SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement"), dated May 31, 1998, is
between ▇▇▇▇▇▇▇ Capital Ltd. located at Tropic Isle Building Road Town, Tortolla
British Virgin Islands ("Seller"), and EYEQ Networking, Inc., a Delaware
corporation (hereinafter "EYEQ" or "Buyer"). Buyer desires to acquire from
Seller, and Seller is willing to transfer to Buyer, upon the terms and
conditions of this Agreement, that aggregate number of shares of common stock
set forth under Seller's name on the signature page hereof, that Seller owns
(the "JET Shares") in Jet Aviation Trading, Inc. a Florida corporation.
1 Transfer by Seller. In exchange for the consideration set forth
below, at Closing (as defined in paragraph 3), Seller will transfer and convey
the JET Shares to Buyer, free and clear of all liabilities, security interests,
liens, pledges, claims and encumbrances.
2 Acquisition Price. The aggregate acquisition price for the JET Shares
shall be one share of Common Stock $.001 par value per share, of Buyer, issued
by the Buyer, for every two and one-half (2.5) JET Shares transferred hereunder
(the "EYEQ Shares"). The acquisition price will be equitably adjusted for any
stock splits, reverse stock splits, stock combinations or recapitalizations of
Buyer which occur after April 22, 1998 and prior to closing as set forth in
Section 3 hereof.
3 Closing.
3.1 Time and Place. The closing for the exchange (the
"Closing") will be held at the offices of Klehr, Harrison, ▇▇▇▇▇▇, Branzburg &
▇▇▇▇▇▇ LLP ("KHHBE"), located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, on May 4, 1998 (the "Closing Date") or as soon as practicable after
the satisfaction of the condition set forth in Section 8.1 hereof, provided
that, if the Closing has not been completed by May 31, 1998, this Agreement will
terminate and neither party will have any further obligations to the other
except for any breach of its obligations hereunder.
3.2 Delivery by Seller. At the Closing, Seller will deliver to
Buyer certificates representing the JET Shares, duly endorsed for transfer.
3.3 Delivery by Buyer. At the Closing, Buyer shall deliver to
Seller a certificate representing the EYEQ Shares.
4 Representations and Warranties by Seller. Seller represents and
warrants to Buyer as follows:
4.1 Ownership and Power to Transfer. Seller is the lawful
owner, of record and beneficially, of the JET Shares free and clear of all
liabilities, security interests, liens, pledges, claims and encumbrances. Upon
delivery of certificates representing the JET Shares as contemplated by this
Agreement, Buyer will acquire good title to the JET Shares, free and clear of
any liability, security interest, lien, pledge, claim or encumbrance of any
nature whatsoever other than any restrictions on the transfer of the JET Shares
required by the Securities Act of 1933, as amended (the "Securities Act").
4.2 Validity of the Agreement. This Agreement constitutes the
legal, valid and binding agreement of Seller enforceable against Seller in
accordance with its terms.
4.3 Absence of Litigation. There is no litigation, proceeding,
claim or investigation pending or threatened, against or affecting the JET
Shares, whether or not fully covered by insurance, nor is there any valid basis
for any such litigation, proceeding, claim or investigation.
4.4 No Violation. Neither the execution or delivery of this
Agreement by Seller, nor the performance by Seller of any of the transactions
contemplated hereby (i) conflicts with, or constitutes a breach or default under
(a) any applicable judgment, order, writ, injunction or decree of any court or
(b) any applicable law or any applicable rule or regulation of any
administrative agency or governmental or regulatory authority or (ii) violates,
conflicts with, or constitutes a default (or an event or condition that, with
notice or lapse of time or both, would constitute a default) under, any
contract, commitment, understanding, arrangement, agreement or restriction of
any kind or character to which Seller is a party or may be bound.
4.5 Additional Representations and Warranties. The Seller
represents and warrants as follows, which representations and warranties shall
be true and correct as of the date when made and as of the Closing Date as
though made at that time:
(a) Seller is acquiring the EYEQ Shares for its own
account for investment purposes only and not with a view to the resale or
distribution thereof.
