Exhibit 3.1
SHARE EXCHANGE AGREEMENT
SHARE EXCHANGE AGREEMENT (the "Agreement"), dated as of this _____ day of
_______________, 1999, by and among MOTIONCAST TELEVISION CORPORATION OF
AMERICA, a Nevada corporation ("MOTIONCAST"), XXXXXXXXXX.XXX, INC., a Nevada
corporation ("BROWSESAFE"), and all of the shareholders of BROWSESAFE.
W I T N E S S E T H :
WHEREAS, MOTIONCAST desires to acquire BROWSESAFE as a wholly-owned subsidiary;
and
WHEREAS, the BROWSESAFE shareholders have agreed to exchange all of their
BROWSESAFE shares solely for restricted shares of MOTIONCAST common stock; and
WHEREAS, the Boards of Directors of MOTIONCAST and BROWSESAFE have approved and
adopted this Agreement as a "plan of reorganization" within the meaning of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
provisions and conditions contained herein, and for other good and valuable
consideration, the adequacy and receipt of which are hereby acknowledged, the
parties hereto agree that MOTIONCAST shall acquire all of the issued and
outstanding capital stock of BROWSESAFE in exchange solely for its voting stock
(the "Exchange") upon and subject to the following terms and conditions:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings, unless the context shall otherwise require:
(a) MOTIONCAST Common Stock shall mean the Common Stock, $.001 par
value, of MOTIONCAST, as more fully described in the Articles of
Incorporation of MOTIONCAST.
(b) BROWSESAFE Common Stock shall mean the Common Stock, $.001 par
value, of BROWSESAFE, as more fully described in the Articles of
Incorporation of BROWSESAFE.
(c) Closing shall mean the consummation of the Exchange in accordance
with the provisions hereof to be held on or before June 24, 1999
unless changed by the mutual agreement of the parties hereto.
(d) Exceptions Schedule shall mean the schedule attached hereto as
Exhibit A in the case of MOTIONCAST and Exhibit B in the case of
BROWSESAFE.
ARTICLE II
EXCHANGE OF SECURITIES
On the Closing Date, all of the outstanding shares of BROWSESAFE Common Stock
shall be exchanged for 13,938,000 shares of MOTIONCAST Common Stock.
The MOTIONCAST Common Stock certificates shall bear the usual restrictive legend
pertaining to Rule 144 of the General Rules and Regulations promulgated under
the Securities Act of 1933. MOTIONCAST and the BROWSESAFE shareholders shall
execute the appropriate investment letters containing representations that the
BROWSESAFE Common Stock and the MOTIONCAST Common Stock they are acquiring,
respectively, are being acquired for investment purposes only and not with a
view to resale, distribution or liquidation. At the Closing, all transactions
shall be deemed to have been simultaneous and none shall become effective until
all have been completed.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The following representations and warranties are hereby made by MOTIONCAST to
BROWSESAFE and by BROWSESAFE to MOTIONCAST.
3.01 Organization; Authorization. It is a corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation and has full power and authority to carry on its business
as it now is being conducted and to own the properties and assets it now
owns. It is duly qualified to do business or is in the process of
qualifying to do business as a foreign corporation and is in good
standing in every jurisdiction in which the conduct of its business or
ownership of its properties requires such qualification; and it has full
power and authority to enter into this Agreement and to carry out the
transaction contemplated herein.
3.02 No Defaults. Except as set forth in the Exceptions Schedule, it is not
in default under any material contract, lease, agreement or other
undertaking to which it is a party or by which it is bound. The
execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, or compliance with the terms and
conditions hereof will not conflict with, result in a breach of the
unwaived terms and conditions of, nor constitute a default under its
articles of incorporation or bylaws or any contract, agreement,
commitment or other undertaking to which it is a party or by which it is
bound.
3.03 Governmental Consents. Except for the requirements of the Securities Act
of 1933, as amended, and any applicable state securities laws, no
consent or approval of, or filing or registration with, any governmental
or regulatory authority is required in connection with the performance
of the terms of this Agreement.
3.04 Title to Assets. It has good and marketable title to all of its
properties and assets, both real and personal, free and clear of all
security interests, liens, claims, equities of others and
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restrictions on the right to transfer, except as disclosed in the
Exceptions Schedule, none of which exceptions impairs in any material
respect the normal conduct of its business.
3.05 Tax Returns and Payments. Except as disclosed in the Exceptions
Schedule, all of its tax returns and reports required by law to be filed
have been duly filed, and all taxes, assessments, fees and other
governmental charges (other than those presently payable without
interest or penalty or those which are being contested in good faith by
appropriate proceedings diligently conducted and which are disclosed in
the Exceptions Schedule) upon it or upon any of its properties, assets,
interest or income which are due or are to become due have been paid or
adequately reserved against. None of its federal income tax returns is
currently under examination by the Internal Revenue Service.
