SHARE EXCHANGE AGREEMENT
Exhibit
10.1
SHARE
EXCHANGE AGREEMENT (this “Agreement”), dated as of September
29th,
2008, by and among parties listed on Exhibit “A” hereto (individually, a
“Seller” and collectively, “Sellers”), SPORTSQUEST INC., a Delaware corporation
(the “Company” or “SPQS”) and VERIDIGM, INC., a Delaware corporation
(“Purchaser” or “VRGD”) and DOMARK INTERNATIONAL, INC (a Nevada Corp) (“DOMK”)
(limited to those matters relating only to DOMK).
WITNESSETH:
WHEREAS,
Sellers
are the record and beneficial owners of all of the majority of the issued and
outstanding shares of Common and Preferred stock of the Company (the
“SPQS Shares”)
in the
amounts set forth beside their respective names on Exhibit
“A”;
and
WHEREAS,
upon
the terms and conditions set forth herein, Purchaser desires to purchase all
of
each Seller’s right, title and interest in and to each Seller’s common and
preferred shares as indicated in EXHIBIT
A and certain consideration listed in Section 2.02,
in
exchange for the assets listed in Section 2.03 below and for the irrevocable
assignment of the judgment value inclusive of all accrued interest to date,
collection costs to date, enforcement costs to date, and attorneys fees accrued
to date of case - BC
359831
in the
Los Angeles Superior Court pursuant to VRGD
(f/k/a
E-Notes Systems Inc, Plaintiff) vs. TOTALMED
SYSTEMS INC.,
(the
Defendant) (a Florida Corp) (the “TM
Judgment”)
as is
set forth on Exhibit
“B”
NOW,
THEREFORE,
in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, and for other good and valuable consideration,
the
receipt and sufficiency of which is hereby acknowledged, Sellers, the Company
and Purchaser hereby agree to be legally bound as follows:
ARTICLE
I
EXCHANGE
OF SHARES
1.01 Exchange
of Shares.
Upon
the terms and subject to the conditions of this Agreement, on the Closing Date
(as defined in Section
2.01
below),
each Seller is selling, conveying, assigning and transferring to Purchaser,
and
Purchaser is purchasing and acquiring from each Seller, all of such Seller’s
right, title to, interest in and to such Seller’s SPQS
common
and preferred Shares, free and clear of any and all claims, liens, charges,
security interests, pledges or encumbrances of any nature whatsoever
(“Liens”)
in
exchange for TM
Judgment
.
ARTICLE
II
CLOSING
2.01 Closing
Date.
The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall
take place on or before 10-17-2008
(the
“Closing
Date”).
2.02 Failure
to Close.
In the
event of that the following Closing conditions do
not occur;
(a) Senior
debt holders consent is NOT forthcoming for the assignment of specific SPQS
assets to DOMK or nominee as described herein PRIOR TO the Closing date of
10-17-2008,
(b) Senior
debt holders have NOT memorialized the consolidated debt positions applicable
to
SPQS,
The
Purchasers will agree to assign the TM Judgment (BC 359831) to
DOMK for 50,000 shares of DOMK common stock and this Share Exchange Agreement
will be cancelled.
2.03 Document
Deliveries by Sellers.
At the
Closing, Sellers shall deliver to Purchaser, unless waived by Purchaser in
writing, the following:
(a)
certificates
representing in the aggregate, 9,973,397 (nine million, nine hundred and seventy
three thousand, three hundred & ninety seven) SPQS common Shares duly
endorsed for transfer to Purchaser with medallion guarantee; and
(b)
certificate
representing 100,000 SPQS preferred Shares duly endorsed for transfer to
Purchaser with medallion guarantee; and
(c)
sealed
Certificate of Designation for SPQS preferred Shares; and
(d)
Lock
up
& Leak out agreement on acceptable terms to all parties to be executed by
and between DOMK and Purchaser and SportsQuest, Inc., and
(e)
notarized
letter irrevocably waiving any and all due compensation and cancelling any
/all
employment agreement (s) due to officer & director R. Xxxxxx Xxxx from SPQS,
and
(f)
notarized
letter irrevocably waiving any and all due compensation and cancelling any
/all
employment agreement (s), consulting agreement due to officer & director X.
