EXHIBIT 10
SHARE EXCHANGE AGREEMENT AND RELEASE
EXHIBIT 10
SHARE EXCHANGE AGREEMENT & RELEASE
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This Share Exchange Agreement & Release ("Agreement"), dated as of April
24, 2006, between Xxxxxxxx Xxxxxxxx, ("TM") Xxxxx Xxxxxxxx, ("SM"), and Xxxx
Xxxx ("JR"), Chance Xxxxxx ("CV").
W I T N E S S E T H:
A. WHEREAS, Captech Financial Group, Inc. ("the Company") is a corporation
duly organized under the laws of the State of Florida.
B. WHEREAS, Buyer wishes to purchase an aggregate of 111,570,000 shares of
common stock of the Company, from TM (collectively, the "Purchase Shares"), and
TM desires to sell the Purchase Shares to Buyer free and clear of all liens and
encumbrances.
C. WHEREAS, Xxxxx Xxxxxxxx previously borrowed funds totaling $400,000 from
JR and CV invested $500,000 in eAuto Network, Inc..
D. WHEREAS, SM delivered, as collateral to JR, a certain certificate of
eAuto Network, Inc., which is still held by JR, for 9,894,000 common shares.
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE I
The Consideration
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1.1 Subject to the conditions set forth herein, TM shall sell to JR and JR
shall purchase an aggregate of 111,570,000 shares of common stock of the Company
from TM. The purchase price for the shares to be paid by JR to TM is delivery of
9,894,000 shares of eAuto Network, Inc. (the "Consideration") as full
consideration for the Shares.
ARTICLE II
Closing and Conveyance of Shares
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2.1 The Purchase Shares shall be conveyed by TM to JR upon receipt of the
consideration of the 9,894,000 shares of eAuto Network, Inc. by TM, and
satisfaction of a) the conditions precedent in Article VI, and b) procedures in
Article 5.
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2.2 Closing hereunder shall be completed by delivery of the
consideration consisting share certificates on or before ______________, 2006 at
5:00 p.m. PST ("Closing Date") subject to satisfaction of the terms and
conditions set forth herein. Consideration may be delivered by Federal Express
or wire transfers, and any closing documents may be delivered by facsimile,
Federal Express or other appropriate means.
ARTICLE III
Representations, Warranties and Covenants of TM
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TM to the best of his knowledge, even though he is not an officer or
director of Captech hereby, represents, warrants and covenants to JR as follows:
3.1 Captech Financial Group, Inc. is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida, and has
the corporate power and authority to own or lease its properties and to carry on
its business as it is now being conducted. The Articles of Incorporation and
Amendments and Bylaws of Company, which will be delivered to Buyer at closing,
are complete and accurate, and the minute books of Company, copies of which have
also been delivered to Buyer, contain a record, which is complete and accurate
in all material respects, of all meetings, and all corporate actions of the
shareholders and Board of Directors of Company.
3.2 The authorized capital stock of Company consists of 200,000,000 shares
of common stock. There are 132,457,200 shares of Common Stock of Company issued
and outstanding. All such shares of capital stock of Company are validly issued,
fully paid, non-assessable and free of preemptive rights. Company has no
outstanding options, warrants, or other rights to purchase, or subscribe to, or
other securities convertible into or exchangeable for any shares of capital
stock of Company, or contracts or arrangements of any kind relating to the
issuance, sale or transfer of any capital stock or other equity securities of
Company. All of the outstanding shares of capital stock of Company have been
offered, issued, sold and delivered in compliance with applicable federal and
state securities laws and none of such securities were, at the time of issuance,
subject to preemptive rights. None of such issued and outstanding shares is the
subject of any voting trust agreement relating to the voting thereof or
restricting in any way the sale or transfer thereof.
