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EXHIBIT 10.3
STOCK EXCHANGE AGREEMENT
THIS AGREEMENT is made and entered into this 15th day of August, 2000, by
and between Berten USA Holdings, Inc., a Nevada corporation ("BTUS") and
Digitalreach International, Inc., a Nevada corporation ("DR");
The parties agree as follows:
1. The Acquisition.
1.1 Purchase and Sale Subject to the Terms and Conditions of this
Agreement. At the Closing to be held as provided in Section 2
hereof, BTUS shall sell FIVE MILLION (5,000,000) shares of common
stock of BTUS, representing 13.49% of the fully-diluted
outstanding common stock of BTUS (the "BTUS Shares") to the DR
shareholders, and the DR shareholders shall purchase the BTUS
Shares from BTUS, free and clear of all encumbrances other than
restrictions imposed by Federal and State securities laws. The
BTUS Shares shall be delivered to the DR Shareholders as set forth
in Exhibit "A" hereto.
1.2 Purchase Price. The DR Shareholders will exchange FIVE MILLION
(5,000,000) shares of DR common stock, representing 100% of the
issued and outstanding common stock of DR (the "DR Shares") for
the BTUS Shares.
2. The Closing.
2.1 Place and Time. The closing of the sale and exchange of the BTUS
Shares for the DR Shares (the "Closing") shall take place at 0000
Xxxxxx xx xxx Xxxxx, Xxxxx 0000, Xxx Xxxxxxx, XX, no later than
the close of business on August 15, 2000 or at such other place,
date and time as the parties may agree in writing.
2.2 Deliveries by DR. At the Closing, the shareholders of DR shall
deliver the following to BTUS:
2.2.1 Certificates representing the DR Shares, duly endorsed for
transfer to BTUS and accompanied by any applicable stock
transfer tax stamps; DR shall immediately change those
certificates for, and deliver to BTUS at the Closing, a
certificate representing the DR Shares registered in the
name of BTUS.
2.2.2 The documents contemplated in Section 3 hereof.
2.2.3 All other documents, instruments and writings required by
this Agreement to be delivered by DR at the Closing and any
other documents and records relating to DR's business
reasonably requested by BTUS in connection with this
Agreement.
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2.3 Deliveries by BTUS. At the Closing, BTUS shall deliver the
following to DR and/or shareholders of DR:
2.3.1 The BTUS Shares for further delivery to the DR shareholders
as contemplated by section 1 hereof.
2.3.2 The documents contemplated by Section 4 hereof.
2.3.3 All other documents, instruments and writings required by
this Agreement to be delivered by BTUS at the Closing.
3. Conditions to BTUS' Obligations. The obligations of BTUS to effect the
Closing shall be subject to the satisfaction at or prior to the Closing
of the following conditions, any one or more of which may be waived by
BTUS:
3.1 No Injunction. There shall not be in effect any injunction, order
or decree of a court of competent jurisdiction that prevents the
consummation of the transactions contemplated by this Agreement,
that prohibits BTUS' acquisition of the DR Shares or the BTUS
Shares by shareholders of DR or that will require any divestiture
as a result of BTUS' acquisition of the DR Shares or that will
require all or any part of the business of BTUS to be held
separate and no litigation or proceedings seeking the issuance of
such an injunction, order or decree or seeking to impose
substantial penalties on BTUS or DR if this Agreement is
consummated shall be pending.
3.2 Representations, Warranties and Agreements. (a) The
representations and warranties of DR set forth in this Agreement
shall be true and complete in all material respects as of the
Closing Date as though made at such time, and (b) DR shall have
performed and complied in all material respects with the
agreements contained in this Agreement required to be performed
and complied with by it at or prior to the Closing.
3.3 Regulatory Approvals. All licenses, authorizations, consents,
orders and regulatory approvals of governmental bodies necessary
for the consummation of BTUS' acquisition of DR Shares shall have
been obtained by DR and shall be in full force and effect.
4. Conditions to DR's Obligations. The obligations of DR to effect the
Closing shall be subject to the satisfaction at or prior to the Closing
of the following conditions, any one or more of which may be waived by
DR:
4.1 No Injunction. There shall not be in effect any injunction, order
or decree of a court of competent jurisdiction that prevents the
consummation of the transactions contemplated by this Agreement,
that prohibits DR's acquisition of the BTUS Shares or the DR
Shares by shareholders of BTUS or that will require any
divestiture as a result of DR's acquisition of the BTUS Shares or
that will require all or any part of the business of DR to be held
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separate and no litigation or proceedings seeking the issuance of
such an injunction, order or decree or seeking to impose
substantial penalties on DR or BTUS if this Agreement is
consummated shall be pending.