Xxxxxx from SPQS; and
(g)
notarized
evidence of irrevocable indemnification to the Purchaser pursuant to litigation
between Xxxxxx - Xxxxxx “(ZCE
Inc., ZCE”)
and
SPQS; and
(h)
notarized
evidence of irrevocable assignment of all litigation pursuant to ZCE
vs SPQS and SPQS vs ZCE to DOMK;
and;
(i)
evidence
of irrevocable cancellation and termination of SPQS contracts and all agreements
with Xxxxx Xxxxxxxx; and
(j)
a
copy of
15c211 filed with FINRA and any and all FINRA comment letters;
and
2
(k)
corporate
resolutions instructing SPQS contracted Edgarizer service to recognize change
of
control to nominated instructions; and
(l)
copy
of
SPQS bylaws; and
(m)
copies
of
Federal tax returns for fiscal years 2005, 2006, 2007
(n)
copies
and where available, originals of all SPQS accounting records and work schedules
used in preparing its reports to the SEC for the periods 10-31-07, and the
10Qs
for January31, 2008, April 30, 2008 and the 10K for the interim period
5-31-2008.
(o)
Schedule
of all outstanding remaining liabilities to be evidenced in affidavit form
and
sworn and notarized by officer(s) / director(s) “(Exhibit
C”)
(p)
copy
of
verified, valid senior lenders (NIR
Group LLC)
irrevocable consent to release and transfer of SPQS assets to be transferred
to
DOMK or other nominated DOMK subsidiary; and
(q)
notarized
SPQS
corporate
board resolutions detailing the Agreement herein and accepting the resignation
(s) of all present Officers and Directors from all executive positions,
consultancies and corporate responsibilities and electing newly nominated person
(s) to Officer (s) and Director (s) positions of
SPQS
upon
closing, with Purchaser recognizing that, as SPQS is a reporting company
pursuant to the Securities Exchange Act of 1934, as amended, the resignation
of
the current Directors is not effective until 10 days following the filing of
a
Schedule 14f; and
(r)
such
other documents as may be necessary to effect the consummation of the
transactions contemplated by this Agreement.
2.04 Deliveries
by Purchaser.
At the
Closing, Purchaser shall deliver to Sellers, unless waived by Sellers in
writing, the following:
(a)
certificate
(s) evidencing 390,000 (three
hundred and ninety thousand)
Preferred Series A Shares of Greens
Worldwide Inc
(an
Arizona Corp) (“GRWW”)
irrevocably transferred to DOMK; and
(b)
All
remaining assets of SPQS (“Exhibit
E”)
will
be transferred to DOMK or other nominated DOMK subsidiary upon closing for
the
consideration represented herein, excluding 500,000 shares of DOMK held by
SPQS,
which shares will remain in SPQS and nominated to designated party.
(c)
such
other documents as may be necessary to effect the consummation of the
transactions contemplated by the Agreement.
(d)
Board
resolution of purchaser approving this transaction.
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ARTICLE
III
REPRSENTATIONS
AND WARRANTIES OF OFFICER (S) AND DIRECTOR (S) AND
THE
COMPANY
Officer
(s) and Directors (s) and the Company, severally and jointly, represent and
warrant to Purchaser that:
3.01 Organization
and Authority.
(a) The
Company is a corporation duly organized, validly existing and
in good standing prior to the closing date
under
the laws of Delaware at closing and has the full corporate authority and power
to carry on its business, to enter into and perform this Agreement and to carry
out the transactions contemplated hereby.
3.02 Except
as
disclosed in Section 3.01, the Company has all the requisite corporate power
and
authority to own or lease and operate its properties and to carry on its
business as now being operated and conducted. The Company is not qualified
to do
business as a foreign corporation in any jurisdiction there being no
jurisdiction where the character of the Company’s business requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the condition (financial or otherwise), operations,
or prospects of the Company (a “SPQS Material
Adverse Effect”).