3.3 This Agreement has been duly authorized, validly executed and delivered
on by TM and is a valid and binding agreement and obligation of TM enforceable
against the parties in accordance with its terms, subject to limitations on
enforcement by general principles of equity and by bankruptcy or other laws
affecting the enforcement of creditors' rights generally, and TM has complete
and unrestricted power to enter into and to consummate the transactions
contemplated by this Agreement.
3.4 Neither the making of nor the compliance with the terms and provisions
of this Agreement and consummation of the transactions contemplated herein by TM
will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of the Company, or of any material provisions of any
indenture, mortgage, deed of trust or other material agreement or instrument to
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which the Company is a party, or of any material provision of any law, statute,
rule, regulation, or any existing applicable decree, judgment or order by any
court, federal or state regulatory body, administrative agency, or other
governmental body having jurisdiction over the Company, or any of its material
properties or assets, or will result in the creation or imposition of any
material lien, charge or encumbrance upon any material property or assets of TM
or the Company pursuant to the terms of any agreement or instrument to which TM
is a party or by which TM or the Company may be bound or to which any of TM's or
the Company's property is subject and no event has occurred with which lapse of
time or action by a third party could result in a material breach or violation
of or default by TM or the Company.
3.5 There is no claim, legal action, arbitration, governmental
investigation or other legal or administrative proceeding, nor any order, decree
or judgment in progress, pending or in effect, or to the best knowledge of TM
threatened against or relating to TM or the Company or affecting any of Company
assets, properties, business or capital stock. There is no continuing order,
injunction or decree of any court, arbitrator or governmental authority to which
TM is a party related to Company or by which Company or its assets, properties,
business or capital stock are bound.
3.6 Company has accurately prepared and filed all federal, state and other
tax returns required by law, domestic and foreign, to be filed by it, has paid
or made provisions for the payment of all taxes shown to be due and all
additional assessments, and adequate provisions have been and are reflected in
the financial statements of Company for all current taxes and other charges to
which Company is subject and which are not currently due and payable. None of
the Federal income tax returns of Company have been audited by the Internal
Revenue Service or other foreign governmental tax agency. Company has no
knowledge of any additional assessments, adjustments or contingent tax liability
(whether federal or state) pending or threatened against Company for any period,
nor of any basis for any such assessment, adjustment or contingency.
3.7 TM has delivered to JR audited financial statements of Company
dated December 31, 2004 and unaudited financial statements for the period ended
September 30, 2005. All such statements, herein sometimes called "Company
Financial Statements" are complete and correct in all material respects and,
together with the notes to these financial statements, present fairly the
financial position and results of operations of Company for the periods
indicated. All financial statements of Company have been prepared in accordance
with generally accepted accounting principles.
3.8 As of the date hereof, to the best of his knowledge and belief, TM
represents and warrants that all outstanding indebtedness of Company is as shown
on the financial statements.
3.9 Since the dates of the Company Financial Statements, there have not
been any material adverse changes in the business or condition, financial or
otherwise, of Company. Company does not have any liabilities, commitments or
obligations, secured or unsecured except as shown on updated financials (whether
accrued, absolute, contingent or otherwise).
3.10 Company is not a party to any contract performable in the future.
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3.11 The representations and warranties of the TM shall be true and correct
as of the date hereof.
3.12 TM will deliver to JR, all of Company corporate books and records at
closing.
3.13 Company has no employee benefit plan in effect at this time.
3.14 No representation or warranty by TM in this Agreement, or any
certificate delivered pursuant hereto contains any untrue statement of a
material fact or omits to state any material fact necessary to make such
representation or warranty not misleading.
3.15 JR has received copies of Form 10KSB as filed with the Securities and
Exchange Commission ("SEC") which included audits for the year ended December
31, 2004 and each of its other reports to shareholders filed with the SEC
through the period. Company is a registered company under the Securities
Exchange Act of 1934, and is current in its filings.
3.16 TM has conducted no business whatsoever since December 31, 2004, has
incurred no liabilities except as shown on the financial statements.
3.17 TM warrants that the shares of the Company are and will be delivered
free and clear of any and all liens, encumbrances, pledges, or charges.
