SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement"), is
entered into and effective as of March 1st, 2001, by and
between ▇▇▇▇▇▇ ▇▇▇▇▇, as the authorized representative of
the shareholders of ▇▇▇▇▇▇▇▇.▇▇▇, Inc., who are parties
to this Agreement and whose names are set forth in the
attached Schedule "A", (collectively the "SHAREHOLDERS"),
▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Florida corporation (E.H.1.), ▇.▇.
▇▇▇▇▇▇, as Escrow Agent, and KenRoy Communications Corp.
Inc., a Nevada corporation. ("the Company").
1. RECITALS
This Agreement is entered into with reference to and in
contemplation of the following facts, circumstances and
representations:
1.1. The SHAREHOLDERS are the owners of all of the
ownership or membership interests in E.H.1. (the "E.H. 1
Shares").
1.2. The Company desires to issue a total of 10,000,000
shares of its common stock (the Shares") to the
SHAREHOLDERS in exchange for the E.H.1 Shares.
1.3. The SHAREHOLDERS desire to exchange the E.H.1 Shares
for the Shares in accordance with the terms and
conditions of the Agreement.
1.4. E.H.1 desires that this transaction be consummated.
2. EXCHANGE AND ISSUANCE OF SHARES
2.1. Exchange of the Shares: The Company shall exchange
and deliver to the SHAREHOLDERS, a total of 10,000,000
restricted shares of the Company common stock in
accordance with the allocation set forth in the attached
Schedule "A".
2.2. Exchange of E.H.1 Shares: At the closing, the
SHAREHOLDERS shall exchange and deliver to the Company
the 2,750 E.H.1 Shares which represent all of the
ownership interests in E.H.1.
2.3. Nature of the Shares: The SHAREHOLDERS shall be
issued the Company Shares, which unless otherwise
contractually restricted, shall be subject to a one (1)
year holding period before the Company Shares are
eligible for sale in the U.S. public market. The sale of
the Company Shares will be further limited by the resale
provisions of SEC Rule 144.
2.4. Restricted Nature of the Company Shares:
Notwithstanding the one (1) year holding period for the
Company Shares, a SHAREHOLDER who becomes an "affiliate"
or "control person" of the Company will be subject to
certain limitations with respect to the sale of the
Company Shares. Accordingly, as a result of such a
designation, the sale of the Company Shares will be
limited by SEC Rule 144.
2.5. Private Sale Acknowledgment: The parties acknowledge
and agree that the exchange and issuance of the Company
Shares is being undertaken as a private sale pursuant to
Section 4(2) of the Securities Act of 1933, as amended,
and is not being transacted via a broker-dealer and/or in
the public market place.
2.6. Status of Present Share ownership and Contemplated
Share Issuance by the Company: The parties hereto
acknowledge and agree that the Company will issue
10,220,000 Company Shares. Accordingly, and upon the
Closing of the share exchange contemplated by this
Agreement, the following will be resulting share
ownership of the Company:
Name No Shares %Ownership
Original Company Shareholders 220,000 2.156%
E.H.1 Shareholders 10,000,000 97.844%
______________ Totals 10,220,000 100%
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The COMPANY represents and warrants to the SHAREHOLDERS
and E.H.1. as follows:
3.1. Organization: The Company is a corporation duly
incorporated and validly existing under the laws of the
State of Nevada and is in good standing with respect to
all of its regulatory filings.
3.2 Capitalization: The authorized capital of the
Company consists of 20,000,000 common shares with a no
par value with the exception of the common shares
described in Paragraph 2.6. No other common shares will
have been validly authorized and issued by the COMPANY
prior to the Closing of the contemplated share exchange.
3.3 Financial Statements: The Company has furnished to
the SHAREHOLDERS and E.H.1. unaudited financial
statements for the period ending December 31, 2000.
Moreover, at the Closing the financial affairs of the
Company will be materially the same as represented in the
financial statements for the period ending December 31,
2000.
3.4 Books and Records: All material transactions of the
Company have been promptly and properly recorded or filed
in or with its books and records and the Minute Book of
the Company contains records of all meetings and
proceedings of the shareholders and directors thereof.
