SHARE EXCHANGE AGREEMENT
THIS
SHARE EXCHANGE AGREEMENT
(this
“Agreement”)
is
effective as of January 5, 2007, by and among EYI Industries, Inc., a Nevada
corporation (the “Company”)
and
those certain undersigned shareholders (the “Shareholders”,
and
together with the Company, the “Parties”)
of
Essentially Yours Industries, Inc., a Nevada corporation and majority owned
subsidiary of the Company (“EYII”).
RECITALS:
WHEREAS,
on
November 4, 2003 the Company and EYII completed a share exchange transaction
(the “Original
Agreement”)
pursuant to which the Company issued shares of voting stock of the Company
in
exchange for a majority of the issued and outstanding shares of common stock
of
EYII, par value $0.001 per share (the “EYII
Common Stock”)
held
by those shareholders of EYII who (a) executed that certain Investment Letter,
dated December 2003, containing customary representations, warranties and
covenants regarding the ownership of their shares and compliance with federal
and state securities laws (the “Investment
Letter”)
and
(b) delivered their shares to the Company for exchange (the “Original
Shareholders”);
WHEREAS,
the
Company desires to purchase the balance of those shares of EYII Common Stock
held by the Shareholders not previously purchased by the Company pursuant to
the
Original Agreement so as to cause EYII to become, upon completion of this
Agreement, a wholly-owned subsidiary of the Company;
WHEREAS,
the
Board of Directors of the Company (the “Board”)
has
approved the proposed transaction, contingent upon satisfaction prior to closing
of all of the terms and conditions of this Agreement; and
WHEREAS,
the
Parties desire to make certain representations, warranties and agreements in
connection with completion of the proposed share exchange
transaction.
NOW,
THEREFORE,
in
consideration of the foregoing recitals, which shall be considered an integral
part of this Agreement, and the covenants, conditions, representations and
warranties hereinafter set forth, the parties hereby agree as
follows:
ARTICLE
I
THE
EXCHANGE:
1.1. The
Exchange.
At the
Closing (as hereinafter defined), the Company shall acquire the shares of issued
and outstanding EYII Common Stock held by the Shareholders, free and clear
of
all liens, charges or encumbrances, in exchange for shares of Common Stock
(the
“Exchange
Shares”)
as
provided for in Section 1.3 hereof (the “Exchange”).
The
Exchange shall take place upon the terms and conditions provided for in this
Agreement and applicable state law.
1.2. Closing
and Closing Date.
Subject
to the provisions of this Agreement, the Parties shall hold a closing (the
“Closing”)
on (i)
the first business day on which the last of the conditions set forth in Article
IV to be fulfilled prior to the Closing is fulfilled or waived or (ii) such
other date as the Parties hereto may agree (the “Closing
Date”),
at
such time and place as the Parties hereto may agree.
1.3. Exchange
of Shares; Stock Certificates.
(a) Conversion.
On the
Closing Date, each share of EYII Common Stock surrendered to the Company by
the
Shareholders will be converted into approximately 7.67535 Exchange Shares.
No
fractional shares of Common Stock shall be issued in connection with the
Exchange. In lieu of such fractional shares, any Shareholder who would otherwise
be entitled to receive a fraction of a share of Common Stock (after separately
aggregating all fractional shares of stock issuable to such holder) shall be
issued one (1) whole share of Common Stock.
(b) Exchange
of Certificates.
On and
after the Closing Date, each Shareholder shall be entitled to receive, in
exchange for the outstanding shares of EYII Common Stock held by such
Shareholder upon surrender thereof to the Company or its exchange agent, a
certificate or certificates representing the number of whole Exchange Shares
into which such Shareholder’s shares(s) of EYII Common Stock were converted
pursuant to Section 1.3(a). If, after the Closing Date, certificates for
EYII Common Stock are presented to the Company, they shall be cancelled and
exchanged for Exchange Shares as provided herein.
1.4. Approval
of Share Exchange.
By
their execution of this Agreement, each Shareholder and the Company hereby
ratifies, approves and adopts the Exchange for all purposes under the laws
of
the State of Nevada.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
2.1. Representations
and Warranties of the Company.
The
Company represents and warrants to the Shareholders as follows:
(a) Organization,
Standing and Power.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada, has all requisite power and authority
to
own, lease and operate its properties and to carry on its business as now being
conducted, and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership or leasing
of
its properties makes such qualification necessary.
(b) Capital
Structure.
(i) The
authorized capital stock of the Company consists of (a) Three Billion
(3,000,000,000) shares of Common Stock, par value $0.001 per share of
which 286,975,475
shares are issued and outstanding and (b) Ten Million (10,000,000) shares of
preferred stock, per value $0.001 per share of which zero (0) shares are issued
and outstanding. All of the issued and outstanding shares of Common Stock are
validly issued, fully paid and nonassessable, were issued in compliance with
all
applicable securities laws and are free from preemptive rights or other
restrictions on transfer. Except as disclosed in those documents filed by the
Company with the U.S. Securities and Exchange Commission (“SEC”),
there
are no other options, warrants, calls, agreements or other rights to purchase
or
otherwise acquire from the Company at any time, or upon the happening of any
stated event, any shares of the capital stock of the Company, whether or not
presently issued or outstanding.
