3254K
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement") is entered into and
effective as of December 20, 1996, by and between XXXXXXX X XXXXX, XXXX X.
XXXXXX, residents of Vancouver, British Columbia and 471141 B.C. LTD, a British
Columbia corporation (collectively the "SHAREHOLDERS"), FAMILYWARE PRODUCTS
INC., a Canadian corporation ("FP1") and ONE AND ONLY, INC., a Nevada
corporation ("OAO" or the "COMPANY").
1. RECITALS
This Agreement is entered into with reference to and in contemplation of
the following facts, circumstances and representations:
1. The SHAREHOLDERS are the owners of all of the outstanding and issued
shares of common stock of FPI (the "FPI Shares").
2. OAO desires to issue a total of 4,901,760 shares of its common stock
(the "OAO Shares") to the SHAREHOLDERS and their respective designees
in exchange for all of the FPI Shares.
3. OAO desires to issue an additional 98,240 shares of its common stock
to certain creditors of FPI (the "Creditor Shares") in consideration
of the cancellation of the debts and obligations of FPI to these
creditors.
4. The SHAREHOLDERS desire to exchange the FPI Shares for the OAO Shares
in accordance with the terms and conditions of this Agreement.
5. FPI desires that this transaction be consummated.
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2. EXCHANGE AND ISSUANCE OF SHARES
2.1 Exchange of OAO Shares: OAO shall exchange and deliver to the
SHAREHOLDERS and their respective designees a total of 4,901,760 Regulation S
shares of OAO common stock in accordance with the allocation set forth in the
attached Schedule "A".
2.2 Issuance of Creditor Shares: OAO shall further issue an additional
98,240 Regulation S shares of OAO common stock to those creditors of FPI as set
forth in the attached Schedule "B".
2.3 Exchange of FPI Shares: At the closing the SHAREHOLDERS shall exchange
and deliver to OAO a total of 150,000 shares of FPI common stock which
represents all of the issued and outstanding shares of FPI.
2.4 Nature of OAO Shares and Creditor Shares: The SHAREHOLDERS and
creditors shall be issued the OAO Shares and the Creditor Shares (collectively
referred to herein as the "Shares") pursuant to Regulation S which unless
otherwise contractually restricted, shall be subject to a one (1) year holding
period before the Shares are eligible for sale to U.S. persons or in the U.S.
public market.
2.5 Restricted Nature of Shares: Notwithstanding the one (1) year holding
period for the Shares to be issued pursuant to Regulation S, each of the
SHAREHOLDERS who become "affiliates" or "control persons" of OAO will be subject
to certain limitations with respect to the sale of their respective Shares.
Accordingly, as a result of such a designation, the sale of the Shares will be
limited by SEC Rule 144.
2.6 Voting Rights of Control Shares: The issuance of the OAO Shares to the
SHAREHOLDERS will result in the SHAREHOLDERS obtaining "control shares" and a
"controlling interest" in OAO as the terms are defined in Nevada Revised
Statutes Sections 78.3784 and 78.43785. The voting rights of these control
shares must be approved by the Shareholders of OAO pursuant to Nevada Revised
Statute Section 78.379.1. Accordingly, OAO will provide the necessary written
consent of the OAO Shareholders granting the voting rights to these control
shares.
2.7 Private Sale Acknowledgment: The parties acknowledge and agree that the
exchange and issuance of the Shares is being undertaken as a
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private sale pursuant to Section 4 of the Securities Act of 1933, as amended,
and is not being transacted via broker-dealer and/or in the public market place.
3. REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The COMPANY represents and warrants to the SHAREHOLDERS and FPI as follows:
3.1 Organization: OAO is a corporation duly incorporated and validly
existing under the laws of Nevada and is in good standing with respect to all of
its regulatory filings.