3.06 No Litigation. Except as disclosed in the Exceptions Schedule:
(a) there is no action, proceeding, claim or investigation pending
or, to the best of the party's knowledge, threatened against it
or to which any of its assets or properties are subject before
any court or any governmental department, commission, board,
bureau, agency or instrumentality, business or goodwill and,
after investigation, it knows of no basis or grounds for any such
action, proceeding, claim or investigation; and
(b) there is no outstanding order, writ, injunction or decree of any
court, governmental department, commission, board, bureau, agency
or instrumentality, or any arbitration award against it.
3.07 No Adverse Changes. Since the execution of the letter of intent, it has
not engaged in any material transaction not in the ordinary course of
business, made or declared any dividends or distributions of its
capital, surplus or profits, or redeemed or issued any shares of its
Common Stock or other securities, except as noted in the Exceptions
Schedule. Other than as set forth in the Exceptions Schedule, there have
been no changes in its assets, properties, liabilities or financial
condition from those shown in the audited financial statements for its
last fiscal year or in its condition, other than changes which have not
materially affected, singly or in the aggregate, its business assets,
properties or financial condition. Other than as set forth in the
Exceptions Schedule, it has not borrowed any amounts or incurred any
liabilities other than pursuant to contracts entered into in the
ordinary course of business; discharged any lien or encumbrance or
satisfied any liabilities other than current liabilities incurred in the
ordinary course of business; mortgaged, pledged or subjected to lien or
charge or any other encumbrance any of its assets or properties except
as may be required in the ordinary course of business; sold, assigned or
transferred any of its assets except in the ordinary course of business;
waived any rights of substantial value; or loaned money to any of its
directors, officers or shareholders.
3.08 No Adverse Claims. Except as set forth in the Exceptions Schedule, none
of its officers or employees has any claim against it except for
salaries or other ordinary expenses, and it is
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not obligated to any of such persons in any way or for any amount except
for salaries, wages or ordinary expenses.
3.09 Books and Records Complete. Except as set forth in the Exceptions
Schedule, its books and records are substantially accurate and complete
and there are no material matters for which proper entry has not been
made in such books and records.
3.10 Insurance. It is adequately insured, except as disclosed in the
Exceptions Schedule, with respect to risks usually insured against by
companies owning properties similar to those owned by it. All policies
are presently in force and paid in full and will continue to be so
without interruption until the Closing Date.
3.11 No Brokerage Fees. No agent, broker, investment banker, person or firm
acting on behalf of it to the best of its knowledge, is or will be
entitled to any broker's or finder's fee or any other commission or fee,
directly or indirectly, in connection with any of the transactions
contemplated hereby.
3.12 Subsidiaries. It does not own stock or securities evidencing an
ownership interest in any corporation, business trust, firm or business
which may be considered a subsidiary, except as set forth on the
Exceptions Schedule.
3.13 Contracts. Other than as set forth in the Exceptions Schedule, it is not
a party to any material (1) labor agreements, (2) contracts of
employment, (3) contracts for the purchase, sale or lease (as lessor or
lessee) of real estate or personal property, (4) contracts for services
to be rendered to it, (5) employee insurance, hospital or medical
expense programs, or (6) pension or profit-sharing plans, retirement
plans, bonus or incentive agreements or plans, or stock purchase or
stock option plans, formal or informal.
3.14 Financial Statements. Its financial statements fairly represent its
financial condition and have been prepared in accordance with generally
accepted accounting principles. Neither MOTIONCAST nor BROWSESAFE will
have any liabilities other than as set forth on the financial statements
or on the Exceptions Schedule or, in the case of BROWSESAFE, as might be
incurred in the ordinary course of business.
3.15 Property and Equipment. The property and equipment as shown on the most
recent balance sheet are in good operating condition and in a state of
good maintenance and repair, ordinary wear and tear excepted.
3.16 Representations True. No representation or warranty contained herein,
nor any statement or certificate furnished hereunder or in connection
herewith, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading. There is no
fact known to it that materially and adversely affects its business,
prospects, or financial condition or any of its subsidiaries, that has
not been set forth in this Agreement or in the schedules, exhibits,
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certificates, or statements in writing furnished in connection with the
transactions contemplated by this Agreement. Each has disclosed to the
other all contingent liabilities and all claims affecting its business
past and pending.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MOTIONCAST
4.01 Capital Stock. MOTIONCAST represents and warrants that its authorized
capital stock consists of 25,000,000 shares of Common Stock, $.001 par
value, of which 2,000,000 shares are issued and outstanding. All of the
issued and outstanding shares of MOTIONCAST Common Stock are validly
issued, fully paid and nonassessable. MOTIONCAST has full right and
authority to issue to the BROWSESAFE shareholders, upon the terms and
conditions set forth in this Agreement, the shares specified by this
Agreement and, subject to the receipt of the consideration therefor
pursuant to the terms and conditions hereof, the shares will be duly and
validly issued as fully paid and nonassessable shares of MOTIONCAST
Common Stock. All of its currently issued and outstanding shares of
Common Stock have been issued pursuant to a duly registered public
offering or in accordance with an applicable exemption from state and
federal securities laws.
