SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement, dated July 15, 2004, by and
between BF Acquisition Group III, Inc., a Florida corporation with its
principal offices located at 0000 Xxxx Xxxxxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000 ("Buyer"); and XxxxxxxxxxxXxxxxx.xxx, Inc., a
Delaware corporation, whose principal place of business is at 0 Xxxx
Xxxx Xx., Xxxxxx, Xxxxxxxx 00000 ("Seller"); and the shareholders
whose signatures appear on the Counterpart Signature Pages of this
Agreement (the "Shareholders", and each of those persons individually,
a "Shareholder").
RECITALS
WHEREAS, Buyer desires to acquire from the Shareholders 425,000
shares of common stock of the Seller, which represents approximately
92% of all of the issued and outstanding shares of capital stock of
Seller, solely in exchange for an aggregate of 3,000,000 shares of
authorized, but theretofore unissued shares of Buyer's series A
preferred stock, par value $0.50 per share ("Series A Preferred
Stock") pursuant to the applicable laws of the State of Delaware and
Florida. Each Shareholder desires to exchange all of their
beneficially owned shares of Seller's capital stock solely for shares
of Series A Preferred Stock in the amount set forth herein.
WHEREAS, Prior to the date hereof, the respective boards of
directors of each of Buyer and Seller have, and each Shareholder has,
approved and adopted this Agreement and it is the intent of the
parties hereto that the transactions contemplated hereby be structured
so as to qualify as a tax-free exchange under Section 368 of the
Internal Revenue Code of 1986, as amended (the "IRC"), and the
provisions of this Agreement will be interpreted in a manner
consistent with this intent.
WHEREAS, the contemplated transactions shall be consummated
pursuant to and in accordance with the terms and conditions set forth
in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth in this Agreement, the parties agree as follows:
SECTION 1. Acquisition And Exchange Of Shares
1.1 The Agreement. The parties hereto hereby agree that Buyer
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shall acquire from the Shareholders 425,000 shares of
common stock of the Seller, which represents approximately
92% of all of the issued and outstanding shares of capital
stock of Seller, solely in exchange for an aggregate of
3,000,000 shares of authorized, but theretofore unissued
shares of Series A Preferred Stock. The parties hereto
agree that at the closing of the transactions contemplated
by this Agreement, the Seller will become an approximate
92% majority-owned subsidiary of Buyer subject to the
conditions set forth herein.
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1.2 Exchange of Shares.
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(a) At the closing, defined in Section 2.1 below ("Closing"),
Buyer will cause to be issued and held for delivery to the
Shareholders or their designees, stock certificates representing an
aggregate of 3,000,000 shares of Series A Preferred Stock, in exchange
for 425,000 shares of common stock of the Seller, which represents
approximately 92% of all of the issued and outstanding shares of
capital stock of Seller, which shares will be delivered to Buyer at
the Closing.
(b) The shares of Series A Preferred Stock to be issued
pursuant to paragraph (a) of this Section 1.2 will be authorized, but
theretofore unissued shares of Series A Preferred Stock, and will be
issued to the Shareholders as more fully described on Schedule 1.2
herein.
(c) All shares of Series A Preferred Stock to be issued
hereunder shall be deemed "restricted securities" as defined in
paragraph (a) of Rule 144 under the Securities Act of 1933, as amended
(the "Securities Act"), and each Shareholder will represent in writing
that they are acquiring said shares for investment purposes only and
without the intent to make a further distribution of the shares. All
shares of Series A Preferred Stock to be issued under the terms of
this Agreement shall be issued pursuant to an exemption from the
registration requirements of the Securities Act, under Section 4(2) of
the Securities Act and the rules and regulations promulgated
thereunder. Certificates representing the shares of Series A
Preferred Stock to be issued hereunder will bear a restrictive legend
in substantially the following form:
The shares represented by this certificate have not
been registered under the Securities Act of 1933, as
amended, and may not be offered for sale, sold, or
otherwise disposed of, except in compliance with the
registration provisions of such Act or pursuant to an
exemption from such registration provisions, the
availability of which is to be established to the
satisfaction of the Company.
SECTION 2. Closing/Rule 14f-1 Compliance.