3.2 Capitalization: The authorized capital of OAO consists of 50,000,000
common shares with a par value of $.0005 and of which 2,002,500 common shares
have been validly authorized and issued by the COMPANY, are outstanding as fully
paid and non-assessable shares and were issued in full compliance with all
federal and state securities laws. Such issued and outstanding shares are
hereinafter referred to as the "Existing OAO Shares,"
3.3 Financial Statements: OAO has furnished to the SHAREHOLDERS and FPI
audited financial statements for the periods ending December 31, 1994, December
31, 1995 and June 30, 1996. That at the Closing the financial affairs of OAO
will be materially the same as represented in the financial statements for the
period ending June 30, 1996.
3.4 Books and Records: All material transactions of OAO have been promptly
and properly recorded or filed in or with its books and records and the Minute
Book of OAO contains records of all meetings and proceeds of the shareholders
and directors thereof.
3.5 Legal Compliance: OAO is not in breach of any laws, ordinances,
statutes, regulations, by-laws, orders or decrees to which OAO is subject or
which apply to it or any of its assets.
3.8 Tax Returns: All tax returns and reports of OAO required by law to be
filed prior to the date hereof have been tiled and are substantially true,
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complete and correct and all taxes and governmental charges have been paid.
3.7 Adverse Financial Events: OAO has not experienced nor is it aware of
any occurrence or event which has had or might reasonably be expected to have a
material adverse effect on its financial condition.
3.8 Disputes, Claims and Investigations: There are no disputes, claims,
actions, suits, judgments, investigations or proceedings outstanding or pending
or to the knowledge of OAO threatened against or affecting OAO at law or in
equity or before or by any federal, state, municipal or other governmental
department, commission, board, bureau or agency.
3.9 Employee Liabilities: OAO has no liability to former employees or any
liability to any governmental authorities with respect to current or former
employees.
3.10 No Conflicts or Agreement Violations: The execution, delivery and
performance of this Agreement will not conflict with or be in violation of the
articles or by-laws of OAO or of any agreement to which OAO is a party and will
not give any person or company a right to terminate or cancel any agreement or
right enjoyed by OAO and will not result in the creation or imposition of any
lien, encumbrances or restriction of any nature whatsoever in favor of a third
party upon or against the assets of OAO.
3.11 Validity Issued and Authorized Shares: That the Shares will be validly
authorized and issued by the COMPANY, they will be fully paid and non-assessable
and that they will be issued in full compliance with all federal and state
securities laws.
3.12 Restrictive Legend: That the Shares will have a restrictive legend
imposed thereon identifying them as "Regulation S shares" which are subject to
the conditions and limitations of Regulation S Rule 903(c)(3) with respect to
their sale in the U.S. public market place.
3.13 Restriction on Recapitalization: That for a period of one (1) year
from the Closing, that the COMPANY will not institute a recapitalization in the
form of a reverse stock split.
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3.14 Corporate Authority: The officers or representatives of the COMPANY
executing this Agreement represent that they have been authorized to execute
this Agreement pursuant to a resolution of their Board of Directors.
4. REPRESENTATIONS OF SHAREHOLDERS AND FPI
The SHAREHOLDERS and FPI collectively and individually hereby represent and
warrant to OAO as follows:
4.1 Share Ownership: That the SHAREHOLDERS are the owners, beneficially and
of record, of all of the FPI Shares free and clear of all liens, encumbrances,
claims, charges and restrictions.
4.2 Transferability of Shares: That the SHAREHOLDERS have full power to
transfer the FPI Shares to OAO without obtaining the consent or approval of any
other person or governmental authority other than the Board of Directors of FPI
which has earlier granted such approval.
4.3 Validly Issued and Authorized Shares: That the FPI Shares are validly
authorized and issued, fully paid, and nonassessable, and the FPI Shares have
been so issued in full compliance with all federal and provincial securities
laws.
4.4 Organization: FPI is a corporation duly incorporated and validly
existing under the laws of Canada and is in good standing with respect to all of
its regulatory filings.
4.5 Capitalization: The authorized capital of FPI consists of an unlimited
amount of common shares with no par value and of which 150,000 common shares are
issued and outstanding as fully paid and non-assessable shares.
4.6 Financial Statements: FPI has furnished to OAO unaudited financial
statements for the period ending November 30, 1996. That at the Closing the
financial affairs of FPI will be materially the same as represented in these
same financial statements.
