SECURITIES EXCHANGE AGREEMENT
This
SECURITIES EXCHANGE AGREEMENT (“Agreement”) dated as of October 28, 2005, is by
and between AMERICAN
SECURITY RESOURCES CORPORATION,
a
Nevada corporation (“American Security Resources”), eGo
DESIGN, INC.,
an
Oregon corporation (“eGo”), and Xxxxxx
X. Xxxxx,
Xxxxxxxx
X. Xxxxxxx and
Xxxxx Xxxxx,
all of
whom are the only
shareholders of eGo (the “Shareholders”.)
W
I T N E S S E T H:
WHEREAS,
as of September 30, 2005, there were 100,000 issued and outstanding shares
of
the common stock, no par value of eGo Designs, Inc. (the “eGo Stock”), all of
which are owned by the Shareholders;
WHEREAS,
as of September 30, 2005, there were 42,811,266 issued and outstanding shares
of
the common stock, par value $0.001 of American Security Resources Corporation
common stock (the “American Security Resources Stock”);
WHEREAS,
American Security Resources proposes to acquire one hundred percent (100%)
of
the issued and outstanding shares of eGo on a fully diluted basis at the time
of
Closing along with an exclusive right to market and license eGo’s fuel cell
technology (“Exclusive Fuel Cell License”) for the exchange of twelve Million
(12,000,000) restricted shares of Common Stock of American Security Resources
Corporation. Said shares shall represent not less than twenty six percent (26%)
of the issued and outstanding shares of American Security Resources Corporation
on the Date of Closing. At the Date of Closing, the bid price for American
Security shares shall be a minimum of $0.05 per share; and
WHEREAS,
the Board of Directors of American Security Resources and eGo and the
Shareholders have duly approved the terms and conditions of this
Agreement;
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants,
agreements, representations and warranties contained herein, the parties hereto
agree as follows:
ARTICLE
1
EXCHANGE
PRICE
| 1.1 |
Exchange
At
the Closing (defined below) to be held in accordance with the
provisions
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of
Article 3
below
and subject to the terms and agreements set forth herein, eGo hereby exchanges
with American Security Resources and American Security Resources hereby
exchanges with eGo one hundred percent (100%) of the issued and outstanding
shares of eGo on a fully diluted basis at the time of Closing (the “eGo
shares”). The exchange price for the eGo shares shall be Twelve Million
(12,000,000) shares of the Common Stock of American Security Resources
Corporation. eGo will provide to American Security Resources the name, address,
and tax identification number of the person(s) or entities to whom it desires
to
have the American Security Resources Stock issued.
.
ARTICLE
3
CLOSING
| 3.1 |
Closing.
The consummation of the purchase (the “Closing”) shall occur at a
mutually
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agreed
location in Tualatin, Oregon, as soon as practicable after the mutual agreement
of American Security Resources, eGo
and the
Shareholders that all conditions described in Articles 6 and 7 have been
satisfied or waived by the applicable party and after American Security
Resources has had reasonable time to review and verify eGo’s responses to
American Security Resources’ Due Diligence Request. All costs and expenses
associated with consummation of the transactions contemplated by this Agreement
incurred by American Security Resources shall be the sole responsibility of
American Security Resources, while all expenses incurred by the Shareholders
and
eGo shall be the sole responsibility of eGo.
3.2 Deliveries
by American Security Resources.
American Security Resources shall deliver, or cause to be delivered to the
Shareholders at Closing six
million (6,000,000) shares of Common Stock of American Security Resources
Corporation, and an additional 6,000,000 shares within 5 business
days.
3.3 Deliveries
by eGo Designs, Inc.
eGo
Designs, Inc. shall deliver, or cause to be delivered to American
Security Resources Corporation
at
Closing one
hundred percent (100%) of the issued and outstanding common stock of eGo.
3.4 Appointment
of a member of the Board of Directors.
American Security Resources shall appoint Xx Xxxxx to be a member of its board
of Directors.
ARTICLE
4
REPRESENTATIONS
OF eGO DESIGNS, INC.
eGo
hereby represents and warrants to American Security Resources as follows (it
being acknowledged that American Security Resources is entering into this
Agreement in material reliance upon each of the following representations and
warranties, and that the truth and accuracy of each, as evidenced by the
execution of this Agreement by a duly authorized officer of eGo,
constitutes a condition precedent to the obligations of American Security
Resources hereunder).
4.1 Existence
and Good Standing.
eGo
is a
corporation duly organized, validly existing and in good standing under the
laws
of the State of Oregon. eGo
has no
subsidiaries. eGo
has the
power to own or lease its respective properties and assets and to carry on
its
businesses as now being conducted. eGo
is duly
qualified to do business and is in good standing in the State of Oregon, which
is the only jurisdiction in which the character or location of the properties
owned or leased by eGo
or the
nature of the business conducted by eGo
makes
such qualification necessary.