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2.1 Closing. Closing shall take place at 0 Xxxx Xxxx Xx.,
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Xxxxxx, Xxxxxxxx 00000, at 10:00 A.M. on July 31, 2004 (the "Closing"
or "Closing Date"), or at another time, date, and place mutually
agreed to by the parties, but no later than September 30, 2004 ("Drop
Dead Date").
2.2 Rule 14f-1 Compliance. Rule 14f-1 promulgated under the
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Securities and Exchange Act of 1934, as amended (the "Exchange Act")
apply to the transactions contemplated by this Agreement such that
Buyer has an obligation to file certain information, as provided in
Rule 14f-1, to the Securities Exchange Commission (the "SEC") and the
historic shareholders of Buyer not less than 10 days prior to the date
of such change in control of the Company's board of directors.
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SECTION 3. Representations and Warranties of Seller and Shareholders.
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3.1 Seller's Representations and Warranties. As of the Closing
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Date, Seller represents and warrants to Buyer as follows:
3.1.1 Capital Structure. The capitalization of Seller
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consists of 20,000,000 shares of common stock, $0.01 par value, of
which 461,280 shares are issued and outstanding. All of the issued and
outstanding capital stock of Seller has been duly authorized and
validly issued, and is fully paid and nonassessable, free of
preemptive rights, and not subject to any restriction on transfer
under the Certificate of Incorporation of Seller or any agreement to
which Seller is a party or of which Seller has been given notice.
There are no outstanding subscriptions, options, warrants, convertible
securities, rights, agreements, understandings, or commitments of any
kind relating to the subscription, issuance, repurchase, or purchase
of capital stock or other securities of Seller, or obligating Seller
to transfer any additional shares of its capital stock of any class or
any other securities.
3.1.2 Ownership of the Shares. The shares of Buyer's series
-----------------------
A preferred stock ("Series A Preferred Stock") being issued to
Seller's shareholders at the Closing are duly authorized and will be
validly issued, fully paid, and nonassessable on their issuance. The
persons receiving these securities at the Closing will acquire good,
valid, and indefeasible title, free and clear of any interests,
security interests, claims, liens, pledges, options, penalties,
charges, other encumbrances, buy-sell agreements, or rights of any
party whatsoever.
3.1.3 Organization and Good Standing.
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Seller is duly qualified as a Delaware corporation and is
in good standing in any jurisdiction in which the conduct of its
business or the ownership of its assets requires such qualification.
A true and complete copy of the Certificate of
Incorporation of Seller, each as amended to this date, has been
delivered or made available to Buyer. The minute books of Seller are
current as required by law, contain the minutes of all meetings of the
incorporators, Board of Directors, committees of the Board of
Directors, and shareholders from the date of incorporation to this
date, and adequately reflect all material actions taken by the
incorporators, Board of Directors, committees of the Board of
Directors, and shareholders of Seller. Seller has no subsidiaries.
3.1.4 Authorization; Validity. The execution, delivery, and
-----------------------
performance of this Agreement by Seller has been duly and validly
authorized by all requisite corporate action. This Agreement has been
duly and validly executed and delivered by Seller, and is the legal,
valid, and binding obligation of Seller, enforceable in accordance
with its terms, except as limited by bankruptcy, insolvency,
moratorium, reorganization, and other laws of general application
affecting the enforcement of creditors' rights and by the availability
of equitable remedies.
3.1.5 Consents. Other than is set forth herein, no approval,
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consent, waiver, or authorization of or filing or registration with
any governmental authority or third party is required for the
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execution, delivery, or performance by Seller of the transactions
contemplated by this Agreement.
3.1.6 Litigation. Other than is set forth herein, no
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litigation is pending or to the knowledge of Seller, threatened, to
which Seller is or may become a party.
3.1.7 Violations. The execution, delivery, or performance of
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this Agreement does not and will not (i) with or without the giving of
notice or the passage of time, or both, constitute a default under,
result in breach of, result in the termination of, result in the
acceleration of performance of, require any consent, approval, or
waiver, or result in the imposition of any lien or other encumbrance
on any property or assets of Seller under, any agreement, lease, or
other instrument to which Seller is a party or by which any of the
property or assets of Seller are bound; (ii) violate any permit,
license, or approval required by Seller to own its assets and operate
its business; (iii) violate any law, statute, or regulation or any
judgment, order, ruling, or other decision of any governmental
authority, court, or arbitrator; or (iv) violate any provision of
Seller's Articles of Incorporation or Bylaws.
