SECURITIES EXCHANGE AGREEMENT
BY AND BETWEEN
ANZA CAPITAL, INC.,
A NEVADA CORPORATION,
AND
▇▇▇▇▇ AND ▇▇▇▇▇ ▇▇▇▇▇
SECURITIES EXCHANGE AGREEMENT
This Securities Exchange Agreement (the "AGREEMENT") is entered into
effective this 17th day of September, 2004, by and between Anza Capital, Inc., a
Nevada corporation ("ANZA"), and ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, each an individual
(collectively referred to as "▇▇▇▇▇"). Each of Anza and ▇▇▇▇▇ shall be referred
to as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Anza's common stock is traded on the Over the Counter Bulletin
Board under the symbol "AZAC";
WHEREAS, ▇▇▇▇▇ is the owner of One Million (1,000,000) shares (the "TQ
SHARES") of common stock of Cash Technologies, Inc. ("TQ"), whose stock is
traded on the American Stock Exchange;
WHEREAS, Anza has established a series of preferred stock known as the
Series G Convertible Preferred Stock (the "PREFERRED STOCK"), the rights,
privileges, and preferences of which are as set forth in the Certificate of
Designation attached hereto as Exhibit A;
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WHEREAS, the Parties desire to enter into this Securities Exchange
Agreement for the purpose of diversifying their assets while improving their
respective net worth;
NOW, THEREFORE, for good and adequate consideration, the receipt of which
is hereby acknowledged, the Parties covenant, promise and agree as follows:
AGREEMENT
1. TERMS OF THE EXCHANGE: The Exchange shall be consummated on the
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following terms and conditions:
(a) The closing of the transactions contemplated hereby shall be the date
this Agreement is entered into (the "CLOSING DATE"), notwithstanding the fact
that the Parties may still need to deliver securities in compliance with their
obligations hereunder.
(b) Within ten (10) business days of the Closing Date, ▇▇▇▇▇ shall deliver
to the escrow agent (the "ESCROW AGENT") as set forth in that certain Escrow
Agreement attached hereto as Exhibit B (the "ESCROW AGREEMENT"), the TQ Shares.
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(c) Within ten (10) business days of the Closing Date, Anza shall cause to
be issued and shall deliver to the Escrow Agent, pursuant to the terms of the
Escrow Agreement, Five Hundred Thousand (500,000) shares of Preferred Stock (the
"ANZA SHARES").
(d) Within five (5) business days of the Closing Date, ANZA shall cause to
be issued and shall deliver to the Escrow Agent, pursuant to the terms of the
Escrow Agreement, warrants to
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acquire Two Million (2,000,000) shares of Anza common stock at an exercise price
of $0.10 per share as set forth in the Warrant Agreement attached hereto as
Exhibit C (the "ANZA WARRANTS").
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2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY ▇▇▇▇▇: ▇▇▇▇▇ hereby
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represents, warrants and agrees as follows:
(a) ▇▇▇▇▇ has all requisite power and authority to enter into and
perform this Agreement and to consummate the transactions contemplated hereby
and to effect the exchange of the shares in accordance with the terms hereof.
(b) The information heretofore furnished by ▇▇▇▇▇ to Anza for
purposes of or in connection with this Agreement or any transaction contemplated
hereby does not, and all such information hereafter furnished by ▇▇▇▇▇ to Anza
will not (in each case taken together and on the date as of which such
information is furnished), contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein, in the light of the circumstances under which they are made,
not misleading.
(c) The representations and warranties herein by ▇▇▇▇▇ will be true
and correct in all material respects on and as of the date hereof and will,
except as provided herein, survive the Closing Date.
(d) No form of general solicitation or general advertising was used
by ▇▇▇▇▇ or Anza or, to the best of its actual knowledge, any other person
acting on behalf of ▇▇▇▇▇ or Anza, in connection with the exchange.
(e) ▇▇▇▇▇ acknowledges that ▇▇▇▇▇ has been furnished with such
financial and other information concerning Anza, the directors and officers of
Anza, and the business of Anza as ▇▇▇▇▇ considers necessary in connection with
the transactions contemplated hereby. As a result, ▇▇▇▇▇ is familiar with the
business, operations, properties, and financial condition of Anza and has
discussed, either directly or through its agent, with officers or legal counsel
of Anza any questions ▇▇▇▇▇ may have had with respect thereto. ▇▇▇▇▇ has
consulted with his or her own legal, accounting, tax, investment and other
advisers with respect to the tax treatment, merits, and risks of the
transactions contemplated hereby.
