EXCHANGE AGREEMENT
EXCHANGE AGREEMENT dated as of April 1, 2001 by and among Crest View, Inc.,
a Nevada corporation with offices at 0000 Xxxx Xxxxxxx Xxxxx Xxxxxxx, Xxxxx 000,
Xxxxxxxxx, XX 00000 (the "Company"), Xxxxxxx Limited Partners, a Nevada family
limited partnership, with an address at 00 Xxxxxxxxxx Xxxxx, Xxxxxxxxx, XX 00000
("Xxxxxxx"), and Xxxxxx X. Xxxxxx, with an address at 00 Xxxxxxxxxx Xxxxx,
Xxxxxxxxx, XX 00000 (the"Noteholder").
WITNESSETH:
WHEREAS, the Company is incorporated under the laws of Nevada and is
authorized to issue 40,000,000 shares of Common Stock, $.001 par value per share
(the "Shares");
WHEREAS, the Company is indebted to the Noteholder in the principal sum of
thirteen thousand five hundred ($13,500) dollars as of April 1, 2001, plus
accrued interest thereon;
WHEREAS, the Company has proposed to sell to the Noteholder's designee,
Xxxxxxx, in exchange for a portion of the Company's indebtedness, 2,400,000
units (the "Units") of the Company, each of which consists of (i) one share and
(ii) one-third of one Redeemable Class A Common Stock Purchase Warrant to
purchase one Share at $6.00 and one Redeemable Class B Common Stock Purchase
Warrant to purchase one Share at $9.00 (collectively, the "Warrants");
WHEREAS, the Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, as amended, on Form SB-2 (the
"Registration Statement") to offer Units to the public;
WHEREAS, the Noteholder, subject to receipt and review of the amended
prospectus included in the Registration Statement, desires to contribute to the
paid-in-capital of the Company, the Company's aforesaid indebtedness to the
Noteholder to the extent of the principal amount of two thousand four hundred
($2,400) dollars and no accrued interest ("Exchanged Indebtedness"), in exchange
for 2,400,000 Units (at an exchange price of $.001 per Unit) (the "Exchanged
Units") in the Company on the same terms and conditions as the Units will be
initially offered to the public, and
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WHEREAS, the Company desires to accept the contribution to its capital of
the Exchanged Indebtedness and to issue the Units in exchange therefor, all on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Exchange of Exchanged Indebtedness for Shares.
(a) The Noteholder hereby contributes the Exchanged Indebtedness to the
capital of the Company, and the Company acknowledges consideration by this
exchange, and hereby delivers to the Noteholder's designee, Xxxxxxx, which
hereby acknowledges receipt, of certificate(s) representing the Shares and
Warrants underlying the Exchanged Units.
2. Representations and Warranties of the Noteholder and Xxxxxxx.
The Noteholder and Xxxxxxx hereby represent and warrant to the Company
that:
(a) The Noteholder owns the Exchanged Indebtedness, free and clear of any
mortgage, lien, pledge, charge or other encumbrance whatsoever, and has full
power and authority and all necessary permits and licenses to transfer the
Exchanged Indebtedness to the Company pursuant to this Exchange Agreement;
(b) The execution, delivery and performance by the Noteholder and Xxxxxxx
of this Exchange Agreement has been duly and validly authorized by all necessary
action on the part of the Noteholder and Xxxxxxx; and
(c) The Exchange Agreement has been duly and validly authorized, executed
and delivered by the Noteholder and Xxxxxxx and constitutes the legal, valid and
binding obligation of the Noteholder and Xxxxxxx, enforceable against the
Noteholder and Xxxxxxx in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting the enforceability of creditors' rights generally.
3. Representations and Warranties of the Company.
The Company represents and warrants to the Noteholder and Xxxxxxx that:
(a) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nevada, and is duly
qualified to transact business as a
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foreign corporation in each jurisdiction wherein the failure so to qualify would
have a material adverse effect upon its business;
(b) The execution, delivery and performance by the Company of this Exchange
Agreement has been duly and validly authorized by all necessary action on the
part of the Company; and
(c) This Exchange Agreement has been duly and validly authorized, executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the enforceability of
creditors' rights generally.
4. Registration Rights.
(a) The Company shall register the Exchanged Units with the Commission in
the first available registration statement following the Registration Statement
for the Company's initial public offering.
(b) All expenses incurred in connection with the Registration Statement
pursuant to this Section 4, including, without limitation, registration, filing
and qualification fees, printing expenses, fees and disbursements of counsel for
the Company and expense of any special audit required for such registration,
shall be borne by the Company; provided, however, that the Company shall not be
required to pay fees and disbursements of counsel for the Noteholder and Xxxxxxx
(collectively referred to as "the Noteholder" in this section), stock transfer
taxes or underwriters' discounts, or commissions relating to the Exchanged
Units.
(c) In the case of the registration effected by the Company pursuant to
this Section 4, the Company will furnish such number of prospectuses and other
documents incident thereto as the Noteholder from time to time may reasonably
request.
