EXCHANGE AGREEMENT ANNEX I
THIS AGREEMENT OF EXCHANGE (the "Agreement"), is dated as of June 20, 1998,
and entered into by and between Xxxxxx Diversified Corporation, a Nevada
corporation ("Xxxxxx"), and Xxxxxx Feed Lots, Inc. ("MFL").
RECITALS
The Boards of Directors of Xxxxxx and MFL have adopted resolutions
approving the exchange pursuant to Section 78.450 of the Nevada General
Corporation Law and Section 0-000-000 of the Colorado Business Corporation Act
(the "Exchange") of the issued and outstanding capital stock of MFL, consisting
solely of 1,000 shares of common stock, for 15,000,000 shares of Xxxxxx common
stock in accordance with this Agreement and the Plan of Exchange (the "Plan") in
the form of Exhibit "A" attached hereto and by this reference made a part
hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the agreements, provisions and
covenants herein contained, Xxxxxx and MFL hereby agree as follows:
ARTICLE I
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THE EXCHANGE
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1.1 Filing of the Plan and Articles of Exchange. Subject to the conditions
contained in Article V of this Agreement, executed articles of exchange,
including the Plan, shall be delivered to the Secretary of State of Colorado for
filing as soon as practicable following the time when the last of such
conditions shall have been fulfilled (or waived in writing in accordance with
Section 8.1 hereof) or such earlier or later date as may be mutually agreed to
in writing by Xxxxxx and MFL.
1.2 Time of Filing and Effective Time. The time of delivery to the
Secretary of State of Colorado pursuant to the preceding section is herein
referred to as the "Time of Filing". The "Effective Time of the Exchange" shall
be when a certificate of exchange is issued by the Secretary of State of
Colorado.
1.3 The Exchange. At the Effective Time of the Exchange each outstanding
share of MFL shall be deemed to be owned and held by Xxxxxx, and each holder of
then outstanding MFL share certificates shall be entitled to receive the Xxxxxx
common stock specified in the Plan, subject to the conditions contained therein.
ARTICLE II
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REPRESENTATIONS AND WARRANTIES OF MFL
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MFL represents and warrants as follows:
2.1 No Breaches of Statute or Contract; Required Consents. Neither the
execution and delivery of this Agreement or the related articles of exchange by
MFL, nor compliance by MFL with the terms and provisions thereof and of the Plan
will: (i) conflict with or result in a breach of any of the provisions of the
articles of incorporation, bylaws or other governing instruments of MFL, or any
judgment, order, decree, or ruling to which MFL is a party, or any injunction to
which it is subject, of any court of governmental authority or of any agreement,
contract or commitment to which it is a party and which is material to the
financial condition of MFL considered as a whole, or (ii) require the
affirmative consent or approval of any non-governmental third party (apart from
stockholder approval referred to elsewhere herein).
2.2 Authorization of Agreement. MFL has the corporate power to enter into
this Agreement and to perform its obligations hereunder; the execution, delivery
and, subject to requisite stockholder approval, the performance of this
Agreement by MFL has been duly and validly authorized by the board of directors
of MFL, and MFL has taken, or will use its best efforts to take prior to the
Time of Filing, all action required by law, its articles of incorporation and
bylaws to authorize the execution, delivery and performance of this Agreement,
the Plan, and related articles of exchange.
2.3 Further Representations.
(a) MFL is duly organized, validly existing and in good standing as a
corporation under the laws of the State of Colorado; has full corporate power to
carry on its business as it is now being conducted, and to own and operate the
properties and assets it now owns or operates; and is duly qualified to do
business and is in good standing in each jurisdiction where the conduct of its
business or the ownership of its properties require such qualification.
(b) Pursuant to its Articles of Incorporation, MFL is authorized to
issue 2,500 shares of common stock with $100.00 par value, of which a total of
1,000 shares are each validly issued, fully paid and nonassessable. MFL has no
other class of stock or convertible securities outstanding. There are no
existing options, warrants, calls, commitments or rights of any character to
purchase or otherwise acquire from MFL shares of capital stock of any class, no
outstanding securities of MFL that are convertible into shares of capital stock
of MFL of any class, and no options, warrants or rights to purchase from MFL any
such convertible securities.