3.1.8 Broker and Finder Fees. Seller shall incur no
----------------------
liability to any Broker or Finder or Agent for any brokerage fees,
finder's fees or commissions with respect to the Share Exchange.
3.1.9 Financial statements. Audited financial statements
--------------------
for the year ended December 31, 2003 have been submitted to the Buyer.
These statements were prepared according to generally accepted
accounting principals. They fairly represent the financial position
of the Seller as of the respective dates and the results of its
operations for the periods indicated. Since the date of the last
balance sheet, there has not been any material change in the financial
condition or operations of the Seller. The Seller did not, as of the
date of the last balance sheet, have any debt, liability or
obligations of any nature, whether accrued, absolute, contingent or
otherwise, and whether due or to become due that is not reflected in
the Seller's balance sheet.
3.1.10 Tax Filings. All tax returns required to be
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filed with respect to Buyer and its affiliates, or any of their
income, properties or operations are in all material respects true,
complete and correct and have been duly filed in a timely manner.
Further, all taxes attributable to Buyer and its affiliates that are
or were due and payable (without regard to whether such taxes have
been assessed) have been paid.
3.2 Shareholders' Representations and Warranties. As of the
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Closing Date, each Shareholder individually represents and warrants to
Buyer with respect to itself and its shares of stock of Seller as
follows:
3.2.1 Shareholder of Seller. The Shareholder is the sole
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record and beneficial holder of all issued and outstanding shares of
capital stock of Seller, as described below, and the Shareholder owns
such shares free and clear of all liens, restrictions and claims of
any kind.
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3.2.2 Authorization; Validity. This Agreement has been duly
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and validly executed and delivered by the Shareholder, and is the
legal, valid, and binding obligation of the Shareholder, enforceable
in accordance with its terms, except as limited by bankruptcy,
insolvency, moratorium, reorganization, and other laws of general
application affecting the enforcement of creditors' rights and by the
availability of equitable remedies.
3.2.3 Consents. Other than is set forth herein, no approval,
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consent, waiver, or authorization of or filing or registration with
any governmental authority or third party is required for the
execution, delivery, or performance by the Shareholder of the
transactions contemplated by this Agreement.
3.2.4 Violations. Other than is set forth herein, the
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execution, delivery, or performance of this Agreement does not and
will not (i) with or without the giving of notice or the passage of
time, or both, constitute a default, result in breach of, result in
the termination of, result in the acceleration of performance of,
require any consent, approval, or waiver, or result in the imposition
of any lien or other encumbrance upon any property or assets of the
Shareholder, under any agreement, lease, or other instrument to which
such Shareholder is a party or by which any of the property or assets
of such Shareholder is bound; or (ii) violate any law, statute, or
regulation or any judgment, order, ruling, or other decision of any
governmental authority, court, or arbitrator.
3.3 Survival of Representations and Warranties. Each of the
------------------------------------------
representations and warranties in Sections 3.1 and 3.2 shall survive
the Closing until the expiration of all applicable statute of
limitations periods.
SECTION 4. Representations and Warranties of Buyer.
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4.1 Buyer's Representations and Warranties. As of the Closing
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Date, Buyer represents and warrants to Seller as follows:
4.1.1 Capital Structure. The capitalization of Buyer
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consists of (i) 50,000,000 shares of common stock, $0.001 par value,
of which 975,000 shares are issued and outstanding; and (ii) 5,000,000
shares of preferred stock, none of which are issued and outstanding.
