SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (this "Agreement") is made and entered
into as of the 31st day of December, 2002, (the "Effective Date") by and between
THE XXXXXXX CORPORATION, a Nevada corporation ("Xxxxxxx"), and SUNCOAST
NATURALS, INC., a Delaware corporation ("Suncoast").
In consideration of the premises and the mutual terms and provisions
set forth in this Agreement, the parties hereto agree as follows:
ARTICLE ONE
ACQUISITION AND EXCHANGE OF SHARES
Section 1.1. Acquisition of the CPNP Shares. Subject to the terms
and conditions hereof, as of the Effective Date, Xxxxxxx agrees to assign,
transfer, deliver and convey unto Suncoast, and Suncoast agrees to acquire from
Xxxxxxx, all of Xxxxxxx'x right, title and interest in and to the 600,000 shares
of Common Stock of Caribbean Pacific Natural Products, Inc. ("CPNP"),
representing 60% of CPNP's authorized and outstanding Common Stock now owned by
Xxxxxxx (the "CPNP Shares").
Section 1.2. Exchange of Shares: Nomination and Endorsement
Agreement
(a) In exchange for the transfer of the CPNP Shares, on the
Effective Date, Suncoast agrees to issue to Xxxxxxx, subject to the terms and
conditions hereof, 750,000 shares of Suncoast's Common Stock and 100,000 shares
of its Class A Redeemable Preferred Stock. When exchanged, the shares issued to
Xxxxxxx hereunder shall be duly authorized and validly issued, fully paid and
non-assessable, and not issued in violation of any preemptive rights.
(b) The shares of Suncoast's Common Stock issued to Xxxxxxx in
connection herewith (the "Common Shares") shall, once issued, have the same
dividend rights, conversion rights, voting powers, preferences, priorities and
other special rights and powers as all other issued and outstanding shares of
Suncoast's Common Stock, and shall represent not more that 19.5% of the issued
and outstanding voting stock of Suncoast on the Effective Date or thereafter.
(c) The shares of Suncoast's Class A Redeemable Preferred Stock
issued to Xxxxxxx in connection herewith (the "Preferred Shares") shall be
non-voting. Xxxxxxx shall have an option to sell (i.e. "put") the Preferred
Shares to Suncoast, and Suncoast shall be required to purchase such shares, at
such times and in the maximum quantities set forth on Schedule "A" attached
hereto and incorporated herein by this reference and for the per share cash
consideration hereinafter described. At any time following the first anniversary
of the Effective Date, Suncoast shall have an option to purchase (i.e. "call")
those Preferred Shares not yet put to Xxxxxxx for the per share cash
consideration described in Schedule "A". Any party exercising its rights to a
put or call hereunder shall give written notice thereof to the other party in
accordance with the provisions of Section 7.1 hereof. The notice shall specify
the number of shares covered, the purchase price of such shares (including the
interest factor to the date of payment and delivery) as well as the date of
payment and delivery which shall be a date not less than seven (7) nor more than
thirty (30) days following the date such notice shall be deemed to have been
given or made as provided in Section 7.1. On the delivery date, Xxxxxxx shall
surrender to Suncoast, or its duly authorized designee, possession of all
certificates representing the Preferred Shares covered by the put or call
notice, endorsed in blank or accompanied by duly executed stock powers, and such
Preferred Shares shall be free and clear of any claims, liens, charges,
encumbrances or other restrictions or commitments of any nature whatsoever.
(d) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of Suncoast, the holders of the Preferred Shares shall
be entitled to receive out of the assets of Suncoast available for distribution
to the stockholders, before any distribution of assets shall be made to the
holders of other shares of Suncoast capital stock, an amount equal to the value
of any unexercised put or call rights provided for in Section 1.2(c) above. The
value of unexercised put or call rights provided for in Section 1.2.(c) shall be
for the entire face value of the put or call rights together with accrued
interest. Except for this preference payment, the holders of the Preferred
Shares shall have no other rights to share in the assets of Suncoast upon the
liquidation, dissolution or winding up of Suncoast.
Section 1.3. Exchange Procedures: Surrender of Certificates.
As of the Effective Date, Xxxxxxx shall surrender to Suncoast, or
its duly authorized designee, possession of all certificates representing the
CPNP Shares, endorsed in blank or accompanied by duly executed stock powers
effectively transferring the CPNP Shares to Suncoast. Thereupon. Suncoast shall
issue, in the name of Xxxxxxx, certificates representing the Common Shares and
the Preferred Shares.
Section 1.4. The Closing. The closing of the transactions
contemplated hereunder shall take place at Xxxxxxx'x principal executive office
and be effective as of 12 p.m. EST, December 31, 2002.