(ii) The
Exchange Shares to be issued pursuant to this Agreement will be, when issued
pursuant to the terms of the resolution of the Board approving such issuance,
validly issued, fully paid and nonassessable and not subject to preemptive
rights.
(c) Articles
of Incorporation, Bylaws, and Minute Books.
The
copies of the Articles of Incorporation (as amended) and of the Bylaws (as
amended) of the Company which have been made available to the Shareholders
for
inspection and which are referenced as Exhibits to the Company’s most recent
Registration Statement on Form SB-2/A as filed with the SEC on June 22, 2006
are
true, correct and complete. The minute book of the Company, which has been
made
available to the Shareholders for inspection, contains accurate minutes of
all
meetings and accurate consents in lieu of meetings of the Board (and any
committee thereof) and of the shareholders of the Company since the date of
incorporation and accurately reflects all transactions referred to in such
minutes and consents in lieu of meetings.
(d) Authority.
(i) The
Company has all requisite power and authority to enter into this Agreement
and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by the Board. No other corporate or shareholder
proceedings on the part of the Company are necessary to authorize the Exchange
contemplated hereby. This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due execution by the other Parties
hereto, constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as its
enforceability may be limited by general principles of equity or by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other laws
relating to or affecting creditors’ rights generally.
(ii) The
Board
(at a meeting or meetings duly called and held prior to the date hereof) has
determined that the Exchange is advisable and fair to and in the best interests
of the shareholders of the Company.
2
(e) Conflict
with Other Agreements; Approvals.
The
execution and delivery of this Agreement does not, and the consummation of
the
transactions contemplated hereby will not, (i) conflict with or result in a
breach of any provision of the Articles of Incorporation (as amended) or Bylaws
(as amended) or other governing documents of the Company; (ii) require any
consent, approval, authorization or permit of, or filing with or notification
to, any court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (a “Governmental
Entity”)
by or
with respect to the Company, except as may be required under the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”);
(iii)
require any consent, waiver or approval, or result in a default, or give rise
to
any right of termination, cancellation, modification or acceleration, under
any
of the terms, conditions or provisions of any note, license, agreement,
contract, indenture or other instrument or obligation to which the Company
is a
party or by which any of its assets may be bound; (iv) result in the creation
or
imposition of any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind on any asset of the Company or (v) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Company
or by which any of its assets is bound, except, in the cases of clauses (ii),
(iii), (iv) and (v), violations that would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
Company or on the ability of the Parties to consummate the Exchange or the
other
transactions contemplated hereby.
(f) Books
and Records.
The
Company has made and will make available for inspection by the Shareholders
upon
reasonable request all the books of the Company relating to the business of
the
Company. Such books of the Company have been maintained in the ordinary course
of business. All documents furnished or caused to be furnished to the
Shareholders by the Company are true and correct copies, and there are no
amendments or modifications thereto except as set forth in such
documents.
(g) Compliance
with Laws.
The
Company is and has been in compliance in all material respects with (i) all
laws, regulations, rules, orders, judgments, decrees and other requirements
and
policies imposed by any Governmental Entity applicable to it, its properties
or
the operation of its business and (ii) any note, bond, mortgage, contract,
agreement, license, lease or other instrument or obligation to which the Company
is a party or by which the Company or any of its property or assets is bound
or
affected.
(h) SEC
Filings.
The
Company has filed all periodic and other reports required to be filed with
the
SEC and, as of the date hereof, is current in its filing obligations. The
Company’s reports on Form 10-QSB for the quarterly period ended June 30, 2006
and Form 10-KSB for the fiscal year ended December 31, 2005, as filed with
the
SEC on August 21, 2006 and March 31, 2006, respectively, contain all material
information concerning the Company, updated to the latest practicable date
prior
to each filing, required by SEC rules to be disclosed in such form, and do
not
make any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(i) Financial
Statements and Tax Returns.
Copies
of the Company’s audited financial statements, including its balance sheet as of
December 31, 2005, and its statements of operations, cash flows and
shareholders’ equity for the years ended December 31, 2005 and 2004 and copies
of the Company’s interim unaudited financial statements for the period ended
June 30, 2006 (collectively, the “Company
Financial Statements”)
have
been made available to the Shareholders. The Company Financial Statements were
prepared in accordance with Generally Accepted Accounting
Principles (“GAAP”)
applied on a consistent basis through the periods involved, and the Company
Financial Statements and notes fairly present the financial condition and the
results of operations, changes in stockholders’ equity, and cash flow of the
Company as at the respective dates of and for the periods referred to in such
financial statements, except that any unaudited interim financial statements
were or are subject to normal and recurring year-end adjustments which have
not
been and are not likely to be materially adverse to the Company. No financial
statements of any person or entity are required by GAAP to be included in the
consolidated financial statements of the Company.
(j) Litigation.
There
is no suit, action or proceeding pending, or, to the knowledge of the Company,
threatened against or affecting the Company which is reasonably likely to have
a
material adverse effect on the Company, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding
against the Company having, or which, insofar as reasonably can be foreseen,
in
the future could have, any such effect.
(k) Tax
Returns.