(b) Seller has not and will not, directly or
indirectly, offer, sell, transfer, assign, exchange or otherwise dispose of all
or any part of the EYEQ Shares, except in accordance with the provisions of this
Agreement and the Securities Act. Seller understands that Buyer has no present
intention of registering the resale of the EYEQ Shares other than as
contemplated by Section 7 hereof.
(c) Seller is acquiring the EYEQ Shares without
having relied upon any offering literature or prospectus. Seller has such
knowledge and experience in financial, business and tax matters that Seller is
capable of evaluating the merits and risks relating to Seller's investment in
the EYEQ Shares and making an investment decision with respect to Buyer.
(d) To the full satisfaction of Seller, Seller has
been given the opportunity to obtain information and documents relating to Buyer
and to ask questions of and receive answers from representatives of Buyer
concerning Buyer and the investment in the EYEQ Shares.
(e) Seller has adequately analyzed the risks of an
investment in the EYEQ Shares and has determined that the EYEQ Shares are a
suitable investment for Seller and that Seller is able at this time, and in the
foreseeable future, to bear the economic risk of a total loss of its investment
in Buyer.
(f) Seller is aware that there are substantial risks
attendant to an investment in the EYEQ Shares.
(g) Seller is an "accredited investor" as defined in
Rule 501 of Regulation D of the Securities Act ("Regulation D") as presently in
effect and is purchasing the EYEQ Shares for its own account and the Seller, if
an entity, has not been formed for the specific purpose of acquiring the EYEQ
Shares.
(h) Seller understands that no United States federal
or state agency or any other government or governmental agency has passed upon
or made any recommendation or endorsement of the EYEQ Shares.
(i) Seller understands that the EYEQ Shares are being
offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and
that Buyer is relying upon the truth and accuracy of, and Seller's compliance
with, the representations, warranties, and agreements, of Seller set forth
herein in order to determine the availability of such exemptions and the
eligibility of Seller to acquire such EYEQ Shares.
(j) Seller is a resident of the jurisdiction set
forth under Seller's name on the signature page hereof.
5 Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows, which representations and warranties shall be
true and correct as of the date when made and as of the Closing Date as though
made at that time:
5.1 Fees or Commissions. Buyer has not made any agreement or
taken any action which might cause anyone to become entitled to a broker's fee
or commission as a result of the transactions contemplated hereunder.
5.2 Validity of the Agreement. This Agreement constitutes the
legal, valid and binding agreement of Buyer enforceable against Buyer in
accordance with its terms.
5.3 Absence of Litigation. There is no litigation, proceeding,
claim or investigation pending or threatened, against or affecting the EYEQ
Shares, whether or not fully covered by insurance, nor is there any valid basis
for any such litigation, proceeding, claim or investigation.
5.4 No Violation. Neither the execution or delivery of this
Agreement by Buyer, nor the performance by Buyer of any of the transactions
contemplated hereby (i) conflicts with, or constitutes a breach or default under
(a) any applicable judgment, order, writ, injunction or decree of any court or
(b) any applicable law or any applicable rule or regulation of any
administrative agency or governmental or regulatory authority or (ii) violates,
conflicts with, or constitutes a default (or an event or condition that, with
notice or lapse of time or both, would constitute a default) under, any
contract, commitment, understanding, arrangement, agreement or restriction of
any kind or character to which Buyer is a party or may be bound.
5.5 No General Solicitation. Buyer has not conducted any
"general solicitations" as such term is defined in Regulation D, with respect to
the EYEQ Shares being offered hereby.
6 Indemnity.
6.1 Seller shall indemnify Buyer, and hold Buyer harmless from
and against, any loss, liability, claim, obligation, damage or deficiency,
including interest, penalties and reasonable attorneys fees and expenses
(collectively "Damages") arising from any misrepresentation or breach of
warranty made by Seller in this Agreement or any nonfulfillment by Seller of any
obligation on the part of Seller set forth in this Agreement.