4.2 Representations, Warranties and Agreements. (a) The
representations and warranties of BTUS set forth in this Agreement
shall be true and complete in all material respects as of the
Closing Date as though made at such time, and (b) BTUS shall have
performed and complied in all material respects with the
agreements contained in this Agreement required to be performed
and complied with by it at or prior to the Closing.
4.3 Regulatory Approvals. All licenses, authorizations, consents,
orders and regulatory approvals of governmental bodies necessary
for the consummation of DR's acquisition of BTUS Shares shall have
been obtained by BTUS and shall be in full force and effect.
5. Representations and Warranties of DR. DR represents and warrants to BTUS
that, to the knowledge of DR, and except as set forth in the DR
Disclosure Letter:
5.1 Organization of DR; Authorization. DR is a corporation duly
organized, validly existing and in good standing under the laws of
Nevada with full corporate power and authority to execute and
deliver this Agreement and to performs its obligations hereunder.
The execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action of DR and
this Agreement constitutes a valid and binding obligation of DR,
enforceable against it in accordance with its terms.
5.2 Capitalization. As of the Closing Date, all of the issued and
outstanding shares of common stock of DR are validly issued, fully
paid and non-assessable. There are no outstanding warrants,
options or other agreements on the part of DR obligating DR to
issue any additional shares of common or preferred stock or any of
its securities of any kind. Except as otherwise set forth herein,
DR will not issue any shares of capital stock from the date of
this Agreement through the Closing Date.
5.3 No Conflict as to DR. Neither the execution and delivery of this
Agreement nor the consummation of the sale of the DR Shares to
BTUS will (a) violate any provision of the certificate of
incorporation or by-laws of DR or (b) violate, be in conflict
with, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under any
agreement to which DR is a party or (c) violate any statute or law
or any judgment, decree, order, regulation or rule of any court or
other governmental body applicable to DR.
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5.4 Ownership of DR Shares. The delivery of certificates to BTUS
provided in Section 2.2 will result in BTUS' immediate acquisition
of record and beneficial ownership of the DR Shares, free and
clear of all encumbrances subject to applicable State and Federal
securities laws. There are no outstanding options, rights,
conversion rights, agreements or commitments of any kind relating
to the issuance, sale or transfer of any equity securities or
other securities of DR.
5.5 No Conflict as to DR and Subsidiaries. Neither the execution and
delivery of this Agreement nor the consummation of the sale of the
DR shares to BTUS will (a) violate any provision of the
certificate of incorporation or by-laws (or other governing
instrument) of DR or any of its subsidiaries or (b) violate, or be
in conflict with, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the
performance required by, or excuse performance by any person of
any of its obligations under, or cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the
creation or imposition of any encumbrance upon any property or
assets of DR or any of its subsidiaries under, any material
agreement or commitment to which DR or any of its subsidiaries is
a party or by which any of their respective property or assets is
bound, or to which any of the property or assets of DR or any of
its subsidiaries is subject or (c) violate any statute or law or
any judgment, decree, order, regulation or rule of any court or
other governmental body applicable to DR or any of its
subsidiaries except, in the case of violations, conflicts,
defaults, terminations, accelerations or encumbrances described in
clause (b) of this Section 5.5, for such matters which are not
likely to have a material adverse effect on the business or
financial condition of DR and its subsidiaries, taken as a whole.
5.6 Consents and Approvals of Governmental Authorities. Except with
respect to applicable State and Federal securities law, no
consent, approval or authorization of, or declaration, filing or
registration with, any governmental body is required to be made or
obtained by DR or any of its subsidiaries in connection with the
execution, delivery, and performance of this Agreement by DR or
the consummation of the sale of the DR Shares to BTUS.
5.7 Financial Statements. DR has delivered to BTUS consolidated
balance sheets of DR as of _____________ and statements of income
and changes in financial position for the period from inception to
the period then ended, together with the report thereon of DR's
independent accountant (the "DR Financial Statements"). Such DR
Financial Statements are internally prepared and unaudited but
fairly present the consolidated
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financial condition and results of operations of DR and its
subsidiaries as at the respective dates thereof and for the period
therein referred to, all in accordance with generally accepted
United States accounting principles consistently applied
throughout the periods involves, except as set forth in the notes
thereto.
5.8 No Material Adverse Change. Since the date of the DR Financial
Statements, there has not been any material adverse change in the
business or financial condition of DR and its subsidiaries taken
as a whole.
5.9 Brokers or Finders. DR has not employed any broker or finder or
incurred any liability for any brokerage or finder's fees or
commissions or similar payments in connection with the sale of the
DR Shares to BTUS.