4.02 Information Furnished. MOTIONCAST represents and warrants that it has
furnished to BROWSESAFE and to the BROWSESAFE shareholders copies of all
documents used in connection with the offer and sale of its Common
Stock, used in connection with fulfilling the requirements of Rule
15c2-11 of the Securities Exchange Act of 1934, or released to the
public. Such documents do not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
contained therein not misleading. Such documents contain all of the
material and relevant information concerning the business and financial
condition of MOTIONCAST as of their respective dates.
4.03 Warrants and Convertible Securities. Except as described in Sections
4.06, 8.07 and 8.08, there are no outstanding options, warrants or other
rights to subscribe for, purchase, or receive shares of MOTIONCAST
Common Stock or any other securities convertible into MOTIONCAST Common
Stock.
4.04 Assets and Liabilities. Except as described in Sections 8.07, 8.08 and
in the Exceptions Schedule, MOTIONCAST represents and warrants that it
has no assets or liabilities except for at least $135,000 in cash.
4.05 No Contingent Liabilities. MOTIONCAST represents and warrants that it
is not subject to any contingent liabilities.
4.06 Contracts. Other than as set forth in the Exceptions Schedule,
MOTIONCAST is not a party to any contract, lease, agreement or other
undertaking. The agreement engaging Alexis Stock Transfer as
MOTIONCAST'S transfer agent shall be amended at Closing. The
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consulting agreement with Alexis Capital, Inc. and the consulting
agreement with Xxxxxxx Xxxxxx shall be terminated in exchange for
100,000 shares of MOTIONCAST stock at Closing. MOTIONCAST shall have no
further liability to Alexis Capital, Inc. or Xxxxxxx Xxxxxx upon
termination of these consulting agreements.
4.07 Active Business. Since August 31, 1998 MOTIONCAST has not engaged in the
active conduct of any operating business.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BROWSESAFE AND BROWSESAFE SHAREHOLDERS
5.01 Capital Stock. The authorized capital stock of BROWSESAFE consists of
50,000,000 shares of $.001 par value Common Stock, of which 13,938,000
shares will be issued and outstanding as of the Closing Date, and
1,000,000 shares of Preferred Stock, $.01 par value, none of which are
issued or outstanding. The outstanding shares of BROWSESAFE Common Stock
are validly issued, fully paid and nonassessable. As of the Closing
Date, there will be no outstanding options, warrants or other rights to
subscribe for, purchase, or receive shares of BROWSESAFE Common Stock or
any other securities convertible into BROWSESAFE Common Stock except as
set forth on the Exceptions Schedule or in Sections 8.07 and 8.08.
5.02 Ownership of BROWSESAFE Common Stock. To the best of their knowledge,
the BROWSESAFE shareholders have good title to, and own beneficially,
free and clear of all liens, encumbrances and restrictions on transfer,
and have full right and authority to exchange, upon the terms and
conditions set forth in this Agreement, all of the outstanding shares of
BROWSESAFE Common Stock.
ARTICLE VI
INDEMNIFICATION
6.01 Indemnity Agreement of MOTIONCAST. MOTIONCAST covenants and agrees to
indemnify and save and hold harmless BROWSESAFE and the BROWSESAFE
shareholders from and against any damage, expense, liability, loss or
deficiency (including, without limitation, reasonable attorneys' fees
and other costs and expenses incident to any suit, action or proceeding)
arising out of or resulting from, and to pay BROWSESAFE or any
BROWSESAFE shareholder on demand the full amount of any and all sums
which BROWSESAFE or any BROWSESAFE shareholder may pay or become
obligated to pay on account of: (1) any inaccuracy in any representation
or breach of any warranty or covenant made by MOTIONCAST hereunder or in
any schedule delivered pursuant hereto; or (2) any failure by MOTIONCAST
duly to perform or observe any term, provision, covenant or agreement
hereunder to be performed or observed by MOTIONCAST. BROWSESAFE or any
BROWSESAFE shareholder shall give prompt notice in writing of
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any claim to which this Section 6.01 applies and afford MOTIONCAST
reasonable opportunity to pay, settle or contest such claim at its
expense.
