EXHIBIT 10.1
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER TH SECURITIES ACT OF 1933 9THE "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. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
AGREEMENT FOR THE EXCHANGE OF STOCK
AGREEMENT made this 23rd day of August, 1996, by and between
MARICULTURE SYSTEMS, INC., a Florida corporation, (the "ISSUER") and the
individuals listed in Exhibit A attached hereto, (the "SHAREHOLDERS"), which
SHAREHOLDERS own all of the issued and outstanding shares of MARICULTURE
SYSTEMS, INC., a Washington corporation, ("MSI").
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 issued to SHAREHOLDERS, 8,800,000 shares of the
common stock of ISSUER, $.001 par value, in exchange for 100% of the issued and
outstanding shares of MSI, such that MSI shall become a wholly owned subsidiary
of the ISSUER.
2. REPRESENTATIONS AND WARRANTIES. ISSUER represents and warrants to
SHAREHOLDERS and MSI 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 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
20,000,000 shares of common stock, $0.001 part value, of which 1,200,000 are
issued and outstanding, and 1,000,000 shares of preferred stock, par value
$.001, none of which are issued. All outstanding shares are fully paid and non
assessable, free of liens, encumbrance, options, restrictions and legal or
equitable rights 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. None of the
outstanding shares of ISSUER are subject to any stock restriction agreements.
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.
iii. Financial Statements. Exhibit B to this Agreement includes
the balance sheet of ISSUER as of August 31, 1996, and the related statements of
income and retained earnings for the period then ended. The financial statements
have been prepared in accordance with generally accepted accounting principles
consistently followed by ISSUER throughout the periods indicated,
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and fairly present the financial position of ISSUER as of the date of the
balance sheet in the financial statements, and the results of its operations for
the 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. Liabilities. ISSUER does not have any debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that is not reflected on the ISSUERS'
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. At closing, ISSUER will be free
from any and all liabilities, liesn, claims and/or commitments.
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 any license, indenture, mortgage,
charter, instrument, articles of incorporation, bylaw, or other agreement or
instrument to which ISSUER or its shareholders are a party, or by which they may
be bound, nor will any consents or authorizations of any party other than those
hereto be required, (b) an event that would cause ISSUER to be liable to any
party, or (c) an event that would result in the creation or imposition or any
lien, charge or encumbrance on any asset of ISSUER or upon the securities of
ISSUER to be acquired by SHAREHOLDERS.
vii. Full Disclosure. None of the representations and
warranties made by the ISSUER, or in any certificate or memorandum furnished or
to be furnished by the ISSUER, contains or will contain any untrue statement of
a material fact, or omit any 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, and 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. Litigation. ISSUER is not (and has not been) a part to any
suit, action, arbitration, or legal, administrative, or other proceeding, or
pending governmental investigation. To the best knowledge of the ISSUER, there
is no basis for any such action or proceeding and no such action or proceeding
is threatened against ISSUER and ISSUER is not subject to or in default with
respect to any order, writ, injunction or decree of any federal, state, local,
or foreign court, department, agency, or instrumentality.
xi. 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.
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xii. Corporate Documents. Copies of each of the following
documents, which are true, complete and correct in all material respects, will
be attached to and made a part of this Agreement:
1. Articles of Incorporation;
2. Bylaws;
3. Minutes of Shareholders Meetings;
4. Minutes of Directors Meetings;
5. List of Officers and Directors;
6. Balance Sheet as of August 31, 1996, together with other
financial statements described in Section 2(iii);
7. Stock register and stock records of ISSUER and a current,
accurate list of ISSUER's shareholders.
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 and encumbrances 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 law,
rule, regulation, or decree which would, as a result of the issuance of the
Shares to SHAREHOLDERS, impair, restrict or delay SHAREHOLDERS' voting rights
with respect to the Shares.