The
Company has filed or will file within the time prescribed by law (including
extension of time approved by the appropriate taxing authority) all tax returns
and reports required to be filed with any jurisdiction where such filing is
required by law, and all such returns are true, accurate and complete in all
material respects. The Company has paid all taxes, interest, penalties,
assessments or deficiencies that were due and payable except for those for
which
an adequate reserve has been provided in accordance with GAAP. The Company
has
made adequate provisions in the Company Financial Statements in accordance
with
GAAP appropriately and consistently applied for the payment of all material
taxes, interest, penalties, assessments or deficiencies for which the Company
may be liable for the periods covered thereby that were not yet due and payable
as of the dates thereof. There is no claim pending or, to the knowledge of
the
Company, threatened against the Company for (i) any other tax returns or reports
which are required to be filed which have not been so filed or (ii) any unpaid
assessment for additional taxes for any fiscal period or any basis therefore.
The Company has provided to EYII copies of its tax returns filed for the tax
years ended December 31, 2002 and 2001.
3
(l) No
Undisclosed Liabilities.
Except
as set forth in the Company Financial Statements, the Company has no material
liabilities or obligations of any nature (whether absolute, accrued, contingent,
or otherwise) except current liabilities incurred in the ordinary course of
business since the respective dates thereof, all of which shall be paid in
full
on the Closing Date.
(m) No
Material Adverse Change.
Except
as set forth in the reports on Form 10-QSB and Form 10-KSB, since December
31,
2002, there has not been any material adverse change with regard to the Company,
and no event has occurred or circumstance exists that may result in such a
material adverse change.
(n) Brokers.
No
person or entity is entitled to receive any brokerage,
finder’s or other fee or commission in connection with this Agreement or the
transactions contemplated hereby based upon agreements made by or on behalf
of
the Company or any of its officers, directors or employees.
(o) Full
Disclosure.
No
representation or warranty of the Company in this Agreement omits to state
a
material fact necessary to make the statements herein, in light of the
circumstances in which they were made, not misleading. There is no fact known
to
the Company that has specific application to EYII and that materially adversely
affects or, as far as the Company can reasonably foresee, materially threatens,
the assets, business, prospects, financial condition, or results of operations
of the Company that has not been set forth in this Agreement.
2.2. Representations
and Warranties of the Shareholders.
(a) Ownership
of the EYII Common Stock.
Each
Shareholder’s Shares of EYII Common Stock are owned of record, legally and
beneficially by each such Shareholder. Each share of EYII Common Stock is free
and clear of any and all security interests, encumbrances, and rights of any
kind or nature whatsoever (collectively, “Encumbrances”),
and
upon delivery of each share of EYII Common Stock hereunder, the Company will
acquire title thereto, free and clear of any and all Encumbrances. Other than
voting rights, redemption rights and such other rights conferred by EYII’s
charter documents and by applicable Nevada statutes, to the best knowledge
of
each Shareholder there exist no Securities Rights (as defined herein) with
respect to the EYII Common Stock. All rights and powers to vote the EYII Common
Stock are held exclusively by the Shareholders. The certificates representing
the EYII Common Stock to be delivered to the Company at the Closing are, and
the
signatures and endorsements thereof or stock powers relating thereto will be,
valid and genuine. For the purposes of this section, “Securities
Rights”
means,
with respect to the EYII Common Stock, all written or unwritten contractual
rights relating to the issuance, sale, assignment, transfer, purchase,
redemption, conversion, exchange, registration or voting of the EYII Common
Stock and all rights conferred by EYII’s governing documents and by any
applicable agreement.
(b) Authority
Relative to This Agreement.
Each
Shareholder has all necessary power and authority to execute and deliver this
Agreement, to perform the obligations hereunder and to consummate the
transactions contemplated by this Agreement. The execution and delivery of
this
Agreement by each Shareholder, the performance by each Shareholder of his
obligations hereunder and the consummation by each Shareholder of the
transactions contemplated by this Agreement have been duly authorized by all
necessary action on the part of each Shareholder as are necessary to authorize
this Agreement or to consummate the transactions contemplated by this Agreement.
This Agreement has been duly and validly executed and delivered by each
Shareholder and constitutes the legal, valid and binding obligations of each
Shareholder, enforceable against each Shareholder in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws of general application affecting the
enforcement of creditors’ rights generally.
(c) Brokers.
No
person or entity is entitled to receive any brokerage, finder’s or other fee or
commission in connection with this Agreement or the transactions contemplated
hereby based upon agreements made by or on behalf of the Company or any of
its
officers, directors or employees.
(d) Full
Disclosure.
No
representation or warranty of the Shareholders in this Agreement omits to state
a material fact necessary to make the statements herein, in light of the
circumstances in which they were made, not misleading. There is no fact known
to
the Shareholders that has specific application to the Company and that
materially adversely affects or, as far as the Shareholders can reasonably
foresee, materially threatens, the assets, business, prospects, financial
condition, or results of operations of EYI that has not been set forth in this
Agreement.
4
ARTICLE
III
ADDITIONAL
AGREEMENTS
3.1. Access
and Inspection, Etc.