ARTICLE IV
Procedure for Closing
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4.1 At the Closing Date, the purchase and sale shall be consummated after
satisfaction of all conditions precedent set forth in Article VI, by the common
stock certificates of the Company for the Purchase Shares being delivered, duly
executed, for 111,570,000 shares of common stock to JR, and the delivery of the
Consideration for share purchase to TM by JR as required hereinabove in the form
of the 9,894,000 common shares of eAuto Network, together with delivery of all
other items, agreements, warranties, and representations set forth in this
Agreement.
ARTICLE V
Conditions Precedent to the
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Consummation of the Purchase
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The following are conditions precedent to the consummation of the Agreement
on or before the Closing Date:
5.1 TM shall have performed and complied with all of its respective
obligations hereunder which are to be complied with or performed on or before
the Closing Date.
5.2 No action, suit or proceeding shall have been instituted or shall have
been threatened before any court or other governmental body or by any public
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authority to restrain, enjoin or prohibit the transactions contemplated herein,
or which might subject any of the parties hereto or their directors or officers
to any material liability, fine, forfeiture or penalty on the grounds that the
transactions contemplated hereby, the parties hereto or their directors or
officers, have violated any applicable law or regulation or have otherwise acted
improperly in connection with the transactions contemplated hereby, and the
parties hereto have been advised by counsel that, in the opinion of such
counsel, such action, suit or proceeding raises substantial questions of law or
fact which could reasonably be decided adversely to any party hereto or its
directors or officers.
5.3 The representations and warranties made by TM in this Agreement shall
be true as though such representations and warranties had been made or given on
and as of the Closing Date, except to the extent that such representations and
warranties may be untrue on and as of the Closing Date because of changes caused
by transactions agreed to or approved in writing by JR.
ARTICLE VI
Termination and Abandonment
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6.1 Anything contained in this Agreement to the contrary notwithstanding,
the Agreement may be terminated and abandoned at any time prior to or on the
Closing Date:
(a) By mutual consent of parties;
(b) By either party, if any condition set forth in Article V relating to
the other party has not been met or has not been waived;
(c) By Buyer, if any suit, action, or other proceeding shall be pending or
threatened by the federal or a state government before any court or
governmental agency, in which it is sought to restrain, prohibit, or
otherwise affect the consummation of the transactions contemplated
hereby;
(d) By JR, if there is discovered any material error, misstatement or
omission in the representations and warranties of another party; or
(e) By TM, if the Closing does not occur, through no failure to act by TM,
on closing date, or if Buyer fails to deliver the consideration
required herein.
6.2 Any of the terms or conditions of this Agreement may be waived at any
time by the party which is entitled to the benefit thereof, by action taken by
its Board of Directors provided; however, that such action shall be taken only
if, in the judgment of the Board of Directors taking the action, such waiver
will not have a materially adverse effect on the benefits intended under this
Agreement to the party waiving such term or condition.
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ARTICLE VII
Continuing Representations,
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Warranties and Covenants and Indemnity
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7.1 The respective representations, warranties, and covenants of the
parties hereto and the covenants and agreements of the parties herein shall
survive after the closing under this Agreement in accordance with the terms
thereof.
7.2 The waiver of any condition to a party's obligation to consummate the
transactions contemplated hereunder, where such condition is based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, or payment of Damages, or other remedy based on such
representation, warranty, covenant or obligation.
7.3 TM shall indemnify and hold harmless the JR and the company's future
officers, directors and affiliates (the "Indemnified Party") for, and will pay
to the JR Indemnified Party, the amount of, any loss, liability, claim, damage
(including, without limitation, incidental and consequential damages), cost,
expense (including, without limitation, interest, penalties, costs of
investigation and defense and the reasonable fees and expenses of attorneys and
other professional experts) or diminution of value, whether or not involving a
third-party claim (collectively, "Damages"), directly or indirectly arising
from, attributable to or in connection with any breach by any of the Seller of
any covenant, agreement or obligation of Seller contained in this agreement or
in connection with any liability or debt of Company not set forth in the
Financial Statements or paid in full by Seller, except that any liability of
Seller under such indemnity shall be limited to a maximum amount equal to the
purchase price hereunder, or the amount of the debt whichever is greater.