3. SHAREHOLDERS and MSI represent and warrant to ISSUER the following:
i. Organization. MSI is a corporation duly organized, validly
existing, and in good standing under the laws of Washington, 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 Washington. All actions
taken by the incorporators, directors and shareholders of MSI have been valid
and in accordance with the laws of the State of Washington.
ii. Shareholders and Issued Stock. Exhibit A annexed hereto
sets forth the names and share holdings of 100% of MSI's shareholders.
iii. Listing Stock for Trading. Upon closing, SHAREHOLDERS and
MSI shall take all steps reasonably necessary to get the ISSUER's common stock
listed for trading in NASD Automated Bulletin Board and to, as soon as
practicably possible, have the company listed with Standard & Poors or Moodys in
their Accelerated Corporate Report.
iv. Counsel. SHAREHOLDERS and MSI represent and warrant that
prior to Closing, that they are represented by independent counsel or have had
the opportunity to retain independent counsel to represent them in this
transaction and that prior to Closing, the law offices of Eric P. Liftman, P.A.
has acted as exclusive counsel tot he ISSUER and has not represented either the
SHAREHOLDERS or MSI 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, the availability of which is to be
established to the satisfaction of ISSUER. SHAREHOLDERS agrees, prior to any
Transfer,
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to give written notice to ISSUER expressing his desire to effect the transfer
and describing the proposed transfer.
5. CLOSING. The closing of this transaction shall take place at the law
offices of Eric P.Littman, 1428 Brickell Avenue, 8th Floor, Miami, Florida.
Unless the closing of this transaction takes place on or before August 31, 1996,
then either party may terminate this Agreement.
6. DOCUMENTS TO BE DELIVERED AT CLOSING.
i. By the ISSUER
(1) Board of Directors Minutes authorizing the issuance of
a certificate or certificates for MARICULTURE SYSTEMS, INC. 8,800,00 Shares,
registered in the names of the SHAREHOLDERS equal to their pro-rata holdings in
MSI.
(2) The resignation of all officers of ISSUER.
(3) A Board of Directors resolution appointing such person as
SHAREHOLDERS designate as a director(s) of ISSUER.
(4) The resignation of all the directors of ISSUER, except
that of SHAREHOLDERS designee, dated subsequent to he resolution described in 3,
above.
(5) Unaudited financial statements of ISSUER, which shall
include a balance sheet dated as of August 31, 1996 and statements of
operations, stockholders equity and cash flows 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 directors meeting, financial
statements, checkbooks, savings account books, minutes of shareholder and
directors 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.
(8) Within 30 days of closing, a private placement
memorandum pursuant to Rule 504 of Regulation D as promulgated under the
Securities Act of 1993. for up to 988,000 shares of ISSUER's stock, on a post
closing basis, at a price of $1.00 per share.
(9) An Opinion Letter from ISSUER's Attorney attesting to
the validity and condition of the ISSUER.
ii. By SHAREHOLDER AND MSI:
(1) Delivery to the ISSUER, or to its Transfer Agent, the
certificates representing 100% of the issued and outstanding stock of MSI.
(2) Consents signed by all the shareholders of MSI
consenting to the terms of this Agreement.
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7. REMEDIES.
i. Arbitration. Any controversy or claim arising out of, or
relating to, this Agreement, or the making, performance, or interpretation
thereof, shall be settled by arbitration in Miami, Dade County, Florida in
accordance with the Commercial 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 headings
throughout this Agreement are for convenience and reference only, and shall in
now way be deemed to define, limit, or add to the meaning of any provision of
this Agreement.
ii. No Oral change. This Agreement and any provision herein,
may not be waived, changed, modified, or discharged orally, but only by a
written agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, or discharge is sought.
iii. No Waiver. Except as otherwise provided herein, no waiver
of any covenant, condition, or provision of this Agreement shall be deemed to
have been made unless expressly in writing and signed by the party against whom
such waiver is charged; and (a) the failure of any party to insist in any one or
more cases upon the performance of any of the provisions, covenants, or
conditions of this Agreement or to exercise any option herein contained shall
not be construed as a waiver or relinquishment for the future of any such
provisions, covenants, or conditions, (b) 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 (c) 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 to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed, and by fax, as follows:
ISSUER: Dale B. Finfrock
P.O. Box 669
Palm Beach, FL 33480
With a copy to: Eric P. Liftman, Esquire
1428 Brickell Ave
8th Floor
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Miami, Florida 33131
Tel: (305) 372-3322
Fax: (305) 372-0280
MSI: Robert E. Work
7221 196th Street, S.W.
Lynwood, WA 98036
IN WITNESS WHEREOF, the undersigned has executed this Agreement this
23rd day of August, 1996.
MARICULTURE SYSTEMS, INC. MARICULTURE SYSTEMS, INC.
A Florida corporation A Washington corporation
By: /s/ Dale B. Frinfrock By: /s/ Robert E. Work
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Dale B. Frinfrock, President Robert E. Work, President