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(c) MFL has delivered to Xxxxxx the following documents, all of which
have been signed for identification by the President of MFL and are dated as of
the date hereof. (i) a list of all the liabilities and obligations of MFL as of
February 28, 1998 (Exhibit "B"); and (ii) all property and all other assets of
MFL as of February 28, 1998 (Exhibit "C"). MFL has good and marketable title to
all properties and assets, real and personal, described in Exhibit "C". All of
the properties and assets listed on Exhibit "C" are free and clear of all
mortgages, ledges, liens, charges, security interests or other encumbrances of
any nature whatsoever, except for mortgages, pledges, liens, charges, security
interests or other encumbrances as set forth in Exhibit "B", liens for current
taxes not yet due and payable, and imperfections of title, easements and
encumbrances, if any, that are not substantial in character, amount or extent
and do not materially detract from the value, or interfere with the present or
proposed use, of the property subject thereto or affected thereby, or otherwise
materially impair business operations. All leases pursuant to which MFL leases
any substantial amount of real or personal property are in good standing, valid
and effective in accordance with their respective terms, and under none of these
leases is there any existing fault, event of default or event that with notice
or the lapse of time, or both, would constitute a default and in respect of
which MFL has not taken adequate steps to prevent a default from occurring.
(d) Between February 28, 1998 and the date of this Agreement there has
not been any material adverse change in the financial condition or in the
operations, business or property of MFL.
(e) The structures, equipment, machinery, vehicles and other physical
assets of MFL that are necessary to the operation of the business being
conducted by it are in good operating condition and repair, subject only to the
ordinary wear and tear of the business.
(f) Neither MFL nor, to the knowledge of its shareholders, any other
party breached any material provision of, or defaulted in any material respect
of the terms of any contract, or agreement to which MFL is a party which would
have a materially adverse effect upon the business or financial condition of
MFL.
(g) MFL has delivered to Xxxxxx written information in the form of
Exhibit "D" attached to this Agreement as of the date hereof respecting the
following:
All real property owned or leased by MFL with the amount of any
mortgages encumbering any such real property; all personal property used in the
trade business of MFL with the amount of any liens encumbering any such personal
property.
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(h) MFL will deliver such other lists, descriptions, information,
schedules, documents and reports as may reasonably be requested by Xxxxxx.
(i) To the best knowledge of its shareholders, there is no default or
claim, purported or alleged default, or statement of facts under which lack of
notice or the lapse of time, or both, would constitute a default, on any
obligation to be performed by MFL under any material lease, contract, plan or
other arrangement.
(j) To the best knowledge of its shareholders, no suit, action or
legal, administrative or arbitration proceeding, which might materially and
adversely affect the overall financial condition, business or property of MFL,
is pending or, to the knowledge of its shareholders threatened.
(k) Its shareholders have no knowledge of any tax liability or claim
by any taxing authority for due but unpaid taxes, interest or penalties, nor has
MFL been advised of any request or demand for audit by any taxing authority.
(l) The representations and warranties of its shareholders and MFL
shall be as of the date of this Agreement and as of the date of the Closing. Any
such representation made as of such dates shall survive the Closing. All
representations and warranties of MFL are based upon knowledge only of its
officers and directors and no one else.
ARTICLE III
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REPRESENTATIONS AND WARRANTIES OF XXXXXX
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Xxxxxx represents and warrants as follows:
3.1 Accuracy of Proxy Statement and Exchange Act Filings. The information
concerning Xxxxxx contained, or incorporated by reference, in the proxy
solicitation material soliciting approval of the Exchange and the Exchange Act
filings which have been provided to MFL are responsive in all material respects
to the requirements of the appropriate forms and related rules and regulations,
and do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make such information not misleading; provided,
however, that as to information supplied to Xxxxxx by MFL which is included in
the proxy solicitation material, Xxxxxx represents only that it has no knowledge
of any such untrue statement or misleading omission.