The
Company shall have allowed and shall allow the Shareholders and their authorized
representatives full access during normal business hours from and after the
date
hereof and prior to the Closing Date to all of the properties, books, contracts,
commitments and records of the Company for the purpose of making such
investigations as the Shareholders may reasonably request in connection with
the
transactions contemplated hereby, and the Company shall furnish to the
Shareholders such information concerning its affairs as the Shareholders may
reasonably request. The Company shall have caused and shall cause the personnel
of the Company to assist the Shareholders in making such investigation and
shall
use its best efforts to cause the counsel, accountants, and other non-employee
representatives of the Company to be reasonably available to the Shareholders
for such purposes.
3.2. Confidential
Treatment of Information.
From
and after the date hereof, the Parties hereto shall and shall cause their
representatives to hold in confidence this Agreement (including any exhibits
and
schedules hereto), all matters relating hereto and all data and information
obtained with respect to the other Parties or their business, except such data
or information as is published or is a matter of public record, or as compelled
by legal process. In the event this Agreement is terminated pursuant to Article
V hereof, each Party shall promptly return to the other(s) any statements,
documents, schedules, exhibits or other written information obtained from them
in connection with this Agreement, and shall not retain any copies
thereof.
3.3 Indemnification.
Each
Shareholder shall indemnify and hold harmless each other Party to this Agreement
from and against any and all loss, liability, claim, damage, and expense
(including, without limitation, reasonable attorneys' fees and disbursements)
arising out of or resulting from any matter that conflicts or is inconsistent
with the representations made in Section 2.2. Nothing contained therein shall
preclude a Party to this Agreement from seeking equitable relief, where
appropriate.
3.4 Entire
Agreement.
This
Agreement (including the documents and the instruments referred to herein)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, by and among the Parties with respect
to
the subject matter hereof, and is not intended to confer upon any person other
than the Parties hereto any rights or remedies hereunder.
3.5. Public
Announcements.
After
the date hereof and prior to the Closing, none of the Parties hereto shall
make
any press release, statement to employees or other disclosure of this Agreement
or the transactions contemplated hereby without the prior written consent of
the
other Parties, except as may be required by law.
3.6. Best
Efforts.
Subject
to the terms and conditions provided in this Agreement, each of the Parties
shall use its best efforts in good faith to take or cause to be taken as
promptly as practicable all reasonable actions that are within its power to
cause to be fulfilled those conditions precedent to its obligations or the
obligations of the other parties to consummate the transactions contemplated
by
this Agreement that are dependent upon its actions.
ARTICLE
IV
CONDITIONS
PRECEDENT
4.1. Conditions
to Each Party’s Obligation to Effect the Exchange.
The
respective obligations of each Party to effect the Exchange shall be subject
to
the satisfaction or waiver by such Party of the following conditions on or
before the Closing Date:
(a) Consents
and Waiting Periods.
The
filing, occurring or obtainment of all authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations of waiting periods
imposed by any Governmental Entity or by any applicable law, rule, or regulation
governing the transactions contemplated hereby; and
(b) No
Statutes or Judgments.
No
statute, rule, regulation, executive order, judgment, decree or injunction
shall
have been enacted, entered, issued, promulgated or enforced by any court or
Governmental Entity against the Company or EYII and be in effect that prohibits
or restricts the consummation of the Exchange or makes such consummation
illegal; provided that each Party agrees to use all reasonable efforts to have
such prohibition lifted.
5
4.2. Conditions
to Obligations of the Company.
The
obligation of the Company to effect the Exchange is subject to the satisfaction
of the following conditions on or before the Closing Date unless waived by
the
Company:
(a) Representations
and Warranties.
The
representations and warranties of each Shareholder set forth in this Agreement
shall be true and correct in all material respects as of the date of this
Agreement and (except to the extent such representations and warranties speak
as
of an earlier date) as of the Closing Date as though made on and as of the
Closing Date, except as otherwise contemplated by this Agreement, and, with
respect only to the representations and warranties of each Shareholder, the
Company shall have received a certificate signed on behalf of the Shareholder
to
such effect.
(b) Performance
of Obligations of the Shareholders.
The
Shareholders shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to the Closing
Date.
(c) Closing
Documents.
The
Company shall have received such certificates and other closing documents as
counsel for the Company shall reasonably request.
(d) Number
of Shares.
At or
before the Closing, the Shareholders shall surrender to the Company certificates
representing the balance of the total issued and outstanding shares of EYII
Common Stock not held by the Company, and such certificates shall be accompanied
by appropriate stock powers in a form acceptable to the Company and executed
by
the respective Shareholder, assigning such certificates to the Company, free
and
clear of any liens, claims, options, charges, and encumbrances of any
nature.
(e) Consents.
The
Shareholders shall have obtained the consent or approval of each person whose
consent or approval shall be required in connection with the transactions
contemplated hereby under any loan or credit agreement, note, mortgage,
indenture, lease or other agreement or instrument, except those for which
failure to obtain such consents and approvals would not, in the reasonable
opinion of the Company, individually or in the aggregate, have a material
adverse effect on EYII and its subsidiaries and related entities taken as a
whole upon the consummation of the transactions contemplated hereby.
4.3. Conditions
to Obligations of the Shareholders.
The
obligation of the Shareholders to effect the Exchange is subject to the
satisfaction of the following conditions unless waived by the
Shareholders:
(a) Representations
and Warranties.