(a)
This
Agreement has been duly and validly authorized and approved by all requisite
actions of the Company and constitutes the valid and legally binding obligations
of each the Company, enforceable in accordance with its terms.
3.03 No
Conflicts.
Neither
the execution, delivery or performance of this Agreement, nor the consummation
of the transactions contemplated hereby, nor compliance with the terms and
provisions hereof, will contravene any provision of any applicable law, statute,
rule or regulation, or any judgment, decree, franchise, ruling, order or permit
of any court or governmental authority applicable to the Company,
(a) will
conflict or be inconsistent with the organizational documents of the Company,
or
(b) will
conflict or be inconsistent with or will result in a breach of or constitute
a
default (or with notice or lapse of time or both, constitute a default) under
any contract to which the Company is a party or by which any of his, her, or
its
assets is bound, which could reasonably be expected to have an SPQS Material
Adverse Effect, or
(c) will
result in the creation of or imposition of (or obligation to create or impose)
any Lien upon the assets and properties of the Company.
3.04 No
Consents.
No
order, consent, approval, license, registration or validation of, or filing
with, or exemption by, any federal, state or local governmental agency,
commission, board or public authority or any third party is required to
authorize, or is required in connection with, the execution, delivery or
performance by Sellers or the Company of this Agreement.
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3.05 Capitalization
of the Company.
(a) The
authorized, issued and outstanding shares of capital stock of the Company is
set
forth on Schedule
3.05
and to
this Agreement. All of the issued and outstanding shares of capital stock of
the
Company are duly authorized, validly issued, fully paid, and
non-assessable.
(b)
There
are
no authorized or outstanding options, warrants, and other equivalent rights
to
purchase or acquire capital stock of the Company other than described in
Exhibit
D.
(c)
Except
as
set forth on Schedule
3.05 (b) or Exhibit D,
there
are (i) no authorized or outstanding securities, rights (preemptive or other),
subscriptions, calls, commitments, warrants, options, or other agreements that
give any person the right to purchase, subscribe for, or otherwise receive
or be
issued capital stock of the Company or any security convertible into or
exchangeable or exercisable for capital stock of the Company,
(d)
The
outstanding debt securities of the Company that upon the conversion, exchange,
or exercise thereof would require the issuance, sale, or transfer by the Company
of any new or additional shares of capital stock of the Company (or any other
securities of the Company which, whether after notice, lapse of time, or payment
of monies, are or would be convertible into or exchangeable or exercisable
for
shares of capital stock of the Company is evidenced in Exhibit
D
(“NIR
Holders Consolidated Notes”)
,
(e)
no
agreements or commitments exist obligating the Company to repurchase, redeem,
or
otherwise acquire its capital stock or other securities, and
(f)
no
outstanding or authorized stock appreciation rights, phantom stock, stock
rights, or other equity-based interests in respect of the Company.
3.06 Title
to SPQS Shares.
Sellers
own beneficially the SPQS common and preferred Shares of the Company in the
respective amounts set forth on Exhibit
“A”,
free
and clear of any Liens. Upon consummation of the transactions contemplated
hereby, Purchaser will receive good and marketable title to the Shares, free
and
clear of any Liens.
3.07 Liabilities.
Except
as set forth on Schedule
3.07,
the
Company is not subject to any liabilities or obligations of any nature, whether
absolute, accrued, contingent or otherwise, and whether due or to become due,
that will survive the Closing other than those listed in continuing liabilities
affidavit in Exhibit
C.
3.08 Assets.
The
Company has good and marketable title to its assets, free and clear of all
liens.
3.09 Litigation.
There
are no lawsuits, inquiries, proceedings or investigations pending or, threatened
before any federal, state or local court or governmental or administrative
body
or agency against the Company or any Seller related to (i) the transactions
contemplated by this Agreement, or (ii) the Company, nor, are there any facts
which would provide a basis for any such lawsuit, inquiry, proceeding or
investigation. The Company is not subject to any judgment, order or decree
entered in any lawsuit or proceeding.