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4.7 Books and Records: All material transactions of FPI have been promptly
and properly recorded or filed in or with its books and records and the Minute
Book of FPI contains records of all meetings and proceeds of the shareholders
and directors thereof.
4.8 Legal Compliance: FPI is not in breach of any laws, ordinances,
statutes, regulations, by-laws, orders or decrees to which FPI is subject or
which apply to it or any of its assets.
4.9 Tax Returns: All tax returns and reports of FPI required by law to be
filed prior to the date hereof have been filed and are subsequently true,
complete and correct and all taxes and governmental charges have been paid.
4.10 Adverse Financial Events: FPI has not experienced nor is it aware of
any occurrence or event which has had or might reasonably be expected to have a
material adverse effect on its financial condition.
4.11 Disputes, Claims and Investigations: There are no disputes, claims,
actions, suits, judgments, investigations or proceedings outstanding or pending
or to the knowledge of FPI threatened against or affecting FPI at law or in
equity or before or by any federal, provincial, municipal or other governmental
department, commission, board, bureau or agency.
4.12 Employee Liabilities: FPI has no liability to former employees or any
liability to any government authorities with respect to current or former
employees.
4.13 No Conflicts or Agreement Violations: The execution, delivery and
performance of this Agreement will not conflict with or be in violation of the
articles or by-laws of FPI or of any agreement to which FPI is a party and will
not give any person or company a right to terminate or cancel any agreement or
right enjoyed by FPI and will not result in the creation or imposition of any
lien, encumbrances or restriction of any nature whatsoever in favor of a third
party upon or against the assets of FPI.
4.14 No Liens: That FPI has not received a notice of any assignment, lien,
encumbrance, claim or charge against the FPI Shares.
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4.15 Restriction on Recapitalization: That the SHAREHOLDERS and FPI
specifically represent, warrant and agree that for a period of one (1) year from
the Closing, that the SHAREHOLDERS will not as the controlling shareholders of
OAO nor will FPI institute a recapitalization of OAO in the form of a reverse
stock split.
4.16 Corporate Authority: The officers or representatives of FPI and the
471141 B.C. LTD executing this Agreement represent that they have been
authorized to execute this Agreement pursuant to resolutions of their respective
Boards of Directors.
5. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS ALONE
The SHAREHOLDERS alone further represent and warrant to OAO as follows with
respect to the OAO Shares:
5.1 Financially Responsible: That they are financially responsible, able to
meet their obligations and acknowledge that this investment will be speculative.
5.2 Investment Experience: That they have had experience in the business of
investments in one or more of the following: (i) investment experience with
securities such as stock and bonds; (ii) ownership of interests in partnerships,
new ventures and start-up companies; (iii) experience in business and financial
dealings; and that they can protect their own interests in an investment of this
nature and they do not have an "Investor Representative", as that term is
defined in Regulation D of the Securities Act of 1933 and do not need such an
Investor Representative.
5.3 Investment Risk: That they are capable of bearing the high degree of
economic risks and burdens of this investment, including but not limited to the
possibility of complete loss of all its investment capital and the lack of a
liquid market, such that it may not be able to liquidate readily the investment
whenever desired or at the then current asking price.
5.4 Access to Information: That they have had access to the information
regarding the financial conditions of the COMPANY, including but not limited to
the Disclosure and Financial Statement dated September 23, 1996 filed by the
COMPANY pursuant to Rule 15c2-11(a)(5) of the
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Securities Exchange Act of 1934, and they were able to request copies of such
information, ask questions of and receive answers from the COMPANY regarding
such information and any other information they desire concerning the OAO
Shares, and all such questions have been answered to their full satisfaction.
5.5 Private Transaction: That at no time were they presented with or
solicited by any leaflet, public promotional meeting, circular, newspaper or
magazine article, radio or television advertisement or any other form of general
advertising.
5.6 Investment Intent: The OAO Shares are not being purchased with a view
to or for the resale or distribution thereof and they have no present plans to
enter into any contract, undertaking, agreement or arrangement for such resale
or distribution.