The
representations and warranties of the Company set forth in this Agreement shall
be true and correct in all material respects as of the date of this Agreement
and (except to the extent such representations speak as of an earlier date)
as
of the Closing Date as though made on and as of the Closing Date, except as
otherwise contemplated by this Agreement, the Shareholders shall have each
received a certificate signed on behalf of the Company by the President to
such
effect.
(b) Performance
of Obligations of the Company.
The
Company shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing Date,
and
each Shareholder shall have received a certificate signed on behalf of the
Company by the President to such effect.
(c) Closing
Documents.
Each
Shareholder shall have received such certificates and other closing documents
as
counsel for any such Shareholder shall reasonably request.
(d) Consents.
The
Company shall have obtained the consent or approval of each person whose consent
or approval shall be required in connection with the transactions contemplated
hereby.
(e) Due
Diligence Review.
Each
Shareholder shall have completed to its reasonable satisfaction a review of
the
business, operations, finances, assets and liabilities of the Company and shall
not have determined that any of the representations or warranties of the Company
contained herein are, as of the date hereof or the Closing Date, inaccurate
in
any material respect or that the Company is otherwise in violation of any of
the
provisions of this Agreement.
6
ARTICLE
V
TERMINATION
AND AMENDMENT
5.1. Termination.
This
Agreement may be terminated at any time prior to the Closing Date:
(a) By
mutual
written consent of the Company and any Shareholder with respect to such
Shareholder;
(b) By
the
Company if there has been a material breach of any representation, warranty,
covenant or agreement on the part of any Shareholder set forth in this
Agreement, or by any Shareholder with respect to such Shareholder if there
has
been a material breach of any representation, warranty, covenant or agreement
on
the part of the Company, which breach has not been cured within five (5)
business days following receipt by the breaching party of notice of such breach;
or
(c) By
either
the Company or any Shareholder with respect to such Shareholder if any court,
Governmental Entity or other competent authority shall have issued an order,
decree or ruling, or taken any other action, enjoining, restraining or otherwise
preventing the consummation of the Exchange or any of the other transactions
contemplated hereby, and such order, decree, ruling or other action shall have
become final and non-appealable.
5.2. Effect
of Termination.
In the
event of termination of this Agreement by either the Company or a Shareholder
with respect to such Shareholder as provided in Section 5.1, this
Agreement, except for the provisions of this Section 5.2 and Article V, shall
forthwith become void, and there shall be no liability or obligation on the
part
of any Party hereto. In such event, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be
paid by the Party incurring such expenses. Nothing in this Section 5.2
shall relieve any Party for liability for any breach of this
Agreement.
5.3. Amendment.
This
Agreement may be amended by the Company and the Shareholders, by action taken
or
authorized by the Board and by each Shareholder, provided no amendment shall
be
made which by law requires approval by the shareholders of any Party without
such further approval. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the Parties hereto.
5.4. Extension;
Waiver.
At any
time prior to the Closing Date, the Company and the Shareholders, by action
taken or authorized by the Board and by each Shareholder, may, to the extent
legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other Parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a Party
hereto to any such extension or waiver shall be valid only if set forth in
a
written instrument signed on behalf of such Party.
ARTICLE
VI
INDEMNIFICATION
6.1. Indemnification
by the Shareholders.
Each
Shareholder (hereinafter called the “Shareholder Indemnitor”) shall defend,
indemnify and hold harmless the Company and its subsidiaries and affiliates,
their officers, directors, employees and agents (hereinafter, collectively,
called the “Company Indemnitee”) against and in respect of any and all loss,
damage, liability, fine, penalty, cost and expense, including reasonable
attorneys’ fees and amounts paid in settlement (collectively, the “Company
Losses”), suffered or incurred by any Company Indemnitee by reason of, or
arising out of such Shareholder’s misrepresentation, breach of warranty or
breach or non-fulfillment of any agreement contained in this Agreement or in
any
certificate, schedule, instrument or document delivered to the Company by or
on
behalf of such Shareholder pursuant to the provisions of this
Agreement.
6.2. Indemnification
by the Company.
The
Company (hereinafter called the “Company Indemnitor”) shall defend,
indemnify and hold harmless each Shareholder (hereinafter called the
“Shareholder Indemnitee”) against and in respect of any and all loss,
damage, liability, cost and expense, including reasonable attorneys’ fees and
amounts paid in settlement (collectively, the “Shareholder Losses”), suffered or
incurred by any Shareholder Indemnitee by reason of or arising out of any
misrepresentation, breach of warranty or breach or non-fulfillment of any
material agreement of the Company contained in this Agreement or in any other
certificate, schedule, instrument or document delivered to the Shareholder
by or
on behalf of the Company pursuant to the provisions of this
Agreement.
7
6.3. Defense
of Claims.
(a) Each
Party seeking indemnification hereunder (an “Indemnitee”): (i) shall
provide the other Party or Parties (the “Indemnitor”) written notice of any
claim or action by a third party arising after the Closing Date for which an
Indemnitor may be liable under the terms of this Agreement, within ten
(10) days after such claim or action arises and is known to Indemnitee, and
(ii) shall give the Indemnitor a reasonable opportunity to participate in
any proceedings and to settle or defend any such claim or action. The expenses
of all proceedings, contests or lawsuits with respect to such claims or actions
shall be borne by the Indemnitor. If the Indemnitor wishes to assume the defense
of such claim or action, the Indemnitor shall give written notice to the
Indemnitee within ten (10) days after notice from the Indemnitee of such
claim or action, and the Indemnitor shall thereafter assume the defense of
any
such claim or liability, through counsel reasonably satisfactory to the
Indemnitee, provided that Indemnitee may participate in such defense at their
own expense, and the Indemnitor shall, in any event, have the right to control
the defense of the claim or action.
