STOCK EXCHANGE AGREEMENT
This
STOCK EXCHANGE AGREEMENT
(the "Agreement"), dated as of August 21, 2018 is being executed by
and between NaturalShrimp Holdings, Inc., ("NSH"), and
NaturalShrimp Incorporated, a Nevada corporation (“SHMP”).
WHEREAS:
A. NSH and SHMP are
executing and delivering this Agreement in reliance upon the
exemption from securities registration afforded by the rules and
regulations as promulgated by the United States Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "1933 Act");
B. NSH desires to
exchange, upon the terms and conditions set forth in this Agreement
(the “Exchange”), and SHMP agrees and approves such
Exchange, of 75,000,000 shares of common stock of SHMP for
5,000,000 shares of Series A Convertible Preferred stock of SHMP
(collectively, the “Shares”).
NOW THEREFORE, NSH and SHMP severally (and not jointly)
hereby agree as follows:
1. Exchange of Shares.
a.
Exchange of Shares.
On the Closing Date (as defined below), NSH shall return 75,000,000
shares of SHMP common stock to SHMP, which shall be cancelled and
returned to the unissued authorized shares of SHMP, and in
exchange, SHMP shall issue to NSH, 5,000,000 shares of Series A
Convertible Preferred Stock, which shall have such rights and
preferences as are provided for in the Certificate of Designation
for the Series A Convertible Preferred Stock as filed with the
secretary of state of Nevada. The common shares to be returned
shall be referred to as the “Common Shares”, and the
Series A Convertible Preferred Shares to be issued as part of the
Exchange shall be referred to as the “Preferred
Shares”.
b.
Value of Shares.
The Common Shares and the Preferred Shares are intended to have the
exact same value, where the same aggregate value is being exchanged
by SHMP and NSH.
c.
Closing Date.
Subject to the satisfaction (or written waiver) of the conditions
thereto set forth in Section 6 and Section 7 below, the date and
time of the Exchange pursuant to this Agreement (the "Closing
Date") shall be the date of execution of this Agreement. Both SHMP
and NSH shall have the Common Shares cancelled and the Preferred
Shares issued on the Closing date. The closing of the transactions
contemplated by this Agreement (the "Closing") shall occur on the
Closing Date at such location as may be agreed to by the
parties.
2. Representations and Warranties. Each Party represents and
warrants to the other Party that:
a.
Investment Purpose.
As of the date hereof, NSH is acquiring the Preferred Shares for
its own account and not with a present view towards the public sale
or distribution thereof, except pursuant to sales registered or
exempted from registration under the 1933 Act.
b.
Investment Status.
NSH has such knowledge and experience in business and financial
matters that it is capable of evaluating this transaction and the
proposed activities thereof, and the risks and merits of this
prospective investment.
c.
Reliance on
Exemptions. Each Party understands that the Preferred Shares
are being issued in reliance upon specific exemptions from the
registration requirements of United States federal and state
securities laws and that each Party is relying upon the truth and
accuracy of the other Party, and the other Party's compliance with,
the representations, warranties, agreements, acknowledgments and
understandings of the Parties set forth herein in order to
determine the availability of such exemptions and the eligibility
of each Party to acquire the Preferred Shares.
d.
Information. Each
Party and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the
other Party, and materials relating to the exchange of the Common
and Preferred Shares which have been requested by either Party or
its advisors. Each Party and its advisors, if any, have been
afforded the opportunity to ask questions of the other Party.
Notwithstanding the foregoing, neither Party has not disclosed to
the other Party any material nonpublic information and will not
disclose such information unless such information is disclosed to
the public prior to or promptly following such disclosure. Neither
such inquiries nor any other due diligence investigation conducted
by either Party or any of its advisors or representatives shall
modify, amend or affect either Party's right to rely on the other
Party’s representations and warranties contained in this
Agreement. Each Party understands that its acquisition of the
Shares involves a significant degree of risk.
e.
Governmental
Review. Each Party understands that no United States federal
or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the
Shares.
f.