Section 1.5. Actions At Closing.
At the Closing, the following deliveries shall be made, each to be
deemed concurrent with all others:
(a) Suncoast shall deliver the following documents to Xxxxxxx:
(1) A certificate signed by an authorized officer of
Suncoast stating that each of the representations and
warranties contained in Article Two is true and correct
in all material respects at the time of Closing with the
same force and effect as if such representations and
warranties had been made as of the Effective Date;
(2) A copy of the resolutions duly adopted by the Board
of Directors and stockholders of Suncoast authorizing
the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby,
duly certified, as of the Effective Date, by the
secretary of Suncoast;
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(3) Certificates representing the Common Shares and the
Preferred Shares registered in the name of Xxxxxxx; and
(b) Xxxxxxx shall deliver the following documents to Suncoast:
(1) A certificate signed by an authorized officer of
Xxxxxxx stating that each of the representations and
warranties contained in Article Three is true and
correct in all material respects at the time of Closing
with the same force and effect as if such
representations and warranties had been made as of the
Effective Date;
(2) A copy of the resolutions duly adopted by the Board
of Directors of Xxxxxxx authorizing the execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby, duly certified, as of
the Effective Date, by the secretary of Xxxxxxx;
(3) The certificates representing the CPNP Shares,
endorsed in blank or accompanied by duly executed stock
powers effectively transferring the CPNP Shares to
Suncoast.
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES OF SUNCOAST
Section 2.1. Corporate Organization and Capital Stock.
(a) Suncoast is a corporation duly organized, validly existing and
in good standing under the law of the State Delaware with full power and
authority to carry on its business as now being conducted.
(b) The authorized capital stock of 26,000,000, consists of (i)
25,000,000 shares of Common Stock, of which, as of the date hereof, 3,100,000
shares prior to the issuance of such shares as stated in Paragraph 1.2.(a) are
issued and outstanding, and (ii) 1,000,000 shares of unclassified Preferred
Stock, of which, as of the date hereof, no shares are issued and outstanding.
All of the issued and outstanding shares of Suncoast's capital stock are duly
and validly issued and outstanding and are fully paid and non-assessable. None
of the outstanding shares of Suncoast's capital stock has been issued in
violation of any preemptive rights of the current or past stockholders of
Suncoast.
(c) The Common Shares and the Preferred Shares that are to be issued
to Xxxxxxx hereunder, when so issued in accordance with the terms of this
Agreement, will be validly issued and outstanding, fully paid and
non-assessable.
Section 2.2. Authorization. As of the Effective Date, (i) there will
be no provision in Suncoast's Articles of incorporation or in its By-Laws, as
amended, which prohibits or limits Suncoast's ability to consummate the
transactions contemplated hereby, (ii) Suncoast shall have the right, power and
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authority to enter into this Agreement and to consummate all of the transactions
and fulfill all of the obligations contemplated hereby and (iii) the execution
and delivery of this Agreement and the due consummation by Suncoast of the
transactions contemplated hereby will have been duly authorized by all necessary
corporate action of the Board of Directors and stockholders of Suncoast. This
Agreement constitutes a legal, valid and binding agreement of Suncoast
enforceable against Suncoast in accordance with its terms.
Section 2.3. No Conflict or Violation. Subject to the fulfillment of
all of the conditions set forth in Article Five hereof, neither the execution
and delivery of this Agreement, nor the consummation of the transactions
contemplated hereby in accordance herewith, nor compliance by Suncoast with any
of the provisions hereof will result in, as of the Effective Date: (i) a
violation of or a conflict with any provision of Suncoast's Articles of
Incorporation or By-Laws, as amended, (ii) a breach of or default under any
term, condition or provision of any obligation, agreement or undertaking,
whether oral or written to which Suncoast is a party, or an event which, with
the giving of notice, lapse of time, or both, would result in any such breach,
(iii) a violation of any applicable law, rule, regulation, order, decree or
other requirement having the force of law, or order, judgment, writ, injunction,
decree or award, or an event which, with the giving of notice, lapse of time, or
both, would result in any such violation, or (iv) any person having the right to
enjoin, rescind or otherwise prevent or impede the transactions contemplated
hereby or to obtain damages from Suncoast or to obtain any other judicial or
administrative relief as a result of any transaction carried out in accordance
with the provisions of this Agreement.