3.5 Legal Compliance: To the best of its knowledge, the
Company is not in breach of any laws, ordinances,
statutes, regulations, by-laws, orders or decrees to
which the Company is subject or which apply to it or any
of its assets.
3.6 Tax Returns: All tax returns and reports of the
Company required by law to be filled prior to the date
hereof have been filed and are substantially true,
complete and correct and all taxes and governmental
charges have been paid.
3.7 Adverse Financial Events: The Company has not
experienced nor is it aware of any occurrence or event,
which has had or might reasonably be expected to have a
material adverse effect on its financial condition.
3.8 Disputes, Claims and Investigations: There are no
disputes, claims, actions, suits, judgments,
investigations or proceedings outstanding or pending or
to the knowledge of the Company threatened against or
affecting the Company at law or in equity or before or by
any federal, state, municipal or other governmental
department, commission, board, bureau or agency.
3.9 Employee Liabilities: The Company has no known
liability to former employees or any liability to any
governmental authorities with respect to current or
former employees.
3.10. Conflicts or Agreement Violations: The
execution, delivery and performance of this Agreement
will not conflict with or be in violation of the
articles or by-laws of the Company or of any
agreement to which the Company is party and will not
give any person or company a right to terminate or
cancel any agreement or right enjoyed by the Company and will
not result in the creation or imposition of any
lien, encumbrance or restriction of any nature
whatsoever in favor of a third party upon or against
the assets of the Company.
3.11. Validly Issued and Authorized the Company Shares:
The Shares will be validly authorized and issued by the
Company, they will be fully paid and non-assessable, and
they will be issued in full compliance with all federal and
state securities laws.
3.12. Restrictive Legend: That the Company Shares will
have a restrictive legend imposed thereon identifying them as
"Restricted Shares" which are subject to the conditions and
limitations of SEC Rule 144 with respect to their sale in
the U.S. public market place.
3.13. Validly Issued and Authorized Outstanding Shares
of The Company: That all of the issued and outstanding
common shares of the Company are validly issued, authorized and
issued, fully paid, and non-assessable, and that the outstanding
shares have been so issued in full compliance with all federal
and state securities laws.
3.14. Corporate Authority: The officers or representatives of the
Company executing this Agreement represent that they have been
authorized to execute this Agreement pursuant to a resolution of
the Board of Directors of the Company.
4. REPRESENTATIONS OF SHAREHOLDERS AND E.H.1.
The Shareholders and E.H.1 collectively and individually
hereby represent and warrant to the Company as follows:
4.1 Share Ownership: The SHAREHOLDERS are the owners,
beneficially and of record, of 2,750 E.H.1 Shares and
said shares are free and clear of all liens,
encumbrances, claims, charges and restrictions, except
those persons listed in Schedule A, who are former
investors of ▇▇▇▇▇▇ ▇▇▇▇▇, and whose shares shall be
allocated and issued from ▇▇▇▇▇'▇ respective shares.
4.2 Transferability of E.H.1 Shares: The SHAREHOLDERS
have full power to transfer the E.H.1 Shares to the
Company without obtaining the consent or approval of any
other person or governmental authority.
4.3 Validly Issued and Authorized Shares: The E.H.1
Shares are validly authorized and issued, fully paid, and
nonassessable, and the E.H.1 Shares have been so issued
in full compliance with all securities laws of the State
of Florida.
4.4 Organization: E.H.1 is a corporation duly
incorporated and validly existing under the laws of the
State of Florida and is in good standing with respect to
all of its regulatory filings.
4.5 Capitalization: The E.H.1 Shares represent one
hundred percent (100%) of the ownership or membership
interest in E.H.1 and that such interest were validly
issued and are fully paid on non-assessable interest.
4.6 Financial Statements: E.H.1 will furnished to the
Company audited financial statements for the period
ending December 31, 2000. At the closing the financial
affairs of E.H.1 will be materially the same as
represented in these same financial statements.
4.7 Books and Records: All material transactions of
E.H.1 have been promptly and properly recorded or filed
in or with its books and records, and the Minute Book
of E.H.1 contains records of all meetings and
proceedings of the members and directors thereof.
4.8 Legal Compliance: E.H.1 is not in breach of any
laws, ordinances, statutes, regulations, by-laws, orders
or decrees to which E.H.1 is subject or which apply to it
or any of its assets.