6.2 Buyer shall indemnify Seller and hold Seller harmless from
and against any Damages arising from any misrepresentation or breach of warranty
made by Buyer in this Agreement or any nonfulfillment by Buyer of any obligation
on the part of Buyer set forth in this Agreement.
6.3 Any party which may be entitled to indemnification under
this Agreement shall give prompt notice to the indemnifying party. The
indemnifying party shall have the right, at its expense, to assume and direct
the investigation and defense of any claim, action or proceeding, including the
selection of counsel, provided any counsel selected by the indemnifying party is
reasonably satisfactory to the indemnified party. No settlement for monetary
payment which is the subject of indemnity under this Agreement shall be made
without the consent of the indemnifying party and the indemnifying party shall
have the right to direct proceedings with respect to such settlement. All
amounts to which an indemnified party may be entitled hereunder shall be
advanced by the indemnifying party as such amounts are incurred.
6.4 Remedies Cumulative. Except as expressly provided in this
Agreement, the remedies provided herein shall be cumulative and shall not
preclude assertion by any party hereto of any other rights or the seeking of any
other remedies against any other party hereto.
7 Registration Rights.
7.1 If, at any time after the Closing, Buyer proposes to
register any of its shares of Common Stock under the Securities Act other than
pursuant to a registration effected to implement an employee benefit plan or a
transaction to which Rule 145 or any similar rule of the Securities and Exchange
Commission under the Securities Act applies, whether or not for sale for its own
account, Buyer shall give written notice thereof to the Sellers and upon written
request of any Seller, given within 15 days after the receipt of any such
written notice, Buyer will include in such registration statement any or all of
the EYEQ Shares acquired pursuant to this Agreement then owned by such Seller;
provided, however, that (i) the maximum number of shares to be sold shall not
exceed the number which the managing underwriter, if any, considers, in good
faith, to be appropriate based on market conditions and other relevant factors
(including pricing); and (ii) if the total number of shares desired to be sold
exceeds such amount, Buyer shall be entitled to include in such registration
statement the full amount of shares that it desires to include, and the Sellers,
together with any other shareholders who elect to participate in the offering,
shall be entitled to sell up to any remaining amount of shares pro rata in
proportion to the number of shares requested to be included therein.
7.2 Withdrawal of Shares. If the number of shares to be
included in a registration statement pursuant to this Section 7 is reduced as
provided in Section 7.1, any Seller that previously had elected to participate
in such offering may withdraw its shares from such registration statement by
giving written notice to such effect to Buyer at any time prior to the effective
date thereof. At any time prior to such effective date, Buyer shall have the
right to withdraw such registration statement for any reason whatsoever.
7.3 Information Regarding Sellers; Underwriting Arrangements.
(a) Each Seller participating in a registration
hereunder shall furnish to Buyer such information regarding such Seller and the
distribution of such Seller's securities as Buyer may from time to time request
in order to comply with the Securities Act and the rules and regulations of the
Securities and Exchange Commission thereunder. Each Seller shall notify Buyer as
promptly as practicable of any inaccuracy or change in information previously
furnished by such Seller to Buyer or of the happening of any event as a result
of which any prospectus relating to such registration contains an untrue
statement of a material fact regarding such Seller or the distribution of such
securities or omits to state any material fact regarding such Seller or the
distribution of such securities required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and shall promptly furnish to Buyer any additional
information required to correct or update any previously furnished information
or required so that such prospectus shall not contain, with respect to such
Seller or the distribution of such securities, an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(b) Each Seller participating in a registration
hereunder shall, if requested by Buyer or the managing underwriter(s) in
connection with such registration, (i) subject to Section 7.4 hereof, agree to
sell its shares on the basis provided in any underwriting arrangements entered
into in connection therewith and (ii) complete and execute all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
customary in similar offerings.
7.4 Restrictions on Sales. Except in connection with any
registration under this Section 7, no Seller shall sell any shares of Common
Stock of EYEQ or securities convertible into or exercisable for Common Stock of
EYEQ for twelve (12) months following the Closing. In connection with any
registration under this Section 7, no Seller shall sell any shares of Common
Stock of EYEQ or securities convertible into or exercisable for Common Stock of
EYEQ, except pursuant to such registration, for the period following the
effective date of the applicable registration statement that the managing
underwriter of the offering determines is necessary to effect the offering,
which period shall not exceed 360 days.