4.2 Capitalization.
eGo
currently has outstanding 100,000 shares of common stock and no shares of
preferred stock. All such outstanding shares have been duly authorized and
validly issued and are fully paid and nonassessable. There are no outstanding
options, warrants, rights, calls, commitments, conversion rights, rights of
exchange, plans or other agreements, commitments or arrangements of any
character providing for the purchase, subscription, issuance or sale of any
shares of capital stock of eGo,
other
than the acquisition of the eGo
shares
as contemplated by this Agreement.
4.3 Ownership
of Stock.
eGo
shall
transfer one
hundred percent (100%) of its issued and outstanding common stock of eGo on
a
fully diluted basis
at
the time of Closing to
American Security Resources free and clear of all preemptive or similar rights,
liens, encumbrances, restrictions and claims of every kind and the delivery
to
American Security Resources of the eGo Stock pursuant to the provisions of
this
Agreement will transfer to American Security Resources valid title thereto,
free
and clear of all liens, encumbrances, restrictions and claims of every kind.
The
eGo Stock to be exchanged herein has been duly authorized and validly issued
and
is fully paid and non-assessable.
4.4 Authority
to Execute and Perform Agreement; No Breach.
eGo
has the
full legal right and power and all authority and approval required to enter
into, execute and deliver this Agreement, and to sell, assign, transfer and
convey the eGo Stock and to perform fully their respective obligations
hereunder. This Agreement has been duly executed and delivered by officers
of
eGo and, assuming due execution and delivery by, and enforceability against,
American Security Resources, constitutes the valid and binding obligation of
eGo
enforceable in accordance with its terms, subject to the qualifications that
enforcement of the rights and remedies created hereby is subject to (i)
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors, and (ii) general
principles of equity (regardless of whether such enforcement is considered
in a
proceeding in equity or at law). No approval or consent of, or filing with,
any
governmental or regulatory body, and no approval or consent of, or filing with,
any other person is required to be obtained by the Shareholders or in connection
with the execution and delivery by the Shareholders of this Agreement and
consummation and performance by them of the transactions contemplated hereby.
The
execution, delivery and performance of this Agreement (including but not limited
to the employment agreement incorporated by reference pursuant to Section 6
hereto) by the Shareholders and the consummation of the transactions
contemplated hereby in accordance with the terms and conditions hereof, the
Shareholders will not:
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(a)
|
violate,
conflict with, or result in the breach of any of the terms of, or
constitute (or with notice or lapse of time or both would constitute)
a
default under, any contract, lease, agreement or other instrument
or
obligation to which a Shareholder is a party or by or to which any
of the
properties and assets of the Shareholder may be bound or
subject;
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(b)
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violate
any order, judgment, injunction, award or decree of any court, arbitrator,
governmental or regulatory body, by which a Shareholder or the securities,
assets, properties or business of any of him is bound; or
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| (c) |
violate
any statute, law or regulation to which Shareholders are
subject.
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4.5 Securities
Matters.
eGo
hereby represents, warrants and covenants to American Security Resources, as
follows:
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(a)
|
It
has been advised that the American Security Resources Stock has not
been
registered under the Securities Act of 1933, as amended (the “Securities
Act”,) or any state securities act in reliance on exemptions
therefrom.
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(b)
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The
American Security Resources Stock is being acquired solely for the
account
of eGo’s assignee, for investment, and is not being acquired with a view
to or for the resale, distribution, subdivision or fractionalization
thereof. The assignee has no present plans to enter into any such
contract, undertaking, agreement or arrangement and the assignee
further
understands that the American Security Resources Stock may only be
resold
pursuant to a registration statement under the Securities Act or
pursuant
to some other available exemption.
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(c)
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eGo
acknowledges, in connection with the exchange of the American Security
Resources Stock, that no representation has been made by representatives
of American Security Resources regarding its business, assets or
prospects
other than that set forth herein and that it is relying upon the
information set forth in the filings made by American Security Resources
pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended
and such other representations and warranties as set forth in this
Agreement.
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(d)
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They
agree that the certificate or certificates representing the American
Security Resources Stock will be inscribed with substantially the
following legend:
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“The
securities represented by this certificate have not been registered under the
Securities Act of 1933. The securities have been acquired for investment and
may
not be sold, transferred or assigned in the absence of an effective registration
statement for these securities under the Securities Act of 1933 or an opinion
of
the Company’s counsel that registration is not required under said
Act.”
4.6 Financial
Statements and No Material Changes.
Annexed
hereto as Schedule 4.6(a) are the unaudited balance sheets, income statements
and statements of cash flows of eGo as of October 28, 2005 (the “eGo Financial
Statements”).