4.9 Tax Returns: All tax returns and reports of E.H.1
required by law to be filed prior to the date hereof have
been filed and are true, complete and correct and all
taxes and governmental charges have been paid.
4.10. Adverse Financial Events: E.H.1. has not
experienced nor is it aware of any occurrence or event
which had or might reasonably be expected to have a
material adverse effect on its financial condition.
4.11. Disputes, Claims and Investigations: There are
no disputes, claims, actions, suits, judgments, investigations
or proceedings outstanding or pending or to the knowledge of
E.H.1 threatened against or affecting E.H.1 at law or in
equity or before or by any federal, municipal or other governmental
department, commission, board, bureau or agency.
4.12. Employee Liabilities: E.H.1 has no liability to
former employees or any liability to any government authorities with
respect to current or former employees.
4.13. No Conflicts or Agreement Violations: The execution, delivery
and performance of this Agreement will not
conflict with or be in violation of the Articles of Incorporation
of E.H.1 or of any agreement to which E.H.1 is a
party and will not give any person or company a right to terminate
or cancel any agreement or right enjoyed by E.H.1 and
will not result in the creation or imposition of any lien,
encumbrance or restriction of any nature whatsoever in favor of
a third party upon or against the assets of E.H.1.
4.15. No Liens: That E.H.1 has not received a notice of any
assignment, lien, encumbrance, claim or charge against the E.H.1
shares.
4.16. Corporate Authority: The officers or representatives of
E.H.1 executing this agreement represent that they have been
authorized to execute this Agreement pursuant to a resolution
of the Board of Directors of E.H.1
5. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS ALONE
The SHAREHOLDERS alone further represent and warrant to
the Company as follows with respect to the Company
Shares:
5.1 Financially Responsible: That they are financially
responsible, able to meet their obligations and acknowledge
that this investment will be speculative.
5.2 Investment Experience: That they have had experience
in the business of investments in one or more of the following:
(i) investment experience with securities such as stocks
and bonds; (ii) ownership of interest in partnerships,
new ventures and start-up companies; (iii) experience
in business and financial dealings; and that they can protect
their own interest in an investment of this nature and they
do not have an "Investor Representative", as that term
is defined in Regulation D of the Securities Act of 1933 and
do not need such and Investor Representative.
5.3 Investment Risk: That they are capable of bearing
the high degree of economic risks and burdens of this
investment, including but not limited to the possibility
of complete loss of all their investment capital and the
lack of a liquid market, such that they may not be able
to liquidate readily the investment whenever desired or
at the then current asking price.
5.4 Access to Information: That they have had access to
the information regarding the financial condition of the
Company and they were able to request copies of such
information, ask questions of and receive answers from
the Company regarding such information and any other
information he desires concerning the Company shares, and
all such questions have been answered to his full
satisfaction.
5.5 Private Transaction: That at no time were they
presented with or solicited by any leaflet, public
promotional meeting, circular, newspaper or magazine
article, radio or television advertisement or any other
form of general advertising
5.6 Investment Intent: The Company Shares are not being
purchased with a view to or for the resale or
distribution thereof and they have no present plans to
enter into any contract, undertaking, agreement or
arrangement for such resale or distribution.
5.7 Due Diligence: That the SHAREHOLDERS shall have
completed a due diligence review of the affairs of the
Company and are satisfied with the results.
6 CLOSING, ESCROW HOLDER AND CONDITIONS TO CLOSING
6.1 Exchange Closing: The closing of the share
exchange as contemplated by this Agreement (the
"Closing") shall take place in Los Angeles, California,
at such time and place as may be agreed among by the
parties, but in no event later than March 31 2001,
unless otherwise extended in writing by the parties.
6.2 Closing: Prior to the Closing the following will be
required:
1. Delivery of E.H.1 Shares: The SHAREHOLDERS shall
deliver to E.H.1. the Escrow Holder the certificate
or certificates representing the 2,750 shares
registered in the name of the SHAREHOLDERS duly
endorsed for transfer accompanied by duly
executed assignments of the E.H.1 Shares to the
Company.
2. Delivery of the Company Shares: The Company
shall deliver to the. Escrow Holder a total of
10,220,000 of the Company Shares registered
in the names of the SHAREHOLDERS as set forth
in Schedule "A."