Section 2.4. Litigation and Proceedings. There is no action, suit,
proceeding or investigation pending or, to the knowledge of Suncoast, threatened
which challenges the validity of this Agreement or the transactions contemplated
hereby, or otherwise seeks to prevent, directly or indirectly the consummation
of such transactions.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES OF XXXXXXX
Section 3.1. Corporate Organization. Xxxxxxx is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and qualified to do business in Pennsylvania with full power and
authority to carry on its business as it is now being conducted.
Section 3.2. Authorization. Xxxxxxx has full right, power and
authority to enter into this Agreement and to consummate or cause to be
consummated all of the transactions and to fulfill all of the obligations
contemplated hereby The execution and delivery of this Agreement and the due
consummation by Xxxxxxx of the transactions contemplated hereby have been duly
authorized by all necessary corporate action of the Board of Directors of
Xxxxxxx. This Agreement constitutes a legal, valid and binding agreement of
Xxxxxxx enforceable against Xxxxxxx in accordance with its terms.
Section 3.3. No Conflict or Violation. Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby nor compliance by Xxxxxxx with any of the provisions hereof
will result in: (i) a violation of or a conflict with any provision of the
Articles of Incorporation or By-Laws of Xxxxxxx, (ii) a breach of or default
under any term, condition or provision of any obligation, agreement or
undertaking, whether oral or written to which Xxxxxxx is a party, or an event
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which, with the giving of notice, lapse of time, or both, would result in any
such breach, (iii) a violation of any applicable law, rule, regulation, order,
decree or other requirement having the force of law, or order, judgment, writ,
injunction, decree or award, or an event which, with the giving of notice, lapse
of time, or both, would result in any such violation, or (iv) any person having
the right to enjoin, rescind or otherwise prevent or impede the transactions
contemplated hereby or to obtain damages from Xxxxxxx or to obtain any other
judicial or administrative relief as a result of any transaction carried out in
accordance with the provisions of this Agreement.
Section 3.4. Title to CPNP Shares. Xxxxxxx possesses good and
marketable title to the CPNP Shares and has full right to transfer the same as
contemplated herein. The CPNP Shares are, and will be as of the Effective Date,
free and clear of any claims, lien, charges, encumbrances or other restrictions
or commitments of any nature whatsoever. Except that Xxxxxxx gives no warranty
as to the rights of third parties regarding to contest its ownership of shares
based on an action brought by Xxxxxxx Xxxxxxx against Caribbean Pacific
International, Caribbean Pacific Natural Products, Inc., and The Xxxxxxx
Corporation in the Circuit Court of the Ninth Judicial Circuit in and for Orange
County, Florida (Case Number: 02-CA-11704) alleging that CPNP was formed as a
result of a fraudulent asset conveyance pursuant to ss.726, et seq. Florida
statutes.
Section 3.5. Sale of Substantially All Assets. The CPNP Shares do
not constitute all or substantially all of the assets of Xxxxxxx.
ARTICLE FOUR
AGREEMENTS OF PARTIES
Section 4.1. Agreements of Xxxxxxx
(a) Xxxxxxx shall, in the event it has knowledge of the occurrence,
or impending or threatened occurrence, of any event or condition which would
cause or constitute a breach (or would have caused or constituted a breach had
such event occurred or been known prior to the date hereof) of any of its
representations, warranties or agreements contained or referred to herein, give
prompt written notice thereof to Suncoast and use reasonable efforts to prevent
or promptly remedy the same.
(b) Xxxxxxx shall use reasonable efforts to perform and fulfill all
conditions and obligations on its part to be performed or fulfilled under this
Agreement and to effect the exchange contemplated hereby in accordance with the
terms and conditions hereof.
Section 4.2. Agreements of Suncoast.
(a) Suncoast shall, in the event it has knowledge of the occurrence,
or impending or threatened occurrence, of any event or condition which would
cause or constitute a breach (or would have caused or constituted a breach had
such event occurred or been known prior to the date hereof) of any of its
representations, warranties or agreements contained or referred to herein, give
prompt written notice thereof to Xxxxxxx and use reasonable efforts to prevent
or promptly remedy the same.
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(b) Suncoast shall use reasonable efforts to perform and fulfill all
conditions and obligations on its part to be performed or fulfilled under this
Agreement and to effect the exchange contemplated hereby in accordance with the
terms and conditions hereof.
(c) Suncoast shall execute a corporate guarantee of the real
property lease obligations of CPNP in place and stead of the existing corporate
guarantees of Xxxxxxx.
(d) Suncoast acknowledges the existing Royalty Agreement between
CPNP and Caribbean Pacific International, Inc. and the obligations of CPNP
thereunder.
(e) Suncoast agrees that it will at its cost, within sixty days from
the Closing, register for public sale through an appropriate Registration
Statement the Shares of Common Stock issued to Xxxxxxx pursuant to Section 2.1
hereof.