(b) If
the
Indemnitor shall not assume the defense of, or if after so assuming it shall
fail to defend, any such claim or action, the Indemnitee may defend against
any
such claim or action in such manner as they may deem appropriate and the
Indemnitee may settle such claim or litigation on such terms as they may deem
appropriate but subject to the Indemnitor’s approval, such approval not to be
unreasonably withheld; provided, however, that any such settlement shall be
deemed approved by the Indemnitor if the Indemnitor fails to object thereto,
by
written notice to the Indemnitee, within fifteen (15) days after the
Indemnitor’s receipt of a written summary of such settlement. The Indemnitor
shall promptly reimburse the Indemnitee for the amount of all expenses, legal
and otherwise, incurred by the Indemnitee in connection with the defense and
settlement of such claim or action.
(c) If
a
non-appealable judgment is rendered against any Indemnitee in any action covered
by the indemnification hereunder, or any lien attaches to any of the assets
of
any of the Indemnitee, the Indemnitor shall immediately upon such entry or
attachment pay such judgment in full or discharge such lien unless, at the
expense and direction of the Indemnitor, an appeal is taken under which the
execution of the judgment or satisfaction of the lien is stayed. If and when
a
final judgment is rendered in any such action, the Indemnitor shall forthwith
pay such judgment or discharge such lien before any Indemnitee is compelled
to
do so.
6.4. Waiver.
The
failure of any Indemnitee to give any notice or to take any action hereunder
shall not be deemed a waiver of any of the rights of such Indemnitee hereunder,
except to the extent that Indemnitor is actually prejudiced by such
failure.
6.5. Limitations
on Indemnification.
Notwithstanding anything to the contrary contained in this Agreement no Party
shall be responsible hereunder for any Indemnifiable Loss unless the Indemnitee
shall have provided such Party with written notice containing a reasonable
description of the claim, action or circumstances giving rise to such
Indemnifiable Loss within three (3) years after the Closing
Date.
ARTICLE
VII
GENERAL
PROVISIONS
7.1. Survival
of Representations, Warranties and Agreements.
The
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Closing Date
for a period of one (1) year.
7.2. Notices.
All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally, telecopied (which is confirmed) or mailed
by registered or certified mail (return receipt requested) to the Parties at
the
following addresses (or at such other address for a Party as shall be specified
by like notice):
|
(a) If
to the Company to:
|
0000
Xxxxxxx Xxxxxx
|
|
Xxxxxxx,
XX Xxxxxx X0X 169
|
|
|
Attention:
Xxx Xxxxxxxx
|
|
|
Telephone:
(000) 000-0000
|
|
|
Facsimile:
(000) 000-0000
|
|
|
With
a copy to:
|
Xxxxxxxxxxx
& Xxxxxxxx Xxxxxxxxx Xxxxxx LLP
|
|
000
Xxxxx Xxxxxxxx Xxxx., 00xx
Xxxxx
|
|
|
Xxxxx,
Xxxxxxx 00000
|
|
|
Attention:
Xxxxxxx X. Xxxxxx, Esq.
|
|
|
Telephone:
(000) 000-0000
|
|
|
Facsimile:
(000) 000-0000
|
8
|
(b) If
to a Shareholder, to:
|
The
Addresses Provided On
|
|
The
Signature Pages Attached Hereto.
|
|
7.3. Interpretation.
When a
reference is made in this Agreement to Sections, such reference shall be to
a
Section of this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation”. The phrase “made
available” in this Agreement shall mean that the information referred to has
been made available if requested by the Party to whom such information is to
be
made available.
7.4. Counterparts.
This
Agreement may be executed in two (2) or more counterparts, all of which shall
be
considered one and the same agreement and shall become effective when two (2)
or
more counterparts have been signed by each of the Parties and delivered to
the
other Parties, it being understood that all Parties need not sign the same
counterpart.
7.5. Governing
Law.
This
Agreement shall be governed and construed in accordance with the laws of the
State of Nevada without regard to principles of conflicts of law. Each Party
hereby irrevocably submits to the jurisdiction of any Nevada state court or
any
federal court in the State of Nevada in respect of any suit, action or
proceeding arising out of or relating to this Agreement, and irrevocably accept
for themselves and in respect of their property, generally and unconditionally,
the jurisdiction of the aforesaid courts.
7.6. No
Remedy in Certain Circumstances.
Each
Party agrees that, should any court or other competent authority hold any
provision of this Agreement or part hereof or thereof to be null, void or
unenforceable, or order any party to take any action inconsistent herewith
or
not to take any action required herein, the other Party shall not be entitled
to
specific performance of such provision or part hereof or thereof or to any
other
remedy, including but not limited to money damages, for breach hereof or thereof
or of any other provision of this Agreement or part hereof or thereof as a
result of such holding or order.
