EXHIBIT 10.?
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement") is
entered into and effective as of April 22, 2002, by and between ARGOSY
INTERNATIONAL, LTD, a Turks and Caicos Islands corporation (the "SHAREHOLDER"),
TITANIC EXPLORATIONS LIMITED (BVI), a British Virgin Islands company ("TEL"),
DANEPATH LTD., a United Kingdom company ("DL") and CLIP 'N ▇▇▇▇▇▇ FASHIONS,
INC., a Delaware corporation ("CNP" or the "COMPANY")
1. RECITALS
This Agreement is entered into with reference to and in contemplation
of the following facts, circumstances and representations:
1.1 The SHAREHOLDER is the owner of 200 shares of the common stock of TEL
which represent all of the issued and outstanding shares of the common stock of
TEL (the "TEL Shares").
1.2 The SHAREHOLDER is also the owner of 100 shares of common stock of DL
which represents all of the issued and outstanding shares of common stock of DL
(the "DL Shares").
1.3 TEL desires to issue a total of 2,333,334 shares of its common stock
(the "CNP Shares") to the SHAREHOLDER, or its assigns, in exchange for both the
TEL Shares and the DL Shares.
1.4 The SHAREHOLDER desires to exchange both the TEL Shares and the DL
Shares for the CNP Shares in accordance with the terms and conditions of this
Agreement.
1.5 TEL and DL desire that this transaction be consummated.
2. EXCHANGE AND ISSUANCE OF SHARES
2.1 Exchange of CNP Shares: CNP shall exchange and deliver to the
SHAREHOLDER, a total of 2,333,334 restricted shares of CNP common stock with 99%
of the CNP Shares being allocated for the TEL Shares and 1% for the DL Shares.
2.2 Exchange of TEL Shares: At the Closing, the SHAREHOLDER shall exchange
and deliver to CNP a total of 200 shares of TEL common stock which represent one
hundred percent (100%) of the issued and outstanding shares of TEL and a total
of 100 Shares of DL common stock which represent one hundred percent (100%) of
the issued and outstanding shares of DL.
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2.3 Nature of CNP Shares: The SHAREHOLDER shall be issued the CNP Shares
which unless otherwise contractually restricted, shall be subject to a one (1)
year holding period before the CNP Shares are eligible for sale in the U.S.
public market. The sale of the CNP Shares will be further limited by the resale
provisions of SEC Rule 144.
2.4 Restricted Nature of CNP Shares: Notwithstanding the one (1) year
holding period for the CNP Shares, if the SHAREHOLDER becomes an "affiliate<-1-
34> or "control person" of CNP, it will be subject to certain limitations with
respect to the sale of its CNP Shares. Accordingly, as a result of such a
designation, the sale of the CNP Shares will be limited by SEC Rule 144.
2.5 Private Sale Acknowledgment: The parties acknowledge and agree that the
exchange and issuance of the CNP Shares is being undertaken as a private sale
pursuant to Section 4(2) of the Securities Act of 1933, as amended and the
Delaware General Corporation Law and is not being transacted via a broker-dealer
and/or in the public market place.
2.6 Status of Present Share Ownership and Contemplated Share Issuance by
CNP: The parties hereto acknowledge and agree that upon the issuance of the CNP
Shares, and upon the Closing of the share exchange contemplated by this
Agreement, that the following will be the resulting share ownership of CNP:
Name No. Shares % Ownership
1. Present CNP
Shareholders 8,400,000 78.26%
2. TEL Shareholder
and DL Shareholder 2,333,334 21.74%
TOTALS 10,733,334 100%
========== =======
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The COMPANY represents and warrants to the SHAREHOLDER, TEL and DL as
follows:
3.1 Organization: CNP is a corporation duly incorporated and validly
existing under the laws of the State of Delaware and is in good standing with
respect to all of its regulatory filings.