(d) In connection with the filing of the Registration Statement pursuant to
this Section 4, it shall be a condition precedent to the registration of the
Exchanged Units of the Noteholder that the Noteholder agree, in writing:
(i) To furnish all material information to the Company concerning
himself and his holdings of securities of the Company and, if appropriate,
the proposed method of sale or other disposition of the Exchanged Units
(and the underlying Shares and Warrants) and such other
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information (particularly within his knowledge) and undertakings as shall
be reasonably required by law or by the Company in connection with the
preparation and filing of the Registration Statement covering all or a part
of the Units and in order to insure full compliance with the Securities Act
of 1933 (the "Act") and the Securities Exchange Act of 1934 (the "1934
Act");
(ii) To indemnify and hold harmless the Company, its directors, its
officers who have signed the Registration Statement, and each person, if
any, who controls the Company, within the meaning of the Act, against any
losses, claims, damages, expenses or liabilities, whether joint or several,
to which the Company or any such director, officer or controlling person
may become subject under the Act, the 1934 Act or under any other statute
or at common law or otherwise insofar as such losses, claims, damages,
expenses or liabilities (or actions in respect thereof) arise out of or Are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, or any amendment or
supplement thereto, or arise out of or are based upon the omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and to reimburse the Company for any legal or other
expenses reasonably incurred by the Company, or any such director, officer
or controlling person in connection with investigating and defending any
such loss, claim, damage, expense, liability or action; provided, however,
that any such indemnification and reimbursement shall be available only to
the extent that any such untrue statement or alleged untrue statement or
omission was made by the Company upon and in conformity with written
information furnished by the Noteholder expressly for use in the
Registration Statement;
(iii) To notify the Company promptly, in writing, of the commencement
of any action against the Noteholder which is based upon an alleged act or
omission, which, if proved, would result in the Company having to indemnify
the Noteholder pursuant to Subparagraph (e) below, and if the Noteholder
desires, the Company will assume the defense of such action including the
employment of counsel and payment of all expenses. The Noteholder's
omission to notify the Company promptly of the commencement of such action,
if prejudicial to the ability of the Company to defend such action, shall
relieve the Company of any liability to indemnify him under Subparagraph
(e) below; and
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(e) (i) The Company shall indemnify and hold harmless the Noteholder, and
each person, if any, who controls the Noteholder within the meaning of the Act,
against any losses, claims, damages, expenses or liabilities, whether joint or
several, to which the Noteholder or such controlling person becomes subject,
under the Act, the 1934 Act or under any other statute or at common law or
otherwise, insofar as such losses, claims, damages, expenses or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement covering the Exchanged Units, in any prospectus contained therein, or
in an amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and to reimburse the
Noteholder, and such controlling persons for any legal or other expenses
reasonably incurred by the Noteholder, or such controlling persons in connection
with investigating and defending any such loss, claim, damage, expense,
liability or action; provided, however, that the Company shall not be obligated
to indemnify in any such case to the extent that any such loss, claim, damage,
expense or liability arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished by the Noteholder or such
controlling person expressly for use in the Registration Statement;
(ii) The Company agrees that, in the event it receives notice of the
commencement of any action against it which is based upon an alleged act or
omission which, if proved, would result in the Noteholder's having to
indemnify the Company pursuant to subdivision (ii) of Paragraph 4(d) above,
the Company will promptly notify the Noteholder in writing of the
commencement of such action and permit the Noteholder, if he so desires, to
participate in and assume the defense of such action with counsel
satisfactory to him. The omission to notify the Noteholder promptly of the
commencement of any such action, if prejudicial to his ability to defend
such action, shall relieve him of any liability to indemnify the Company
under Paragraph 4(d) above; and
(iii) The Company further agrees that if the foregoing provisions
contained in subdivision (i) of this Paragraph 4(e) are held to be
unenforceable, the Noteholder or controlling person of the Noteholder may
recover contribution from the Company in an amount which when
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added to contributions the Noteholder or controlling person has theretofore
received or concurrently receives from officers and directors of the
Company or controlling persons of the Company, will reimburse the
Noteholder or controlling person for all losses, claims, damages, or
liabilities and legal or other expenses; provided, however, that if the
full amount of the contribution specified in this Paragraph 4(e) is not
permitted by law, then the Noteholder or controlling person shall be
entitled to a contribution from the Company and its officers, directors and
controlling persons to the full extent permitted by law.
5. Notices.
All notices hereunder shall be in writing and delivered personally or sent
by registered or certified mail, return receipt requested, postage prepaid,
addressed to the addresses first above described.
6. Expenses.
The Company and the Noteholder shall each bear their own expenses in
connection with this Exchange Agreement and in connection with all things
required to be done by either of them hereunder.
7. Entire Agreement; Amendments.
This Exchange Agreement contains the entire agreement of the parties with
respect to the subject matter hereof and no amendment, modification or waiver of
any provision hereof will be binding on any party hereto unless the same shall
be in writing and signed by the party to be charged.
8. Binding Effect.
The Exchange Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors, assigns, heirs,
distributees and legal representatives.
9. Governing Law.
This Exchange Agreement and the rights and obligations of the parties
hereto shall be governed by and construed in accordance with the substantive
laws of the State of Nevada applicable in the case of agreements made and to be
performed entirely within such State.
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10. Counterparts.
This Exchange Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which together shall constitute but one
agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Exchange Agreement as of the date first written above.
CRESTVIEW, INC.
By:/s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx X. Xxxxxxx, Vice President
NOTEHOLDER:
/s/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx
XXXXXXX LIMITED PARTNERS
By:/s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx, Manager
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