7.7. Assignment.
Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the Parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other Parties, except that
the Company may assign, in its sole discretion, any or all of its rights,
interests and obligations hereunder to any direct or indirect wholly owned
subsidiary of the Company. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the Parties
and their respective successors and assigns.
7.8. Gender.
Where
the context requires, the use of the singular form herein shall include the
plural, the use of the plural shall include the singular, and the use of any
gender shall include any and all genders.
7.9. Acceptance
by Fax.
This
Agreement shall be accepted, effective and binding, for all purposes, when
the
parties shall have signed and transmitted to each other, by telecopier or
otherwise, copies of the signature pages hereto.
7.10. Opportunity
to Hire Counsel; Role of Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxx
LLP.
Each
Shareholder acknowledges that he has been advised and has been given an
opportunity to hire counsel with respect to this Agreement and the transactions
contemplated hereby. Each Shareholder further acknowledges that the law firm
of
Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxx LLP has solely represented the
Company in connection with this Agreement and the transactions contemplated
hereby and no other entity.
7.11. Time
is of the Essence.
It is
understood and agreed among the Parties hereto that time is of the essence
in
this Agreement and this applies to all terms and conditions contained
herein.
7.12. NO
JURY TRIAL.
THE
PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY
OF
THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON
OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY DOCUMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’ ACCEPTANCE OF
THIS AGREEMENT.
9
IN
WITNESS WHEREOF,
this
Share Exchange Agreement has been signed by the Parties set forth below as
of
the date set forth above.
| THE COMPANY: | ||
| EYI INDUSTRIES, INC. | ||
| |
|
|
| /s/ Xxx Xxxxxxxx | ||
|
Name: Xxx
Xxxxxxxx
Title: President,
Chief Executive Officer and
Principal Executive Officer
|
||
| THE SHAREHOLDERS: | ||
| XXXXXXX AND XXXXX XXXXXXXXX | ||
| |
|
|
| /s/ Xxxxxxx Xxxxxxxxx | ||
|
Name: Xxxxxxx Xxxxxxxxx |
||
| /s/ Xxxxx Xxxxxxxxx | ||
|
Name: Xxxxx Xxxxxxxxx |
||
| XXXXX AND XXXXXX XXXXXXXX | ||
| |
|
|
| /s/ Xxxxx Xxxxxxxx | ||
|
Name: Xxxxx Xxxxxxxx |
||
| /s/ Xxxxxx Xxxxxxxx | ||
|
Name: Xxxxxx Xxxxxxxx |
||
| XXXXXXX AND XXXXX XXXXXXXXX | ||
| |
|
|
| /s/ Xxxxxxx Xxxxxxxxx | ||
|
Name: Xxxxxxx Xxxxxxxxx |
||
| /s/ Xxxxx Xxxxxxxxx | ||
|
Name: Xxxxx Xxxxxxxxx |
||
| XXXX X. XXXXXX, an Individual | ||
| |
|
|
| /s/ Xxxx X. Xxxxxx | ||
|
Name: Xxxx X. Xxxxxx |
||
| XXXXXXX XXXXXXXXXX, an Individual | ||
| |
|
|
| /s/ Xxxxxxx Xxxxxxxxxx | ||
|
Name: Xxxxxxx Xxxxxxxxxx |
||
10
| XXXXX & XXXXXX XXXXX | ||
| |
|
|
| /s/ Xxxxx Xxxxx | ||
|
Name: Xxxxx Xxxxx |
||
| /s/ Xxxxxx Xxxxx | ||
|
Name: Xxxxxx Xxxxx |
||
| XXXXX AND XXXX XXXXXX | ||
| |
|
|
| /s/ Xxxxx Xxxxxx | ||
|
Name: Xxxxx Xxxxxx |
||
| /s/ Xxxx Xxxxxx | ||
|
Name: Xxxx Xxxxxx |