6.02 Indemnity Agreement of BROWSESAFE. BROWSESAFE covenants and agrees to
indemnify and save and hold harmless MOTIONCAST from and against any
damage, expense, liability, loss or deficiency (including, without
limitation, reasonable attorneys' fees and other costs and expenses
incident to any suit, action or proceeding) arising out of or resulting
from, and to pay MOTIONCAST on demand the full amount of any and all
sums which MOTIONCAST may pay or become obligated to pay on account of:
(1) any inaccuracy in any representation or breach of any warranty or
covenant made by BROWSESAFE; or (2) any failure by BROWSESAFE duly to
perform or observe any term, provision, covenant or agreement hereunder
to be performed or observed by BROWSESAFE. MOTIONCAST shall give
BROWSESAFE prompt notice in writing of any claim to which this Section
6.02 applies and afford BROWSESAFE reasonable opportunity to pay, settle
or contest such claim at its expense.
6.03 Remedies. In addition to any other remedies available at law or in
equity, in the event there is: 1) any material inaccuracy in any
representation or material breach of any warranty or covenant made by
MOTIONCAST hereunder or in any schedule delivered pursuant hereto; or
2) any material failure by MOTIONCAST duly to perform or observe any
term, provision, covenant or agreement hereunder to be performed or
observed by MOTIONCAST under the terms of this Agreement, the
BROWSESAFE Shareholders shall, at their option, be entitled to: 1)
receive additional shares of MOTIONCAST stock (thereby further diluting
the MOTIONCAST Shareholders presently holding the 2,000,000 issued and
outstanding shares) to place the BROWSESAFE Shareholders in the same
economic position as they would have been in had the breach not
occurred or 2) rescission of the share exchange transaction. The
BROWSESAFE Shareholders shall be entitled to retain a security interest
in all of BROWSESAFE's assets in order to secure their rights under
this section.
ARTICLE VII
COVENANTS
7.01 Examination of Documents. Prior to the Closing, all original documents
and other information relating to its affairs will be made available,
and copies of any such documents will be furnished, upon request, to the
other party and its counsel. Included among the documents to be made
available are all articles of incorporation and amendments, bylaws and
amendments, minutes of all incorporators, directors and shareholders
meetings or consent minutes with respect to actions taken by
incorporators, directors or shareholders, all financial statements and
all material contracts, leases and agreements to which it is a party or
an intended beneficiary.
Share Exchange Agreement - Page 7
7.02 Preservation of Business; Access to Documents. From and after the date
of this Agreement and until the Closing Date, MOTIONCAST and BROWSESAFE
covenant and agree with each other that each corporation shall:
(a) use its best efforts to preserve its business organization,
goodwill and business relationships intact and to retain the
services of its officers and key employees;
(b) provided the same does not violate any statute, order, decree,
rule, regulation or contract, give each other and its authorized
agents full access, during normal business hours, upon reasonable
notice, to all of its assets, properties, books, records,
agreements and commitments and furnish such representatives
during such period with all such information concerning its
affairs as the other may reasonably request; provided, however,
that each party and its authorized agents shall hold in
confidence all documents and information thus acquired or learned
concerning the parties and, if the transactions contemplated by
this Agreement are not consummated, all such documents shall
immediately thereafter be returned to the appropriate parties;
(c) take all necessary corporate and any other action, and use its
best effort to obtain all consents, approvals and agreements
required to carry out the transactions contemplated in this
Agreement and to satisfy, or cause to be satisfied, the
conditions specified herein; and
(d) maintain in full force and effect insurance policies providing
coverages and amount of coverage as now provided.
7.03 Business in Ordinary Course. MOTIONCAST, BROWSESAFE and the BROWSESAFE
shareholders further covenant and agree with each other that each of the
representations and warranties made by it as set forth in Articles III,
IV, and V will be true and correct on the Closing Date. From the date of
this Agreement until the Closing Date, neither MOTIONCAST or BROWSESAFE
shall do any of the following except with the prior written consent of
the other party:
(a) effect any general salary increase except in line with its past
practices;
(b) enter into any written employment agreement;
(c) increase the base compensation or other benefits of any employee
by more than ten percent;
(d) make any contribution to any trust or plan for the benefit of
employees not required by the present terms thereof or in
accordance with past practices;
(e) make any change in any employee benefit plan which would
materially increase the cost thereof or adopt any new employee
benefit plan;
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(f) issue to commit to issue any capital stock or other ownership
interests;
(g) grant or commit to grant any options, warrants or other rights to
subscribe for or purchase or otherwise acquire any shares of its
capital stock or other ownership interest or issue or commit to
issue any securities convertible into or exchangeable for shares
of its Common Stock or other ownership interests;
(h) declare, set aside or pay any dividend or distribution with
respect to its Common Stock or other ownership interests;
(i) directly or indirectly redeem, purchase or otherwise acquire or
commit to acquire any of its Common Stock or other ownership
interest or directly or indirectly terminate or reduce or commit
to terminate or reduce any bank line of credit or the
availability of any funds under any loan or financing agreement;
(j) effect a split or reclassification of any capital stock or
recapitalization;
(k) change its articles of incorporation, bylaws or other governing
instruments;
(l) borrow or agree to borrow any funds except pursuant to existing
bank lines of credit or other existing loan agreements or
financing arrangements; or
(m) waive or commit to waive any right of substantial value.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE EXCHANGE
The obligations of the parties under this Agreement are subject to the
satisfaction of the following express conditions precedent at or before the
Closing:
8.01 Approvals. This Agreement and the transaction contemplated hereby shall
have received the requisite approvals and authorizations of the Board of
Directors and shareholders of MOTIONCAST and of BROWSESAFE.