3.2 Capitalization: The authorized capital of CNP consists of 50,000,000
common shares with a par value $.001 and with the exception of the common shares
described in Paragraph 2.6, no common shares will have been validly authorized
and issued by the COMPANY prior to the Closing of the contemplated share
exchange.
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3.3 Financial Statements: CNP has furnished to the SHAREHOLDER, TEL and DL
audited financial statements for the period ending December 31, 2001. That at
the Closing the financial affairs of CNP will be materially the same as
represented in the financial statements for the period ending December 31, 2001.
3.4 Books and Records: All material transactions of CNP have been promptly
and properly recorded or filed in or with its books and records and the Minute
Book of CNP contains records of all meetings and proceedings of the shareholders
and directors thereof.
3.5 Legal Compliance: To the best of its knowledge, CNP is not in breach of
any laws, ordinances, statutes, regulations, by-laws, orders or decrees to which
CNP is subject or which apply to it or any of its assets.
3.6 Tax Returns: All tax returns and reports of CNP required by law to be
filed prior to the date hereof have been filed and are substantially true,
complete and correct and all taxes and governmental charges have been paid.
3.7 Adverse Financial Events: CNP has not experienced nor is it aware of
any occurrence or event which has had or might reasonably be expected to have a
material adverse effect on its financial condition.
3.8 Disputes, Claims and Investigations: There are no disputes, claims,
actions, suits, judgments, investigations or proceedings outstanding or pending
or to the knowledge of CNP threatened against or affecting CNP at law or in
equity or before or by any federal, state, municipal or other governmental
department, commission, board, bureau or agency.
3.9 Employee Liabilities: CNP has no known liability to former employees or
any liability to any governmental authorities with respect to current or former
employees.
3.10 No Conflicts or Agreement Violations: The execution, delivery and
performance of this Agreement will not conflict with or be in violation of the
articles or by-laws of CNP or of any agreement to which CNP is a party and will
not give any person or company a right to terminate or cancel any agreement or
right enjoyed by CNP and will not result in the creation or imposition of any
lien, encumbrance or restriction of any nature whatsoever in favor of a third
party upon or against the assets of CNP.
3.11 Validly Issued and Authorized Shares: That the CNP Shares will be
validly authorized and issued by the COMPANY, they will be fully paid and
non-assessable and they will be issued in full compliance with all federal and
state securities laws.
3.12 Restrictive Legend: That the CNP Shares will have a restrictive legend
imposed thereon identifying them as "Restricted Shares" which are subject to the
conditions and limitations of SEC Rule 144 with respect to their sale in the
U.S. public market place.
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3.13 Corporate Authority: The officers or representatives of the COMPANY
executing this Agreement represent that they have been authorized to execute
this Agreement pursuant to a resolution of the Board of Directors of the
COMPANY.
4. REPRESENTATIONS OF SHAREHOLDER, TEL AND DL
The SHAREHOLDER, TEL and DL collectively and individually hereby represent
and warrant to CNP as follows:
4.1 Share Ownership: That the SHAREHOLDER is the owner, beneficially and of
record, of the TEL Shares and the DL Shares and said shares are free and clear
of all liens, encumbrances, claims, charges and restrictions.
4.2 Transferability of TEL Shares and DL Shares: That the SHAREHOLDER has
full power to transfer the TEL Shares and the DL Shares to CNP without obtaining
the consent or approval of any other person or governmental authority.
4.3 Validly Issued and Authorized Shares: That the TEL Shares and the DL
Shares are validly authorized and issued, fully paid, and nonassessable, and the
TEL Shares have been so issued in full compliance with all securities laws of
the British Virgin Islands and that the DL Shares have been so issued in full
compliance with all securities laws of the United Kingdom.
4.4 Organization: TEL is a corporation duly incorporated and validly
existing under the laws of the British Virgin Islands and is in good standing
with respect to all of its regulatory filings, and DL is a corporation duly
incorporated and validly existing under the laws f the United Kingdom and is in
good standing with respect to all of its regulatory filings.
