EXHIBIT 10.1
SHARE EXCHANGE AGREEMENT
THIS AGREEMENT made as of March 23, 2001
BETWEEN: Xxxxxxx Xxxxxxx, 0000 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
(the "Vendor")
AND: AirCare Installations Inc. (Incorporation No. 599519) a British
Columbia company with an address at 000-000 Xxxxxxxx Xxxxxx, Xxxxxxxx,
XX X0X 0X0
(the "Company")
AND: Armor Enterprises, Inc., a Florida corporation with an address at 000
Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx, XXX#00000, Xxxxxxx, Xxxxxxx, X.X.X
00000
(the "Purchaser")
BACKGROUND
A. The Vendor is the registered and beneficial owner of all the issued and
outstanding shares in the capital of (the "Company"), being 120 common shares
without par value (the "Shares").
B. The Company is a private British Columbia corporation that carries on an
automotive parts business in British Columbia.
C. The Vendor, as the registered and beneficial owner of the Shares, has agreed
to sell and the Purchaser has agreed to purchase the Shares, on the terms and
conditions contained in this Agreement.
D. The Purchaser is a Florida corporation that currently has no active business
and is a development stage company seeking to acquire and active business.
THE AGREEMENT WITNESSES that in consideration of the premises and covenants and
agreements contained in this Agreement, the parties covenant and agree with each
other as follows:
Article 1 - Schedules
1.1 The following are the Schedules attached to and incorporated in this
Agreement by reference and deemed to be part of this Agreement;
1. Financial Statements
2. Directors Resolutions
3. Memorandum and Articles of the Company
4. Asset List - Company
5. Restrictive Covenant Agreements
6. Opinion of Vendor's Counsel
1
Article 2 - Definitions
In this Agreement:
2.1 "Business" means the automotive parts business of the Company, including the
ownership of the product line, formulas, trademarks, trade secrets, machinery
and other assets necessary to continue the successful operation of the Company's
business.
2.2 "Closing Date" means March 23, 2001, or such earlier or later date as may be
mutually agreed upon by the parties in writing.
2.3 "Financial Statements" means the financial statements of the Company as
attached in this Agreement as Schedule 1
2.4 "Shares means all the issued and outstanding shares in the capital of the
Company at the Time of Closing.
2.5 "Time of Closing" means 10:00 am (Vancouver time) on the Closing Date.
Article 3 - Purchased Shares and Purchase Price
3.1 Purchases Shares
Subject to the terms and conditions of this Agreement and based on the
representations and warranties of the Vendor set forth in this Agreement, on the
Closing Date the Vendor will sell, assign and transfer to the Purchaser and the
Purchaser will purchase from the Vendor all (but not less than all) of the
Shares for 17,000,000 (seventeen million) common shares in the capital stock of
the Purchaser (the "Purchase Price"), valued at US$0.01 per share. The Purchase
Price will be allocated equally per-share. If the transactions in this Agreement
are completed on the Closing Date, the Vendor will be entitled to the Purchase
Price. If the transactions contemplated in this Agreement are not completed on
the Closing Date, the Vendor will forthwith repay the Purchase Price to the
Purchaser.
3.2 Financing
After the Closing Date the Purchaser will conduct a private placement offering
of 10,000,000 common shares for US$0.01 per share for an aggregate of US$100,000
(the "Financing"). It is agreed that all of the parties to this agreement will
participate in the conduct of the private placement on a best efforts basis.
3.3 Management Fee
The president of the Purchaser, will receive a management fee to be agreed and
contingent upon the success of the private placement of shares.
2
3.4 Employment Agreement
The Vendor will enter into a Restrictive Covenant Agreement that will be
attached to this Agreement and form a part of this Agreement.
3.5 Audited Financial Statements
In the event that the Company is unable to produce audited financial Statements
by October 1, 2001, then this agreement shall be subject to cancellation at the
option of the shareholders of the Purchaser as at the date of this agreement.
Article 4 - Vendor's Representations and Warranties
In order to induce the Purchaser to enter into and consummate this Agreement,
the Vendor and the Company represent and warrant to and covenant with the
Purchaser as follows:
4.1 The Company is a company duly incorporated and organized under the laws of
British Columbia, is not a reporting Company, and is a valid and subsisting
company in good standing with the Office of the Registrar of Companies of
British Columbia.
4.2 The Company is duly licensed and authorized to carry on business by the
appropriate regulatory or governmental authority of each jurisdiction where it
carries on business.
