EXHIBIT 10
Reorganization Agreement
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 LAW, AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN
RULE 144 UNDER THE 1933 ACT'. title 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 24th day of August, 1998, by and between GCST
Corp., a Florida corporation, (the :'ISSUER") and the shareholders of Secure
America Corporation (tile "SHAREHOLDERS"), which SHAREHOLDERS own all of the
issued and outstanding shares of Secure America Corporation. a California
corporation("SAI")
In consideration of the mutual promises, covenants, and representations
contained herein, and other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. EXCHANGE OF SECURITIES. Subject to the terms and conditions of this
Agreement, the ISSUER agrees to issue to SHAREHOLDERS, 5,850.000 shares of the
common stock of ISSUER. $0.001 par value (the "Shares"), in exchange for 100% of
tile issued and outstanding shares of the SAI, such that SAI shall become a
wholly owned subsidiary), of the ISSUER.
2. REPRESENTATIONS AND WARRANTIES. ISSUER represents and warrants to
SHAREHOLDERS and SAI the following:
i. Organization. ISSUER is a corporation duly organized,
validly existing, and in good standing under the laws of Florida, 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 Florida All actions
taken by the Incorporators, directors and shareholders of ISSUER have been valid
and in accordance with the laws of the State of Florida.
ii. Capital. The authorized capital stock of ISSUER consists
of 50,000.000 shares of common stock, $0.001 par value, of which 1,000.000 are
issued and outstanding. 150,000 of the outstanding shares were fully paid and
non assessable, free of liens, encumbrances, options, restrictions and legal or
equitable fights of others not a part), to this Agreement. At 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 capital stock. 850,000 of
the outstanding shares of ISSUER are subject to a stock restriction pending
Secure America Corporation taking delivery of 504-b funds from proposed
offering. All of the shareholders of ISSUER have valid title to such shares and
acquired their shares in a lawful transaction and in accordance with the laws of
Florida. The Selling Shareholder and the Issuer hereby shall, upon closing,
retire and cancel 350,000 shares of the Selling Shareholder's common stock of
the Company.
iii. Financial Statements. Annexed hereto as Exhibit B to this
Agreement are the audited financial statements of ISSUER as of May 20, 1998. The
financial statements have been prepared in accordance with generally accepted
accounting principles consistently followed by ISSUER throughout the periods
indicated and fairly present the financial position of ISSUER as of tile date of
the balance sheet in the financial statements, and the results of its operations
for tile periods indicated.
iv. Absence of Changes. Since the date of the financial
statements, 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.
v. Assets and Liabilities. ISSUER does not have any debt,
liabilities, 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' financial statement. ISSUER is not aware of any pending, threatened or
asserted claims, lawsuits or contingencies involving ISSUER or its common stock.
there is no dispute of any kind between ISSUER and any third party, and no such
dispute will exist at the closing of this Agreement. ISSUER has no assets. At
closing, ISSUER will be free from any' and all liabilities, liens, claims and/or
commitments and will continue to have no asserts.
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vi. 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 an), license, indenture, mortgage,
charter, instrument, articles of incorporation, bylaws, or other agreement or
instrument to which ISSUER or its shareholders are a party, or by which tine;,'
may be bound, nor will any consents or authorizations of any part).' 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 thc creation or imposition or
any lien charge or encumbrance, nee on any asset of ISSUER or upon the
securities of ISSUER to be acquired by SHAREHOLDERS.
vii. Full Disclosure. None of representations and warranties
made by the ISSUER, or in any certificate or memorandum furnished or to bc
furnished by the ISSUER. contains or will contain any untrue statement of a
material fact, or omit an) material fact the omission of which would be
misleading.
viii. Contract and Leases. ISSUER is not currently carrying on
any business and is not a party to any contract, agreement or lease. No person
holds a power of attorney from ISSUER.
ix Compliance with Laws. ISSUER has complied with. mid is not
in violation of any federal, state, or local statute, law and/or regulation
pertaining to ISSUER. ISSUER has complied with all federal and state securities
laws in connection with the issuance, sale and distribution of its securities.
x. OTC Bulletin Board Listing . The Company is currently
listed on the OTC Electronic Bulletin Board with the following trading symbol'
GCCT
xi. Litigation. ISSUER is not (and has not been) 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 an5' 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, wit, injunction, or decree of any federal, slate, local,
or foreign court, department, agency, or instrumentality.
xii. Conduct of Business. Prior to the closing, ISSUER shall
conduct its business in the normal course, and shall not (1) sell pledge, or
assign any assets (2) amend its Articles of Incorporation or Bylaws, (3) declare
dividends, redeem or sell stock or other securities, (4) incur any liabilities,
(5) acquire or dispose of any assets, enter into any contract, guarantee
obligations of any third party, or (6) enter into any other transaction.
xiii. 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 Florida.
xiv. Title. The Shares to be issued to SHAREHOLDERS will be,
at closing, free and clear of all liens, security interests, pledges, charges,
claims, encumbrances and restrictions of any kind. None of such Shares are or
will be subject to any voting trust or agreement. No person holds or has the
right to receive any proxy or similar instrument with respect to such shares,
except as provided in this Agreement. the ISSUER is not a party to any agreement
which offers or grants to any person the right to purchase or acquire any of the
securities to be issued to SHAREHOLDERS. There is no applicable local, state or
federal lax,,', 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 Shares.