4.5 Capitalization: The authorized capital of TEL consists of 50,000 common
shares with a par value of $1.00 and of which 200 common shares are issued and
outstanding as fully paid and non-assessable shares. The authorized capital of
DL consists of ________ common shares with a par value of $_______ and of which
100 common shares are issued and outstanding as fully paid and non-assessable
shares.
4.6 Financial Statements: TEL and DL have furnished to CNP financial
statements for the period ending December 31, 2001. That at the Closing the
financial affairs of TEL and DL will be materially the same as represented in
these same financial statements.
4.7 Books and Records: All material transactions of TEL and DL have been
promptly and properly recorded or filed in or with its books and records and the
Minute Books of TEL and DL contain records of all meetings and proceedings of
the shareholders and directors thereof.
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4.8 Legal Compliance: TEL and DL are not in breach of any laws, ordinances,
statutes, regulations, by-laws, orders or decrees to which TEL and DL are
subject or which apply to them or any of their assets.
4.9 Tax Returns: All tax returns and reports of TEL and DL required by law
to be filed prior to the date hereof have been filed and are true, complete and
correct and all taxes and governmental charges have been paid.
4.10 Adverse Financial Events: TEL and DL have not experienced nor are they
aware of any occurrence or event which has had or might reasonably be expected
to have a material adverse effect on their financial conditions.
4.11 Disputes, Claims and Investigations: There are no disputes, claims,
actions, suits, judgments, investigations or proceedings outstanding or pending
or to the knowledge of TEL or DL threatened against or affecting TEL or DL at
law or in equity or before or by any federal, municipal or other governmental
department, commission, board, bureau or agency.
4.12 Employee Liabilities: TEL and DL have no liability to former employees
or any liability to any government authorities with respect to current or former
employees.
4.13 No Conflicts or Agreement Violations: The execution, delivery and
performance of this Agreement will not conflict with or be in violation of the
Memorandum of Association of TEL or DL or of any agreement to which TEL or DL is
a party and will not give any person or company a right to terminate or cancel
any agreement or right enjoyed by TEL or DL and will not result in the creation
or imposition of any lien, encumbrance or restriction of any nature whatsoever
in favor of a third party upon or against the assets of TEL or DL.
4.14 No Liens: That TEL or DL have not received a notice of any assignment,
lien, encumbrance, claim or charge against the TEL Shares or the DL Shares.
4.15 Assets and Joint Venture of TEL: That TEL's assets include a
proprietary library of research on shipwrecks which define the detail of their
valuable cargo and which assets as specifically set forth in the TEL financial
statements. Still further that TEL is a 50% participant in a joint venture
established for the purpose of locating and recovering valuable cargo from
various shipwrecks and that a copy of said Joint Venture Agreement has been
provided to CNP.
4.16 Assets and Business of DL: That DL is in the business of deep water
exploration and owns and operates ships, Remote Operated Vehicles and employs a
professional team who have collaborated in several successful maritime recovery
projects. The nature and extent of these assets are specifically set forth in
the DL financial statements.
4.17 Corporate Authority: The officers or representatives of the
SHAREHOLDER, TEL and DL executing this Agreement represent that they have been
authorized to execute this Agreement pursuant to a resolution of their
respective Boards of Directors.
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5. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER ALONE
The SHAREHOLDER alone further represents and warrant to CNP as follows with
respect to the CNP Shares:
5.1 Financially Responsible: That it is financially responsible, able to
meet its obligations and acknowledges that this investment will be speculative.
5.2 Investment Experience: That it has had experience in the business of
investments in one or more of the following: (i) investment experience with
securities such as stocks and bonds; (ii) ownership of interests in
partnerships, new ventures and start-up companies; (iii) experience in business
and financial dealings; and that it can protect its own interests in an
investment of this nature and they do not have an "Investor Representative", as
that term is defined in Regulation D of the Securities Act of 1933 and do not
need such an Investor Representative.