3. Delivery of Certificates of Good Standing:
Each party shall deliver to the Escrow Holder a
current Certificate of Good Standing issued
respectively by the Florida Secretary of State
and California Secretary of State.
4. Requisite Corporate Resolutions: Each party
shall deliver to the Escrow Holder certified
copies of resolutions for their respective
Boards of Directors authorizing the subject
transaction.
5. Satisfactory Completion of Due Diligence: Each
party shall deliver to the Escrow holder
written notice that is has completed its due
diligence investigation and is satisfied with
the results of such investigation.
6. Documents: Both parties shall deliver to
the Escrow Holder such other documents as are
required by the terms and conditions of the
Agreement.
7. Appointment of Directors: The Company
shall deliver to the Escrow Holder certified
resolutions of the The Company Board of
Directors for the following actions (1) the
appointment of ▇▇▇▇▇ ▇▇▇▇▇ as the President of
the Company; and (2) the appointment of ▇▇▇▇▇
▇▇▇▇▇▇▇ as Secretary of the Company.
8. Close of Transaction: The subject transaction
shall close upon the satisfaction of the above
conditions.
9. Notices: All notices given pursuant to the
Agreement must be in writing and may be
given by (1) personal delivery, or (2)
registered or certified mail, return receipt
requested, or (3) via facsimile transmission
to the Escrow Holder and the parties as set
forth below. Any party hereto may by notice
so given change its address for any future notices:
ESCROW HOLDER ▇.▇. ▇▇▇▇▇▇
Suite 151
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
SHAREHOLDERS ▇▇▇▇▇▇ ▇▇▇▇▇
AND E.H.1. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
The Company ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
7 COOPERATION,ARBITRATION, INTERPRETATION, MODIFICATION
AND ATTORNEY FEES
7.1 Cooperation of parties: The parties further agree
that they will do all things necessary to accomplish
and facilitate the purpose of this Agreement and that they
will sign and execute any and all documents
necessary to bring about and perfect the purposes of this
Agreement.
7.2 Arbitration: The parties hereby submit all controversies,
claims and matters of difference arising out of this
Agreement to arbitration in Los Angeles, California according
to the rules and practices of the American Arbitration
Association from time to time in force. The submission and
agreement to arbitrate shall be specifically enforceable.
The Agreement shall, further be governed by the laws
of the State of California.
7.3 Interpretation of Agreement: The Parties agree that
should any provision of this Agreement be found to be
ambiguous in any way, such ambiguity shall not be
resolved by construing such provisions or any part of or
the entire Agreement in favor of or against any party
herein, but rather by construing the terms of the
Agreement fairly and reasonably in accordance with their
generally accepted meaning.
7.4 Modification of Agreement: This Agreement may be
amended or modified in any way at any time by an
instrument in writing stating the manner in which it is
amended or modified and signed by each of the parties
hereto. Any such writing amending or modifying this
Agreement shall be attached to and kept with this
Agreement.
7.5 Attorney Fees: If any legal action or any
arbitration or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in
connection with any of the provisions of the Agreement,
the successful or prevailing party shall be entitled to
recover reasonable attorneys' fees and other costs
incurred in that action or proceeding, in addition to any
other relief to which it may be entitled.
7.6 Entire Agreement: This Agreement constitutes the
entire Agreement and understanding of the parties hereto
with respect to the matters herein set forth, and all
prior negotiations, writings and understandings relating
to the subject matter of this Agreement are merged herein
and are superseded and canceled by this Agreement.
7.7 Counterparts: This Agreement may be signed in one
or more counterparts.
7.8 Facsimile Transmission Signatures: A signature
received pursuant to a facsimile transmission shall be
sufficient to bind a party to this Agreement.
SHAREHOLDERS OF
▇▇▇▇▇▇▇▇.▇▇▇, INC.
Dated: 3/7/01 By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
Their Authorized Representative
Dated: 3/7/01 ▇▇▇▇▇▇▇▇.▇▇▇, INC.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
Dated: 3-7-01 KENROY COMMUNICATIONS CORP. INC.
/s/ ▇▇▇ Royceton
By: _________________________
Title: President
Dated: 12 March 01 ESCROW AGENT
/s/ ▇. ▇. ▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