EXHIBIT 6.1
SHARE EXCHANGE AGREEMENT BETWEEN
XXXXXX X. XXXX, THE XXXX GROUP PLC
AND INTEGRITY HOLDINGS, LTD.
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement") is entered into and
effective as of July 1, 1998, by and between XXXXXX X. XXXX (the "SHAREHOLDER"),
THE WYSE GROUP PLC, a United Kingdom public limited company ("WGP") and
INTEGRITY HOLDINGS, LTD., a Nevada corporation ("IHL" 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 SHAREHOLDER is the owner of 50,000 shares of the ordinary or
common stock of WGP which represent all of the issued and outstanding
shares of ordinary or common stock of WGP (the "WGP Shares").
2. IHL desires to issue a total of 183,375 shares of its common stock
(the "IHL Shares") to the SHAREHOLDER in exchange for the WGP Shares.
3. The SHAREHOLDER desires to exchange the WGP Shares for the IHL Shares
in accordance with the terms and conditions of this Agreement.
4. WGP desires that this transaction be consummated.
2. EXCHANGE AND ISSUANCE OF SHARES
2.1 EXCHANGE OF IHL SHARES: IHL shall exchange and deliver to the
SHAREHOLDER, a total of 183,375 restricted shares of IHL common stock.
2.2 EXCHANGE OF WGP SHARES: At the Closing, the SHAREHOLDER shall exchange
and deliver to IHL a total of 50,000 shares of WGP ordinary or common stock
which represents one hundred percent (100%) of the issued and outstanding shares
of WGP.
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2.3 NATURE OF IHL SHARES: The SHAREHOLDER shall be issued the IHL Shares
which unless otherwise contractually restricted, shall be subject to a one (1)
year holding period before the IHL Shares are eligible for sale in the U.S.
public market. The sale of the IHL Shares will be further limited by the resale
provisions of SEC Rule 144.
2.4 RESTRICTED NATURE OF IHL SHARES: Notwithstanding the one (1) year
holding period for the IHL Shares, a SHAREHOLDER who becomes an "affiliate" or
"control person" of IHL will be subject to certain limitations with respect to
the sale of its IHL Shares. Accordingly, as a result of such a designation, the
sale of the IHL Shares will be limited by SEC Rule 144.
2.5 PRIVATE SALE ACKNOWLEDGMENT: The parties acknowledge and agree that
the exchange and issuance of the IHL Shares is being undertaken as a private
sale pursuant to Section 4 of the Securities Act of 1933, as amended and Nevada
Revised Statutes Chapter 78 and 90 and is not being transacted via a
broker-dealer and/or in the public market place.
2.6 STATUS OF PRESENT SHARE OWNERSHIP AND CONTEMPLATED SHARE ISSUANCE BY
IHL: The parties hereto acknowledge and agree that in addition to the issuance
of the 183,375 IHL Shares, that IHL contemplates the issuance of an additional
10,450,000 shares of its common stock pursuant to a SEC Regulation D, Rule 504
Offering (the "Rule 504 Shares"). Accordingly, upon the issuance of the Rule 504
Shares and upon the Closing of the share exchange contemplated by this
Agreement, that the following will be the resulting share ownership of IHL:
NAME NO. SHARES % OWNERSHIP
---- ---------- -----------
1. WGP Shareholder 183,376 1.64%
2. Present Shareholders 594,450 5.29%
3. Rule 504
Shareholders 10,450,000 93.07%
---------- -----
TOTALS 1,227,825 100%
---------- -----
---------- -----
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3. REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The COMPANY represents and warrants to the SHAREHOLDER and WGP as follows:
3.1 ORGANIZATION: IHL is a corporation duly incorporated and validly
existing under the laws of the State of Nevada and is in good standing with
respect to all of its regulatory filings.
3.2 CAPITALIZATION: The authorized capital of IHL consists of 100,000,000
common shares with a par value $.001 and with the exception of the common shares
described in Paragraph 2.6, no common shares will have been validly authorized
and issued by the COMPANY prior to the Closing of the contemplated share
exchange.