5.7 Due Diligence: That the SHAREHOLDERS shall have completed a due
diligence review of the affairs of OAO and are satisfied with the results of
that review.
6. CLOSING, ESCROW HOLDER AND
CONDITIONS TO CLOSING
6.1 Exchange Closing: The closing of the share exchange as contemplated by
this Agreement (the "Closing") shall take place in Vancouver, British Columbia,
at such time and place as may be agreed among by the parties, but in no event
later than __________, 1996, unless otherwise extended in writing by the
parties.
6.2 Appointment of Escrow Holder: The parties hereby appoint XXXXXXX X.
XXX, III, ESQ. as the Escrow Holder pursuant to this Agreement.
6.3 Opinion of Counsel for OAO: The SHAREHOLDERS and FPI shall have
received an opinion from the legal counsel for OAO, in form and substance
reasonably satisfactory to the SHAREHOLDERS and FPI, to the effect that:
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1. OAO is a corporation duly organized and legally existing under the
laws of the State of Nevada and is in good standing with respect to
all of its regulatory filings, and
2. This Agreement when duly executed and delivered by OAO, constitutes a
legal, valid and binding obligation of OAO enforceable against it in
accordance with its terms, and
3. The Shares delivered pursuant to the Agreement have been validly
issued are fully paid and non-assessable, and
4. The Existing OAO Shares and the Shares have been legally and validly
issued and have been and are in compliance with all federal and state
securities laws including but not limited to SEC Regulation S and
Nevada Revised Statutes Chapters 78 and 90.
6.4 Opinion of Counsel For SHAREHOLDERS and FPI: OAO shall have received an
opinion from the legal counsel for the SHAREHOLDERS and FPI, in form and
substance reasonably satisfactory to OAO, to the effect that:
1. FPI is a corporation duly organized and legally existing under the
laws of Canada and is in good standing with respect to all of its
regulatory filings, and
2. The FPI Shares delivered pursuant to this Agreement have been validly
issued, fully paid, non-assessable, and have been originally issued in
full compliance with all federal and provincial securities laws.
3. The SHAREHOLDERS have the full power to transfer the FPI Shares to OAO
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without obtaining the consent or approval of any other person or
governmental agency upon the approval by the Board of Directors of
FPI.
6.5 Escrow Conditions and Closing: Prior to the Closing the following will
be required:
1. Delivery of FPI Shares: The SHAREHOLDERS shall deliver to the Escrow
Holder the certificate or certificates representing the FPI Shares
registered in the name of OAO, duly endorsed for transfer accompanied
by a duly executed assignment of the FPI Shares to OAO.
2. Delivery of OAO Shares: OAO shall deliver to the Escrow Holder a total
of 4,901,760 of the Shares registered in the names of the SHAREHOLDERS
and their respective designees as set forth in Schedule "A".
3. Delivery of Creditor Shares: OAO shall deliver to the Escrow Holder a
total of 98,240 of the Shares registered in the name of the creditors.
4. Legal Opinion and Documents: Both parties shall deliver to the Escrow
Holder such legal opinions and other documents as are required by the
terms and conditions of the Agreement.
5. Requisite Corporate Resolutiona: Each party shall deliver to the
Escrow Holder certified copies of resolutions from their respective
Boards of Directors authorizing the subject transaction.
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6. Shareholder Approval: OAO shall deliver to the Escrow Holder
documentation evidencing the OAO shareholder approval of the subject
transaction.
6.6 Close of Termination: The subject transaction shall "close' upon the
satisfaction of the above conditions.
7. COOPERATION, ARBITRATION, INTERPRETATION,
MODIFICATION AND ATTORNEY FEES
7.1 Cooperation of Parties: The parties further agree that they will do all
things necessary to accomplish and facilitate the purpose of this Agreement and
that they will sign and execute any and all documents necessary to bring about
and perfect the purposes of this Agreement.
7.2 Arbitration: The parties hereby submit all controversies, claims and
matters of difference arising out of this Agreement to arbitration In Las Vegas,
Nevada according to the rules and practices of the American Arbitration
Association from time to time in force. This submission and agreement to
arbitrate shall be specifically enforceable. The Agreement shall further be
governed by the laws of the State of Nevada.
