EXHIBIT 6.1
AMENDMENT
EXCHANGE AGREEMENT
THIS AMENDED EXCHANGE AGREEMENT ("Agreement"), dated effective as of
September 9, 1999 is by and between DIPPY FOODS, INC., a Nevada corporation
("Dippy Nevada") DIPPY FOODS, INC., a California corporation ("Dippy
California"), and certain shareholders of Dippy Nevada as listed on Exhibit "A"
attached hereto and incorporated herein by reference (the "Dippy Nevada
Shareholders") (collectively, the "Parties").
WITNESSETH
WHEREAS, as of the date hereof, Dippy California has 10,000,000 shares of
common stock authorized, of which 6,400,000 are outstanding and held by the
Shareholders listed in Section 1.1 hereof ("the Dippy California
Shareholders");
WHEREAS, Dippy Nevada is a publicly traded company;
WHEREAS, the Dippy California Shareholders agree and desire to exchange
their shares of Dippy California for shares of common stock of Dippy Nevada on
the terms and conditions set forth in this Exchange Agreement (hereinafter
called the "Agreement");
WHEREAS, Dippy Nevada desires to exchange newly issued shares of common
stock of Dippy Nevada for all of the shares of common stock of Dippy California
("the Shares") held by the Dippy California Shareholders on the terms and
conditions set forth herein;
WHEREAS, Dippy California desires to become a wholly-owned subsidiary of
Dippy Nevada;
WHEREAS, Dippy Nevada desires to conduct a private offering after the
Exchange occurs (the "Private Offering") as set forth below; and
WHEREAS, the Parties hereby set forth the generally proposed terms of the
transaction set forth herein, but intend to undertake the final transaction, if
applicable, under one the various provisions of the Internal Revenue Code
(including without limitation Sections 351, 368 and 721 of the Code) such that
cash payable hereunder, including the funds raised in the Private Offering,
shall be used to retire debt of Dippy California and such that securities
transferred herein qualify as tax free transactions.
NOW THEREFORE, in consideration of the premises and respective mutual
agreements, covenants, representations and warranties herein contained, it is
agreed by and among the Parties as follows:
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THE EXCHANGE
1.1 Exchange of Shares. Upon execution of this Agreement as provided in
Section 5.1 hereto (the "Closing"), subject to the terms and conditions herein
set forth, and on the basis of the representations, warranties and agreements
herein contained, the Dippy California Shareholders listed below will exchange
their shares of common stock of Dippy Nevada in the following denominations
("Exchange"):
NEVADA SHARES OF DIPPY CALIFORNIA SHARES OF DIPPY
NAME OF SHAREHOLDER TO BE SURRENDERED TO BE RECEIVED
-------------------------- ---------------------------- ----------------
Xxx Xxxxxxxxx 5,500,000 4,000,000
Bromley Xxxxxx 250,000 125,000
Xxx Xxxxxxxx 250,000 125,000
Xxxxxx and Xxxxx Xxxxxxx 11,428 5,714
Xxxxx Xxxxx 12,000 6,000
Xxxxx Xxxxx & Xxxxxxxxxx 24,000 12,000
Xxxxxxxx
Xxxxxx and Xxxxx Xxxxxx 12,000 6,000
Xxx Vivalacqua 14,400 7,200
Xxxxx and Xxxxxx Xxxxx 57,140 28,570
Xxxxxxxx Xxxxxxxx 11,428 5,714
Xxxxx Hrechdaikian 12,000 6,000
Xxxxxxxx and Xxxxxxx Xxxx 12,000 6,000
Xxxx and Xxxxxxxx Xxxxxx 11,428 5,714
Xxxxxxx Xxxx Xxxxx 11,428 5,714
Xxxxxxx Xxxxx 11,428 5,714
Xxxxxxx Xxxxxxxx 250,000 125,000
Stuart Xxxxx Xxxxxxx 11,428 5,714
Xxxxx and Xxxxxx Xxxxxx 12,000 6,000
Xxxxxx Xxxx 31,428 15,714
Xxxxxxx and Xxxxx Xxxxxxxxxxxx 16,000 8,000
Xxxxxxx and Xxxx Xxxx 13,428 6,714
Xxxxxxx Xxxx 22,856 11,428
Xxxxxx Xxxxxxxxx 11,428 5,714
Xxxxxx Xxxxx 26,428 13,214
Xxxxx Xxxxxxxx 11,428 5,714
Xxxxxxx Xxxxx 20,000 10,000
Xxxxxxxx Xxxxx 11,428 5,714
------- -------
TOTAL 6,638,532 4,569,266
Upon completion of the Exchange, Dippy California shall be a wholly owned
subsidiary of Dippy Nevada. (The combined companies shall hereafter be referred
to simply as "Dippy Nevada.")