7.5 Registration Rights Indemnification.
(a) Indemnification by Buyer. In connection with any
registration pursuant to this Section 7, Buyer shall indemnify, defend and hold
harmless each Seller participating in such registration, each person who
controls such Seller within the meaning of the Securities Act,
and each of the partners, officers, directors, employees and agents of the
foregoing in their respective capacities as such (the "Indemnitees"), to the
full extent lawful, from and against all actions, suits, claims, proceedings,
costs, damages, judgments, amounts paid in settlement and expenses (including,
without limitation, reasonable attorneys' fees and disbursements), whether joint
or several (collectively, a "Loss"), to which any such Indemnitee may become
subject under the Securities Act or any other statute or common law, insofar as
any such Loss may arise out of or be based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement thereto, or in any
filing made in connection with the qualification of the offering under blue sky
or other securities laws of jurisdictions in which the Common Stock subject to
registration rights are offered ("Blue Sky Filing"), or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein not misleading and Buyer will
reimburse each Indemnitee for any legal or other expenses reasonably incurred in
connection with investigating or defending such Loss; provided, however, that
such indemnification covenant shall not (i) apply to any Loss arising out of, or
based upon, any such untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission was made in reliance
upon and in conformity with written information furnished to Buyer by or on
behalf of such Indemnitee for use in connection with preparation of the
registration statement, any preliminary prospectus or final prospectus contained
in the registration statement, any such amendment or supplement thereto or any
Blue Sky Filing or (ii) inure to the benefit of any Indemnitee to the extent
that any such Loss arises out of such Indemnitee's failure to send or give a
copy of the final prospectus, as the same may be then supplemented or amended,
to the person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of the securities to such person if such statement or omission was corrected in
such final prospectus. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any Indemnitee and shall
survive the transfer of such securities by any Indemnitee.
(b) Indemnification by the Sellers. As a condition to
including any securities in any registration statement filed pursuant to this
Section 7, Buyer shall have received an undertaking satisfactory to it from the
prospective seller of such securities to indemnify, defend and hold harmless (in
the same manner and to the same extent as set forth in Section 7.5(a) of this
Section 7) Buyer, each director of Buyer, each officer of Buyer and each other
person, if any, who controls Buyer within the meaning of the Securities Act,
with respect to any untrue statement or alleged untrue statement in, or omission
or alleged omission from, such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein or any Blue
Sky Filing, or any amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to Buyer by or on behalf of such
seller for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement;
provided, however, in no event shall the liability of any seller under this
paragraph (b) exceed the net proceeds received by such seller (after the payment
of underwriting discounts and commissions) from the sale of its securities
pursuant to such registration statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of Buyer
or any such director, officer or controlling person and shall survive the
transfer of such securities by such seller.
(c) Notices of Claims. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim hereunder, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action, provided that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Section 7.5(c) unless the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, the indemnifying
party shall be entitled to participate in and, unless a conflict of interest
between such indemnified and indemnifying parties exists in respect of such
claim, to assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that the indemnifying party may wish, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof. In the event that the
indemnifying party advises an indemnified party that it will contest a claim for
indemnification hereunder, or fails, within 30 days of receipt of any
indemnification notice to notify, in writing, such person of its election to
defend, settle or compromise any action, proceeding or claim (or discontinues
its defense at any time after it commences such defense), then the indemnified
party may, at its option, defend, settle or otherwise compromise or pay such
action or claim with the consent of the indemnifying party, which consent shall
not be unreasonably withheld. The indemnified party shall cooperate fully with
the indemnifying party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the indemnified party that relates
to such action or claim. The indemnifying party shall keep the indemnified party
fully apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the indemnified party shall be entitled to
participate in such defense with counsel of its choice at its sole cost and
expense. If the indemnifying party does not assume such defense, the indemnified
party shall keep the indemnifying party apprised at all times as is reasonably
practicable as to the status of the defense. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its written consent; provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the consent of the indemnified party (not to be unreasonably
withheld), consent to entry of any judgment or enter into any settlement that
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.