8.02 Opinions of Counsel. Each corporation shall have caused its counsel to
prepare and deliver to the other an opinion, dated as of the Closing
Date, in form and substance satisfactory to the other, to the effect
that:
(a) It has been duly incorporated and is a validly existing
corporation in good standing under the laws of its state of
incorporation with full corporate power and authority to own and
operate its properties and to carry on its business as presently
being conducted.
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(b) It is duly qualified and licensed to transact business in each
state or other jurisdiction in which it transacts business and by
each governmental authority by which it is required to be
licensed, except for jurisdictions in which failure to qualify
would not materially and adversely affect its business,
operations or financial condition.
(c) Its capitalization is as set forth herein.
(d) Neither the execution and delivery by it of this Agreement nor
compliance with the terms of this Agreement will conflict with or
result in a material breach of any of the terms, conditions or
provisions of, or constitute a material default under, its
articles of incorporation or bylaws or any material note,
indenture, mortgage, deed of trust or other material agreement or
instrument actually known to such counsel to which it is a party
or by which it or any of its property is bound.
(e) This Agreement has been duly authorized and executed by it, and
all corporate action by it required to authorize the Exchange has
been taken.
(f) Such counsel knows of no material litigation, proceeding or
governmental investigation pending or threatened against or
relating to its properties or business, except as disclosed in
writing.
(g) Such counsel knows of no corporate liabilities other than in the
case of BROWSESAFE except as might be incurred in the ordinary
course of business.
(h) Such counsel knows of no outstanding order, writ, injunction or
decree of any court, governmental department, commission, board,
bureau, agency or instrumentality, or any arbitration award
against corporation.
(i) Such counsel knows of no contract, leases, agreements or other
undertakings of the corporation other than in the case of
BROWSESAFE except as might be incurred in the ordinary course of
business.
8.03 Financial Information. MOTIONCAST shall have delivered to BROWSESAFE
audited financial statements covering the last fiscal year and unaudited
interim financial statements covering the period through the most
recently completed fiscal quarter. BROWSESAFE shall have delivered to
MOTIONCAST, such audited and unaudited financial statements as may be
required for the contemplated preparation and filing of an updated Rule
15c2-11 statement reflecting the consummation of the Exchange. The
audited financial statements shall have been prepared by independent
public accountants within the meaning of the Securities Act of 1933 and
the published rules and regulations thereunder. The financial statements
and supporting schedules of the corporation examined by such independent
public accountants at all dates and for all periods referred to in their
opinions shall have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis. Each corporation
shall disclose to the other in the Other Information Schedule (1) any
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changes in the capital stock or other securities of the corporation, or
any payment or declaration of any dividend or other distribution in
respect thereof or exchange therefor, or any change in the debt of the
corporation; (2) any decreases in net current assets or net assets; (3)
any decreases in the cash balance; and (4) any increases in the total
liabilities since the date of the unaudited interim financial
statements.
8.04 Certificate of President and Secretary. BROWSESAFE and MOTIONCAST shall
have furnished to the other a certificate of the president or
vice-president and the secretary of the respective company, dated as of
the Closing Date, to the effect that the representations and warranties
of the respective company in this Agreement are true and correct at and
as of the Closing, that no error, misstatement or omission has been
discovered or is known with respect to such representations and
warranties, and that the respective company has complied with all the
agreements and has satisfied all the covenants on its part to be
performed at or prior to the Closing.
8.05 No Adverse Change in MOTIONCAST or BROWSESAFE. Between the date of
execution of this Agreement and the Closing Date, MOTIONCAST and
BROWSESAFE
(a) except in the ordinary course of its business, shall not have
incurred any liabilities or obligations (direct or contingent) or
disposed of any of its assets, or entered into any material
transaction or suffered or experienced any materially adverse
change in its operations or condition, financial or otherwise;
(b) shall not have increased its issued and outstanding shares of
Common Stock or any other securities; and
(c) shall not have experienced any changes in key management
positions.