1.2 Instruments of Conveyance and Transfer. At the Closing, the Dippy
California Shareholders shall deliver a certificate or certificates
representing their entire share ownership in Dippy California to Dippy Nevada
sufficient to transfer all right, title, and interest in the share to Dippy
Nevada. Concurrently at the closing, Dippy Nevada shall deliver to the Dippy
California Shareholders a certificate or certificates representing
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shares of common stock of Dippy Nevada in the same denominations as set forth in
Section 1.1 hereof sufficient to transfer all right, title, and interest in
those shares to the Dippy California Shareholders.
1.3 Consideration for the Exchange. In consideration for the Exchange,
Dippy California shall receive a total amount of $200,000 ("Exchange Price")
from Dippy Nevada prior to the Closing. Dippy California hereby acknowledges
receipt of $200,000 having been paid in full as agreed.
ARTICLE TWO
THE PRIVATE OFFERING
2.1 The Private Offering. Upon completion of the Exchange as set forth in
Article One of this Agreement, Dippy Nevada shall use its best efforts to issue
and sell shares in a Private Offering under Regulation D of the Securities Act
of 1933, as amended (the "Act"), to raise a minimum of $700,000 and a maximum
$885,000. The Private Offering shall be conducted in accordance with all rules
and regulations of the Act as well as with any and all rules and regulations of
any state in which the Private Offering is sold
2.2 Consideration by Dippy Nevada Shareholders. Certain individuals and
entities own freely tradable shares of common stock of "Dippy Nevada (the
"Dippy Nevada Shareholders").
ARTICLE THREE
USE OF PROCEEDS AND CAPITALIZATION
3.1 Use of Proceeds. Dippy Nevada hereby agrees that to the following uses
of proceeds received under this Agreement and in the Private Offering:
a. $115,000 gross proceeds to be received prior to Closing, shall
first be used to pay or pre-pay any required fees and expenses of
accountants to prepare audited financial statements of Dippy Nevada and of
attorneys to prepare the Private Offering documents. Any remaining proceeds
of the $115,000 shall be used primarily to retire debt of Dippy California,
with 10% of the remaining proceeds to be available for working capital.
b. The gross proceeds to be received from the Private Offering, if
any, or, alternatively, from the sale of the Pledge Shares, shall first be
used to pay any additional fees and expenses of accountants, attorneys, and
other required professionals. After the professional fees are paid, the
remaining proceeds shall be used primarily to retire debt of Dippy
California, with 10% of the remaining proceeds to be available for working
capital.
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ARTICLE FOUR
REPRESENTATIONS AND COVENANTS OF
THE PARTIES
4.1 Representations and Warranties of Dippy California. Dippy California
hereby represents and warrants that:
a. Dippy California is a corporation duly organized, validly existing,
and in good standing under the laws of the State of California. It has all
requisite corporate power, franchises, licenses, permits, and authority to
won its properties and assets and to carry on its business as it has been
and is being conducted. Dippy California is duly qualified and in good
standing to do business in each jurisdiction in which a failure to so
qualify would have a Material Adverse Effect (as defined below) on Dippy
California. For purposes of this Agreement, the term "Material Adverse
Effect" means any change or effect that, individually or when taken
together with all other such changes or effects which have occurred prior
to the date of determination of the occurrence of the Material Adverse
Effect, is or is reasonably likely to be materially adverse to the
business, assets (including intangible assets), financial condition, or
results of operations of the entity.
b. The Dippy California Shares were duly authorized by the appropriate
corporate action of Dippy California.
