Exhibit 10(b)
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (this "Agreement") is made and entered into
as of the 31 st 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 Caribbea4Pacifc 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
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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 in Section 7.1 provided. 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
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right, power and 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
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which Xxxxxxx 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 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-11794) 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
not be any action
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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; and
(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.
(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 seeldng 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; and
(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.
(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
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representations and warranties or agreements of Xxxxxxx or 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 arid 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.
ART1CLE 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:____________________
(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,
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unenforceable or not authorized in any jurisdiction is, as to such 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.
________________________________________________________________________________
SCHEDULE "A"
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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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