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3.10 Real
Property.
The
Company does not own or have any right, title or interest in any real property
except for its leasehold interests in the real property lease described on
Schedule
3.10.
3.11 Contracts. Schedule
3.11
hereto
sets forth a list of all contracts, agreements, leases and arrangements to
which
the Company is party (collectively, the “Company Contracts”).
Except as set forth on Schedule
3.11,
the
Company is not in or alleged to be in default, nor to the best of Sellers’
knowledge, is any other party in or alleged to be in default, nor, to the best
knowledge of Sellers, is there any basis for any claim of default by the Company
or any other party, under any of the Company Contracts.
3.12 Compliance
With Laws.
The
Company is not in violation of any applicable law, rule, regulation or ordinance
including, without limitation, environmental laws, or any judgment, writ,
decree, injunction order or any other requirement of any court or governmental
agency or authority in any manner relating to the Company, which could
reasonably be expected to have an SPQS Material Adverse Effect, nor has any
Seller or the Company received written notice alleging any such
violation.
3.13 Taxes.
The
Company has filed all United States federal, state and local tax returns of
any
kind required to be filed and has paid all taxes and other charges due or
claimed to be due with respect to the Company to any taxing authorities. There
are no Liens for taxes upon any of the Company’s assets and there are no claims
asserted for taxes against any Seller or the Company with respect to any of
the
Company’s assets, except for taxes due but not yet payable.
3.14 No
Brokers.
Neither
the Company nor any Seller has incurred any obligation or liability, contingent
or otherwise, for brokers’ or finders’ fees or commissions in connection with
the execution and delivery of this Agreement or the transactions contemplated
hereby.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
hereby represents and warrants to Sellers and the Company on the date of this
Agreement that:
4.01 Organization
and Authority.
(a) Purchaser
is a corporation duly organized, validly existing and in good standing under
the
laws of Delaware and has the full corporate authority and power to carry on
its
business, to enter into and perform this Agreement and to carry out the
transactions contemplated hereby. Purchaser has all the requisite corporate
power and authority to own or lease and operate its properties and to carry
on
its business as now being operated and conducted. Purchaser is not qualified
to
do business as a foreign corporation in any jurisdiction there being no
jurisdiction where the character of VRGD’s business requires such qualification,
except where the failure to be so qualified would not have a material adverse
effect on the condition (financial or otherwise), operations, or prospects
of
Purchaser (a “VRGD Material
Adverse Effect”).
(b)
This
Agreement has been duly and validly authorized and approved by all requisite
actions of Purchaser and constitutes the valid and legally binding obligations
of Purchaser, enforceable in accordance with its terms.
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4.02
No
Conflicts.
Neither
the execution, delivery or performance of this Agreement, nor the consummation
of the transactions contemplated hereby, nor compliance with the terms and
provisions hereof, (a) will contravene any provision of any applicable law,
statute, rule or regulation, or any judgment, decree, franchise, ruling, order
or permit of any court or governmental authority applicable to Purchaser, (b)
will conflict or be inconsistent with the organizational documents of Purchaser,
(c) will conflict or be inconsistent with or will result in a breach of or
constitute a default (or with notice or lapse of time or both, constitute a
default) under any contract to which Purchaser is a party or by which any of
his, her, or its assets is bound, which could reasonably be expected to have
a
VRGD Material Adverse Effect, or (d) will result in the creation of or
imposition of (or obligation to create or impose) any Lien upon the assets
and
properties of Purchaser.
4.03 No
Consents.
No
order, consent, approval, license, registration or validation of, or filing
with, or exemption by, any federal, state or local governmental agency,
commission, board or public authority or any third party is required to
authorize, or is required in connection with, the execution, delivery or
performance by Purchaser of this Agreement.
4.04 Assets.
Purchaser has good and marketable title to its assets, free and clear of all
liens.