||
| XXXXX CRUEL & ASSOCIATES, LLC | ||
| |
|
|
|
Name: Xxxxx
Cruel
Title:
|
||
| XXXXX XXXXX, an Individual | ||
| |
|
|
| /s/ Xxxxx Xxxxx | ||
|
Name: Xxxxx Xxxxx |
||
| GLOBAL TRENDS, INC. | ||
| |
|
|
| /s/ Art Burleigh | ||
|
Name: Art
Burleigh
Title:
|
||
| XXXX XXXXXX, an Individual | ||
| |
|
|
| /s/ Xxxx Xxxxxx | ||
|
Name: Xxxx
Xxxxxx
|
||
11
| XXXXX XXXXXXXXX, an Individual | ||
| |
|
|
| /s/ Xxxxx Xxxxxxxxx | ||
|
Name: Xxxxx Xxxxxxxxx |
||
| LIANA JANUARY | ||
| |
|
|
| /s/ Liana January | ||
|
Name: Liana January |
||
| NEW U INC. | ||
| |
|
|
| /s/ Xxxx XxXxxxxx | ||
|
Name: Xxxx
XxXxxxxx
Title:
|
||
| NHC LTD. | ||
| |
|
|
| /s/ Xxx Xxxxxxxx | ||
|
Name: Xxx
Xxxxxxxx
Title:
|
||
| /s/ Xxxxx Xxxxxxxx | ||
|
Name: Xxxxx
Xxxxxxxx
Title:
|
||
| XXXXX XXXXXX, an Individual | ||
| |
|
|
| /s/ Xxxxx Xxxxxx | ||
|
Name: Xxxxx Xxxxxx |
||
| PURPLE DOLPHIN ENTERPRISES | ||
| |
|
|
| /s/ Xxxxxxxx Xxxxxxxxx | ||
|
Name: Xxxxxxxx
Xxxxxxxxx
Title:
|
||
12
| XXXXX XXXXXXX, an Individual | ||
| |
|
|
| /s/ Xxxxx Xxxxxxx | ||
|
Name: Xxxxx
Xxxxxxx
|
||
| XXXXXX AND XXXXX XXXXXX | ||
| |
|
|
| /s/ Xxxxxx Xxxxxx | ||
|
Name: Xxxxxx
Xxxxxx
|
||
| /s/ Xxxxx Xxxxxx | ||
|
Name: Xxxxx
Xxxxxx
|
||
| XXXXXX XXXXXX XXXX, an Individual | ||
| |
|
|
| /s/ Xxxxxx Xxxxxx Xxxx | ||
|
Name: Xxxxxx
Xxxxxx Xxxx
|
||
| XXXXXX AND XXXXXXXX XXXXX | ||
| |
|
|
|
Name: Xxxxxx
Xxxxx
|
||
|
Name: Xxxxxxxx
Xxxxx
|
||
| XXXXXXXX XXXXXXXXXXXXX, an Individual | ||
| |
|
|
| /s/ Xxxxxxxx Xxxxxxxxxxxxx | ||
|
Name: Xxxxxxxx
Xxxxxxxxxxxxx
|
||
| XXXXXX XXXXXXX-XXXXX, an Individual | ||
| |
|
|
| /s/ Xxxxxx Xxxxxxx-Xxxxx | ||
|
Name: Xxxxxx
Xxxxxxx-Xxxxx
|
||
13
| THE XXX X. XXXXXXX REVOCABLE TRUST | ||
| |
|
|
| /s/ Xxx X. Xxxxxxx | ||
|
Name:
Title:
|
||
| XXXXXX XXXXXX, an Individual | ||
| |
|
|
|
Name: Xxxxxx
Xxxxxx
|
||
| W. XXXXXXX XXXXX & XXXXXX X. XXXXX | ||
| |
|
|
| /s/ Xxxx Xxxxx | ||
|
Name: W.
Xxxxxxx Xxxxx
|
||
| /s/ Xxxxxx Xxxxx | ||
|
Name: Xxxxxx
X. Xxxxx
|
||
| WFGS INC. | ||
| |
|
|
| /s/ Xxxxx Xxxxxx | ||
|
Name: Xxxxx
Xxxxxx
Title:
|
||
| XXXXXX & XXXXXXX XXXXXXX | ||
| |
|
|
| /s/ Xxxxxx Xxxxxxx | ||
|
Name: Xxxxxx
Xxxxxxx
|
||
| /s/ Xxxxxxx Xxxxxxx | ||
|
Name:
Xxxxxxx
Xxxxxxx
|
||
| XXXXXXX XXXXXX | ||
| |
|
|
| /s/ Xxxxxxx Xxxxxx | ||
|
Name: Xxxxxxx
X.
Xxxxxx
|
||
14
|
Name
of Shareholder
|
Number
of Shares
|
|
The
Xxx X. Xxxxxxx Revocable Trust
|
51,425
|
|
Xxxxxxx
& Xxxxx Xxxxxxxxx
|
769,075
|
|
Xxxxx
and Xxxxxx Xxxxxxxx
|
34,539
|
|
Xxxx
X. Xxxxxx
|
23,026
|
|
Xxxxxxx
Xxxxxxxxxx
|
7,675
|
|
Xxxxx
& Xxxxxx Xxxxx
|
112,828
|
|
Xxxxx
and Xxxx Xxxxxx
|
46,052
|
|
Xxxxx
Xxxxx
|
230,262
|
|
Global
Trends, Inc.
|
158,627
|
|
Xxxx
Xxxxxx
|
25,582
|
|
Xxxxxxx
Xxxxxx
|
51,425
|
|
Xxxxx
Xxxxxxxxx
|
11,513
|
|
Liana
January
|
7,675
|
|
New
U Inc.
|
102,344
|
|
NHC
Ltd.
|
23,026
|
|
Xxxxx
Xxxxxx
|
61,403
|
|
Purple
Dolphin Enterprises
|
11,513
|
|
Xxxxx
Xxxxxxx
|
15,351
|
|
Xxxxxx
and Xxxxx Xxxxxx
|
133,045
|
|
Xxxxxx
Xxxxxx Xxxx
|
15,351
|
|
Xxxxxxxx
Xxxxxxxxxxxxx
|
11,513
|
|
Xxxxxx
Xxxxxxx-Xxxxx
|
7,675
|
|
W.
Xxxxxxx Xxxxx & Xxxxxx X. Xxxxx
|
26,864
|
|
WFGS
Inc.
|
51,172
|
|
Xxxxxx
& Xxxxxxx Xxxxxxx
|
10,362
|
|
TOTAL
|
1,999,323
|