Transfer or
Re-sale. Each Party understands that (i) the sale or re-sale
of the Preferred Shares, or the underlying common shares that the
Preferred Shares are convertible into has not been and is not being
registered under the 1933 Act or any applicable state securities
laws, and the Preferred Shares or the common shares underlying the
Preferred Shares may not be transferred unless (a) the shares are
sold pursuant to an effective registration statement under the 1933
Act, (b) NSH shall deliver to SHMP, at the cost of NSH, an opinion
of counsel that shall be in form, substance and scope customary for
opinions of counsel in comparable transactions to the effect that
the shares to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration, (c) the shares are
sold or transferred to an "affiliate" (as defined in Rule 144
promulgated under the 1933 Act (or a successor rule) ("Rule 144"))
of NSH who agrees to sell or otherwise transfer the shares to be
sold or transferred only in accordance with this Section 2(f); (ii)
any sale of such shares made in reliance on Rule 144 may be made
only in accordance with the terms of said Rule and further, if said
Rule is not applicable, any re-sale of such shares under
circumstances in which the seller (or the person through whom the
sale is made) may be deemed to be an underwriter (as that term is
defined in the 1933 Act) may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the
SEC thereunder; and (iii) neither Party nor any other person is
under any obligation to register such Preferred Shares or the
common shares underlying the Preferred Shares under the 1933 Act or
any state securities laws or to comply with the terms and
conditions of any exemption thereunder (in each case).
g.
Legends. Each of
the Parties understand that the neither the Preferred Shares, nor
the common shares underlying the Preferred Shares have not been
registered under the 1933 Act and may be sold pursuant to Rule 144
or Regulation S without any restriction as to the number of
securities as of a particular date that can then be immediately
sold, the Preferred Shares or the common shares underlying the
Preferred Shares may bear a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against
transfer of the certificates for such shares):
"NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN
OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT."
The
legend set forth above shall be removed and a certificate without
such legend shall be issued to the respective holder of any
Security upon which it is stamped, if, unless otherwise required by
applicable state securities laws, (a) such Security is registered
for sale under an effective registration statement filed under the
1933 Act or otherwise may be sold pursuant to Rule 144 or
Regulation S without any restriction as to the number of securities
as of a particular date that can then be immediately sold, or (b)
such holder provides the other Party with an opinion of counsel, in
form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale or
transfer of such Security may be made without registration under
the 1933 Act. SHMP agrees to sell the NSH Shares, including those
represented by a certificate(s) from which the legend has been
removed, in compliance with NSH’s shareholder
agreement.
h.
Authorization;
Enforcement. This Agreement has been duly and validly
authorized. This Agreement has been duly executed and delivered on
behalf of each Party, and this Agreement constitutes a valid and
binding agreement of each Party enforceable in accordance with its
terms.
i.
Organization and
Qualification. Each Party is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, with full power and
authority (corporate and other) to own, lease, use and operate its
properties and to carry on its business as and where now owned,
leased, used, operated and conducted. Each Party is duly qualified
as a corporation to do business and is in good standing in every
jurisdiction in which its ownership or use of property or the
nature of the business conducted by it makes such qualification
necessary except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect. "Material
Adverse Effect" means any material adverse effect on the business,
operations, assets, financial condition or prospects of either
Party or its Subsidiaries, if any, taken as a whole, or on the
transactions contemplated hereby or by the agreements or
instruments to be entered into in connection herewith.
j.
Authorization;
Enforcement. (i) Each Party has all requisite corporate
power and authority to enter into and perform this Agreement and to
consummate the transactions contemplated hereby and thereby and to
cancel the Common Shares and to issue the Preferred Shares, in
accordance with the terms hereof and thereof, (ii) the execution
and delivery of this Agreement and the consummation by it of the
transactions contemplated hereby and thereby have been duly
authorized by each Party's Board of Directors and no further
consent or authorization of either Party, its Board of Directors,
or its shareholders is required, (iii) this Agreement has been duly
executed and delivered by each Party by its authorized
representative, and such authorized representative is the true and
official representative with authority to sign this Agreement and
the other documents executed in connection herewith and bind each
Party accordingly, and (iv) this Agreement constitutes a legal,
valid and binding obligation of each Party enforceable against each
Party in accordance with its terms.
k.
Issuance of Preferred
Shares. The Preferred Shares are duly authorized and will be
validly issued, fully paid and non-assessable, and free from all
taxes, liens, claims and encumbrances with respect to the issue
thereof.