4.05 Litigation.
Except
as set forth in Schedule
4.05,
there
are no lawsuits, inquiries, proceedings or investigations pending or, threatened
before any federal, state or local court or governmental or administrative
body
or agency against Purchaser related to (i) the transactions contemplated by
this
Agreement, or (ii) Purchaser, nor, are there any facts which would provide
a
basis for any such lawsuit, inquiry, proceeding or investigation. Purchaser
is
not subject to any judgment, order or decree entered in any lawsuit or
proceeding.
4.06 Compliance
with Laws.
Purchaser is not in violation of any applicable law, rule, regulation or
ordinance including, without limitation, environmental laws, or any judgment,
writ, decree, injunction order or any other requirement of any court or
governmental agency or authority in any manner relating to Purchaser, which
could reasonably be expected to have a VRGD Material Adverse Effect, nor has
Purchaser received written notice alleging any such violation.
4.07 Taxes.
Purchaser has filed all United States federal, state and local tax returns
of
any kind required to be filed and has paid all taxes and other charges due
or
claimed to be due with respect to Purchaser to any taxing authorities. There
are
no Liens for taxes upon any of Purchaser’s assets and there are no claims
asserted for taxes against Purchaser with respect to any of Purchaser’s assets,
except for taxes due but not yet payable.
4.08 No
Brokers.
Purchaser has not incurred any obligation or liability, contingent or otherwise,
for brokers’ or finders’ fees or commissions in connection with the execution
and delivery of this Agreement or the transactions contemplated
hereby.
4.09 Investment.
Purchaser is acquiring the SPQS Shares for its own account, not as nominee
or
agent, and not with the view to or for sale in connection with a distribution
of
the SPQS Shares. It understands that the securities have not been, and will
not
be, registered under the Securities Act by reason of an exemption from the
registration provisions of the Securities Act,
the
availability of which depends upon, among other things, the bona fide nature
of
its investment intent and the accuracy of its representations as expressed
herein.
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ARTICLE
V
MISCELLANEOUS
5.01 Survival.
The
representations and warranties of Sellers and the Company on the one hand,
and
the representations and warranties of Purchaser, on the other hand, shall
survive the Closing;
5.02 Expenses.
Purchaser and Sellers shall bear their own respective expenses incurred in
connection with this Agreement, and in connection with all obligations required
to be performed by each of them under this Agreement. The Company shall not
bear
any expenses of Sellers.
5.03 Notices.
All
notices, requests, demands, instructions and other communications hereunder
shall be in writing and shall be delivered to each party hereto, mailed by
registered or certified mail, return receipt requested, sent by documented
overnight delivery service or, to the extent receipt is confirmed, telecopied
to
the parties at the following addresses (or to such other address as a party
may
have specified by notice given to the other party pursuant to this Section
6.03):
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If
to Sellers and the Company, to:
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R.
Xxxxxx Xxxx
0000
Xxxx Xxxxxxxx #000
Xxxxxx
Xxxxxxx 00000
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With
a copy to:
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(which
shall not constitute notice)
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If
to the Purchaser, to:
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Xxxx
Xxxxxxx
Veridigm
Inc.,
00
Xxx Xxxxxxxxxx Xxxxxx
Xxxxxx
XXXX 0XX
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5.04 Entire
Agreement.
This
Agreement, and the agreements, and instruments referred to in this Agreement,
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings between
the
parties with respect to their respective subject matter.
5.05 Amendment;
Waiver.
No
provision of this Agreement may be amended or modified except by an instrument
in writing signed by both parties hereto. No waiver of any breach or default
hereunder shall be considered valid unless in writing and signed by the party
giving such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default of the same or similar nature.
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5.06 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of each party hereto,
its legal successors and permitted assigns, provided, however, that no party
shall have the right to assign this Agreement, in whole or in part, without
the
prior written consent of the other parties, except that Purchaser may assign
its
rights under this Agreement to an affiliate without the prior written consent
of
Sellers, provided that in such event Purchaser shall remain liable for its
obligations under this Agreement.
5.07 Headings.
The
section and paragraph headings contained herein are for the purpose of
convenience only and are not intended to define or limit the contents of said
sections and paragraphs.