5.3 Investment Risk: That it is capable of bearing the high degree of
economic risks and burdens of this investment, including but not limited to the
possibility of complete loss of all its investment capital and the lack of a
liquid market, such that it may not be able to liquidate readily the investment
whenever desired or at the then current asking price.
5.4 Access to Information: That it has had access to the information
regarding the financial condition of the COMPANY and it was able to request
copies of such information, ask questions of and receive answers from the
COMPANY regarding such information and any other information their desires
concerning the CNP Shares, and all such questions have been answered to its full
satisfaction.
5.5 Private Transaction: That at no time was it presented with or solicited
by any leaflet, public promotional meeting, circular, newspaper or magazine
article, radio or television advertisement or any other form of general
advertising.
5.6 Investment Intent: The CNP Shares are not being purchased with a view
to or for the resale or distribution thereof and it has no present plans to
enter into any contract, undertaking, agreement or arrangement for such resale
or distribution.
5.7 Due Diligence: That the SHAREHOLDER shall have completed a due
diligence review of the affairs of CNP and is satisfied with the results of that
review.
6. CLOSING, ESCROW HOLDER AND CONDITIONS TO CLOSING
6.1 Exchange Closing: The closing of the share exchange as contemplated by
this Agreement (the "Closing") shall take place in San Diego, California, at
such time and place as
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may be agreed among by the parties, but in no event later than April 22, 2002,
unless otherwise extended in writing by the parties.
6.2 Appointment of Escrow Holder: The parties hereby appoint ▇▇▇▇▇▇▇ ▇.
▇▇▇, III, ESQ. of San Diego, California as the Escrow Holder pursuant to this
Agreement.
6.3 Opinion of Counsel for CNP: SHAREHOLDER. TEL and DL shall have received
an opinion from the legal counsel for CNP, in form and substance reasonably
satisfactory to the SHAREHOLDER, TEL and DL, to the effect that:
1. CNP is a corporation duly organized and legally existing under the laws of
the State of Delaware and is in good standing with respect to all of its
regulatory filings, and
2. This Agreement when duly executed and delivered by CNP, constitutes a
legal, valid and binding obligation of CNP enforceable against it in
accordance with its terms, and
3. The CNP Shares delivered pursuant to the Agreement have been validly issued
are fully paid and non-assessable, and
4. The CNP Shares have been legally and validly issued and are in compliance
with all federal and state securities laws including but not limited to
Section 4(2) of the Securities Act of 1933, as amended, and the Delaware
General Corporation Law.
6.4 Opinion of Counsel for SHAREHOLDER, TEL and DL: CNP shall have received
an opinion from the legal counsel for the SHAREHOLDER, TEL and DL, in form and
substance reasonably satisfactory to CNP, to the effect that:
1. TEL is a corporation duly organized and legally existing under the laws of
the British Virgin Islands and is in good standing with respect to all of
its regulatory filings, and
2. DL is a corporation duly organized and legally existing under the laws of
the United Kingdom and is in good standing with respect to all of its
regulatory filings, and
3. The TEL Shares and DL delivered pursuant to this Agreement have been
validly issued, fully paid, non-assessable, and have been originally issued
in full compliance with all securities laws of their respective regulatory
agencies and jurisdictions.
4. The SHAREHOLDER has the full power to transfer the TEL Shares and the DL
Shares to CNP without obtaining the consent or approval of anyother person
or governmental agency.
5. TEL is a party to that certain Joint Venture Agreement, that TEL is not in
breach of said Agreement and that except as disclosed in its financial
statements, that there are no liens, encumbrances, claims or charges
against TEL's interest in said Agreement or its other assets.
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6. That except as disclosed in its Financial Statements, that that there are
no liens, encumbrances, claims or charges against the assets of DL.
6.5 Escrow Conditions and Closing: Prior to the Closing the following will
be required:
1. Delivery of TEL Shares and DL Shares: The SHAREHOLDER shall deliver to the
Escrow Holder the certificate or certificates representing the 200 TEL
Shares registered in the name of TEL, and the 100 DL Shares registered in
the name of DL, duly endorsed for transfer accompanied by a duly executed
assignments of the TEL Shares and the DL Shares to CNP.