3.3 FINANCIAL STATEMENTS: IHL has furnished to the SHAREHOLDER and WGP
audited financial statements for the period ending May 31, 1998. That at the
Closing the financial affairs of IHL will be materially the same as represented
in the financial statements for the period ending May 31, 1998.
3.4 BOOKS AND RECORDS: All material transactions of IHL have been promptly
and properly recorded or filed in or with its books and records and the Minute
Book of IHL contains records of all meetings and proceedings of the shareholders
and directors thereof.
3.5 LEGAL COMPLIANCE: To the best of its knowledge, IHL is not in breach
of any laws, ordinances, statutes, regulations, by-laws, orders or decrees to
which IHL is subject or which apply to it or any of its assets.
3.6 TAX RETURNS: All tax returns and reports of IHL required by law to be
filed prior to the date hereof have been filed and are substantially true,
complete and correct and all taxes and governmental charges have been paid.
3.7 ADVERSE FINANCIAL EVENTS: IHL 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 IHL threatened against or affecting IHL at
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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: IHL has no known 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 IHL or of any agreement to which IHL is a party and will
not give any person or company a right to terminate or cancel any agreement or
right enjoyed by IHL 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 IHL.
3.11 VALIDLY ISSUED AND AUTHORIZED SHARES: That the IHL 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 IHL Shares will have a restrictive
legend imposed thereon identifying them as "Restricted Shares" which are subject
to the conditions and limitations of SEC Rule 144 with respect to their sale in
the U.S. public market place.
3.13 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 the Board of Directors of the
COMPANY.
4. REPRESENTATIONS OF SHAREHOLDER AND WGP
The SHAREHOLDER and WGP collectively and individually hereby represent and
warrant to IHL as follows:
4.1 SHARE OWNERSHIP: That the SHAREHOLDER is the owner, beneficially
and of record, of the WGP Shares and said shares are free and clear of all
liens, encumbrances, claims, charges and restrictions.
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4.2 TRANSFERABILITY OF WGP SHARES: That the SHAREHOLDER has full power to
transfer the WGP Shares to IHL without obtaining the consent or approval of any
other person or governmental authority.
4.3 VALIDLY ISSUED AND AUTHORIZED SHARES: That the WGP Shares are validly
authorized and issued, fully paid, and nonassessable, and the WGP Shares have
been so issued in full compliance with all securities laws of the United
Kingdom.
4.4 ORGANIZATION: WGP is a public limited company duly incorporated and
validly existing under the laws of the United Kingdom and is in good standing
with respect to all of its regulatory filings.
4.5 CAPITALIZATION: The authorized capital of WGP consists of 50,000 or
ordinary common shares with a par value or equivalent of L 1.00 and of which
50,000 ordinary or common shares are issued and outstanding as fully paid and
non-assessable shares.
4.6 FINANCIAL STATEMENTS: WGP has furnished to IHL audited financial
statements for the period ending June 30, 1998. That at the Closing the
financial affairs of WGP will be materially the same as represented in these
same financial statements.
4.7 BOOKS AND RECORDS: All material transactions of WGP have been promptly
and properly recorded or filed in or with its books and records and the Minute
Book of WGP contains records of all meetings and proceeds of the shareholders
and directors thereof.
4.8 LEGAL COMPLIANCE: WGP is not in breach of any laws, ordinances,
statutes, regulations, by-laws, orders or decrees to which WGP is subject or
which apply to it or any of its assets.
4.9 TAX RETURNS: All tax returns and reports of WGP 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: WGP 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.
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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 WGP threatened against or affecting WGP 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: WGP 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
Memorandum or Articles of Association of WGP or of any agreement to which WGP is
a party and will not give any person or company a right to terminate or cancel
any agreement or right enjoyed by WGP 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 WGP.
4.14 NO LIENS: That WGP has not received a notice of any assignment, lien,
encumbrance, claim or charge against the WGP Shares.
4.15 CORPORATE AUTHORITY: The officers or representatives of WGP executing
this Agreement represent that they have been authorized to execute this
Agreement pursuant to a resolution of the Boards of Directors of WGP.
5. REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDER ALONE
The SHAREHOLDER alone further represents and warrants to IHL as follows
with respect to the WGP Shares:
5.1 FINANCIALLY RESPONSIBLE: That he is financially responsible, able to
meet his obligations and acknowledges that this investment will be speculative.
5.2 INVESTMENT EXPERIENCE: That he has 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)
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experience in business and financial dealings; and that he can protect his 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 he is 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 he may not be able to liquidate readily the investment
whenever desired or at the then current asking price.
5.4 ACCESS TO INFORMATION: That he has had access to the information
regarding the financial condition of the COMPANY and he was able to request
copies of such information, ask questions of and receive answers from the
COMPANY regarding such information and any other information he desires
concerning the IHL Shares, and all such questions have been answered to his full
satisfaction.
5.5 PRIVATE TRANSACTION: That at no time was he 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 IHL Shares are not being purchased with a view
to or for the resale or distribution thereof and he has no present plans to
enter into any contract, undertaking, agreement or arrangement for such resale
or distribution.
5.7 DUE DILIGENCE: That the SHAREHOLDER shall have completed a due
diligence review of the affairs of IHL and is 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 San Diego, California, at
such time and place as may be agreed among by the parties, but in no event later
than August 14, 1998, unless otherwise extended in writing by the parties.
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6.2 APPOINTMENT OF ESCROW HOLDER: The parties hereby appoint XXXXXXX X.
XXX, III, ESQ, of San Diego, California as the Escrow Holder pursuant to this
Agreement.
6.3 OPINION OF COUNSEL FOR IHL: The SHAREHOLDER and WGP shall have
received an opinion from the legal counsel for IHL, in form and substance
reasonably satisfactory to the SHAREHOLDER and WGP, to the effect that:
1. IHL 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 IHL,
constitutes a legal, valid and binding obligation of IHL
enforceable against it in accordance with its terms, and
3. The IHL Shares delivered pursuant to the Agreement have been
validly issued are fully paid and non-assessable, and
4. The IHL Shares have been legally and validly issued and are in
compliance with all federal and state securities laws including
but not limited to Section 4 of the Securities Act of 1933, as
amended, and Nevada Revised Statutes Chapters 78 and 90.
6.4 OPINION OF COUNSEL FOR SHAREHOLDER AND WGP: IHL shall have received
an opinion from the legal counsel for the SHAREHOLDER and WGP, in form and
substance reasonably satisfactory to IHL, to the effect that:
1. WGP is a public limited company duly organized and legally
existing under the laws of the United Kingdom and is in good
standing with respect to all of its regulatory filings, and
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2. The WGP 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 state
securities laws.
3. The SHAREHOLDER has the full power to transfer the WGP Shares to
IHL without obtaining the consent or approval of any other person
or governmental agency.
4. That IHL is legally capable of owning and is permitted to own a
controlling interest in WGP under the applicable laws of the
United Kingdom.
6.5 ESCROW CONDITIONS AND CLOSING: Prior to the Closing the following will
be required:
1. DELIVERY OF WGP SHARES: The SHAREHOLDER shall deliver to the
Escrow Holder the certificate or certificates representing the
50,000 WGP Shares registered in the name of IHL, duly endorsed
for transfer accompanied by a duly executed assignment of the WGP
Shares to IHL.
2. DELIVERY OF IHL SHARES: IHL shall deliver to the Escrow Holder a
total of 183,375 of the Shares registered in the names of the
SHAREHOLDER.
3. 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.
4. REQUISITE CORPORATE RESOLUTIONS: Each party shall deliver to the
Escrow Holder certified copies of resolutions from their
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respective Boards of Directors authorizing the subject
transaction.
6.6 CLOSE OF TRANSACTION: 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 New York,
New York 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 reasonably 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 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.
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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 to this
Agreement.
SHAREHOLDER
DATED: August 4, 1998 /s/ Xxxxxx X. Xxxx
--------------------------
XXXXXX X. XXXX
THE WYSE GROUP PLC
DATED: August 4, 1998 BY: /s/ Xxxxxx X. Xxxx
--------------------------
XXXXXX X. XXXX
Managing Director
INTEGRITY HOLDINGS, LTD.
DATED: August , 1998 BY:
--------------------------
XXXXXXX XXXXX
President
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