3.2 Status of Xxxxxx Common Stock. The shares of Xxxxxx Common Stock to be
issued to the stockholders of MFL pursuant to this Agreement and Plan, when so
issued, will be duly and validly authorized and issued, fully paid and
nonassessable.
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3.3 No Breach of Contract; Required Consents. Neither the execution and
delivery of this Agreement nor compliance by Xxxxxx with the terms of provisions
thereof and of the Plan will: (i) conflict with or result in a breach of any of
the provisions of the articles of incorporation or bylaws or other governing
instruments of Xxxxxx, or any judgment, order, decree, or ruling to which Xxxxxx
is a party, or any injunction to which it is subject, of any court or government
authority, or of any agreement, contract or commitment to which Xxxxxx is a
party and which is material to the financial condition or results of operations
or conduct of the business of Xxxxxx considered as a whole, or (ii) require the
affirmative consent or approval of any nongovernmental third party.
3.4 Authorization of Agreement. Xxxxxx has the corporate power to enter
into this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement by Xxxxxx have been duly and validly
authorized and approved by the board of directors of Xxxxxx; and Xxxxxx has
taken, or will use its best efforts to take prior to the Time of Filing, all
action required by law, its articles of incorporation or bylaws to authorize the
execution, delivery and performance of this Agreement and the Plan.
ARTICLE IV
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CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE TIME OF EXCHANGE
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4.1 Access; Operation of Business between the date of this Agreement and
the Effective Time of the Exchange.
(a) Access. MFL and Xxxxxx each agrees to furnish the other with such
financial and operating data and other information with respect to the business
and properties of it as the other shall from time to time reasonably request in
furtherance of consummating the Exchange; provided, however, that any such
investigation shall not affect any of the representations and warranties
hereunder. In the event of termination of this Agreement, MFL and Xxxxxx will
each return to the other all documents and other material obtained from the
other in connection with the transactions contemplated hereby, and each shall
maintain the confidentiality of such materials.
(b) Conduct of Business. MFL and Xxxxxx shall continue to conduct
their business in conformity with established industry practice in a diligent
manner.
4.2 Preparation of Proxy Statement. Both MFL and Xxxxxx acknowledge
participation in the preparation of the proxy solicitation material to be filed
with the SEC relating to a special meeting of stockholders of Xxxxxx to vote on
the Exchange, and agree to cooperate in the preparation of final proxy
solicitation material relating to such meeting (the "Proxy Statement").
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4.3 Stockholder Approval of MFL. MFL agrees that the execution of this
Agreement by Xxxxx X. Xxxxxx and Xxxxxx X. Xxxx shall constitute all necessary
shareholders approval as is necessary under Colorado law.
Xxxxx X. Xxxxxx and Xxxxxx X. Xxxx further acknowledge and agree that
the shares of Xxxxxx they or their assigns may acquire as a result of the
Exchange contemplated herein are being acquired for investment purposes only and
not with a view toward their redistribution or reoffering. All stock
certificates representing Xxxxxx Common Shares issued to the shareholders of MFL
shall be endorsed with the following restrictive legend:
No sale, offer of sell, or transfer of the shares
represented by this certificate shall be made unless a
registration statement under the Federal Securities Act of
1933, as amended, with respect to such shares is then in
effect or an exemption from the registration requirements is
then in fact applicable to said shares.
4.4 Stockholder Approval of Xxxxxx. Xxxxxx agrees to submit the Plan of
Exchange to its stockholders for approval, as provided by law, at a meeting
which shall be held as soon as practicable, following clearance of the Proxy
Statement by the SEC.
ARTICLE V
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CONDITIONS; ABANDONMENT OF EXCHANGE
-----------------------------------
5.1 General Conditions. The obligations of the parties hereto to effect the
Exchange shall be subject to the following conditions:
(a) No Governmental Proceedings. No governmental action or proceeding
shall have been instituted or be threatened at the Time of Filing by or before a
court or other governmental body, agency or authority to restrain or prohibit
the transactions contemplated by this Agreement.