4.2 Representations and Warranties of the Dippy California Shareholders.
The Dippy California Shareholders hereby represent and warrant that, on the
Closing Date as defined in Section 5.1 below, the Dippy California Shareholders
shall transfer title, in and to the Dippy California Share, to Dippy Nevada free
and xxxx of all liens, security interests, pledges, encumbrances, charges,
restrictions, demands and claims, of any kind and nature whatsoever, whether
direct or indirect or contingent, other than any legends required by the
securities laws.
4.3 Representations and Warranties of Dippy Nevada. Dippy Nevada hereby
represents and warrants that:
a. Dippy Nevada is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Nevada. It has all
requisite corporate power, franchises, licenses, permits, and authority to
own its properties and assets and to carry on its business as it has been
and is being conducted. Dippy Nevada is duly qualified and in good standing
to do business in each jurisdiction in which a failure to so qualify would
have a Material Adverse Effect on Dippy Nevada.
b. Dippy Nevada is an "Accredited Investor" as defined in Regulation D
of the Securities Act of 1933 (the "Act").
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c. Dippy Nevada's own account as principal, for investment purposes
only and not with a view to the resale or distribution thereof, in whole or
in part, and no other person or entity has a direct or indirect beneficial
interest in such Shares.
d. Dippy Nevada will not sell or otherwise transfer the Dippy
California Shares without registration under the Act or an exemption
therefrom and fully understands and agrees that Dippy Nevada must bear the
economic risk of Dippy Nevada's purchase for an indefinite period of time
because, among other reasons, the Shares have not been registered under the
Act or under the securities laws of any state and, therefore, cannot be
resold, pledged, asigned or otherwise disposed of unless they are
subsequently registered under the Act and under the applicable securities
laws of such states or unless an exemption from such registration is
available.
e. On the Closing Date as defined in Section 5.1 below, Dippy Nevada
shall transfer title, in and to the newly issued Dippy Nevada Shares to
Dippy California Shareholders free and clear of all liens, security
interests, pledges, encumbrances, charges, restrictions, demands and
claims, of any kind and nature whatsoever, whether direct or indirect or
contingent, other than any legends required by the securities laws.
4.4 Representations and Warranties of the Dippy Nevada Shareholders. The
Dippy Nevada Shareholders hereby collectively represent and warrant that they
each are the sole legal and beneficial owners of the number of shares of common
stock of Dippy Nevada set forth next to their name on Exhibit A and that, if
required by the terms of this Agreement, they can immediately transfer title, in
and to the Dippy Nevada Shares owned by them to the Dippy Nevada free and clear
of all liens, security interests, pledges, encumbrances, charges, restrictions,
demands and claims, of any kind and nature whatsoever, whether direct or
indirect or contingent, other than any legends required by the securities laws.
ARTICLE FIVE
CLOSING AND DELIVERY OF DOCUMENTS
5.1 Closing. The Closing shall be deemed to have occurred upon execution of
this Agreement. Immediately upon such execution, the following shall occur as
single integrated transaction.
5.2 Delivery by Dippy Nevada. Dippy Nevada shall deliver the certificates
representing the shares of common stock to the Dippy California Shareholders as
required by Section 1.1 and shall deliver to Dippy California the Purchase
Price as required in Section 1.3.
5.3 Delivery by Dippy California Shareholders. Dippy California
Shareholders shall deliver to Dippy Nevada the stock certificates and any and
all instruments of conveyance and transfer required by Section 1.2.
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ARTICLE SIX
MISCELLANEOUS
6.1 Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the transactions
contemplated hereby, and supersedes all prior agreements, arrangements and
understandings related to the subject matter hereof. No understanding, promise,
inducement, statement of intention, representation, warranty, covenant or
condition, written or oral, express or implied, whether by statute or otherwise,
has been made by any party hereto which is not embodied in this Agreement or the
written statements, certificates, or other documents delivered pursuant hereto
or in connection with the transactions contemplated hereby, and no party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not so set forth.
6.2 Notices. Any notice, request, instruction or other document required by
the terms of this Agreement, or deemed by any of the Parties hereto to be
desirable, to be given to any other Party hereto shall be in writing and shall
be given by facsimile, personal delivery, overnight, delivery, or mailed by
registered or certified mail, postage prepaid, with return receipt requested, to
the following addresses:
If to Dippy California or
The Dippy California Shareholders: Dippy Foods, Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxx Xxxxxxxxx
Fax: 562/000-0000
If to Dippy Nevada or the
Dippy Nevada Shareholders: Dippy Foods, Inc.