(f) ▇▇▇▇▇ hereby agrees to indemnify and defend Anza and its
directors and officers and hold them harmless from and against any and all
liability, damage, cost or expense incurred on account of or arising out of:
(i) Any breach of or inaccuracy in ▇▇▇▇▇'▇ representations,
warranties or agreements herein;
(ii) Any action, suit or proceeding based on a claim that any of
said representations, warranties or agreements were inaccurate or misleading or
otherwise cause for obtaining damages or redress from Anza or any director or
officer of Anza.
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(g) The representations, warranties and agreements contained in this
Agreement shall be binding on ▇▇▇▇▇'▇ successors, assigns, heirs and legal
representatives and shall inure to the benefit of the respective successors and
assigns of Anza and its directors and officers.
(h) ▇▇▇▇▇ acknowledges and agrees that the Anza Shares and any shares
of Anza acquired upon exercise of the Anza Warrants (the "WARRANT SHARES" and
together with the Anza Warrants and the Anza Shares, the "ANZA SECURITIES") will
be "restricted securities" as that term is defined in Rule 144 under the
Securities Act of 1933 (the "ACT") and, accordingly, that the Anza Securities
must be held indefinitely unless they are subsequently registered under the Act
and qualified under applicable state blue sky law and any other applicable
securities law or exemptions from such registration and qualification as are
available. ▇▇▇▇▇ understands that, other than as set forth in this Agreement,
Anza is under no obligation to register the Anza Securities under the Act, to
qualify the Anza Securities under any securities law, or to comply with any
exemption under the Act or any other law. ▇▇▇▇▇ understands that Rule 144
prevents the sale of any of the Anza Securities for at least one year, and only
then under certain specific circumstances
(i) ▇▇▇▇▇ hereby represents that as of the Closing Date, (i) the TQ
Shares represent less than 19.9% of the issued and outstanding common stock of
TQ, and (ii) the TQ Shares have been included in a registration statement and
are eligible for immediate resale in accordance with Rule 144.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY ANZA: Anza hereby
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represents, warrants and agrees as follows:
(a) Anza is a corporation duly organized, validly existing and in
good standing under the laws of Nevada, with full power and authority to own,
lease, use, and operate its properties and to carry on its business as and where
now owned, leased, used, operated and conducted. Anza has all requisite
corporate power and authority to enter into and perform this Agreement and to
consummate the transactions contemplated hereby and to effect the exchange of
the shares in accordance with the terms hereof.
(b) The information heretofore furnished by Anza to ▇▇▇▇▇ for
purposes of or in connection with this Agreement or any transaction contemplated
hereby does not, and all such information hereafter furnished by Anza to ▇▇▇▇▇
will not (in each case taken together and on the date as of which such
information is furnished), contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein, in the light of the circumstances under which they are made,
not misleading.
(c) The representations and warranties herein made by Anza will be
true and correct in all material respects on and as of the date hereof and will,
except as provided herein, survive the Closing Date.
(d) Anza acknowledges that it has been furnished with such financial
and other information concerning TQ, the directors and officers of TQ, and the
business of TQ as Anza considers necessary in connection with the transactions
contemplated hereby. As a result, Anza is
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familiar with the business, operations, properties, and financial condition of
TQ and has discussed with ▇▇▇▇▇ any questions it may have had with respect
thereto. Anza has consulted with its own legal, accounting, tax, investment and
other advisers with respect to the tax treatment, merits, and risks of the
transactions contemplated hereby.
(e) Anza hereby agrees to indemnify and defend ▇▇▇▇▇ and hold them
harmless from and against any and all liability, damage, cost or expense
incurred on account of or arising out of:
(i) Any breach of or inaccuracy in Anza's representations,
warranties or agreements herein;
(ii) Any action, suit or proceeding based on a claim that any of
said representations, warranties or agreements were inaccurate or misleading or
otherwise cause for obtaining damages or redress from ▇▇▇▇▇.
(f) During the term of this Agreement, Anza will provide notice to
▇▇▇▇▇, within twenty-four (24) hours of it becoming aware, of any claim or
demand by a third party that is reasonably likely to have an effect on the First
Collateral Bank warehouse facility, the TQ Shares, and/or the Anza Shares then
held in escrow.
(g) The representations, warranties and agreements contained in this
Agreement shall be binding on Anza's successors, assigns, heirs and legal
representatives and shall inure to the benefit of the respective successors and
assigns of ▇▇▇▇▇.