The board of directors is authorized to provide for the issuance of
such preferred stock in classes and series and, by filing the
appropriate articles of amendment with the Secretary of State of
Florida, is authorized to establish the number of shares to be
included in each class and series and the preferences, limitations,
and relative rights of each class and series. Of these shares of
preferred stock, 3,000,000 shares are designated as series A preferred
stock ("Series A Preferred Stock") and have the preferences,
limitations and relative rights described on Schedule 4.1.1. All of
the issued and outstanding capital stock of Buyer has been duly
authorized and validly issued, and is fully paid and nonassessable,
free of preemptive rights, and not subject to any restriction on
transfer under the Articles of Incorporation or Bylaws of Buyer or any
agreement to which Buyer is a party or of which Buyer has been given
notice. There are no outstanding subscriptions, options, warrants,
convertible securities, rights, agreements, understandings, or
commitments of any kind relating to the subscription, issuance,
repurchase, or purchase of capital stock or other securities of Buyer,
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or obligating Buyer to transfer any additional shares of its capital
stock of any class or any other securities.
4.1.2 Organization and Good Standing.
------------------------------
Buyer is duly qualified as a Florida corporation and is in
good standing in any jurisdiction in which the conduct of its business
or the ownership of its assets requires such qualification.
A true and complete copy of the Articles of Incorporation
and Bylaws of Buyer, each as amended to this date, has been delivered
or made available to Seller. The minute books of Buyer are current as
required by law, contain the minutes of all meetings of the
incorporators, Board of Directors, committees of the Board of
Directors, and shareholders from the date of incorporation to this
date, and adequately reflect all material actions taken by the
incorporators, Board of Directors, committees of the Board of
Directors, and shareholders of Buyer. Buyer has no subsidiaries.
4.1.3 Authorization; Validity. The execution, delivery, and
-----------------------
performance of this Agreement by Buyer has been duly and validly
authorized by all requisite corporate action. This Agreement has been
duly and validly executed and delivered by Buyer, and is the legal,
valid, and binding obligation of Buyer, enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency, moratorium,
reorganization, and other laws of general application affecting the
enforcement of creditors' rights and by the availability of equitable
remedies.
4.1.4 Consents. Other than is set forth herein, no approval,
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consent, waiver, or authorization of or filing or registration with
any governmental authority or third party is required for the
execution, delivery, or performance by Buyer of the transactions
contemplated by this Agreement.
4.1.5 Litigation. Other than is set forth herein, no
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litigation is pending or to the knowledge of Buyer, threatened, to
which Buyer is or may become a party.
4.1.6 Violations. The execution, delivery, or performance of
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this Agreement does not and will not (i) with or without the giving of
notice or the passage of time, or both, constitute a default under,
result in breach of, result in the termination of, result in the
acceleration of performance of, require any consent, approval, or
waiver, or result in the imposition of any lien or other encumbrance
on any property or assets of Buyer under, any agreement, lease, or
other instrument to which Buyer is a party or by which any of the
property or assets of Buyer are bound; (ii) violate any permit,
license, or approval required by Buyer to own its assets and operate
its business; (iii) violate any law, statute, or regulation or any
judgment, order, ruling, or other decision of any governmental
authority, court, or arbitrator; or (iv) violate any provision of
Buyer's Articles of Incorporation or Bylaws.
4.1.7 Broker and Finder Fees. Buyer shall incur no
----------------------
liability to any Broker or Finder or Agent for any brokerage fees,
finder's fees or commissions with respect to the Share Exchange.
6
4.1.8 Reports and Financial Statements. Other than as set
--------------------------------
forth herein, from April 2002 to the date hereof, except where failure
to do so did not and would not have a material adverse effect on
Buyer, Buyer has filed all reports, registrations and statements,
together with any required amendments thereto, that it was required to
file with the SEC, including, but not limited to, Forms 10-KSB, Forms
10-QSB, Forms 8-K and Proxy Statements (collectively the "Buyer's
Reports"). Buyer has furnished or will furnish to Seller (and the
Shareholders upon the request of Shareholders) copies of all Buyer's
Reports filed with the SEC since April 2002. As of their respective
dates (but taking into account any amendments filed prior to the date
of this Agreement), the Buyer's Reports (other than the financial
statements included therein) complied in all material respects with
all the rules and regulations promulgated by the SEC and did not
contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, misleading. The financial statements of Buyer included in
the Buyer's Reports complied as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, were prepared in
accordance with GAAP consistently applied during the periods presented
(except, as noted therein, or, in the case of unaudited statements, as
permitted by Form 10-QSB of the SEC) and fairly present (subject, in
the case of unaudited statements, to normal audit adjustments) the
financial position of Buyer and its consolidated subsidiaries as of
the date thereof and the results of their operations and their cash
flows for the periods then ended.