7.4 Promptly after receipt by an indemnified party of written notice (the
"Notice of Claim") of the commencement of any action, suit or proceeding against
it, or written threat thereof, such indemnified party will, if a claim is to be
made against an indemnifying party under either of said sections, as applicable,
give notice to the indemnifying party of the commencement of such action, suit
or proceeding. The indemnified party shall furnish to the indemnifying party in
reasonable detail such information as the indemnified party may have with
respect to such indemnification claims (including copies of any summons,
complaint or other pleading which may have been served on it and any written
claim, demand, invoice, billing or other document evidencing or asserting the
same). Subject to the limitations set forth in this section, no failure or delay
by the indemnified party in the performance of the foregoing shall reduce or
otherwise affect the obligation of the indemnifying party to indemnify and hold
the indemnified party harmless except to the extent that such failure or delay
shall have materially and adversely affected the indemnifying party's ability to
defend against, settle or satisfy any action, suit or proceeding with respect to
the claim for which the indemnified party is entitled to indemnification
hereunder.
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7.5 If the claim or demand set forth in the Notice of Claim given by the
indemnified party is a claim or demand asserted by a third party, the
indemnifying party shall have 30 days after the Date of Notice of Claim to
notify the indemnified party in writing of its election to defend such third
party claim or demand on behalf of the indemnified party (the "Notice Period");
provided, however, that the indemnified party is authorized to file any motion,
answer or other pleading which it deems necessary or appropriate to protect its
interests during the Notice Period. If the indemnifying party elects to defend
such third party claim or demand, the indemnified party shall make available to
the indemnifying party and its agents and representatives all records and other
materials which are reasonably required in the defense of such third party claim
or demand and shall otherwise cooperate (at the sole cost and expense of the
indemnifying party) with, and assist (at the sole cost and expense of the
indemnifying party) the indemnifying party in the defense of, such third party
claim or demand, and so long as the indemnifying party is diligently defending
such third party claim in good faith, the indemnified party shall not pay,
settle or compromise such third party claim or demand. If the indemnifying party
elects to defend such third party claim or demand, the indemnified party shall
have the right to control the defense of such third party claim or demand, at
the indemnified party's own expense. If the indemnifying party does not elect to
defend such third party claim or demand or does not defend such third party
claim or demand in good faith, the indemnified party shall have the right, in
addition to any other right or remedy it may have hereunder at the indemnifying
party's expense, to defend such third party claim or demand.
7.6 The term "Date of Notice of Claim" shall mean the date the Notice of
Claim is effective pursuant to section 7.3 of this Agreement.
7.7 A claim for indemnification for any matter not involving a third-party
claim may be asserted by notice to the party from whom indemnification is
sought.
7.8 Any legal action or proceeding with respect to this Agreement or any
matters arising out of or in connection with this Agreement or the transactions
contemplated hereby or the documents executed and delivered in connection
herewith, and any action for enforcement of any judgment in respect thereof may
be brought in the courts of the State of Florida or of the United States of
America for the District of Florida, and, by execution and delivery of this
Agreement, the parties each hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts and appellate courts thereof. The parties irrevocably consent to service
of process out of any of the aforementioned courts in any such action or
proceeding in accordance with the notice provisions set forth in Section 8.5.
The parties each hereby irrevocably waive any objection that it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or the
transactions contemplated hereby or the documents execute and delivered in
connection herewith brought in the courts referred to above and hereby further
irrevocably waive and agree, to the extent permitted by applicable law, not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing herein shall
affect the right of any party hereto to serve process in any other manner
permitted by law.