(b) No Litigation. There shall be no litigation pending at the Time of
Filing challenging the authority of either MFL or Xxxxxx or the officers or
directors of either to enter into this Agreement or seeking to restrain or
prohibit the transactions contemplated hereby, which the board of directors of
either MFL or Xxxxxx shall reasonably believe to present a substantial risk
either of restraining or prohibiting such transactions or of resulting in the
award of material damages or other relief.
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(c) Statutory Requirements and Approvals. All statutory requirements
for the valid consummation by MFL and Xxxxxx of the transactions contemplated by
this Agreement and the Plan shall have been fulfilled; no approvals of the
transactions contemplated by this Agreement shall be required from any federal
or state governmental agency or authorities.
5.2 Conditions of Obligation of Xxxxxx. The obligation of Xxxxxx to effect
the Exchange shall be subject to the following conditions:
(a) Representations and Warranties of MFL to be True. The
representations and warranties of MFL herein contained shall be true in all
material respects at the Effective Time of the Exchange with the same effect as
though made at such time, except to the extent waived hereunder or affected by
the transactions contemplated herein; MFL shall have performed all obligations
and complied with all covenants and conditions required by this Agreement to be
performed or complied with by it at or prior to the Time of Filing; and MFL
shall have delivered to Xxxxxx a certificate of MFL in form and substance
satisfactory to Xxxxxx, dated the Time of Filing and signed by its President or
Vice President to all such effects.
(b) Exercise of Dissenter's Rights. Holders of no more than 10% of the
issued and outstanding shares of Xxxxxx shall have given notice of their
intention to receive payment in cash pursuant to their dissenter's rights. In
the event that more than 10% of the issued and outstanding shares give such
notice Xxxxxx may waive the condition and proceed with the Exchange.
5.3 Conditions of Obligation of MFL. The obligations of MFL to effect the
Exchange shall be subject to the following conditions:
(a) Representations and Warranties of Xxxxxx to be True. The
representations and warranties of Xxxxxx herein contained, shall be true in all
material respects at the Time of Filing with the same effect as though made at
such time, except to the extent waived hereunder or affected by the transactions
contemplated herein; Xxxxxx shall have performed all obligations and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by it prior to the Time of Filing; and Xxxxxx shall have delivered
to MFL a certificate of Xxxxxx in form and substance satisfactory to MFL, dated
the Time of Filing and signed by its President and its principal financial
officer, to all such effects.
5.4 Abandonment. The Exchange may be abandoned before the Effective Time of
the Exchange without liability on the part of any party hereto exercising such
right of abandonment or restriction on the future activities of either party
hereto:
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(a) Mutual Consent. By the mutual consent of the Boards of Directors
of Xxxxxx and MFL evidenced by a writing executed by Xxxxxx and MFL or;
(b) Lapse of Time. By the Board of Directors of Xxxxxx or MFL if the
Effective Time of the Exchange has not occurred on or prior to July 31, 1998.
The power of abandonment provided for by this Section 5.4 may be
exercised by Xxxxxx or MFL only by their respective Boards of Directors and will
be effective only after written notice thereof, signed on behalf of the party
for which it is given by its Chairman of the Board or President, shall have been
given to the other. If the Exchange shall be abandoned, no articles of exchange
or certificates relating to the Exchange shall be filed by the officers of any
such party in the State of Colorado. Abandonment shall not effect any rights
theretofore accruing hereunder.
ARTICLE VI
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INDEMNIFICATION
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6.1. Continuation of Representations and Warranties. Xxxxxx and MFL agree
that the representations, warranties and covenants of Xxxxxx and MFL contained
herein or in any instrument or certificate delivered hereunder shall survive the
Effective Time of the Exchange, regardless of any investigation or inquiry by or
on behalf of Xxxxxx and MFL.