4.3 The authorized capital of the Company is 1,100,000 shares divided as
follows:
a) 100,000 Class "A" common shares without par value;
b) 100,000 Class "B" common shares without par value;
c) 100,000 Class "C" preferred shares without par value;
d) 100,000 Class "D" preferred shares without par value;
e) 1,000,000 Class "E" shares with a par value of C$/01 each.
Of which only 120 Class "A" common shares are issued and outstanding.
4.4 The Vendor owns the Shares as legal and beneficial owner, free and clear of
all liens, claims, charges and encumbrances. The Vendor and the Company has due
and sufficient right and authority to enter into this Agreement on the terms and
conditions set forth in this Agreement and to transfer the legal and beneficial
title to and ownership of the Shares to the Purchaser.
4.5 No person, firm or corporation has any agreement or option or any right
capable of becoming an agreement for the purchase of the Shares or any other
shares in the capital of the Company or any right capable of becoming an
agreement for the purchase, subscription or issuance of any of the unissued
shares in the capital of the Company.
4.6 The Company has the corporate power to own the properties owned by it and to
carry on the Business and is duly qualified to carry on business in British
Columbia.
3
4.7 The Company holds all licenses and permits required for carrying on the
Business in the manner in which it has heretofore been carried on and all such
licenses and permits are in good standing.
4.8 The Financial Statements are true and correct in every material respect and
represent fairly the assets, liabilities and financial position of the Company
as at , and the results of its operations to that date, in accordance with
generally accepted accounting principles applied on a basis consistent with that
of the previous year.
4.9 There are no liabilities, contingent or otherwise, of the Company which are
not disclosed or reflected in Schedule 1 and the Company has not guaranteed, or
agreed to guarantee, any debt, liability or other obligation to any person, firm
or corporation. There are no liabilities of any other party capable of creating
a lien or charge on any of the assets of the Company.
4.10 The Company is not indebted to the Vendor or any affiliate, director or
officer of the Company.
4.11 No dividends or other distribution on any shares in the capital of the
Company have been made, declared or authorized since incorporation, to or on
behalf of the Vendor or to or behalf of officers, directors or shareholders of
the Company.
4.12 No payments of any kind outside the ordinary course of business have been
made or authorized since incorporation, to or on behalf of the Vendor or to or
on behalf of officers, directors or shareholders of the Company.
4.13 Since incorporation:
(a) there have not been any material adverse change in the financial position or
condition of the Company or any damage, loss or other change in circumstances
materially affecting the Business or property of the Company or its right or
capacity to carry on business;
(b) the Company has not waived or surrendered any right of material value;
(c) the Company has not discharged or satisfied or paid any lien or encumbrance
or obligation or liability;
(d) the Business of the Company has been carried on in the ordinary course; and
(e) no capital expenditures have been authorized or made.
4.14 The Memorandum and Articles of the Company are as attached in Schedule 3
4.15 The Company does not have any contracts, agreements, collective agreements,
pension plans, profit-sharing plans, bonus plans, group insurance or similar
plans, undertakings or arrangements whether oral, written or implied with
employees, lessees, licensees, managers, accountants, suppliers, agents,
distributors, officers, directors, lawyers or others, except as set out in
Schedule 5.
4
4.16 There is no basis for and there are no actions, suits, judgments,
investigations or proceedings outstanding or pending or t the knowledge of the
Vendor threatened against or affecting the Company or before or by any federal,
provincial, state, municipal or other governmental department, commission,
board, bureau or agency.
4.17 The Company is not in breach of any laws, ordinances, statutes,
regulations, bylaws, orders or decrees to which it is subject or which apply to
it and uses to which the assets of the Company have been put are not in breach
of any statute, bylaw, regulation, covenant, restriction, plan or permit,
including those regulating the discharge of materials into the environment and
the storage, treatment and disposal of waste or otherwise relating to the
protection of the environment and health and safety of persons. For greater
certainty, the assets of the Company have not been used in a manner which does
or will give rise to any obligation of restoring or removal or any liability for
the costs of restoration or removal or for the payment damages to any third
party.
4.18 The employees of the Company and their current remuneration are described
in Schedule 5.
4.19 The Company has good marketable title to all its properties and assets and
in particular the properties and assets described in Schedule 4, subject to no
mortgage, pledge, deed of trust, lien, conditional sale agreement, encumbrance
or charge and all of such properties in assets are in good order and repair.
4.20 The Company has not experienced nor is it or the Vendor aware of any
occurrence or event which has had, or might reasonably be expected to have, a
materially adverse effect on the Business or the results of its operations.
4.21 Neither the Vendor nor any officer, director or employee of the Company is
now indebted or under obligation to the Company on any account.