4.1.9 Tax Filings. All tax returns required to be filed
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with respect to Buyer and its affiliates, or any of their income,
properties or operations are in all material respects true, complete
and correct and have been duly filed in a timely manner. Further, all
taxes attributable to Buyer and its affiliates that are or were due
and payable (without regard to whether such taxes have been assessed)
have been paid.
4.2 Survival of Representations and Warranties. Each of the
------------------------------------------
representations and warranties in Section 4.1 shall survive the
Closing until the expiration of all applicable statute of limitations
periods.
SECTION 5. Covenants of Seller.
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5.1 Except as may otherwise be consented to or approved in
writing by Buyer, Seller agrees that from the date of this Agreement
and until the Closing:
5.1.1 Conduct Pending Closing. (i) The Business of Seller
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shall be conducted only in the ordinary course consistent with past
practices.
5.1.2 Access to Records. Seller shall provide Buyer and its
-----------------
representatives access to all records of Seller that they reasonably
may request and provide reasonable access to the properties of Seller.
7
5.1.3 Solicitation. Seller agrees that it will not solicit,
------------
consider, or negotiate any offers to acquire the shares or assets of
Seller, or to provide any information or to make available any
management personnel to third parties for such purposes.
5.1.4 Confidentiality. Seller agrees to keep the provisions
---------------
of this Agreement confidential and will not disclose its provisions to
any person, excluding Seller's accountants, attorneys, and other
professionals with whom Seller conducts business and to whom such
disclosure is reasonably necessary; provided, however, that such
persons shall be advised of the confidential nature of this Agreement
at the time of such disclosure.
SECTION 6. Covenants of Buyer.
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6.1 Except as may otherwise be consented to or approved in
writing by Seller, Buyer agrees that from the date of this Agreement
and until the Closing:
6.1.1 Conduct Pending Closing. (i) The business of Buyer
-----------------------
shall be conducted only in the ordinary course consistent with past
practices.
6.1.2 Access to Records. Buyer shall provide Seller and its
-----------------
representatives access to all records of Buyer that they reasonably
may request and provide reasonable access to the properties of Buyer.
6.1.3 Solicitation. Buyer agrees that it will not solicit,
------------
consider, or negotiate any offers to acquire the shares or assets of
Buyer, or to provide any information or to make available any
management personnel to third parties for such purposes.
6.1.4 Confidentiality. Buyer agrees to keep the provisions
---------------
of this Agreement confidential and will not disclose its provisions to
any person, excluding Buyer's accountants, attorneys, and other
professionals with whom Buyer conducts business and to whom such
disclosure is reasonably necessary; provided, however, that such
persons shall be advised of the confidential nature of this Agreement
at the time of such disclosure.
SECTION 7. Conditions Precedent to Obligations of Buyer.
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Unless, at the Closing, each of the following conditions is
either satisfied or waived by Buyer in writing, Buyer shall not be
obligated to effect the transactions contemplated by this Agreement:
7.1 Representations and Warranties. The representations and
------------------------------
warranties of Seller shall be true and correct as of the Closing.
7.2 Performance of Covenants. Seller shall have performed and
------------------------
complied in all respects with the covenants and agreements required by
this Agreement.
7.3 Items to be Delivered at Closing. Seller shall have
--------------------------------
tendered for delivery to Buyer the following:
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7.3.1 Delivery of Shares. Stock certificates representing
------------------
425,000 shares of common stock of Seller duly endorsed in blank or
accompanied by duly executed stock powers with all requisite transfer
tax stamps attached, as more fully described on Schedule 1.2 herein.
7.3.2 Corporate Action. A certified copy of the corporate
----------------
action of both Seller and Shareholder authorizing and approving this
Agreement and the transactions contemplated by it.
7.3.3 Investment Letter. An investment letter duly executed
-----------------
by the Shareholder.
7.4 Proceedings and Instruments Satisfactory. All proceedings,
----------------------------------------
corporate or other, to be taken in connection with the transactions
contemplated by this Agreement, and all documents incident to this
Agreement, shall be satisfactory in form and substance to Buyer and
Buyer's counsel, whose approval shall not be withheld unreasonably.