6.2. Indemnification by MFL. MFL agrees to indemnify and hold harmless
Xxxxxx and each person, if any, who controls Xxxxxx within the meaning of
Section 15 of the 1933 Act:
(a) against any and all losses, liabilities, claims, damages and
expenses (including interest, expenses of litigation and attorney's fees)
arising out of or as a result of any inaccuracy or breach of any of the
representations, warranties and covenants of MFL contained in this Agreement and
contained in any instrument or certificate delivered to Xxxxxx pursuant to this
Agreement, or the defense or settlement of any claim asserted against Xxxxxx
challenging any such representation, warranty and covenant, or the failure or
default of MFL to perform or observe any covenant or condition under this
Agreement.
6.3 Indemnification by Xxxxxx. Xxxxxx agrees to indemnify and hold harmless
MFL and each person, if any, who controls MFL:
(a) against any and all losses, liabilities, claims, damages and
expenses (including interest, expenses of litigation and attorneys' fees)
arising out of or as a result of any inaccuracy or breach of any of the
representations, warranties and covenants of Xxxxxx contained in this Agreement
and contained in any instrument or certificate, delivered to MFL pursuant to
this Agreement, or the defense or settlement of any claim asserted against MFL
challenging any such representation, warranty and covenant, or the failure or
default of Xxxxxx to perform or observe any covenant or condition under this
Agreement.
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6.4 Notice. Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have otherwise than
on account of this Agreement. An indemnifying party may participate at its own
expense in the defense of such action. In no event shall the indemnifying
parties be liable for the fees and expenses of more than one counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
ARTICLE VII
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ADDITIONAL MATTERS
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7.1 Management. The parties agree that MFL shall continue to have the same
management after the contemplated Exchange that it had prior to the Exchange.
7.2 Closing. The Closing of the Exchange contemplated by this Agreement
shall take place at the offices of Xxxxxx at such time as may be convenient to
all the parties but in no event later than July 31, 1998. At the Closing MFL
shall deliver share certificates in amounts representing all of the issued and
outstanding common shares of MFL to Xxxxxx and Xxxxxx shall deliver 15,000,000
of its common shares to Xxxxx X. Xxxxxx and Xxxxxx X. Xxxx or to their assigns
as Xxxxxx is directed at Closing.
ARTICLE VIII
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GENERAL
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8.1 Waivers. Each of Xxxxxx and MFL may, pursuant to action by its
respective Board of Directors, by an instrument in writing, extend the time for
or waive the performance of any of the obligations of the other or waive
compliance by the other with any of the covenants or conditions contained
herein; provided, however, that no such waiver or extension shall affect the
rights of the stockholders of Xxxxxx or MFL in a manner which is materially
adverse to such stockholders.
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8.2 Notices. All notices, requests, demands and other communications which
are required of permitted hereunder shall be in writing and shall be deemed to
have been duly given when delivered personally or when mailed by registered or
certified mail, postage pre-paid, as follows:
If to Xxxxxx to:
X.X. Xxx 000
00000 Xxxx CO. Rd. #35
LaSalle, Colorado 80645
If to MFL to:
X.X. Xxx 000
00000 Xxxx CO. Rd. #35
LaSalle, Colorado 80645
8.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.
8.4 Entire Agreement. This Agreement supersedes any and all oral or written
agreements heretofore made relating to the subject matter hereof and constitutes
the entire agreement of the parties relation to the subject matter hereof.
8.5 No Implied Rights or Remedies. Except as otherwise expressly provided
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or to give any person, firm or corporation, other than Xxxxxx and
MFL and their stockholders, any rights or remedies under or by reason of this
Agreement.
8.6 Headings. The headings in this Agreement are inserted for convenience
of reference only and shall not be part of, or control or affect the meaning of,
this Agreement.
8.7 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed on its behalf and attested by its officers there unto duly
authorized, all as of the day and year first above written.
Xxxxxx Diversified Corporation
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
President
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ATTESTED BY:
/s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx Xxxxxx Feed Lots, Inc.
BY: /s/ Xxxxx X. Xxxxxx
---------------------------------
Xxxxx X. Xxxxxx
President
ATTESTED BY:
/s/ Xxxxxx X. Xxxx
--------------------------------
Xxxxxx X. Xxxx
Shareholders of Xxxxxx Feed
Lots, Inc.
/s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxx
------------------------------------
Xxxxxx X. Xxxx
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