4.
Covenants.
a.
Conditions to
Exchange. The obligation of each Party hereunder to exchange
the Common Shares and Preferred Shares at the Closing is subject to
the satisfaction, at or before the Closing Date of each of the
following conditions thereto:
i. Each
Party shall have executed this Agreement and delivered the same to
the other Party.
ii.
Each Party shall have delivered its respective Common or Preferred
Shares to the other Party in accordance with Section 1(a)
above.
iii.
The representations and warranties of the Parties are true and
correct in all material respects as of the date when made and
as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date),
and both Parties shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with at or prior to the Closing Date.
iv. No
litigation, statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental
authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby
which prohibits the consummation of any of the transactions
contemplated by this Agreement.
5.
Governing Law; Miscellaneous.
a.
Governing Law. This
Agreement shall be governed by and construed in accordance with the
laws of the State of Texas without regard to principles of
conflicts of laws. Any action brought by either party against the
other concerning the transactions contemplated by this Agreement
shall be brought only in the state courts of Texas or in the
federal courts located in the state of Texas. The parties to this
Agreement hereby irrevocably waive any objection to jurisdiction
and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based
uponforum non conveniens.
NSH and SHMP waive trial by jury. The prevailing party shall be
entitled to recover from the other party its reasonable attorney's
fees and costs. In the event that any provision of this Agreement
or any other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any such provision which may prove
invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process
and consents to process being served in any suit, action or
proceeding in connection with this Agreement or any other
Transaction Document by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law.
b.
Counterparts.
This
Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which shall constitute
one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the
other party.
c.
Headings. The
headings of this Agreement are for convenience of reference only
and shall not form part of, or affect the interpretation of, this
Agreement.
d.
Severability. In
the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any provision hereof which may prove
invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision
hereof.
e.
Entire Agreement;
Amendments. This Agreement and the instruments referenced
herein contain the entire understanding of the Parties with respect
to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither NSH nor SHMP
makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be
waived or amended other than by an instrument in writing signed by
both Parties.
f.
Notices. All notices, demands,
requests, consents, approvals, and other communications required or
permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in
the mail , registered or certified , return receipt requested ,
postage prepaid , (iii) delivered by reputable air courier service
with charges prepaid , or (iv) transmitted by hand delivery ,
telegram, or facsimile, addressed as set forth below or to such
other address as such party shall have specified most recently by
written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon
hand delivery or delivery by facsimile, with accurate confirmation
generated by the transmitting facsimile machine , at the address or
number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than
on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the
date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing ,
whichever shall first occur. The addresses for such communications
shall be:
If to
NSH, to:
NaturalShrimp
Holdings, Inc.
2068 N.
Valley Mills Drive
Waco,
TX 76710
Attn:
Gerald Easterling
If to
SHMP:
NaturalShrimp
Incorporated
5080
Spectrum Dr., Suite 1000
Addison,
TX 75001
Attn:
Bill Williams
Each
party shall provide notice to the other party of any change in
address.
g.
Successors and
Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and assigns.
Neither Party shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the
other.
h.
Third Party
Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of,
nor may any provision hereof be enforced by, any other
person.
i.
Survival. The
representations and warranties of the Parties and the agreements
and covenants set forth in this Agreement shall survive the closing
hereunder notwithstanding any due diligence investigation conducted
by or on behalf of the Parties. Each Party agrees to indemnify and
hold harmless the other Party and all their officers, directors,
employees and agents for loss or damage arising as a result of or
related to any breach or alleged breach by such Party of any of its
representations, warranties and covenants set forth in this
Agreement or any of its covenants and obligations under this
Agreement, including advancement of expenses as they are
incurred.
j.
Further Assurances.
Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
k.
No Strict
Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied
against any party.
[Signature Page Follows]
IN
WITNESS WHEREOF, the undersigned SHMP and NSH have caused this
Agreement to be duly executed as of the date first above
written.
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NatrualShrimp Incorporated
Signed:________________________
By:
Bill G. Williams
Title:
CEO
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NatrualShrimp Holdings, Inc.
Signed:_________________________
By:
Gerald Easterling
Title:
President
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