8.06 Proceedings Complete. All proceedings of MOTIONCAST and BROWSESAFE in
connection with the authorization, execution and delivery of this
Agreement and the transactions contemplated hereby shall be satisfactory
in form and substance to the other and its counsel, and each corporation
or its counsel shall have received copies of all documents it reasonably
shall request in connection with the transactions contemplated hereby
and of all corporate proceedings of the other in connection therewith.
8.07 Purchase of MOTIONCAST Common Stock. Within 10 business days of Closing,
shareholders of BROWSESAFE other than Browsesafe, LLC, shall purchase
83,162 shares of MOTIONCAST Common Stock for a total of $300,000.
Notwithstanding anything in this Agreement to the contrary, Browsesafe,
LLC shall have no liability for the failure of the other shareholders of
BROWSESAFE to contribute the $300,000 described above or to contribute
any other amounts provided for in this Agreement.
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8.08 MOTIONCAST Assets and Liabilities. At the Closing, MOTIONCAST shall have
no assets or liabilities except for:
$135,000 in cash in the Xxxxxxxxx & Associates Trust Account;
$ 50,000 in promissory notes for sums already advanced to
BROWSESAFE (to be cancelled for shares at $3.60/share);
$ 27,380 in sums already advanced for shares acquisition in
BROWSESAFE;
$ 82,620 in cash to be wired in at Closing, to be cancelled by
shares at $3.60/share in newly-issued common stock;
$300,000 in subscriptions (see 8.07 above).
Cancellation of the indebtedness of $50,000 and consideration for the
$82,620 to be delivered at Closing will amount to a total of 36,838
newly-issued shares of restricted common stock.
8.09 Delivery of MOTIONCAST Books and Records. At the Closing, MOTIONCAST
shall deliver to BROWSESAFE copies of any books and records of
MOTIONCAST, as BROWSESAFE may reasonably request.
8.10 Satisfactory Completion of MOTIONCAST Due Diligence. At the Closing,
MOTIONCAST shall have been satisfied with its due diligence review of
BROWSESAFE.
8.11 Satisfactory Completion of BROWSESAFE Due Diligence. At the Closing,
BROWSESAFE shall have been satisfied with its due diligence review of
MOTIONCAST.
8.12 Satisfactory Review of UCC and Judgment Searches. Prior to the Closing,
BROWSESAFE shall have received and reviewed the UCC and Judgment
searches ordered by it and the results of such searches shall be
satisfactory to BROWSESAFE.
8.13 Satisfactory Review of Agreements between MOTIONCAST and Alexis Stock
Transfer, Alexis Capital, Inc. and Xxxxxxx Xxxxxx. Prior to the Closing,
BROWSESAFE shall have received and reviewed the Agreements between
MOTIONCAST and Alexis Stock Transfer, Alexis Capital, inc. and Xxxxxxx
Xxxxxx. The results of the review shall be satisfactory to BROWSESAFE.
8.14 Cash Receipts. At the Closing, the shareholders of BROWSESAFE other than
Browsesafe, LLC shall wire-transfer $82,620 to MOTIONCAST'S bank account
at Peoples Bank & Trust Company, Indianapolis, Indiana, Account No.
00000000. At the Closing, MOTIONCAST shall cause Xxxxxxxxx & Associates
to wire transfer $135,000 to MOTIONCAST'S bank account at Peoples Bank &
Trust Company, Indianapolis, Indiana, Account No. 00000000.
Share Exchange Agreement - Page 12
ARTICLE IX
TERMINATION, FURTHER ASSURANCES AND MISCELLANEOUS
9.01 Termination and Postponement. This Agreement and the Exchange
contemplated hereby may be terminated, and the transactions provided for
herein abandoned, at any time prior to but not after the Closing, as
follows:
(a) by mutual consent of the MOTIONCAST Board of Directors, the
BROWSESAFE shareholders and the BROWSESAFE Board of Directors;
(b) by the MOTIONCAST Board of Directors, the BROWSESAFE shareholders
or the BROWSESAFE Board of Directors if any of the conditions set
forth in Article VIII shall not have been met by the Closing
Date; or
(c) by the MOTIONCAST Board of Directors, the BROWSESAFE
shareholders or the BROWSESAFE Board of Directors if the
Exchange has not been effected by June 24, 1999, which date
shall be extended unless otherwise requested by the
MOTIONCAST Board of Directors, the BROWSESAFE shareholders and
the BROWSESAFE Board of Directors. In the event of the
termination and abandonment of this Agreement and the Exchange
contemplated hereby, this Agreement shall become void and of
no effect, without any liability on the part of any party or
its directors, officers or shareholders.