(h) As of the date of this Agreement, (i) Anza is authorized to issue
100,000,000 shares of common stock, par value $0.001, and 2,500,000 shares of
preferred stock, par value $0.001; (ii) there are 9,496,346 shares of common
stock issued, 5,358,846 shares of common stock outstanding, and 27,000.5 shares
of preferred stock outstanding; and (iii) on a fully diluted basis, including
outstanding options and warrants, there are approximately 9,478,878 shares of
common stock outstanding.
4. VALUATION AND ADJUSTMENTS: ▇▇▇▇▇ and Anza hereby agree as follows:
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(a) As of September 14, 2004, the closing price for the TQ Shares is
$1.32 per share (the "TQ SHARE PRICE").
(b) Based on the TQ Share Price, the agreed-upon value of the TQ
Shares as of the Closing Date is $1,320,000 (the "INITIAL TQ SHARE VALUE").
(c) Within ten (10) business days of the end of each calendar
quarter, beginning with the quarter ended December 31, 2004 (each a
"SUPPLEMENTAL TQ SHARE VALUATION DATE"), the Escrow Agent shall update the value
of the TQ Shares held in escrow by multiplying the average closing price for the
30 days before the end of the applicable quarter times the number of TQ Shares
then held in escrow, and then adding the value of any cash or other assets
(valued in the same
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manner as the TQ Shares, or otherwise at their fair market value) then held in
escrow (the "SUPPLEMENTAL TQ SHARE VALUE").
If the Supplemental TQ Share Value exceeds $1,000,000, then either (i)
upon the receipt of a written request from ▇▇▇▇▇, that number of TQ Shares may
be released from escrow to ▇▇▇▇▇ so that the Supplemental TQ Share Value is
approximately $1,000,000, or (ii) upon the mutual consent of Anza and ▇▇▇▇▇,
Anza shall issue additional shares of Series G Preferred Stock equal to the
then-Supplemental TQ Share Value. Notwithstanding the foregoing, however, in
the event that any of the TQ Shares have been previously released from escrow
pursuant to this Section 4(c) of the Agreement, and the Supplemental TQ Share
Value is subsequently less than $1,000,000, then upon the receipt of a written
request from Anza, ▇▇▇▇▇ shall re-deposit that number of TQ Shares (up to the
original One Million (1,000,000) TQ Shares), or cash or other assets acceptable
to Anza, with the Escrow Agent so that the Supplemental TQ Share Value is
approximately $1,000,000.
If the Supplemental TQ Share Value is less than $1,000,000, and all of
the TQ Shares are already held in escrow, then upon the receipt of a written
request from Anza, that number of Anza Shares shall be released from escrow to
Anza so that the original issue price of the Anza Shares then held in escrow
shall be approximately equal to the Supplement TQ Share Value. If, on a
subsequent Supplemental TQ Share Valuation Date, the Supplemental TQ Share Value
exceeds $1,000,000, then Anza shall have the choice of re-depositing any
withdrawn Anza Shares to bring the Supplemental TQ Share Value back to
$1,000,000, or adjusting the number of TQ Shares as set forth above.
(d) Notwithstanding the above, ▇▇▇▇▇ ▇▇▇▇▇ shall be entitled to
instruct the Escrow Agent to sell any amount of the TQ Shares held in escrow as
long as the total value of TQ Shares and/or cash and/or other assets acceptable
to Anza remaining in the escrow account is approximately $1,000,000.
5. RESCISSION:
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(a) This Agreement may be rescinded as follows:
(i) Upon the receipt of notice by ▇▇▇▇▇ of any claim or demand,
not currently known to them, and whether or not delivered by Anza in compliance
with Section 3(f) hereof, that is reasonably likely to have an effect on the
First Collateral Bank warehouse facility, the TQ Shares, and/or the Anza Shares
then held in escrow, or if Anza fails to make a dividend payment on the Anza
Shares within ten (10) days of its due date, or if there is a change in control
of Anza, then ▇▇▇▇▇ may rescind this Agreement. Upon rescission of this
Agreement, the Escrow Agent shall return any TQ Shares (or other assets) held in
escrow to ▇▇▇▇▇, and any Anza Shares held in escrow to Anza.
(ii) Anza may rescind this Agreement at any time after the date
which is six (6) months after the Closing Date (the "Exclusion Period") by
providing thirty (30) days advance written notice to ▇▇▇▇▇ (the "ANZA
TERMINATION NOTICE PERIOD"); however, if Anza rescinds the Agreement during the
thirty (30) day period immediately following the Exclusion Period, Anza is
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limited to rescinding the transaction only with respect to one-half (1/2) of the
then-outstanding Anza Shares. The Exclusion Period and the Anza Termination
Notice Period is waived for Anza if ▇▇▇▇▇ exercises a conversion of the Anza
Shares. After the expiration of the Anza Termination Notice Period (if
applicable), the Escrow Agent shall return any TQ Shares held in escrow to
▇▇▇▇▇, and any Anza Shares held in escrow to Anza.