4.22 All tax returns and reports of the Company required by law to be filed
before the date of this Agreement have been filed and are substantially true,
complete and correct.
4.23 Under the INCOME TAX ACT of Canada and British Columbia the Company has
been since its incorporation and is now a Canadian-controlled private
corporation.
4.24 The Company has not before the day of this Agreement:
(a) acquired any property from a person with whom it was not dealing with at
arm's length except as set out in Schedule 5; or
5
(b) disposed of anything to a person with whom the Company was not dealing with
at arm's length for proceeds less than the fair market value.
4.25 The Company has made all elections required to be made under the Income Tax
Act of Canada in connection with any distributions by the Company and all such
elections were true and correct.
4.26 All material transactions of the Company have been promptly and properly
recorded or filed in or with its respective books and records. The minute books
of the Company contain all records of the meetings and proceedings of
shareholders and directors of the Company.
4.27 The performance of this Agreement will not be in violation of the
Memorandum or Articles of the Company or of any agreement to which the Vendor or
the Company is a party and will not give any person or Company any right to
terminate or cancel any agreement or any right enjoyed by the Company and will
not result in the creation or imposition of any lien, encumbrance or restriction
of any nature in favor of a third party upon or against the assets of the
Company or the Shares or the violation of any law or regulation of Canada or of
any province or territory of Canada, any municipal by law or ordinance or any
order or decree of any court or tribunal to which the Vendor or the Company is
subject which could materially affect the Business or the Company or prevent the
due and valid transfer of the Shares as provided in this Agreement.
4.28 The Company maintains such insurance against loss for damages to its assets
and with respect to public liability as is reasonably prudent for a company such
as the Company.
4.29 The Company does not own, directly or indirectly, any shares or interest in
any other company or business entity.
4.30 The Vendor is a resident of Canada (as defined in the INCOME TAX ACT of
Canada and the INCOME TAX ACT of British Columbia).
4.31 This Agreement has been duly executed delivered by the Vendor and is a
valid and binding obligation of the Vendor enforceable in accordance with its
terms.
4.32 The tax value of the assets of the Business is not determined, but will
depend upon the technical performance ability of its products currently under
development.
4.33 The leases and agreements described in the contracts and agreements
attached as part of Schedule 5 are all in good standing and in full force and
effect and no party is in default under those leases and agreements. All amounts
payable by the Vendor or the Company under those leases and agreements have been
paid n full. All necessary consents to the assignment of such leases and
agreements to the Company have been obtained.
6
Article 5 - Covenants to the Vendor
The Vendor covenants and agrees with the Purchaser as follows:
5.1 Consents
Both before and after the Closing Date, the Vendor shall use best efforts to
assist the Purchaser in obtaining from all appropriate federal, provincial,
state, municipal, and other governmental or administrative bodies and all other
persons all such approvals and consents in form and terms satisfactory to
counsel for the Purchaser as are necessary or required in order to permit the
sale, transfer and assignment of all the right, title and interest of the Vendor
in and to the Shares to the Purchaser.
5.2 Possession
At or before the Time of Closing, the Vendor shall deliver to the Purchaser
possession of all books, records, book accounts, lists of suppliers and
customers of the Company and all other documents, files, records and other data,
financial or otherwise, relating to the business.
5.3 Books and Records
The Vendor will permit the Purchaser, anytime up to the Closing Date, and its
auditors, solicitors and other authorized persons, to make such investigation of
the properties and assets of the Company and of its financial and legal
condition and the properties and assets of the Vendor as described in Schedule 4
as the Purchaser deems necessary or advisable to familiarize itself with such
properties, assets and other matters and have full access to the Business
premises and to all records, documents and other information related to the
Business and the Company, including all working papers (internal and external)
and details of accounts and inventories prepared, obtained or used in connection
with the preparation of the Financial Statements.
5.4 Interim Management - Positive Covenants
From the date of this Agreement to the Closing Date, the Vendor will cause the
Company to:
(a) carry on the Business in the ordinary and normal course, in a prudent,
businesslike and efficient manner and substantially in accordance with the
procedures and practices in effect.
(b) maintain insurance on the assets of the Company as they are insured on the
date of this Agreement;
(c) use its best efforts to preserve and maintain the goodwill of Business; and
(d) do all necessary repairs and maintenance to the assets of the Company and
take reasonable care to protect and safeguard those assets.