0000 X. Xxxxxx, #000
Xxxxxxxxx, XX X0X 0X0
Attention: Xxxxx Xxxxx, Esq.
Fax: 604/000-0000
With copies to: Xxxx X. Xxxx, Esq.
X.X. Xxx 0000
Xxx Xxxx Xxxx, Xx 00000
Fax: (000) 000-0000
The persons and addresses set forth above may be changed from time to time
by a notice sent as aforesaid. If notice is given by facsimile, personal
delivery, or overnight delivery in accordance with the provisions of this
Section, said notice shall be conclusively deemed given at the time of such
delivery. If notice is given by mail in accordance with the provisions of this
Section, such notice shall be conclusively deemed given seven calendar days
after deposit thereof in the United States mail.
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6.3 Waiver and Amendment. Any term, provision covenant, representation,
warranty of condition of this Agreement may be waived, but only by a written
instrument signed by the party entitled to the benefits thereof. The failure or
delay of any party at any time or times to require performance of any provision
hereof or to exercise its rights with respect to any provision hereof shall in
no manner operate as a waiver of or affect such party's right at a later time to
enforce the same. No waiver by any party of any condition, or of the breach of
any term, provision, covenant, representation or warranty contained in this
Agreement, in any one or more instances, shall be deemed to be or construed as a
further or continuing waiver of any such condition or breach or waiver of any
other condition or of the breach of any other term, provision, covenant,
representation or warranty. No modification or amendment of this Agreement shall
be valid and binding unless it be in writing and signed by all parties hereto.
6.4 Choice of Law. This Agreement and the rights of the parties hereunder
shall be governed by and construed in accordance with the laws of the State of
California including all matters of construction, validity, performance, and
enforcement and without giving effect to the principles of conflict of laws.
6.5 Jurisdiction. The parties submit to the jurisdiction of the Courts of
the State of California or a Federal Court empanelled in the State of California
for the resolution of all legal disputes arising under the terms of this
Agreement.
6.6 Counterparts; Facsimile Signatures. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same instrument. The Parties agree
that facsimile signatures of this Agreement shall be deemed a valid and binding
execution of this Agreement.
6.7 Attorneys' Fees. Except as otherwise provided herein, if a dispute
should arise between the parties including, but not limited to arbitration, the
prevailing party shall be reimbursed by the non-prevailing party for all
reasonable expenses incurred in resolving such dispute, including reasonable
attorneys' fees exclusive of such amount of attorneys' fees as shall be a
premium for result or for risk of loss under a contingency fee arrangement.
6.8 Taxes. Any income taxes required to be paid in connection with the
payments due hereunder, shall be borne by the party required to make such
payment. Any withholding taxes in the nature of a tax on income shall be
deducted from payments due, and the party required to withhold such tax shall
furnish to the party receiving such payment all documentation necessary to prove
the proper amount to withhold of such taxes and to prove payment to the tax
authority of such required withholding.
6.9 Shareholder and Director Approval. All of the provisions of this
Agreement, including the Closing, are expressly contingent upon the approval of
the shareholder and directors of both Dippy Nevada and Dippy California. Such
approvals shall be evidenced by an executed Certificate of the Secretary of
Dippy Nevada in
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substantially the form set forth in Exhibit C attached hereto. If any required
approvals are not received, this Attachment shall be automatically and
immediately terminated and of no effect and all Parties shall return or cause to
be returned any documents or items of value received in connection with this
Agreement. Further, the parties agree to keep the terms and subject of this
Agreement confidential and shall not disclose same to any third parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
the date of first written hereinabove.
DIPPY NEVADA DIPPY CALIFORNIA
DIPPY FOOD, INC. DIPPY FOODS, INC.,
A Nevada corporation a California corporation
/s/ Xxx Xxxxxxxxx /s/ Xxx Xxxxxxxxx
----------------------- -------------------------
By: By: Xxx Xxxxxxxxx
President President
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