(iii) Upon the conversion of all of the outstanding Anza Shares
held by ▇▇▇▇▇ or its assigned, this Agreement shall automatically terminate.
(iv) In the event of a rescission by either Party, the ▇▇▇▇▇'▇
shall be entitled to keep the Anza Warrants as well as any dividends on the Anza
Shares, whether paid or accrued at the date of rescission.
6. CONFIDENTIALITY: Each Party hereto will hold and will cause its
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agents, officers, directors, attorneys, employees, consultants and advisors to
hold in strict confidence, unless compelled to disclose by judicial or
administrative process or, in the opinion of its counsel, by other requirements
of law, all documents and information concerning any other Party furnished it by
such other Party or its representatives in connection with the subject matter
hereof (except to the extent that such information can be shown to have been (i)
previously known by the Party to which it was furnished, (ii) in the public
domain through no fault of such Party, or (iii) later lawfully acquired from
other sources by the Party to which it was furnished), and each Party will 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 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. Notwithstanding the foregoing,
the Parties acknowledge that this Agreement shall be discussed in, and will be
filed as an exhibit to, Anza's filings with the Securities and Exchange
Commission.
7. This Agreement may not be amended, canceled, revoked or otherwise
modified except by written agreement subscribed by all of the Parties to be
charged with such modification.
8. Any notices to be given hereunder may be effected either by personal
delivery in writing, by facsimile, or by overnight mail. Facsimile or overnight
mailed notices shall be addressed to the Parties at the addresses listed below.
Notices will be deemed communicated as of the date of actual receipt.
If to Anza: Anza Capital, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: The Lebrecht Group, APLC
22342 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇: ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇
33 ▇▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇
Phone ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
9. This Agreement shall be binding upon and shall inure to the benefit of
the Parties hereto and their respective partners, employees, agents, servants,
heirs, administrators, executors, successors, representatives and assigns.
Neither Party may assign its rights, benefits, or obligations under this
Agreement without the express written consent of the other Party.
10. All Parties hereto agree to pay their own costs and attorneys' fees
except as follows:
(a) In the event of any action, suit or other proceeding instituted
to remedy, prevent or obtain relief from a breach of this Agreement, arising out
of a breach of this Agreement, involving claims within the scope of the releases
contained in this Agreement, or pertaining to a declaration of rights under this
Agreement, the prevailing Party shall recover all of such Party's reasonable
attorneys' fees and costs incurred in each and every such action, suit or other
proceeding, including any and all appeals or petitions therefrom.
11. This Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of California
including all matters of construction, validity, performance, and enforcement
and without giving effect to the principles of conflict of laws. Venue for any
action brought under this Agreement shall be in the appropriate court in Orange
County, California.
12. The Parties agree and stipulate that each and every term and condition
contained in this Agreement is material, and that each and every term and
condition may be reasonably accomplished within the time limitations, and in the
manner set forth in this Agreement.
13. The Parties agree and stipulate that time is of the essence with
respect to compliance with each and every item set forth in this Agreement.
14. This Agreement, along with the exhibits hereto, sets forth the entire
agreement and understanding of the Parties hereto and supersedes any and all
prior agreements, arrangements and
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understandings related to the subject matter hereof. No understanding, promise,
inducement, statement of intention, representation, warranty, covenant or
condition, written or oral, express or implied, whether by statute or otherwise,
has been made by any party hereto which is not embodied in this Agreement or the
written statements, certificates, or other documents delivered pursuant hereto
or in connection with the transactions contemplated hereby, and no Party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not so set forth.
15. This Agreement may be executed in one or more counterparts, each of
which when executed and delivered shall be an original, and all of which when
executed shall constitute one and the same instrument.
[remainder of page intentionally left blank; signature page to follow]
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IN WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby,
execute this Agreement upon the date first set forth above.
"ANZA" "▇▇▇▇▇"
Anza Capital, Inc.,
a Nevada corporation
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------- -----------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Its: President
/s/ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇
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EXHIBIT A
SERIES G CONVERTIBLE PREFERRED STOCK
CERTIFICATE OF DESIGNATION
10
EXHIBIT B
ESCROW AGREEMENT
11
EXHIBIT C
ANZA WARRANTS
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