(f) Suncoast agrees to hold Xxxxxxx harmless from any claim from any
creditor of CPNP or any shareholder or director of Caribbean Pacific
International, Inc. who claims that CPNP was formed as a result of a fraudulent
asset conveyance under ss.726, et seq. Florida statutes and/or any other similar
cause of action which would attack Xxxxxxx'x ownership of its interest in CPNP
and/or assert the transaction which created CPNP contravened any statute of
Florida, Delaware or Pennsylvania.
(g) Suncoast shall indemnify and hold Xxxxxxx harmless including
attorneys' fees and costs for any action brought against Xxxxxxx as a result of
any claim referenced in the paragraph above or Section 3.4 of this Agreement.
ARTICLE FIVE
CONDITIONS PRECEDENT TO THE EXCHANGE
Section 5.1. Conditions to the Obligations of Xxxxxxx. Xxxxxxx'x
obligations to effect the exchange shall be subject to the satisfaction (or
waiver by Suncoast) of the following conditions prior to or at the Closing:
(a) The representations and warranties made by Xxxxxxx in this
Agreement shall be true in all material respects at the Closing with the same
effect as though such representations and warranties had been made or given on
and as of the Effective Date;
(b) Suncoast shall have performed and complied in all material
respects with all of its obligations and agreements required to be performed
prior to the Closing under this Agreement;
(c) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the consummation of the exchange
contemplated herein shall be in effect, nor shall any proceeding by any
authority or other person seeking any of the foregoing be pending. There shall
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not be any action taken, or any statute, rule, regulation or order enacted,
entered, enforced or deemed applicable to the exchange which makes the
consummation of the exchange illegal;
(d) All necessary approvals, consents and authorizations required by
law for consummation of the exchange including, without limitation, the approval
by the Board of Directors of Xxxxxxx shall have been obtained; and
(e) Xxxxxxx shall have received all executed documents required to
be received from Suncoast on or prior to the Closing; all in form and substance
reasonably satisfactory to Xxxxxxx.
Section 5.2. Conditions to the Obligations of Suncoast. Suncoast's
obligations to effect the exchange shall be subject to the satisfaction (or
waiver by Xxxxxxx) of the following conditions prior to the Closing:
(a) The representatives and warranties made by Suncoast in this
Agreement shall be true in all material respects at the Closing with the same
effect as though such representations and warranties had been made or given on
and as of the Effective Date;
(b) Suncoast shall have performed and complied in all material
respects with all of its obligations and agreements required to be performed
prior to the Closing under this Agreement;
(c) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the consummation of the exchange
contemplated herein shall be in effect, nor shall any proceeding by any
authority or other person seeking any of the foregoing be pending. There shall
not be any action taken, or any statute, rule, regulation or order enacted,
entered, enforced or deemed applicable to the exchange which makes the
consummation of the exchange illegal;
(d) All necessary approvals, consents and authorizations required by
law for consummation of the exchange including, without limitation, approval by
the Board of Directors and Shareholders of Suncoast or before the Closing shall
have been obtained;
(e) Suncoast shall have received the opinion of Xxxxxxx'x counsel as
required herein; and
(f) Suncoast shall have received all executed documents required to
be received from Xxxxxxx on or prior to the Closing; all in form and substance
reasonably satisfactory to Suncoast.
ARTICLE SIX
TERMINATION OR ABANDONMENT
Section 6.1. Mutual Agreement. This Agreement may be terminated by
the mutual written consent of the parties at any time prior to the Closing,
regardless of whether stockholder approval of this Agreement and the
transactions contemplated hereby shall have been previously obtained.
Section 6.2. Breach of Agreements. In the event there is a material
breach in any of the representations and warranties or agreements of Xxxxxxx or
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Suncoast, which breach is not cured within thirty (30) days after notice to cure
such breach is given by the non-breaching party, then the non-breaching party,
regardless of whether stockholder approval of this Agreement and the
transactions contemplated hereby shall have been previous obtained, may
terminate and cancel this Agreement by providing written notice of such action
to the other party hereto.
Section 6.3. Failure of Conditions. In the event any of the
conditions to the obligations of either party are not satisfied or waived as
specified in Article Five hereof, and if any applicable cure period provided in
Section 6.2 hereof has lapsed, then the party for whose benefit such conditions
were imposed may, regardless of whether stockholder approval of this Agreement
and the transactions contemplated hereby shall have been previously obtained,
terminate and cancel this Agreement by delivery of written notice of such action
to the other party on such date.