5.10 Transactions with Directors and Officers. Except as set forth in
the DR Disclosure Letter, DR and its subsidiaries do not engage in
business with any person in which any of DR's officers or
directors has any material equity interest. No director or officer
of DR owns any property, asset or right which is material to the
business of DR and its subsidiaries taken as a whole.
6. Representations and Warranties of BTUS.
BTUS represents and warrants to DR that except as set forth in the BTUS
Disclosure Letter:
6.1 Organization of BTUS; Authorization. BTUS is a corporation duly
organized, validly existing and in good standing under the laws of
Nevada with full corporate power and authority to execute and
deliver this Agreement and to performs its obligations hereunder.
The execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action of BTUS and
this Agreement constitutes a valid and binding obligation of BTUS,
enforceable against it in accordance with its terms.
6.2 Capitalization. As of the Closing Date, all of the issued and
outstanding shares of common stock of BTUS are validly issued,
fully paid and non-assessable. There are no outstanding warrants,
options or other agreements on the part of BTUS obligating BTUS to
issue any additional shares of common or preferred stock or any of
its securities of any kind. Except as otherwise set forth herein,
BTUS will not issue any shares of capital stock from the date of
this Agreement through the Closing Date.
6.3 No Conflict as to BTUS. Neither the execution and delivery of this
Agreement nor the consummation of the sale of the BTUS Shares
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to DR will (a) violate any provision of the certificate of
incorporation or by-laws of BTUS or (b) violate, be in conflict
with, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under any
agreement to which BTUS is a party or (c) violate any statute or
law or any judgment, decree, order, regulation or rule of any
court or other governmental body applicable to BTUS.
6.4 Ownership of BTUS Shares. The delivery of certificates to DR
provided in Section 2.3 will result in DR's immediate acquisition
of record and beneficial ownership of the BTUS Shares, free and
clear of all encumbrances subject to applicable State and Federal
securities laws. There are no outstanding options, rights,
conversion rights, agreements or commitments of any kind relating
to the issuance, sale or transfer of any equity securities or
other securities of BTUS.
6.5 No Conflict as to BTUS and Subsidiaries. Neither the execution and
delivery of this Agreement nor the consummation of the sale of the
BTUS shares to DR will (a) violate any provision of the
certificate of incorporation or by-laws (or other governing
instrument) of BTUS or any of its subsidiaries or (b) violate, or
be in conflict with, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the
performance required by, or excuse performance by any person of
any of its obligations under, or cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the
creation or imposition of any encumbrance upon any property or
assets of BTUS or any of its subsidiaries under, any material
agreement or commitment to which BTUS or any of its subsidiaries
is a party or by which any of their respective property or assets
is bound, or to which any of the property or assets of BTUS or any
of its subsidiaries is subject or (c) violate any statute or law
or any judgment, decree, order, regulation or rule of any court or
other governmental body applicable to BTUS or any of its
subsidiaries except, in the case of violations, conflicts,
defaults, terminations, accelerations or encumbrances described in
clause (b) of this Section 6.5, for such matters which are not
likely to have a material adverse effect on the business or
financial condition of BTUS and its subsidiaries, taken as a
whole.
6.6 Consents and Approvals of Governmental Authorities. Except with
respect to applicable State and Federal securities law, no
consent, approval or authorization of, or declaration, filing or
registration with, any governmental body is required to be made or
obtained by BTUS or any of its subsidiaries in connection with the
execution, delivery, and performance of this Agreement by BTUS or
the consummation of the sale of the BTUS Shares to DR.
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6.7 Financial Statements. BTUS has delivered to DR consolidated
balance sheets of BTUS as of _____________ and statements of
income and changes in financial position for the period from
inception to the period then ended, together with the report
thereon of BTUS' independent accountant (the "BTUS Financial
Statements"). Such BTUS Financial Statements are internally
prepared and unaudited but fairly present the consolidated
financial condition and results of operations of BTUS and its
subsidiaries as at the respective dates thereof and for the period
therein referred to, all in accordance with generally accepted
United States accounting principles consistently applied
throughout the periods involves, except as set forth in the notes
thereto.
6.8 No Material Adverse Change. Since the date of the BTUS Financial
Statements, there has not been any material adverse change in the
business or financial condition of BTUS DR and its subsidiaries
taken as a whole.
6.9 Brokers or Finders. BTUS has not employed any broker or finder or
incurred any liability for any brokerage or finder's fees or
commissions or similar payments in connection with the sale of the
BTUS Shares to DR.
6.10 Transactions with Directors and Officers. Except as set forth in
the BTUS Disclosure Letter, BTUS and its subsidiaries do not
engage in business with any person in which any of BTUS' officers
or directors has any material equity interest. No director or
officer of BTUS owns any property, asset or right which is
material to the business of BTUS and its subsidiaries taken as a
whole.