The
eGo
Financial Statements were carefully prepared from the books and records of
eGo,
present fairly the financial position, assets and liabilities of eGo and the
results of its operations, for the respective periods indicated and reflect
all
necessary accruals, all in conformity with generally accepted accounting
principles (“GAAP”) applied on a consistent basis. The eGo Financial Statements
contain all adjustments (consisting of only normal recurring accruals) required
to be made by GAAP, subject to normal year-end adjustments.
Except
as
disclosed in Schedule 4.6(b), since September 30, 2005 there has been (a) no
material adverse change in the assets or liabilities, or in the business or
condition, financial or otherwise, or in the results of operations or prospects,
of eGo and (b) no material adverse change in the assets or liabilities, or
in
the business or condition, financial or otherwise, or in the results of
operations or prospects, of eGo and to the best knowledge, information and
belief of eGo, no fact or condition exists or is contemplated or threatened
which might cause such a change in the future.
4.7 Books
and Records.
The
minute books of eGo, all the contents of which have been previously made
available to American Security Resources and their representatives, contain
accurate records of all meetings of, and action taken by (including action
taken
by written consent) the Shareholder and the Board of Directors of eGo. Except
as
set forth on Schedule 4.7 attached hereto, eGo does not have any of its
respective records, systems, controls, data or information recorded, stored,
maintained, operated or otherwise wholly or partly dependent upon or held by
any
means (including any electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto and therefrom)
are not under the exclusive ownership and direct control of eGo.
4.8 Title
to Properties; Encumbrances.
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(a)
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Except
as set forth on Schedule 4.8 attached hereto, eGo has good, valid
and
marketable title to (a) all of its properties and assets (real and
personal, tangible and intangible), including, without limitation,
all of
the properties and assets reflected in the balance sheet included
as part
of the eGo Financial Statements, except as indicated in the Schedules
hereto; and (b) all of the properties and assets purchased by eGo
since
September 30, 2005 all of which purchases as of a date not more than
two
days prior to the date of this Agreement, have been set forth on
Schedule
4.8 attached hereto; in each case subject to no encumbrance, lien,
charge
or other restriction of any kind or
character.
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(b)
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The
rights, properties and other assets presently owned, leased or licensed,
by eGo reflected on the balance sheet included in the eGo Financial
Statements or acquired since September 30, 2005 include all rights,
properties and other assets necessary to permit eGo to conduct its
business in the same manner as its business has heretofore been conducted.
All such properties and assets owned or leased by eGo are in satisfactory
condition and repair, other than ordinary wear and
tear.
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4.9 Leases.
Schedule 4.9 attached hereto, contains an accurate and complete list and
description of the terms of all leases to which eGo is a party (as lessee or
lessor). Each lease listed on Schedule 4.6 (or required to be set forth on
Schedule 4.6) is in full force and effect; all rents and additional rents due
to
date on each such lease have been paid; in each case, the lessee has been in
peaceable possession since the commencement of the original term of such lease
and is not in default thereunder and no waiver, indulgence or postponement
of
the lessee’s obligations thereunder has been granted by the lessor; and there
exists no event of default or event, occurrence, condition or act (including
the
consummation of the transactions contemplated hereby) which, with the giving
of
notice, the lapse of time or the happening of any further event or condition,
would become a default under such lease. eGo has not violated any of the terms
or conditions under any such lease in any material respect, and, to the best
knowledge, information and belief of eGo, all of the covenants to be performed
by any other party under any such lease have been fully performed. The property
leased by eGo is in a state of good maintenance and repair and is adequate
and
suitable for the purposes for which it is presently being used.
4.10 Material
Contracts.
Except
as set forth on Schedule 4.10 attached hereto, eGo is not bound by:
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(a)
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any
agreement, contract or commitment relating to the employment of any
person
by eGo, or any bonus, deferred compensation, pension, profit sharing,
employee option, employee stock purchase, retirement or other employee
benefit plan;
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(b)
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any
agreement, indenture or other instrument which contains restrictions
with
respect to payment of dividends or any other distribution in respect
of
its shares;
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(c)
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any
loan or advance to, or investment in, any individual, partnership,
joint
venture, corporation, trust, unincorporated organization, government
or
other entity (each a “Person”) or any agreement, contract or commitment
relating to the making of any such loan, advance or
investment;
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(d)
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any
guarantee or other contingent liability in respect of any indebtedness
or
obligation of any Person (other than the endorsement of negotiable
instruments for collection in the ordinary course of
business);
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(e)
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any
management service, consulting or any other similar type
contract;
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(f)
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any
agreement, contract or commitment limiting the freedom of eGo to
engage in
any line of business or to compete with any Person;
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(g)
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any
agreement, contract or commitment not entered into in the ordinary
course
of business which involves $250,000 or more and is not cancelable
without
penalty or premium within 30 days; or
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(h)
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any
agreement, contract or commitment which might reasonably be expected
to
have a potential adverse impact on the business or operations of
eGo;
or
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(i)
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any
agreement, contract or commitment not reflected in the eGo Financial
Statement under which eGo is obligated to make cash payments of,
or
deliver products or render services with a value greater than $100,000
individually or $300,000 in the aggregate, or receive cash payments
of, or
receive products or services with a value greater than $100,000
individually or $300,000 in the aggregate, and any other agreement,
contract or commitment which is material to the conduct of the business
of
eGo.