SHAREHOLDERS and SAI represent and warrant to ISSUER the following:
i. Organization. SAI is a corporation duly organized, validly
existing, and in good standing under the laws of California. has all necessary
corporate powers to own properties and carry on a business, and is duly
qualified to do business is all states where it is so required. All actions
taken by the Incorporators, directors and shareholders of SAI have been valid
and in accordance with the laws of its incorporation.
ii. Shareholders and Issued Stock .Exhibit A, annexed hereto
sets forth the names and share holdings of' 100% of SAI's shareholders
iii. Anti-Dilution. For a period of one year from the date of
closing, SHAREHOLDERS and SAI agree that they will not cause or permit the
ISSUER to issue in excess of 1,000,000 shares in a Rule 504 offering.
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iv. Counsel. SHAREHOLDERS and SAI represent and warrant that
prior to Closing, that xxxxx 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, the law offices of Xxxx X. Xxxxxxx, P.A.
has acted as exclusive counsel to the ISSUER and has not represented either the
SHAREHOLDERS or SAI in any manner whatsoever.
4. INVESTMENT INTENT. SHAREHOLDERS agrees that the Shares being issued
pursuant to this Agreement may be sold, pledged, assigned, hypothecate or
otherwise transferred, with or without consideration ( a "Transfer"), only
pursuant to an effective registration statement under the Act, or pursuant to an
exemption from registration under the Act, tile availability of which is to be
established to the satisfaction of ISSUER. SHAREHOLDERS agrees, prior to any
Transfer, to give written notice to ISSUER expressing his desire to effect the
transfer and describing the proposed transfer.
5. CLOSING Thc closing of this transaction shall take place at the law
offices of Xxxx X. Xxxxxxx, 0000 X.X. 000xx Xxxxxx, Xxxxx 000. Xxxxx, Xxxxxxx.
Unless the closing of this transaction takes place on or before August 15, 1998,
then either party may' terminate this Agreement.
6. DOCUMENTS TO BE DELIVERED AT CLOSING.
(I) By the ISSUER
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(1) Board of Directors Minutes authorizing the
issuance of a certificate or certificates for 5,800,000 Shares, registered as
follows:
Xxxxx X Xxxxxx: 4,247,000 Shares
Xxxxxx Xxxx: 275,000 Shares
Western Funds International, Inc. 870,000 Shares
Xxxx Xxxxxxx 58,000 Shares
Ashton Partners 5,000 Shares
Xxxxxxx X. Xxxxxxx 30,000 Shares
Xxxxxx Xxxxx 10,000 Shares
Xxx Xxxxxxxx 10,000 Shares
Xxxxx Xxxxxxxx 5,000 Shares
Xxx Xxxxxxx 290,000 Shares
(2) The resignation of all officers of ISSUER.
(3) A Board of Directors resolution appointing the following as officers and
directors of ISSUER:
Xxxxx Xxxxxx: President, Director
Xxx Xxxxxx: Secretary
Xxxxxx Xxxx: Vice President, Director
(4) The resignation of all the directors of
ISSUER, except that of SHAREHOLDER'S
designee dated subsequent to the resolution
described in 3, above.
(5) Audit financial statements of ISSUER, which
shall include a balance sheet dated as of
May 20, 1998 and statements of operations,
stockholders equity and cash flow for the
twelve month period then ended.
(6) All of the business and corporate records of
ISSUER, including but not limited to
correspondence files, bank statements,
checkbooks, savings account books, minutes
of shareholder and director meetings,
financial statements, shareholder listings,
stock transfer records, agreements and
contracts.
(7) Such other minutes of ISSUER's shareholders or directors as may reasonably
be required by SHAREHOLDERS.
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7. REMEDIES:
i. Arbitration. Any controversy or claim arising out of, or
relating xxx this Agreement or the making, performance, or interpretation
thereof, shall be settled by arbitration in Miami, Dade County, Florida in
accordance with the Rules of the American Arbitration Association then existing,
and judgment on the arbitration award may be entered in any court having
jurisdiction over the subject matter of the controversy.
8. MISCELLANEOUS
i. Captions and Headings. The Article and paragraph heads
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 all 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 hi writing and signed by the
party against whom such waiver is charged; and (I) 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 tills 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, (ii) the acceptance of
performance of anything 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 (iii) no waiver by
any party' of one breach by another party, shall be construed as a waiver with
respect to any other or subsequent breach.
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.
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.
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 date of service if served personally on the party to
whom notice is to be given, or on the third day after mailing if mailed to the
party to whom notice is It) be given, by first class mail, registered or
certified, postage prepaid, and properly addressed, and by Fax, as follows:
ISSUER: Xxxxxx X. Xxxxxxxxx
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Copy to:
XXX Xxxxxxx, Esquire
0000 X.X. 104:~' Street, Xxxxx 000
Xxxxx, Xxxxxxx 00000
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SAI Xxxxx X. Xxxxxx
0000 X Xxxxxxx xxxx Xxxxx
Xxxxx Xxxx XX 00000
IN WITNESS WHEREOF, the undersigned has executed this Agreement this
24th day of August, 1998.
GCST CORP. SECURE AMERICA CORPORATION
By: /s/Xxxxxx X. Xxxxxxxxx, President By:/s/Xxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxxxxx, President Xxxxx X. Xxxxxx
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