5.08 Counterparts.
This
Agreement may be signed in counterparts, each of which shall be deemed an
original, and each party thereto may become a party hereto by executing a
counterpart hereof. This Agreement and any counterpart so executed shall be
deemed to be one and the same instrument. The exchange (by facsimile) of
facsimile copies of executed counterparts of this Agreement shall be deemed
execution and delivery thereof.
5.09 Governing
Law.
This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware (without regard to conflicts of law principles
thereof or of any other State).
5.10 Severability.
Any
provision of this Agreement which is prohibited, unenforceable or not authorized
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition, unenforceability or non-authorization without invalidating
the remaining provisions hereof or affecting the validity, enforceability or
legality of such provision in any other jurisdiction.
5.11 Schedules;
Certain Interpretive Matters.
(a) The
Schedules and Exhibits referred to herein shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein.
(b)
The
specification of any dollar amount in the representations and warranties
contained in this Agreement or the inclusion of any specific item in any
schedule hereto is not intended to imply that such amounts or higher or lower
amounts, or the items so included or other items, are or are not material,
and
no party hereto shall use the fact of the setting of such amounts or the
inclusion of any such item in any dispute or controversy between the parties
as
to whether any obligation, item or matter not described herein or included
in a
Schedule or Exhibit is or is not material for purposes hereof.
(c)
As
used
herein, “include”, “includes” and “including” are deemed to be followed by
“without limitation” whether or not they are in fact followed by such words or
words of like import; “writing”, “written” and comparable terms refer to
printing, typing, lithography and other means of reproducing words in a visible
form; references to any person are also to its successors and permitted assigns;
“hereof”, “herein”, “hereunder” and comparable terms refer to the entirety
hereof and not to any particular article, section or other subdivision hereof
or
attachment hereto; references to any gender include the other gender; references
to the plural include the singular and vice versa; references to this Agreement
or other documents are as amended or supplemented from time to time; unless
otherwise specified, references to “Article”, “Section” or another subdivision
or to an attachment or “Schedule” or “Exhibit” are to an article, section or
subdivision hereof or an attachment or “Schedule” or “Exhibit”
hereto.
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5.12 No
Benefit to Others.
The
representations, warranties and covenants contained in this Agreement are for
the sole benefit of the parties hereto and their respective successors and
permitted assigns and they shall not be construed as conferring and are not
intended to confer any rights on any other persons or entities.
5.13 Preparation
of Agreement.
Counsel
for the parties have participated in the preparation and review of this
Agreement, and have negotiated it on behalf of their respective clients. For
purposes of construction, this Agreement shall be deemed to have been drafted
by
all parties, and no ambiguity shall be resolved against any party by virtue
of
his, her or its participation in the drafting of the Agreement.
5.14 Attorneys’
Fees.
If
either party shall initiate a legal proceeding to enforce its rights hereunder,
the prevailing party in such legal proceedings shall be entitled to recover
from
the other party all costs, expenses and reasonable attorneys’ fees incurred in
connection with such proceedings.
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement on the date and year first above
written.
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SELLER:
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R.
Xxxxxx Xxxx
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R
Xxxxxx
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Director
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PURCHASER:
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VERIDIGM,
INC.
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By:
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Xxxx
Xxxxxxx
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President
& CFO
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SPORTSQUEST
INC
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By:
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Name:
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Title:
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DOMARK
INTERNATIONAL, INC
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(only
as it relates to Domark International, Inc.)
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By:
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Name:
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Title:
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EXHIBIT
“A” Seller’s
common and preferred shares list
EXHIBIT
“B” TM
Judgment
EXHIBIT
“C” Schedule
of all outstanding remaining liabilities to be evidenced in affidavit form
and
sworn and notarized by officer(s) / director(s)
EXHIBIT
“D” “NIR
Holders Consolidated Notes”
EXHIBIT
“E” All
remaining assets of SPQS will be transferred to DOMK or other nominated DOMK
subsidiary upon closing for the consideration represented herein, excluding
500,000 shares of DOMK held by SPQS, which shares will remain in SPQS and
nominated to designated party.
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