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Each
contract or agreement set forth on Schedule 4.10 is in full force and effect
and
there exists no default or event of default or event, occurrence, condition
or
act (including the consummation of the transactions contemplated hereby) which,
with the giving of notice, the lapse of time or the happening of any other
event
or condition, would become a default or event of default thereunder. eGo has
not
violated any of the terms or conditions of any contract or agreement set forth
on Schedule 4.10 in any material respect, and, to the best knowledge,
information and belief of eGo, all of the covenants to be performed by any
other
party thereto have been fully performed. Except as set forth on Schedule 4.10,
the consummation of the transactions contemplated hereby does not constitute
an
event of default (or an event, which with notice or the lapse of time or both
would constitute a default) under any such contract or agreement.
4.11 Restrictive
Documents.
Except
as set forth on Schedule 4.11 attached hereto, neither eGo nor the Shareholders
are subject to, or a party to, any charter, by-law, mortgage, lien, lease,
license, permit, agreement, contract, instrument, law, rule, ordinance,
regulation, order, judgment or decree, or any other restriction of any kind
or
character, which could materially adversely affect the business practices,
operations or condition of eGo or any of its assets or property (“eGo’s
Property”,) or which would prevent consummation of the transactions contemplated
by this Agreement, compliance by the Shareholder with the terms, conditions
and
provisions hereof or the continued operation of “eGo’s Business” after the date
hereof or the Closing on substantially the same basis as heretofore operated
or
which would restrict the ability of eGo to conduct business in any
area.
4.12 Litigation.
Except
as set forth on Schedule 4.12 attached hereto, there is no action, suit,
proceeding at law or in equity, arbitration or administrative or other
proceeding by or before (or to the best knowledge, information and belief of
eGo
any investigation by) any governmental or other instrumentality or agency,
pending, or, to the best knowledge, information and belief of eGo, threatened,
against or affecting eGo, or any of their respective properties or rights.
There
are no outstanding orders, judgments, injunctions, awards or decrees of any
court, governmental or regulatory body or arbitration tribunal by which eGo,
or
any officer, director or employee of eGo, or the securities, assets, properties
or business of any of them is bound.
4.13 Taxes.
Except
as set forth on Schedule 4.13, eGo has filed or caused to be filed, within
the
times and within the manner prescribed by law, all federal, state, local and
foreign tax returns and tax reports which are required to be filed by, or with
respect to eGo. Such returns and reports reflect accurately all liability for
taxes of eGo for the periods covered thereby. Except as set forth on Schedule
4.10, all federal, state, local and foreign income, profits, franchise,
employment, sales, use, occupancy, excise and other taxes and assessments,
stock
and transfer taxes (including interest and penalties) payable by, or due from
eGo, have been fully paid and fully provided for in the books and eGo Financial
Statements. No examination of any tax return of eGo is currently in progress.
There are no outstanding agreements or waivers extending the statutory period
of
limitation applicable to any tax return of eGo. Schedule 4.13 attached hereto
lists all tax sharing contracts, agreements or arrangements to which eGo is
a
party and all such contracts, agreements and arrangements have been terminated
prior to the Closing with no liability or obligation to eGo.
4.14 Liabilities.
Except
as set forth on Schedule 4.14, eGo has no outstanding claims, liabilities or
indebtedness, contingent or otherwise, which are not properly reflected in
the
eGo Financial Statements in a manner consistently with past practice, other
than
liabilities incurred subsequent to September 30, 2005, in the ordinary course
of
business not exceeding $25,000 individually or $50,000 in the aggregate. Neither
is eGo in default in respect of the terms or conditions of any indebtedness,
except where such default would not have a material adverse effect on the
business assets or prospects of eGo.
4.15 Insurance.
eGo
maintains no insurance policies with respect to its business, properties
or
employees.
4.16 Compliance
with Laws.
To the
knowledge of eGo, the Shareholders, its officers, directors or employees, there
are no violations by eGo, its officers, directors or employees of any applicable
order, judgment, injunction, award or decree, related to, arising out of or
affecting eGo’s Business or properties, the violation of which would have a
material adverse effect on the business assets or prospects of eGo. To the
knowledge of eGo, the Shareholders, its officers, and directors, eGo is not
in
violation of any federal, state, local or foreign law, ordinance, regulation
or
any other requirement of any governmental or regulatory body, court or
arbitrator (including, without limitation, laws relating to the environment
and
OSHA and the Americans with Disabilities Act.)
