (b) an event that would cause Company to be liable to any
party; or (c) an event that would result in the creation or imposition
of any lien, charge, encumbrance on any asset of Company.
vii. FULL DISCLOSURE. None of the representations and warranties made by
Company herein contains any untrue statement of a material fact, or
omits any material fact the omission of which would be misleading.
viii.COMPLIANCE WITH LAWS. Company has complied with, and is not in
violation of any federal, state, or local statute, law, and/or
regulation pertaining to them. Company has complied with all federal
and state securities laws in connection with the issuance, sale, and
distribution of its securities.
ix. LITIGATION. Company is not (and has never been) a party to any suit,
action, arbitration, or legal, administrative, or other proceeding, or
pending governmental investigation. To the best knowledge of Company,
there is no basis for any such action or proceeding and no such action
or proceeding is threatened against Company, and Company is not
subject to or in default with respect to any order, wit, injunction,
or decree of any federal, state, local, or foreign court, department,
agency, or instrumentality.
x. CONDUCT OF BUSINESS. From December 31, 2007, to the Closing Date,
Company has conducted its business in the normal course, and has not
(1) sold, pledged, or assigned any assets other than in the ordinary
course of business; (2) amended its Certificate of Incorporation or
Bylaws; (3) declared dividends; (4) redeemed or sold stock or other
securities except in the ordinary course of business; (5) incurred any
liabilities not in the ordinary course of business; (6) acquired or
disposed of any assets other than in the ordinary course of business;
(7) entered into any contract other than in the ordinary course of
business; (8) guaranteed obligations of any third party; or (9)
entered into any other transactions other than in the ordinary course
of business.
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xi. DOCUMENTS. All minutes, consents, or other documents pertaining to
Company and to be delivered by Company to Issuer, are true, complete,
and correct, and are valid and in accordance with applicable law.
xii. TITLE. The Shares to be delivered to Issuer will be, at closing, free
and clear of all liens, security interests, pledges, charges, claims,
encumbrances and restrictions of any kind. None of the Shares are
subject to any voting trust or agreement. No person holds or has the
right to receive any proxy or similar instrument with respect to the
Shares, except as provided in this Agreement. Company is not a party
to any agreement that offers or grants to any person the right to
purchase or acquire any of the Shares. There is no applicable local,
state, or federal law, rule, regulation, or decree which would, as a
result of the transfer of the Shares to Issuer, impair, restrict, or
delay Issuer's voting rights with respect to the Shares.
xiii.COUNSEL. Company and Shareholders represent and warrant that prior to
Closing, that they are represented by independent counsel or have had
the opportunity to retain independent counsel to represent them in
this transaction and that prior to Closing, Counsel for the Company
and Shareholders have not represented either the Issuer or Issuer's
stockholders in any manner whatsoever known to the Company.
xiv. BROKERS. Company and/or Shareholders have not retained any broker or
incurred any obligation to pay a commission to any third party.
xv. CONFLICTS OF INTERESTS OF ISSUER Company and Shareholder have reviewed
and understand the conflicts of interests, if any, between the Issuer
and its officers and directors as disclosed in the Issuers filings
with the SEC, if any.
4. INVESTMENT INTENT.
i. RESTRICTED SHARES. Shareholders understand that (A) the Issuer Shares
Shareholders are receiving from Issuer under this Agreement have not
been registered under the Securities Act of 1933, as amended ("the
Act") or the securities laws of any state, based upon an exemption
from such registration requirements pursuant to Section 4(2) of the
Act; (B) the Issuer Shares are and will be "restricted securities", as
said term is defined in Rule 144 of the Rules and Regulations
promulgated under the Act; and (C) the Issuer Shares may not be sold
or otherwise transferred unless exemptions from such registration
provisions are available with respect to said resale or transfer or
the shares have been registered under the Act.
ii. TRANSFERABILITY. Shareholder will not sell or otherwise transfer any
of the Issuer Shares, any interest therein unless and until (A) the
Issuer Shares shall have first been registered under the Act and/or
all applicable state securities laws; or (B) Shareholder shall have
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first delivered to Issuer a written opinion of counsel, which counsel
and opinion (in form and substance) shall be reasonably satisfactory
to Issuer, to the extent that the proposed sale or transfer is exempt
from the registration provisions of the Act and all applicable state
securities laws.
iii. INVESTMENT INTENT. Shareholder is acquiring the Issuer Shares for
Investment purposes only, without a view for resale or distribution
thereof.
iv. LEGEND. Shareholder understands that the certificates representing the
Issuer Shares will bear the following or similar legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD, TRANSFERRED, FURTHER PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF IN ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT FOR
SUCH SECURITIES UNDER SAID ACT OR (II) AN OPINION OF COMPANY COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
v. CLOSING. The Closing of the share exchange and the transactions
contemplated by this Agreement (the "Closing") shall be upon the
delivery of all documents required to be delivered by each party to
the other. In the event this transaction has not closed on or before
July 18, 2008 this agreement shall become null and void, unless
extended by mutual written consent of the parties. The Closing is
subject to the completion of due diligence by both parties to this
agreement. Execution of this definitive agreement will serve as
confirmation by the parties that the due diligence has been completed
by each party to their satisfaction.
5. DOCUMENTS TO BE DELIVERED AT CLOSING.
i. BY ISSUER:
(1) Resolution of the Board of Directors authorizing the issuance of a
certificate for the number of shares to be delivered to Shareholders
pursuant to Schedule 6(i)(1).
(2) Schedule for the number of Issuer shares registered in the name of
Shareholders pursuant to schedule 6(i)(1).
(3) Certificates for the number of Issuer shares registered in the name of
Xxxxxx Xxxxxxx and Xxxxx Xxxxxx pursuant to Schedule 6(i)(1).