SECTION 8. Conditions Precedent to Obligations of Seller.
---------------------------------------------
Unless, at the Closing, each of the following conditions is
either satisfied or waived by Seller in writing, Seller shall not be
obligated to effect the transactions contemplated by this Agreement.
8.1 Representations and Warranties. The representations and
warranties of Buyer shall be true and correct as of the Closing.
8.2 Items to be Delivered at Closing. Buyer shall have tendered
for delivery to Seller the following:
8.2.1 Delivery of Shares. Stock certificate representing
------------------
3,000,000 shares of preferred stock duly issued in the name of the
Shareholders, as more fully described on Schedule 1.2 herein.
8.2.2 Director's Resolution. A resolution of the Board of
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Directors dated the closing date (i) appointing Xxxxxx XxXxxxxxx and
Xxxxxx X. Xxxxxxx as directors of the Company; and (ii) appointing
Xxxxxx XxXxxxxxx as president, treasurer and secretary of the Company.
8.3 Performance of Covenants. Buyer shall have performed and
------------------------
complied in all respects with the covenants and agreements required by
this Agreement.
SECTION 9. Intentionally Left Blank.
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SECTION 10. Notices.
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Any notice, request, demand, or communication required or
permitted to be given by any provision of this Agreement shall be
deemed to have been delivered, given, and received for all purposes if
9
written and if (i) delivered personally, by facsimile, or by courier
or delivery service, at the time of such delivery; or (ii) directed by
registered or certified United States mail, postage and charges
prepaid, addressed to the intended recipient, at the address specified
below, two business days after such delivery to the United States
Postal Service.
If to Buyer: Xxxxxxx Xxxxxxx
0000 Xxxx Xxxxxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
If to Seller: Xxxxxx XxXxxxxxx
0 Xxxx Xxxx Xx.
Xxxxxx, Xxxxxxxx 00000
Any party may change the address to which notices are to be mailed by
giving notice as provided herein to all other parties.
SECTION 11. Miscellaneous.
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11.1 Survival of Representations and Warranties; Limitation of
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Liability. The representations and warranties of each of the parties
---------
contained herein shall survive the execution and delivery hereof, and
performance of obligations hereunder, and continue in full force and
effect forever hereafter (subject to any applicable statutes of
limitations).
11.2 No Third Party Beneficiaries. This Agreement shall not
----------------------------
confer any rights or remedies upon any person or entity other than the
parties and their respective successors, assigns, heirs or legal
representatives, as the case may be.
11.3 Entire Agreement. This Agreement (including the documents
----------------
referred to herein and the Schedules hereto) constitutes the entire
agreement among the parties and supersedes any prior understandings,
agreements, or representations by or among the parties, written or
oral, to the extent they related in any way to the subject matter
hereof.
11.4 Succession and Assignment. This Agreement shall be binding
-------------------------
upon and inure to the benefit of the parties named herein and their
respective successors, assigns, heirs or legal representatives, as the
case may be.
11.5 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
11.6 Headings. The paragraph and subparagraph headings contained
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in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement.
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11.7 Governing Law. This Agreement shall be governed by, and
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construed in accordance with, the laws of the State of Florida without
giving effect to any choice or conflict of law provision or rule that
would cause the application of the laws of any jurisdiction other than
the State of Florida.
11.8 Amendments and Waivers. No amendment of any provision of
----------------------
this Agreement shall be valid unless the same shall be in writing and
signed by each of the parties hereto. No waiver by any party of any
default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to
any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
11.9 Severability. Any term or provision of this Agreement that
------------
is invalid or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other jurisdiction.
11.10 Conflict of Terms. In the event of a conflict of terms and
-----------------
conditions between this Agreement and any other agreement, the terms
and conditions of this Agreement shall prevail.