7.3 Interpretation of Agreement: The parties agree that should any
provision of this Agreement be found to be ambiguous in any way, such ambiguity
shall not be resolved by construing such provisions or any part of or the entire
Agreement in favor of or against any party herein, but rather by construing the
terms of this Agreement fairly and reasonable in accordance with their generally
accepted meaning.
7.4 Modification of Agreement: This Agreement may be amended or modified in
any way at any time by an instrument in writing stating the manner in which it
is amended or modified and signed by each of the parties hereto. Any such
writing amending or modifying this Agreement shall be attached to and kept with
this Agreement.
7.5 Attorney Fees: If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with
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any of the provisions of the Agreement, the successful or prevailing party shall
be entitled to recover reasonable attorneys' fees and other costs incurred in
that action or proceeding, in addition to any other relief to which it may be
entitled.
7.6 Entire Agreement: This Agreement constitutes the entire Agreement and
understanding of the parties hereto with respect to the matters herein set
forth, and all prior negotiations, writings
and understandings relating to the subject matter of this Agreement are merged
herein and are superseded and canceled by this Agreement.
7.7 Counterparts: This Agreement may be signed in one or more counterparts.
7.8 Facsimile Transmission Signatures: A signature received pursuant to a
facsimile transmission shall be sufficient to bind a party is Agreement
DATED: December 24th, 1996 /s/ XXXXXXX X. XXXXX
-----------------------------------
XXXXXXX X. XXXXX
DATED: December 24th, 1996 /s/ XXXX X. XXXXXX
-----------------------------------
XXXX X. XXXXXX
471141 B.C. LTD
DATED: December 24th, 1996 /s/ XXXXXX XXXXXX
-----------------------------------
XXXXXX XXXXXX
President
ONE AND ONLY, INC.
DATED: December 24th, 1996 /s/ XXXXXXX X. XXXXX
-----------------------------------
XXXXXXX X. XXXXX
President
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SCHEDULE "A"
NAME NO. SHARES
---- ----------
1. Xxxxxxx Xxxx Xxxxx 2,300,307
2. Xxxx X. Xxxxxx 1,370,153
3. Xxxxxx X. Xxx 100,000
4. Xxxxxxxx Xxxxxxx Xxxxxx 400,000
S. Xxxxx X. Xxxxxxxxx 100,000
6. Xxxxx X. Xxxxx 22,500
7. Xxxxxx X. Xxxxxx 22,500
8. Xxxxxxx X. Ozerkevich 14,000
9. Xxxxxx X. Xxxxxxxx 35,000
10. Xxxxx X. Xxxxxxxx 2,000
11. Xxxxx X. Xxxxxx In Trust for Xxxxx Land 8,100
12. Xxxx X. Xxxxxxxxx 13,100
13. Xxxxx X. Xxxxxx 9,500
14. Xxxxx X. Xxxx 1,300
15. Xxxxxx X. Xxxxxx 1,300
16. Xxxxxx X. Xxxxxxx 1,300
17. Xxx X. Xxxxxxx 1,300
18. Xxxxxxx X. Xxxxxxx 1,300
19. Nicolas 0. Xxxxxxxxx 2,700
20. Xxxxx X. Xxxxxx 1,300
21. Xxxxxx X. St. Xxxxx 1,300
22. Xxxxxxxxx X. Xxxx 7,800
23. Xxxxxx Financial Corporation 400,000
24. Xxxx X. Xxxxx 5,000
25. Barakeat Holdings Ltd. 40,000
---------
26. XXXXXX XXXXX XXXXX 40,000
---------
TOTAL SHARES 4,901,760
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SCHEDULE "B"
NAME NO. SHARES
---- ----------
1. Xxxxx X. Xxxxxxxx I/T
for Ernst & Young 8,167
2. Xxxxxxx X. Xxxxxxx I/T for
Xxxxxxx & DuMoulin 3,536
3. Xxxxxx X. Xxxxxxxx In Trust 6,537
4. Xxx Xxxxx Cabo 80,000
------
TOTAL SHARES 98,240
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