ARTICLE SEVEN
MISCELLANEOUS PROVISIONS
Section 7.1. Notices. Any notice or other communication shall be in
writing and shall be deemed to have been given or made on the date of delivery
in the case of hand delivery, or three (3) business days after deposit in the
United States Registered Mail, postage prepaid, or upon receipt if transmitted
by facsimile telecopy or any other means, addressed (in any case) as follows:
(a) if to Xxxxxxx:
The Xxxxxxx Corporation
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xx. Xxx Xxxxxxx
with a copy to:
-----------------------
-----------------------
Attention: _______________
and
(b) if to Suncoast:
Suncoast Naturals, Inc.
0000 XX 00xx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
with copies to:
-----------------------
-----------------------
Attention: _______________
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or to such other address as any party may from time to time designate by notice
to the others.
Section 7.2. Liabilities. In the event that this Agreement is
terminated pursuant to the provisions of Section 6.2 or Section 6.3 hereof on
account of a breach of any of the representations and warranties set forth
herein or any breach of any of the agreements set forth herein or any failure of
conditions precedent to the exchange herein contained, then the non-breaching
party or the party for whose benefit such conditions were imposed shall be
entitled to recover appropriate damages from the breaching party; provided,
however, that notwithstanding the foregoing. in the event this Agreement is
terminated by reason of a failure of a condition precedent set forth in Sections
5.1(c) or (d), or Sections 5.2(c) or (d), no party hereto shall have any
liability to any other party for costs, expenses, damages or otherwise.
Section 7.3. Entire Agreement. This Agreement constitutes the entire
agreement between the parties and supersedes and cancels any and all prior
discussions, negotiations, undertakings and agreements between the parties
relating to the subject matter hereof.
Section 7.5. Headings and Captions. The captions of Articles and
Sections hereof are for convenience only and shall not control or affect the
meaning or construction of any of the provisions of this Agreement.
Section 7.6. Waiver. Amendment or Modification. The conditions of
this Agreement which may be waived may only be waived by notice to the other
party waiving such condition. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. This Agreement may not be amended or
modified except by a written document duly executed by the parties hereto.
Section 7.7. Rules of Construction. Unless the context otherwise
requires: (a) a term has the meaning assigned to it; (b) an accounting term not
otherwise defined has the meaning assigned to it in accordance with generally
accepted accounting principles; (c) "or" is not exclusive; and (d) words in the
singular may include the plural and in the plural include the singular.
Section 7.8. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
shall be deemed one and the same instrument.
Section 7.9. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
administrators, successors and assigns, including any successor by merger,
reorganization or acquisition of substantially all the assets of a party hereto.
There shall be no third party beneficiaries hereof.
Section 7.10. Governing Law; Assignment. This Agreement shall be
governed by the law of the State of Delaware. This Agreement may not be assigned
by either of the parties hereto.
Section 7.11. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction is, as to such
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jurisdiction, ineffective to the extent of any such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof, or affecting the validity enforceability or legality of such
provision in any other jurisdiction, unless the ineffectiveness of such
provision would result in such a material change as to cause completion of the
transactions contemplated hereby to be unreasonable.
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SCHEDULE "A"
The put or call cash consideration payable for the Preferred Shares pursuant to
this Section 1.2(c) (the "Redemption Price") shall be $10.00 per share (for an
aggregate cash consideration not to exceed $1,000,000) plus an interest factor
which shall accrue from the Effective Date through the date of sale or purchase
pursuant to a put or call provided for in this Section 1.2(c). The interest
shall be a fixed annual rate equal to the prime rate announced by Citibank NA,
New York City on the Effective Date, and may be payable in cash or accrued. In
the event that all Preferred Shares are not put by Xxxxxxx to Suncoast or called
by Suncoast on or before December 31, 2007, all such shares shall be redeemed by
Suncoast at face value, together with accrued interest, if any, as of that date.
Schedule of Put Options By Xxxxxxx:
(1) On or After March 31, 2003, and for each calendar quarter thereafter (on or
before the 45th day following the end of each Quarter), a Put Option equal to
the number of Shares which represents 50% of the free cash flow reported by
Suncoast in the immediately preceding quarterly financial statements divided by
the Redemption Price of $10.00 per Share. In the event that all Preferred Shares
are not put by Xxxxxxx to Suncoast or called by Suncoast on or before December
31, 2007, all such shares shall be redeemed by Suncoast at face value, together
with accrued interest, if any, as of that date.
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IN WITNESS WHEREOF, the undersigned have set their hand on the date first above
written.
THE XXXXXXX CORPORATION
By: /s/ Xxx X. Xxxxxxx
-------------------------
President
SUNCOAST NATURALS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
President