11.11 General Interpretive Principles. For purposes of this
-------------------------------
Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
11.1.1 The terms defined in this Agreement include the
plural as well as the singular, and the use of any gender herein shall
be deemed to include the other gender;
11.1.2 Accounting terms not otherwise defined herein have
the meanings given to them in accordance with generally accepted
accounting principles;
11.1.3 References herein to "paragraphs",
"subparagraphs" and other subdivisions without reference to a document
are to designated paragraphs, subparagraphs and other subdivisions of
this Agreement;
11.1.4 A reference to a subparagraph without further
reference to a paragraph is a reference to such subparagraph as
contained in the same paragraph in which the reference appears;
11.1.5 The words "herein", "hereof", "hereunder" and
other words of similar import refer to this Agreement as a whole and
not to any particular provision; and
11.1.6 The term "include" or "including" shall mean
without limitation by reason of enumeration.
11.1.7 Incorporation of Schedules. The schedules
identified in this Agreement are incorporated herein by reference and
made a part hereof.
[See signature page attached]
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
ATTEST: BUYER:
By:_____________________________ By:_____________________________
Xxxxxxx Xxxxxxx, President
SELLER:
By:_____________________________ By:_____________________________
Xxxxxx XxXxxxxxx, President
SELLING SHAREHOLDERS:
________________________________ ________________________________
Witness Xxxxxx XxXxxxxxx,
________________________________ ________________________________
Witness Xxxxx XxXxxxxxx
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Schedule 1.2
Transfer of Shares of Stock
Pursuant to the terms of the Share Exchange Agreement, on the
Closing Date, the Shareholders shall exchange all 425,000 shares of
their common stock of Seller for 3,000,000 shares of Series A
Preferred Stock of Buyer. Accordingly, each Shareholder (or his agent)
agrees to deliver to the Buyer (or its agent) his original common
stock share certificate(s) (in the specific amounts set forth next to
such Shareholder's names), along with any necessary stock transfer
stamps and duly executed stock powers in a form satisfactory to Buyer
(or its agent); and Buyer (or its agent) agrees to deliver to each
Shareholder (or his agent) Series A Preferred Stock share certificates
representing the number of shares of Buyer in the specific amounts set
forth next to such Shareholder's names.
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Name of Shareholder No. of Shares of Common No. of Shares of
Stock to be Delivered Series A Preferred
by Shareholder Stock to be Issued to
Shareholder
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Xxxxxx Xx Xxxxxxx, Xx. 212,500 1,500,000
Xxxxx Xx Xxxxxxx 212,500 1,500,000
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Total 425,000 3,000,000
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Schedule 4.1.1.
Series A Preferred Stock
Series A Preferred Stock have the following preferences, limitations
and relative rights:
1. The stated value of each share of the Series A Preferred Stock
A shall be $0.50 par value.
2. The holders of the shares of the Series A Preferred Stock
shall have the right, at their option, to convert shares of
the Series A Preferred Stock into shares of the Buyer's common
stock at any time subsequent to the three-year anniversary of
the date of issuance of the shares of the Series A Preferred
Stock. The shares of the Series A Preferred Stock, upon
surrender, shall be convertible at the office of any transfer
agent for the Buyer's common stock into fully paid and non-
assessable shares of the Buyer's common stock. The number of
shares deliverable upon conversion of one (1) share of the
Series A Preferred Stock shall be one (1).
3. The shares of the Series A Preferred Stock shall have
identical voting rights and powers as common stock, except
that each share of the Series A Preferred Stock is entitled to
vote two (2) common stock votes per share of Series A
Preferred Stock on all matters that holders of common stock
are entitled to vote on, without provision for cumulative
voting. Each share of the Series A Preferred Stock is entitled
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to vote one (1) vote per share on all matters relating to
matters concerning the Series A Preferred Stock, without
provision for cumulative voting.
4. In the event of any liquidation, dissolution or winding up of
the Buyer, whether voluntarily or involuntarily, the holders
of shares of the Series A Preferred Stock shall be entitled to
be paid in full, the par value of their shares before any
amount shall be paid to the holders of shares of any class of
the Buyers's common stock. Subsequently, the holders of shares
of the Series A shall have identical rights and preferences as
the holders of shares of any class of the Buyer's common
stock, except that each share of the Series A Preferred Stock
shall be entitled to receive and to be paid out of the assets
of the Buyer available for distribution to its shareholders
the ratable amount equal to the number of shares of common
stock into which such share of the Series A Preferred Stock is
convertible.
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