9.02 Waiver. Prior to the Closing Date, any condition specified in Article
VIII hereinabove and any other term or provision of the Agreement, the
waiver of which will not, in the reasonable opinion of the MOTIONCAST
Board of Directors or the BROWSESAFE shareholders, have a materially
adverse effect on the shareholders of MOTIONCAST or the BROWSESAFE
shareholders, respectively, may be waived by such parties if it or they
are entitled to the benefits thereof. Any such permitted waiver shall be
evidenced by a certificate executed on behalf of the electing party by
its authorized agent.
9.03 Appointment of Directors. At the Closing, all of MOTIONCAST's present
officers and all of the directors except for Xxxxx Xxxxxxxxx shall
resign, and Xxxx X. Xxxxx, J. Xxxxxxxx Xxxx, Xxxxxxx Xxxxxxxx nd Xxx
X'Xxxxx shall be appointed to MOTIONCAST's Board of Directors.
9.04 Survival. All agreements, representations and warranties made hereunder
or in connection with the transactions contemplated hereby shall survive
the Closing and remain effective in accordance with the terms hereof
regardless of any investigation at any time made by or on behalf of
MOTIONCAST or BROWSESAFE.
9.05 Expenses. MOTIONCAST and BROWSESAFE shall each bear their respective
costs and expenses incurred prior to Closing, including legal,
accounting and other expenses, in
Share Exchange Agreement - Page 13
connection with the proposed reorganization. The preparation of this
document shall be an expense of MOTIONCAST.
9.06 Assignment. This Agreement may not be assigned nor any of the
performances hereunder delegated by operation of law or otherwise by any
party hereto, and any purported assignment or delegation shall be void.
9.07 Headings. The article and section headings of this Agreement are
inserted for convenience of reference only and do not constitute a part
of this Agreement.
9.08 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors,
legal representatives, assigns and transferors.
9.09 Entire Agreement. This Agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof. There are no
representations, warranties, conditions or other obligations except as
herein specifically provided. Any waiver, amendment or modification
hereof must be in writing. A waiver in one instance shall not be deemed
to be a continuing waiver or waiver in any other instance.
9.10 Change of Fiscal Year. After Closing, MOTIONCAST shall change its fiscal
year end to such year end as may be approved by the new MOTIONCAST Board
of Directors.
9.11 Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Nevada.
9.12 Notices. All notices, requests, instructions or other documents
("Notices") to be given hereunder shall be deemed given if in writing,
sent by certified mail addressed as follows:
Share Exchange Agreement - Page 14
To MOTIONCAST:
Xxxxxxx Xxxxxx, President
Motioncast Television Corporation
of America
00000 Xxxx Xxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
To BROWSESAFE: with a copy to:
Xxxx X. Xxxxx, President Xxx X. Xxxxxxxxx, Esq.
XxxxxxXxxx.xxx, Inc. Xxxx Xxxx Xxxx Xxxxxxxxxx &
000 Xxxx 0xx Xxxxxx, Xxxxx 000 Xxxxxxxxx, X.X.
Xxxxxxxxxxxx, Xxxxxxx 00000 000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Xxxxxx X. Xxxxxxx, Esq.
Xxxx Xxxx Xxxxxx & Darko, LLP
Bank One Tower
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
To the BROWSESAFE shareholders: with a copy to:
Xxxx X. Xxxxx, President Xxx X. Xxxxxxxxx, Esq.
XxxxxxXxxx.xxx, Inc. Xxxx Xxxx Xxxx Xxxxxxxxxx &
000 Xxxx 0xx Xxxxxx, Xxxxx 000 Xxxxxxxxx, X.X.
Xxxxxxxxxxxx, Xxxxxxx 00000 000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Xxxxxx X. Xxxxxxx, Esq.
Xxxx Xxxx Xxxxxx & Darko, LLP
Bank One Tower
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
All notices shall be deemed delivered two days after mailing, if mailed
in accordance herewith. Any party may change its/his address for initial
Notices by giving notice of such change in accordance herewith.
9.13 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the ame instrument. This
Agreement may be deemed executed upon receipt of a facsimile copy
bearing signatures of the parties, provided that a complete document
bearing original signatures is assembled within five business days of
such execution.
Share Exchange Agreement - Page 15
9.14 Name Change. The signatories to this Agreement approve of an amendment
to the Articles of Incorporation changing the name of MOTIONCAST to
"Xxxxxxxxxx.xxx, Inc." The filing of the Amended Articles shall be done
at the time directed by the new MOTIONCAST Board of Directors.
9.15 Effective Date. The Effective date of the Closing shall be June 24,
1999.