2. Delivery of CNP Shares: CNP shall deliver to the Escrow Holder a total of
2,333,334 of the CNP Shares registered in the name of the SHAREHOLDER.
3. Delivery of Certificates of Good Standing: Each party shall deliver to the
Escrow Holder a current Certificate of Good Standing issued by the
Secretary of State or appropriate agency of its respective jurisdiction.
4. Requisite Corporate Resolutions: Each party shall deliver to the Escrow
Holder certified copies of resolutions from their respective Boards of
Directors authorizing the subject transaction.
5. Satisfactory Completion of Due Diligence: Each party shall deliver to the
Escrow Holder written notice that it has completed its due diligence
investigation and is satisfied with the results of such investigation.
6. Legal Opinions and Documents: Both parties shall deliver to the Escrow
Holder such legal opinions and other documents as are required by the terms
and conditions of the Agreement.
6.6 Close of Transaction: The subject transaction shall "close" upon the
satisfaction of the above conditions.
6.7 Notices: All notices given pursuant to this Agreement must be in
writing and may be given by (1) personal delivery, or (2) registered or
certified mail, return receipt requested, or (3) via facsimile transmission to
the Escrow Holder the parties as set forth below. Any party hereto may by notice
so given change its address for any future notices:
ESCROW HOLDER: ▇▇▇▇▇▇▇ ▇. ▇▇▇, ESQ.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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SHAREHOLDER
TEL and DL:
CNP: ▇▇▇▇▇▇▇ ▇. ▇▇▇, ESQ.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
7. COOPERATION, ARBITRATION, INTERPRETATION, MODIFICATION AND ATTORNEY FEES
7.1 Cooperation of Parties: The parties further agree that they will do all
things necessary to accomplish and facilitate the purpose of this Agreement and
that they will sign and execute any and all documents necessary to bring about
and perfect the purposes of this Agreement.
7.2 Arbitration: The parties hereby submit all controversies, claims and
matters of difference arising out of this Agreement to arbitration in San Diego,
California according to the rules and practices of the American Arbitration
Association from time to time in force. This submission and agreement to
arbitrate shall be specifically enforceable. The Agreement shall further be
governed by the laws of the State of Delaware.
7.3 Interpretation of Agreement: The parties agree that should any
provision of this Agreement be found to be ambiguous in any way, such ambiguity
shall not be resolved by construing such provisions or any part of or the entire
Agreement in favor of or against any party herein, but rather by construing the
terms of this Agreement fairly and reasonably in accordance with their generally
accepted meaning.
7.4 Modification of Agreement: This Agreement may be amended or modified in
any way at any time by an instrument in writing stating the manner in which it
is amended or modified and signed by each of the parties hereto. Any such
writing amending or modifying this Agreement shall be attached to and kept with
this Agreement.
7.5 Attorney Fees: If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of the Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it may be
entitled.
7.6 Entire Agreement: This Agreement constitutes the entire Agreement and
understanding of the parties hereto with respect to the matters herein set
forth, and all prior negotiations, writings and understandings relating to the
subject matter of this Agreement are merged herein and are superseded and
canceled by this Agreement.
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7.7 Counterparts: This Agreement may be signed in one or more counterparts.
7.8 Facsimile Transmission Signatures: A signature received pursuant to a
facsimile transmission shall be sufficient to bind a party to this Agreement.
SHAREHOLDER
RGOSY INTERNATIONAL, LTD.
DATED: April 22, 2002 BY:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
TITANIC EXPLORATIONS LIMITED (BVI)
DATED: April 22, 2002 BY:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
DANEPATH LTD.
DATED: April 22, 2002 BY:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
CLIP 'N ▇▇▇▇▇▇ FASHIONS, INC.
DATED: April 22, 2002 BY:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
DATED: April 22, 2002 BY:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇, III
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇, III
Assistant Secretary and General Counsel
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