(4) Such other resolutions of Issuer directors as may reasonably be
required by Company and Shareholders.
(5) Such other agreements relating to the transaction as may reasonably be
required by the Company or Shareholders.
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(6) Certificate of Good Standing from the State of Nevada.
(7) Copy of the draft 8K to be filed with the SEC.
(8) Copy of a draft press release for review and approval.
(9) An employment agreement between the Company and Xxxxxx Xxxxxxx on
terms acceptable to the Company and Xxxxxx Xxxxxxx.
(9) BY COMPANY AND SHAREHOLDERS:
(10) Delivery to the Issuer, certificates evidencing the Shares, and such
stock powers as are required in order to transfer to Issuer good and
marketable title to the Shares.
(11) Resolution by the Board of Directors approving the transaction.
(12) Copies of the basic corporate records, Articles of Incorporation and
Bylaws. Company shall retain all other records at its current
principal address.
(13) A certificate of good standing from the State of Ohio. Company shall
convert from an S corporation to a C corporation prior to closing and
shall provide Issuer with any and all documentation to Issuer as
requested to verify said conversion.
(14) Such other resolutions of Company and Shareholders and/or directors as
may reasonably be required by Issuer.
(15) Such other agreements relating to the transaction as may reasonably be
required by the Issuer.
7. ARBITRATION. Any controversy or claim arising out of, or relating to, this
Agreement, or the making, performance, or interpretation thereof, shall be
settled by arbitration in Orlando, Florida in accordance with the Commercial
Rules of the American Arbitration Association then existing. The arbitrator
assigned shall have authority and power to decide all arbitratible issues.
Judgment on the arbitration award may be entered in any court having
jurisdiction over the subject matter of the controversy. The prevailing party in
such claim or controversy shall be entitled to recover all costs and expenses of
such claim or controversy, including attorney's fees from the non-prevailing
party.
8. POST-CLOSING AGREEMENTS.
i. FURTHER ASSURANCES. The parties shall execute such further documents
and perform such further acts, as may be necessary to effect the
transactions contemplated hereby, on the terms herein contained and
otherwise to comply with the terms of this Agreement, provided, that,
except as contemplated by this Agreement, no party shall be required
to waive any right or incur an obligation in connection therewith.
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ii. INDEMNIFICATION OF DIRECTORS AND OFFICERS. For at least seven (7)
years after the Closing Date, Issuer shall (a) maintain in effect the
current provisions regarding the indemnification of officers and
directors contained in Issuer's Certificate of Incorporation and
Bylaws; provided, however, Issuer may adopt new indemnification
provisions no less favorable than the current provisions as to the
persons who served as directors and officers of Issuer prior to the
Closing Date; and (b) indemnify the persons who served as directors
and officers of Issuer prior to the Closing Date to the fullest extent
to which Issuer is permitted to indemnify such officers and directors
under its Certificate of Incorporation and ByLaws and applicable law
as in effect immediately prior to the Closing Date.
iii. PRESS RELEASE Issuer and Shareholders agree that no public
announcement of the specifics of this transaction or a disclosure of
the parties to this agreement will be made until this transaction has
closed and the public is notified by a press release or filing of an
8K report with the Securities and Exchange Commission or both. The
parties hereto agree that they will take steps to insure that this
provision is adhered to by Issuer and Company, Shareholders
principals, employees, agents and representatives.
9. MISCELLANEOUS.
i. CAPTIONS AND HEADINGS. The headings throughout this Agreement are for
convenience and reference only, and shall in no way be deemed to
define, limit, or add to the meaning of any provision of this
Agreement.
ii. NO ORAL CHANGE. This Agreement and any provision hereof may not be
waived, changed, modified, or discharged orally, but only by an
agreement in writing signed by the party against whom enforcement of
any waiver, change, modification, or discharge is sought.
iii. NON WAIVER. Except as otherwise expressly provided herein, no waiver
of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the
party against whom such waiver is charged; and (1) the failure of any
party to insist in any one or more cases upon the performance of any
of the provisions, covenants, or conditions of this Agreement or to
exercise any option herein contained shall not be construed as a
waiver or relinquishment for the future of any such provisions,
covenants, or conditions; (2) the acceptance of performance of any
thing required by this Agreement to be performed with knowledge of the
breach or failure of a covenant, condition, or provision hereof shall
not be deemed a waiver of such breach or failure; and (3) no waiver of
any party of one breach by another party shall be construed as a
waiver with respect to any subsequent breach.
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iv. TIME OF ESSENCE. Time is of the essence of this Agreement and of each
and every provision hereof.
v. ENTIRE AGREEMENT. This Agreement contains the entire Agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings.
vii. NOTICES. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have
been duly given on the third day after mailing if mailed to the party
to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed, and by fax, as
follows:
Issuer:
R. Xxxxxx Xxxx, CEO
Domark International, Inc.
0000 Xxxx Xxxxxxxx
#000 Xxxxxx, Xxxxxxx 00000
Company and Shareholders:
Xxxxxx Xxxxxxx, President
Javaco, Inc.
With a copy to:
Xxxxxx Xxxx
Attorney at Law
0000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Fax number 000-000-0000
vi. COUNTERPARTS. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(END OF PAGE-Signatures on the next page)
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IN WITNESS WHEREOF, the undersigned has executed this Agreement this 14th
day of July, 2008.
Domark International, Inc.
Javaco, Inc.
By: /s/ Xxxxxx Xxxxxxx By: /s/ R. Xxxxxx Xxxx
------------------------------ ------------------------------
Its President Its CEO
SHAREHOLDERS:
Xxxxxx Xxxxxxx
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Schedule 6(i)(1)