4.17 Employment
Relations.
eGo is
in compliance with all federal, state or other applicable laws, domestic or
foreign, respecting employment and employment practices, terms and conditions
of
employment and wages and hours, and has not and is not engaged in any unfair
labor practice.
4.18 No
Changes Since the September 30, 2005 Balance
Sheet Date.
Except
as disclosed in Schedule 4.18, since the September 30, 2005, Balance
Sheet, eGo has not on a consolidated basis:
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(a)
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incurred
any liability or obligation of any nature (whether accrued, absolute,
contingent or otherwise,) except liabilities and obligations in the
ordinary course of business and consistent with past practice, resulting
in an increase for the liabilities shown on the September 30, 2005
Balance
Sheet of more than $50,000 in the
aggregate;
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(b)
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permitted
any of its material assets to be subjected to any mortgage, pledge,
lien,
security interest, encumbrance, restriction or charge of any
kind;
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(c)
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sold,
transferred or otherwise disposed of any material assets except inventory
sold in the ordinary course of business and consistent with past
practice;
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(d)
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made
any single capital expenditure or commitment therefor, in excess
of
$25,000 or made aggregate capital expenditures and commitments therefor
in
excess of $50,000;
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(e)
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declared
or paid any dividend or made any distribution on any shares, or redeemed,
purchased or otherwise acquired any shares or any option, warrant
or other
right to purchase or acquire any such
shares;
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(f)
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made
any bonus or profit sharing distribution or payment of any
kind;
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(g)
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increased
its indebtedness for borrowed money, or made any loan to any
Person;
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(h)
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written
off as uncollectible any notes or accounts receivable, except immaterial
write-downs or write-offs in the ordinary course of business and
consistent with past practice which do not exceed $100,000 in the
aggregate charged to applicable reserves, and none of which individually
or in the aggregate is material to eGo on a consolidated
basis;
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(i)
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granted
any increase in the rate of wages, salaries, bonuses or other remuneration
or benefits of any executive employee or other employees or
consultants;
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(j)
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canceled
or waived any claims or rights of substantial
value;
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(k)
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made
any change in any method of accounting or auditing
practice;
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(l)
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otherwise
conducted its business or entered into any transaction, except in
the
usual and ordinary manner and in the ordinary course of business
and
consistent with past practices;
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(m)
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paid,
discharged or satisfied any claims, liabilities or obligations (absolute,
accrued, contingent or otherwise) other than the payment, discharge
or
satisfaction in the ordinary course of business and consistent with
past
practice of liabilities and obligations reflected and reserved against
in
eGo’s September 30, 2005 Balance Sheet or incurred in the ordinary course
of business and consistent with past practice since the September
30, 2005
Balance Sheet;
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(n)
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paid,
loaned or advanced any amount to, or sold, transferred or leased
any
properties or assets (real, personal or mixed, tangible or intangible
to,
or entered into any agreement or arrangement of any kind with any
of its
officers, directors or shareholders or any affiliate or associate
of its
officers, directors or shareholders, except compensation to officers
at
rates not exceeding the rate of compensation in effect as of the
September
30, 2005,
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(o)
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suffered
any material adverse changes in its working capital, financial condition,
assets, liabilities (absolute, accrued, contingent or otherwise,)
reserves, business operations or prospects; or
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(p)
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agreed,
whether or not in writing, to do any of the
foregoing.
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4.19 Disclosure.
To the
best of eGo’s knowledge and belief, neither this Agreement, nor the eGo
Financial Statements referred to in Section 4.6 hereof, any Schedule, exhibit
or
certificate attached hereto or delivered in accordance with the terms hereof
or
any document or statement in writing which has been supplied by or on behalf
of
the Shareholder or by or on behalf of any of eGo’s directors or officers in
connection with the transactions contemplated by this Agreement contain any
untrue statement of a material fact, or omits any statement of a material fact
necessary in order to make the statements contained herein or therein not
misleading. There is no fact known to the eGo which could materially and
adversely affect the business, prospects or financial condition of eGo or its
respective properties or assets, which has not been set forth in this Agreement,
the eGo Financial Statements referred to in Section ----4.6 hereof (including
the footnotes thereto,) any Schedule, exhibit or certificate attached hereto
or
delivered in accordance with the terms hereof or any document or statement
in
writing which has been supplied by or on behalf of the Shareholder or by or
on
behalf of any of eGo’s directors or officers in connection with the transactions
contemplated by this Agreement.
4.20 Broker’s
or Finder’s Fees.
Except
as
set forth on Schedule 4.20 attached hereto, no agent, broker, person or firm
acting on behalf of the Shareholders or eGo
is, or
will be, entitled to any commission or broker’s or finder’s fees from any of the
parties hereto, or from any Person controlling, controlled by or under common
control with any of the parties hereto, in connection with any of the
transactions contemplated by this Agreement. Any Broker’s of Finder’s Fees
incurred for the transaction contemplated by this Agreement, will be the sole
responsibility of eGo
and a
table of any such commissions due by eGo
are
included in Schedule 4.20.