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ARTICLE VIII
Miscellaneous
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8.1 This Agreement embodies the entire agreement between the parties, and
there have been and are no agreements, representations or warranties among the
parties other than those set forth herein or those provided for herein, except
that a companion document, the Reorganization Agreement, has been executed
concurrently which contains numerous warranties and representations.
8.2 To facilitate the execution of this Agreement, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one instrument.
8.3 All parties to this Agreement agree that if it becomes necessary or
desirable to execute further instruments or to make such other assurances as are
deemed necessary, the party requested to do so will use its best efforts to
provide such executed instruments or do all things necessary or proper to carry
out the purpose of this Agreement.
8.4 This Agreement may not be amended except by written consent of both
parties.
8.5 Any notices, requests, or other communications required or permitted
hereunder shall be delivered personally or sent by overnight courier service,
prepaid, addressed as follows:
To TM:
To JR:
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.
8.6 No press release or public statement will be issued relating to the
transactions contemplated by this Agreement without prior approval of the TM and
JR. However, Captech Financial Group may issue at any time any press release or
other public statement it believes on the advice of its counsel it is obligated
to issue to avoid liability under the law relating to disclosures, but the party
issuing such press release or public statement shall make a reasonable effort to
give the other party prior notice of and opportunity to participate in such
release or statement.
8.7 This Agreement shall be governed by and construed in accordance with
and enforced under the laws of the state of Florida applicable to all agreements
made hereunder. Venue and jurisdiction for any legal actions hereunder shall be
CircuitCourt in and for Xxxx County, Florida.
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8.8 It is part of the consideration for and condition of this agreement
that Xxxx Xxxx and Chance Xxxxxx shall, at closing, deliver a Release and Waiver
of all Claims against Xxxxx Xxxxxxxx and eAuto Networks, Inc. whatsoever. No
release of any of the Warranties and Representations under this Agreement shall
be implied thereby.
8.9 In the event of a breach or default of this Agreement or any of the
continuing covenants hereunder which results in a party or any effected
shareholder who is a beneficiary of a surviving or continuing covenant,
commencing legal action, the prevailing party in such legal action shall be
entitled to an award of all legal fees and costs of the action, against the
non-prevailing party.
8.10 JR shall designate three new directors at closing the existing
directors shall tender their Resignation effective ten days after mailing of
Notice on Form14F-1 to shareholders of the Company and Releases of all Claims
against the Company.
8.11 JR and CV agree that in consideration for settlement and release by CV
of all claims related to CV's equity investment in eAuto Networks, Inc., JR has
agreed to grant CV certain consideration by a separate written agreement, and
such consideration is adequate and sufficient to induce CV to issue a release to
eAuto Networks, Inc. of all claims whatsoever.
8.12 M.A. Xxxxxxx, as escrow agent, is holding 9,894,000 shares of eAuto
Networks, Inc., and upon his receipt of signed copies of this contract by all
parties, the 111,570,000 shares of Captech Financial Group, Inc., duly executed
and signature guaranteed, and the Releases under 8.8 above, escrow agent is
authorized to deliver the documents and certificates set forth herein, to the
proper recipients pursuant to the Agreement.
8.13 SM understands and agrees that JR makes no representations whatsoever
to SM about eAuto Network, Inc. or its stock, debt, or financial picture, as he
has not acted in any capacity as a control party, officer, or director thereof,
and SM waives hereby any claim or cause of action against JR relating to eAuto
Network, Inc. whatsoever.
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IN WITNESS WHEREOF, the parties have executed this Agreement this 24th day
of April, 2006.
/s/ Xxxxxxxx Xxxxxxxx /s/ Xxxx Xxxx
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XXXXXXXX XXXXXXXX XXXX XXXX
By their endorsements hereon, the undersigned hereby consent and agree to the
performances required hereby of them.
XXXXX XXXXXXXX CHANCE XXXXXX
/s/ Xxxxx Xxxxxxxx /s/ Chance Xxxxxx
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