8 Miscellaneous Terms and Conditions.
8.1 Acquisition of 50% of Jet Aviation Trading, Inc. The
parties agree that Buyer's obligations under this Agreement are conditioned upon
Buyer acquiring not less than 50% of the issued and outstanding shares of the
capital stock of Jet Aviation Trading, Inc.
8.2 Other Transactions. Prior to Closing, Seller shall not,
and shall not permit any party on Seller's behalf to, directly or indirectly,
encourage, solicit, initiate or participate in discussions or negotiations with,
or provide any information or assistance to, any corporation, partnership,
person or other entity or group (other than Buyer and Buyer's representatives)
concerning any merger, sale of securities, sale of substantial assets or similar
transactions involving Jet Aviation Trading, Inc. or the Seller.
8.3 Confidentiality. Seller and Buyer shall hold, and shall
cause their respective consultants and advisors to hold, in strict confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all documents and information concerning the other parties
furnished to it by any other party or its representatives in connection with the
transactions contemplated by this Agreement (except to the extent that such
information shall be shown to have been (a) previously known by the party to
which it was furnished, (b) in the public domain through no fault of such party
or (c) later lawfully acquired from other sources by the party to which it was
furnished), and each party shall not release or disclose such information to any
other person, except its auditors, attorneys, financial advisors, bankers and
other consultants and advisors in connection with the transactions contemplated
by this Agreement. Each party shall be deemed to have satisfied its obligation
to hold confidential information concerning or supplied by the other party if it
exercises the same care as it takes to preserve confidentiality for its own
similar information.
8.4 Execution of Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties hereto and delivered to each of the other parties
hereto.
8.5 Entire Agreement. This Agreement represents the entire
understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
and understandings heretofore made and shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, successors and
assigns.
8.6 Governing Law. This Agreement will be governed by the laws
of the State of Delaware in the United States.
8.7 Notices. All notices and other communications between the
parties shall be in writing and shall be deemed to have been given if mailed
first-class, postage prepaid to the address set forth below or such other
address as Seller or Buyer may give the other for such purpose:
If to Buyer: EYEQ Networking, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Seller: The address set forth on
the signature page hereto.
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Klehr, Harrison, ▇▇▇▇▇▇,
Branzburg & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
8.8 Further Assurances. Prior to and following the Closing, at
the request of either party, the other party or parties shall deliver any
further instruments of transfer and take all reasonable actions as may be
necessary or appropriate to (i) effectuate the conveyance of the JET Shares and
the EYEQ Shares as contemplated hereby and (ii) effectuate any of the other
transactions contemplated by this Agreement.
8.9 Specific Performance. Seller and Buyer acknowledge that,
in view of the uniqueness of the Company's business, Buyer would not have an
adequate remedy at law for money damages in the event that this Agreement were
not performed in accordance with its terms, and therefore agree that Buyer shall
be entitled to specific enforcement of the terms hereof in addition to any other
remedy to which it may be entitled, at law or in equity.
8.10 Participation of KHHBE. The Seller acknowledges that
KHHBE has represented and continues to represent EYEQ with respect to the
transactions contemplated by this Agreement, that KHHBE has not rendered any
advice to Seller with respect to same, and that Seller has had the opportunity
to seek advice of counsel with respect to the risks and merits of the
transactions contemplated by this Agreement including, but not limited to, any
federal or state tax consequences associated with the exchange of JET Shares for
EYEQ Shares.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have executed this Agreement as of the date first written above.
SELLER: BUYER:
▇▇▇▇▇▇▇ Capital Ltd. EYEQ NETWORKING, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------- -----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Address:
Tropic Isle Building
Road Town, Tortolla, British Virgin Islands
128,000
Shares of Jet Aviation Trading, Inc.
Common Stock