5.5 Interim Management - Negative Covenants
From the date of this Agreement to the Closing Date, the Vendor will not, and
will not permit the Company to, without the prior consent in writing of the
Purchaser:
7
(a) purchase or sell, consume or otherwise dispose of any of its assets in
connection with the Business;
(b) enter into any contract or assume or incur any liability relating to or
anyway affecting the Business except in the ordinary course of business and
which are not material;
(c) settle any accounts receivable of any material nature at less than face
value net of the reserve for that account;
(d) waive or surrender any material right in connection with the Business;
(e) discharge, satisfy or pay any lien, encumbrance, obligation or liability in
connection with the Business; or
(f) make any capital expenditures or commitment for any capital expenditures in
connection with the Business.
5.6 Opinion
The Vendor will deliver to the Purchase at the Time of Closing an opinion of the
Vendor's counsel, addressed to the Purchaser, in form satisfactory to counsel
for the Purchaser that:
(a) the Company is duly organized and validly existing under the laws of the
Province of British Columbia and is in good standing with the Office of the
Registrar of Companies of British Columbia;
(b) all necessary steps and corporate proceedings have been taken to permit the
Shares to be duly and validly transferred to and registered in the name of the
Purchaser;
(c) the number of authorized and issued shares in the capital of the Company is
warranted by the Vendor and all issued shares are duly authorized, validly
issued and outstanding as fully paid and non-assessable; and
(d) based on knowledge and belief as informed by the directors of the Company,
such solicitors know of no claims, judgment, actions, suits, litigation,
proceedings or investigations, actual, pending or threatened against the Company
which might materially affect any business, properties, assets, prospects or
conditions, financial or otherwise, of the Company or which could result in any
material liability to the Company.
5.7 Transfer of Shares
The Vendor will, at the time of closing, take all necessary steps and
proceedings as approved by counsel for the Purchaser to permit the Shares to be
duly and regularly transfer to the Purchaser and registered in its name for,
freeing clear of any means, charges, encumbrances.
8
5.8 Resolutions
On the closing date, the Vendor shall deliver to the Purchaser:
(a) certified copies of resolutions of the directors of the Company authorizing
the transfer of the Shares and the registration of the transfer of the Shares in
the name of the Purchaser and authorizing the issue of new share certificates;
(b) duly executed share certificates representing the Shares in the name of the
Purchaser;
(c) all corporate records of the Company and its corporate seal (if it has
adopted a seal); and
(d) certified copies of resolutions of the directors of the Vendor authorizing
the transactions contemplated in this Agreement.
5.9 Representations and Warranties
On the Closing Date, the representations and warranties of the Vendor contained
in this Agreement will be true and correct as if made on and as of the Closing
Date.
5.10 Contracts and Agreements
All of the transactions set out in the contracts and agreements included as
Schedule 5 will be completed on or before the Closing Date.
Article 6 - Conditions of Closing
6.1 The obligations of the Purchaser under this Agreement are subject to the
following conditions for the exclusive benefit of the Purchaser being fulfilled
in all material respects in the reasonable opinion of the Purchaser at the Time
of Closing or waived by the Purchaser at or before the Time of Closing or agreed
by the Vendor and the Purchaser to be indemnified for by the Vendor.
(a) the representations and warranties of the Vendor contained in this Agreement
shall be true and correct as of the date of this Agreement and on and as of the
Closing Date;
(b) the Vendor shall have complied with all covenants and Agreements in this
Agreement agreed to be performed or caused to be performed by its respectively
on the before the Closing Date;
(c) the title of the Company to its assets free and clear of liens, charges and
encumbrances, the legality of the incorporation and organization of the Company,
the due creation and issuance as fully paid and non-assessable of the Shares,
all corporate proceedings of the Company, its shareholders and directors, the
right of the Company to carry on the Business and all other matters which in the
opinion of counsel for the Purchaser are material in connection with the
transactions of purchases and sale contemplated by this Agreement shall be
subject to the favorable opinion of such counsel and all relevant records and
information shall be supplied to such counsel for that purpose;
9
(d) no material loss or destruction of or damage to any of the assets of the
Company shall have occurred between the date of this Agreement and the Time of
Closing;
(e) no action or proceeding in Canada shall be pending or threatened by any
person, Company, firm, governmental authority, regulatory body or agency to
enjoin or prohibit:
(i) the purchase and sale of the Shares and other assets contemplated by this
Agreement or the right of the Purchaser to own the Shares; or
(ii) the right of the Company to conduct its operations and carry on the
Business in the normal course as the Business and its operations have been
carried on in the past; and
(f) the Company shall have the benefit of all licenses and permits, contracts
and agreements necessary to permit it to carry on the Businesses as carried on
by the Vendor.