4.21 Copies
of Documents.
The
Shareholders have caused to be made available for inspection
and
copying by American Security Resources and its advisers, true, complete and
correct copies of all documents referred to in this Article 4 or in any Schedule
attached hereto.
ARTICLE
5
REPRESENTATIONS
OF AMERICAN SECURITY RESOURCES
American
Security Resources hereby represents and warrants to eGo and the Shareholders
as
follows (it being acknowledged that eGo and the Shareholders are entering into
this Agreement in material reliance upon each of the following representations
and warranties, and that the truth and accuracy of each, as evidenced by the
execution of this Agreement by a duly authorized officer of American Security
Resources, constitutes a condition precedent to the obligations of eGo and
the
Shareholders hereunder.)
5.1 Existence
and Good Standing.
American Security Resources is a corporation duly organized, validly existing
and in good standing under the laws of Nevada. American Security Resources
has
the power to own or lease its properties and assets and to carry on its business
as now being conducted. American Security Resources is not qualified to do
business in any foreign jurisdiction.
5.2 Capitalization.
American
Security Resources currently has outstanding
42,811,266
shares
of common stock and no shares of preferred stock. All such outstanding shares
have been duly authorized and validly issued and are fully paid and
nonassessable.
5.3 Approval
of the Agreement.
The
Board of Directors of American Security Resources has authorized the execution
and delivery of this Agreement and has approved the transactions contemplated
hereby. The approval of the shareholders of American Security Resources shall
not be required to approve, authorize, or enter into the Agreement or the
transaction contemplated hereby.
5.4 Validity
of American Security Resources Stock.
The
shares of American Security Resources Stock when issued pursuant to paragraph
1.1 above, shall have been duly authorized and validly issued and fully paid
and
nonassessable.
ARTICLE
6
CONDITIONS
TO AMERICAN SECURITY RESOURCES’ OBLIGATIONS
The
acquisition of the eGo Shares by American Security Resources at the Closing
is
conditioned upon satisfaction, on or prior to such date, of the following
conditions:
6.1 Good
Standing and Other Certificates.
eGo
shall deliver to American Security Resources, a Secretary’s certificate, which
shall be attached hereto as Exhibit 6.1, with the following attached as
exhibits:
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(a)
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copies
of certificates of incorporation, all amendments thereto, in each
case
certified by the Secretary of State or other appropriate official
of its
jurisdiction of incorporation or organization;
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(b)
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a
certificate from the Secretary of State or other appropriate official
of
their respective jurisdictions of incorporation to the effect that
eGo is
in good standing or subsisting in such jurisdiction and listing all
charter documents including all amendments thereto, on file;
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(c)
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a
copy of the bylaws of eGo, certified by its Secretary as being true
and
correct and in effect on the
Closing.
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(d)
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a
resolution of eGo’s Board of Directors approving the transactions
contemplated hereby and authorizing the President and Secretary of
each
entity to execute this Agreement and all documents necessary to consummate
the sale of the Shares.
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6.2 Officer
Certificate.
eGo
shall deliver a certificate of its President, attached hereto as Exhibit 6.2,
stating the following:
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(a)
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Certain
Agreements.
Except as listed on Schedule 4.10, there are no management or consulting
agreements with any third parties to provide services to
eGo.
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(b)
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No
Material Adverse Change.
Prior to Closing, there shall be no material adverse change in the
assets
or liabilities, the business or condition, financial or otherwise,
the
results of operations, or prospects of eGo, whether as a result of
any
legislative or regulatory change, revocation of any license or rights
to
do business, fire, explosion, accident, casualty, labor trouble,
flood,
drought, riot, storm, condemnation or act of God or other public
force or
otherwise.
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(c)
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Truth
of Representations and Warranties.
The representations and warranties of eGo contained in this Agreement
or
in any Schedule attached hereto shall be true and correct on and
as of the
Closing with the same effect as though such representations and warranties
had been made on and as of such date.
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(d)
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Performance
of Agreements.
All of the agreements of eGo to be performed on or before the Closing
pursuant to the terms hereof shall have been duly performed.
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(e)
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No
Litigation Threatened.
No action or proceedings shall have been instituted or threatened
before a
court or other government body or by any public authority to restrain
or
prohibit any of the transactions contemplated hereby.
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6.3 Patents
and/or Patent Applications are in Good Standing.
eGo
shall deliver to American Security Resources, an Attorney’s opinion that all
Patents and/or Patents Applications enumerated in the Exclusive
Fuel Cell License are
owned
by eGo and that all said Patents are in good standing with all governmental
entities that oversee US patents, which shall be attached hereto as Exhibit
6.3,
with the following attached as exhibits:
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(a)
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copies
of all Patents, all amendments thereto, in each case certified by
the US
Patent Office or other appropriate governmental entity;
and
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(b)
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a
resolution of eGo’s Board of Directors approving the transactions
contemplated hereby and authorizing the President and Secretary of
each
entity to execute this Agreement and all documents necessary to consummate
the sale of the Exclusive Fuel Cell License.