Share Exchange Agreement - Page 16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.
------------------------------------ ----------------------------------
MOTIONCAST BROWSESAFE
Motioncast Television Corporation of XxxxxxXxxx.xxx, Inc.
America
By: By: /s/ Xxxx X. Xxxxx
--------------------------------- -------------------------------
Xxxxxxx Xxxxxx, President Xxxx X. Xxxxx, President
Share Exchange Agreement - Page 17
------------------------------------ ----------------------------------
BROWSESAFE Shareholders
Browsesafe, LLC Albury Capital Corp.
By: /s/ Xxxx X. Xxxxx By: /s/ illegible
--------------------------------- -------------------------------
Minati Financial, Inc. Eivissa Capital Corp.
By: /s/ Xxxxxx Xxxxxxx By: /s/ X. Xxxx
--------------------------------- -------------------------------
Torquay Holdings, Ltd. Hemisphere & Associates, Ltd.
By: /s/ illegible By: /s/ illegible
--------------------------------- -------------------------------
Vista Financial Corp.
Barisal Capital Corporation
By: /s/ illegible
--------------------------------- By: /s/ Xxxxx Xxxxxx
-------------------------------
Chariot Group, Ltd.
El Coyote Capital Corp.
By: /s/ Xxxxx Xxxxx By: /s/ illegible
--------------------------------- -------------------------------
Jupiter Financial Services, Inc. HomePride Entertainment Inc.
By: /s/ illegible By: /s/ illegible
--------------------------------- -------------------------------
Kyline Investment Corp. Sterling Overseas Investments SA
By: /s/ Xxxxxxx Xxxxxx By: /s/ illegible
--------------------------------- -------------------------------
Fergus Capital Corporation
By: /s/ illegible
-------------------------------
Share Exchange Agreement - Page 18
EXHIBIT A
MOTIONCAST EXCEPTIONS
SECTION 3.02 None
SECTION 3.04 None
SECTION 3.05 None
SECTION 3.06 None
SECTION 3.07 None
SECTION 3.08 None
SECTION 3.09 None
SECTION 3.10 None
SECTION 3.12 None
SECTION 3.13 1. Agreement with Alexis Stock Transfer as
MOTIONCAST'S transfer agent
2. Consulting Agreement with Alexis Capital, Inc.
3. Consulting Agreement with Xxxxxxx Xxxxxx.
Section 3.14 None
Section 3.15 None
Section 4.04 $3,000.00 liability to Xxxx & Xxxx
$9,800.00 liability to Hemisphere
Section 5.01 See Section 3.13 above.
MOTIONCAST
By: /s/ Xxxxxxx Xxxxxx
------------------
Xxxxxxx Xxxxxx
Share Exchange Agreement - Page 19
EXHIBIT "B"
BROWSESAFE EXCEPTIONS
SECTION 3.02 None
SECTION 3.04 Browsesafe LLC contributed all of its assets to
Xxxxxxxxxx.xxx, Inc. pursuant to the terms of an Asset
and Liability Contribution Agreement dated May ___,
1999. All required filings have not been made with the
Patent and Trademark Office.
SECTION 3.05 None
SECTION 3.06 A letter was received from Blythe & Ost dated June 15,
1999 regarding Winthrop Associates. A copy of the
letter and related information has been sent to
Xxxxxxxxxxx Xxxxxxxxx.
SECTION 3.07 Browsesafe has never had an audited statement.
Browsesafe executed the Asset and Liability
Contribution Agreement described above and completed
the transaction described therein. See Section 3.06
above.
SECTION 3.08 None
SECTION 3.09 None
SECTION 3.10 None
SECTION 3.12 None
SECTION 3.13 Contracts:
----------
Contracts of employment
1. Xxx Xxxxxx - programmer
Contracts for the purchase, sale or lease (as lessor
or lessee) of real estate or personal property
1. Freedom Capital - server lease
2. Skytel Pager - pager services
Contracts for services to be rendered to it
1. Exodus - service and backbone hosting
2. Premium - contract programming
3. Card Services - credit card service
Share Exchange Agreement - Page 20
Employee insurance, hospital or medical expense
programs
1. MetLife - employee disability
2. Brokers National - group dental and eyecare
Stock Purchase/Option Agreements
1. Browsesafe has agreed to issue 62,000 shares
of Motioncast stock to some of its initial investors
in exchange for the investors giving up any rights
they may have under the Investor's Rights Agreement
dated June 29, 1998.
Section 3.14 See Section 8.08 of the Agreement for a description of
certain liabilities. See Section 3.06 above.
Section 5.01 See Section 3.13 above.
BROWSESAFE
By: /s/ Xxxx X. Xxxxx
------------------
Share Exchange Agreement - Page 21