6.2 If any of the conditions in Article 6.1 are not fulfilled or waived or
indemnified for, the Purchaser on the Closing Date may rescind this Agreement by
notice in writing to the Vendor. In such event, the Purchaser shall be released
from all obligations under this Agreement, and the Vendor will also be released
unless the Vendor was reasonably capable of causing such condition or conditions
to be fulfilled or the Vendor has breached any of its representations,
warranties, covenants or agreements in this Agreement. The Purchaser shall be
repaid the Purchase Price paid under Article 3.
6.3 The conditions in Article 6.1 may be waived in whole or in part without
prejudice to any right of rescission in the event of the non-fulfillment of any
other condition or conditions. A waiver will be binding only if it is in
writing.
Article 7 - Closing Arrangements
7.1 Place
The closing shall take place at the Time of Closing at Xxxxx 000-000 Xxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxx, British Columbia.
7.2 Share Certificates/Payment
At the Time of Closing, upon fulfillment of all conditions set out in Article 6
which have not been waived in the manner provided for in Article 6.3, the Vendor
shall deliver to the Purchaser certificates respecting all the Shares and will
cause such Shares to be duly and regularly recorded in the name in the
Purchaser, whereupon, subject to all other terms and conditions hereof being
complied with, the Purchase Price shall be paid and satisfied in the manner
provided in Article 3.
10
Article 8 - General
8.1 Reliance
The Vendor acknowledges and agrees that the Purchaser has entered into this
Agreement relying on the representations, warranties, covenants and agreements
and other terms and conditions of this Agreement and no information which is now
known, which may become known or which could be upon investigation have become
known to the Purchaser or the Company or any of the present or future officers,
directors or professional advisers shall anyway limit or extinguish any rights
an of them may have against the Vendor, including without limitation, any right
to indemnity under Article 9.3 of the Agreement.
8.2 Survival of Representations
The representations, warranties, covenants and agreements of the Vendor
contained in this Agreement and any document or certificate given under this
Agreement shall survive the closing of the transactions contemplated by this
Agreement and remain in full force and effect notwithstanding any waiver by the
Purchaser or the Company unless such waiver was made after notice and in writing
by the Vendor to the Purchaser setting forth the breach.
8.3 Indemnification
The Vendor covenants and agrees to indemnify and save harmless the Purchaser and
the Company from any loss, damages, liabilities, costs and expenses (including
without limitation any tax liability) suffered by the Purchaser or the Company
directly or indirectly as a result of or arising out of any breach of
representations, warranty, covenant or agreement of the Vendor contained in this
Agreement, the Closing Warranty or any document or certificate delivered under
this Agreement.
8.4 Commissions, Legal Fees
Each of the parties will bear the fees and disbursements of the respective
lawyers, accountants and consultants engaged by them respectively in connection
with this Agreement and will not cause or permit any such fees or disbursements
to be charged to the Company before the Closing Date.
8.5 Notices
Any notice, director or other instrument required or permitted to be given under
this Agreement shall be in writing and maybe given by mailing the same postage
prepaid or delivering the same addressed as follows:
To the Vendor:
0000 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
To the Company
000-000 Xxxxxxxx Xxxxxx, Xxxxxxxx, X.X. X0X 0X0
To the Purchaser:
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx, XXX#00000, Xxxxxxx Xxxxxxx, X.X.X. 00000
with a copy to their lawyer at
000-000 X. Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
11
8.6 Time of Essence
Time shall be of the essence of this Agreement
8.7 Further Assurances
Each of the parties will execute and deliver such further documents and
instruments and do such acts and things as may, before or after the Closing
Date, be reasonably required by another party to carry out the intent and
meaning of this Agreement and to assure to the Purchaser the Shares.
8.8 Governing Law
This Agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of British Columbia,
exclusive of the conflicts of laws of British Columbia. The parties agree that
all disputes will be submitted to the jurisdiction of the British Columbia
courts.
8.9 Benefit and Binding Nature of the Agreement
This Agreement shall enure to the benefit of and be binding upon the parties and
their respective successors and assigns.
8.10 Entire Agreement
This Agreement supercedes all prior written or oral agreements between the
parties, and represents the entire agreement between the parties. This Agreement
may only be amended by the parties in writing.
8.11 Counterparts
This agreement may be signed in counterparts and transmitted by facsimile.
IN WITNESS WHEREOF this Agreement has been executed by the parties.
THE VENDOR THE COMPANY
/S/ XXXXXXX XXXXXXX /S/ XXXXXXX XXXXXXX
----------------------------------- -----------------------------------
PRESIDENT
THE PURCHASER
/S/ XXXXXX XXXXX
------------------------------------
PRESIDENT
12