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6.4 Governmental
Approvals.
All
governmental and other consents and approvals, if any, necessary to permit
the
consummation of the transactions contemplated by this Agreement shall have
been
received.
6.5 Proceedings.
All
proceedings to be taken in connection with the transactions contemplated by
this
Agreement and all documents incident thereto shall be satisfactory in form
and
substance to American Security Resources and their counsel, and American
Security Resources shall have received copies of all such documents and other
evidences as they or their counsel may reasonably request in order to establish
the consummation of such transactions and the taking of all proceedings in
connection therewith.
6.6 Unaudited
Financial Statements.
eGo’s
unaudited balance sheets, income statements and statements of cash flows of
eGo
as of September 30, 2005 shall have been completed and delivered before
Closing.
6.7 Employment
Agreements.
At some
point in the future, American Security Resources and eGo may enter into
employment agreements with Shareholders---. Further, American Security Resources
has the right to purchase, at its own expense, keyman insurance on the
Shareholders, where the name of the insured is a Shareholder and the beneficiary
is American Security Resources. The Shareholders will cooperate to their fullest
ability to obtain said keyman insurance at the request of American Security
Resources.
ARTICLE
7
CONDITIONS
TO THE OBLIGATIONS OF
THE
SHAREHOLDERS AND EGO
The
obligations of the Shareholders and eGo at Closing Date are conditioned upon
satisfaction, on or prior to such date, of the following
conditions:
7.1 Secretary’s
Certificate.
American Security Resources shall have delivered to eGo, a Secretary’s
certificate, attached hereto as Exhibit 7.1, with the following attached as
exhibits:
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(a)
|
copies
of the Articles of Incorporation, including all amendments thereto,
of
American Security Resources;
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(b)
|
copies
of resolutions of the Board of Directors of American Security Resources
approving this Agreement; and
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(c)
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certificates
from the Secretary of State of the State of Nevada to the effect
that
American Security Resources is in good standing in such State and
listing
all charter documents, including all amendments thereto, of American
Security Resources on file.
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7.2 Truth
of Representations and Warranties.
The
representations and warranties of American Security Resources contained in
this
Agreement shall be true and correct on and as of the Closing with the same
effect as though such representations and warranties had been made on and as
of
such date, and American Security Resources shall have delivered to eGo a
certificate, dated as of the Closing, to such effect.
ARTICLE
8
SURVIVAL
OF REPRESENTATIONS
8.1 Survival
of Covenants and Agreements.
The
respective representations, warranties, covenants and agreements of eGo and
American Security Resources contained in this Agreement, or any Schedule
attached hereto or any agreement or document delivered pursuant to this
Agreement shall survive for a period of twelve months from the consummation
of
the transactions contemplated hereby; provided, however, that the
representations, warranties and agreements made with regard to taxes and ERISA
matters shall survive until the applicable statutes of limitations have expired;
and provided further, however, that with respect to any covenant, term or
provision to be performed hereunder or in any of the Schedules hereto or any
documents or agreements delivered hereunder, the right of indemnification under
this Article 8 shall survive until such covenant, term or provision has been
fully paid, performed or discharged.
ARTICLE
9
MISCELLANEOUS
9.1 Knowledge
of eGo and American Security Resources.
Where
any representation or warranty contained in this Agreement is expressly
qualified by reference to the knowledge, information and belief of the
Shareholders, eGo or American Security Resources, as the case may be, confirm
that they have made due and diligent inquiry as to the matters that are the
subject of such representations and warranties.
9.2 Expenses.
Except
as otherwise provided for herein, the parties hereto shall pay all of their
own
expenses relating to the transactions contemplated by this Agreement, including,
without limitation, the fees and expenses of their respective counsel and
financial advisers.
9.3 Governing
Law.
The
interpretation and construction of this Agreement, and all matters relating
hereto, shall be governed by the laws of the State of Texas applicable to
agreements executed and to be performed solely within such State without regard
to conflicts of laws.
9.4 Jurisdiction.
Any
judicial proceeding brought against any of the parties to this Agreement on
any
dispute arising out of this Agreement or any matter related hereto may be
brought in the courts of the State of Texas, or in the Federal Courts for the
Southern District of Texas, and, by execution and delivery of this Agreement,
each of the parties to this Agreement accepts the exclusive jurisdiction of
such
courts, and irrevocably agrees to be bound by any judgment rendered thereby
in
connection with this Agreement. The prevailing party or parties in any such
litigation shall be entitled to receive from the losing party or parties all
costs and expenses, including reasonable counsel fees, incurred by the
prevailing party or parties.
9.5 Captions.
The
Article and Section captions are used herein for reference purposes only, and
shall not in any way affect the meaning or interpretation of this
Agreement.
9.6 Publicity.
Except
as otherwise required by law, none of the parties hereto shall issue any press
release or make any other public statement, in each case relating to, connected
with or arising out of this Agreement or the matters contained herein, without
obtaining the prior approval of American Security Resources and eGo to the
contents and the manner of presentation and publication thereof. The parties
hereto agree that the execution of this Agreement requires the release of
information to the financial press concerning this acquisition and accordingly
agree to promptly issue a press release mutually acceptable to eGo and American
Security Resources and to file a Form 8-K report with the Securities and
Exchange Commission containing this agreement and all exhibits and schedules
hereto.
9.7 Notices.
Any
notice or other communication required or permitted hereunder shall be deemed
sufficiently given when delivered in person, one business day after delivery
to
a reputable overnight carrier, four business days if delivered by registered
or
certified mail, postage prepaid or when sent by telecopy with a copy following
by hand or overnight carrier or mailed, certified or registered mail, postage
prepaid, addressed as follows:
If
to
eGo:
eGO
Design, Inc.
00000
X.X. Xxxxxxxxxx, Xxxxx 000x
Xxxxxxxx,
Xxxxxx 00000
Attn:
Xxxxx Xxxxx
If
to
American
Security Resources:
American
Security Resources
0000
Xxxx
Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Attn:
Xxx
X. Xxxxx, Chairman
With
a
copy to:
Xxxxxx
X.
XxXxxx, Esquire
The
XxXxxx Law Firm
000
X.
Xxxxx Xxxx., Xxxxx 000
Xxxxxxxxx,
Xxxxx 00000
9.8 Parties
in Interest.
This
Agreement may not be transferred, assigned, pledged or hypothecated by any
party
hereto, other than by operation of law. This Agreement shall be binding upon
and
shall inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
9.9 Counterparts.
This
Agreement may be executed in two or more counterparts, all of which taken
together shall constitute one instrument.
9.10 Entire
Agreement.
This
Agreement, including the Schedules hereto and the other documents referred
to
herein which form a part hereof, contain the entire understanding of the parties
hereto with respect to the subject matter contained herein and therein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
9.11 Amendments.
This
Agreement may not be changed orally, but only by an agreement in writing signed
by American Security Resources, the Shareholders and eGo.
9.12 Severability.
In case
any provision in this Agreement shall be held invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions hereof
will not in any way be affected or impaired thereby.
9.13 Third
Party Beneficiaries.
Each
party hereto intends that this Agreement shall not benefit or create any right
or cause of action in or on behalf of any Person other than the parties
hereof.
| 9.14 |
Cooperation
After Closing.
From and after Closing, each of the parties hereto
shall
|
execute
such documents and other papers and take such further actions as may be
reasonably required or desirable to carry out the provisions hereof and the
transactions contemplated hereby.
IN
WITNESS WHEREOF, American Security Resources Corporation and eGo Designs, Inc.
have executed this Agreement, all as of the day and year first above
written.
AMERICAN
SECURITY RESOURCES CORPORATION
|
By:
/s/ Xxxxx X Xxxxxxx
|
|
Xxxxx
X Xxxxxxx, CFO, Director and Secretary
|
|
eGo
DESIGN, INC.
|
|
By:
/s/ Xx Xxxxx
|
|
Xx
Xxxxx, Shareholder
|
|
By:
/s/ Xxx Xxxxxxx
|
|
Xxxxxxxx
X. Xxxxxxx, Shareholder
|
|
By:
/s/ Xxx Xxxxx
|
|
Xxxxx
Xxxxx, Shareholder
|
SECURITIES
PURCHASE AGREEMENT
DATED
OCTOBER 28, 2005
BY
AND BETWEEN
AMERICAN
SECURITY RESOURCES CORPORATION,
AND
eGO DESIGNS, INC.
SCHEDULES
& EXHIBITS
eGo
Schedules
4.6(a) Financial
Statements dated October 28, 2005
4.6(b) Material
Adverse Changes since September 30, 2005
4.7 Books
and
Records
4.8 Title
to
Properties
4.9 Leases
4.10 Material
Contracts
4.11 Restrictive
Documents
4.12 Litigation
4.13 Taxes
4.14 Liabilities
4.18
Changes Since the December 31, 2004 Balance Sheet
4.18(f)
Schedule of Bonuses
4.20
Broker's/Finder's
Fees
Exhibits
6.1
Secretary’s
Certificate of eGo
6.2
President’s
Certificate of eGo
6.3 Attorney’s
Opinion Letter stating eGo’s Patents are owned by eGo and are in Good
Standing
7.1
Secretary’s
Certificate of American Security Resources
7.2
President’s Certificate of American Security
Resources