7. Access and Reporting; Filings with Governmental Authorities; Other
Covenants.
7.1 Access Between the Date of this Agreement and the Closing Date.
Each of DR and BTUS shall (a) give to the other and its authorized
representatives reasonable access to all plants, offices,
warehouse and other facilities and properties of DR or BTUS, as
the case may be, and to its books and records, (b) permit the
other to make inspections thereof, and (c) cause its officers and
its advisors to furnish the other with such financial and
operating data and other information with respect to the business
and properties of such party and its subsidiaries and to discuss
with such and its authorized representatives its affairs and those
of its subsidiaries, all as the other may from time to time
reasonably request.
7.2 Regulatory Matters. DR and BTUS shall (a) file with applicable
regulatory authorities any applications and related documents
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required to be filed by them in order to consummate the
contemplated transaction and (b) cooperate with each other s they
may reasonably request in connection with the foregoing.
8. Conduct of BTUS' Business Prior to the Closing.
8.1 Operation in Ordinary Course. Between the date of this Agreement
and the Closing Date, BTUS shall conduct its businesses in all
material respects in the ordinary course.
8.2 Business Organization. Between the date of this Agreement and the
Closing Date, BTUS shall (a) preserve substantially intact the
business organization of BTUS; and (b) preserve in all material
respects the present business relationships and goodwill of BTUS
and each of its subsidiaries.
8.3 Corporate Organization. Between the date of this Agreement and the
Closing Date, BTUS shall not cause or permit any amendment of its
certificate of incorporation or by-laws (or other governing
instrument) and shall not:
8.3.1 issue, sell or otherwise dispose of any of its equity
securities, or create, sell or otherwise dispose of any
options, rights, conversion rights or other agreements or
commitments of any kind relating to the issuance, sale or
disposition of any of its equity securities;
8.3.2 create or suffer to be created any encumbrances thereon, or
create, sell or otherwise dispose of any options, rights,
conversion rights or other agreements or commitments of any
kind relating to the sale or disposition of any equity
securities;
8.3.3 reclassify, split up or otherwise change any of its equity
securities;
8.3.4 be party to any merger, consolidation or other business
combination;
8.3.5 sell, lease, license or otherwise dispose of any of its
properties or assets (including, but not limited to, rights
with respect to patents and registered trademarks and
copyrights or other proprietary rights), in any amount
which is material to the business or financial condition of
BTUS and its subsidiaries, taken as a whole, except in the
ordinary course of business; or
8.3.6 organize any new subsidiary or acquire any equity
securities of any person or any equity or ownership
interest in any business.
8.4 Other Restrictions. Between the date of this Agreement and the
Closing Date, BTUS shall not:
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8.4.1 borrow any funds or otherwise become subject to, whether
directly or by way of guarantee or otherwise, any
indebtedness for borrowed money;
8.4.2 create any material encumbrance on any of its material
properties or assets;
8.4.3 except in the ordinary course of business, increase any
manner the compensation of any director or officer or
increase in any manner the compensation of any class of
employees;
8.4.4 create or materially modify any material bonus, deferred
compensation, pension, profit sharing, retirement,
insurance, stock purchase, stock option, or other fringe
benefit plan, arrangement or practice or any other employee
benefit plan (as defined in section 3(3) of ERISA);
8.4.5 make any capital expenditure or acquire any property or
assets;
8.4.6 enter into any agreement that materially restricts BTUS, DR
or any of their subsidiaries from carrying on business;
8.4.7 pay, discharge or satisfy any material claim, liability or
obligation, absolute, accrued, contingent or otherwise,
other than the payment, discharge or satisfaction in the
ordinary course of business of liabilities or obligations
reflected in the BTUS Financial Statements or incurred in
the ordinary course of business and consistent with past
practice since the date of the BTUS Financial Statements;
or
8.4.8 cancel any material debts or waive any material claims or
rights.
9. Definitions.
As used in this Agreement, the following terms have the meanings
specified or referred to in this Section 9.
9.1 Business Day - any day that is not a Saturday or Sunday or a day
on which banks located in the City of New York are authorized or
required to be closed.
9.2 Code - The Internal Revenue Code of 1986, as amended.
9.3 Disclosure Letter - a letter dated the date of this Agreement,
executed by either DR or BTUS, addressed and delivered to the
other and containing information required by this Agreement and
exceptions to the representations and warranties under this
Agreement.
9.4 Encumbrances - any security interest, mortgage, lien, charge,
adverse claim or restriction of any kind, including, but not
limited
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to, any restriction on the use, voting, transfer, receipt of
income or other exercise of any attributes of ownership, other
than a restriction on transfer arising under Federal or state
securities laws.
9.5 Equity Securities - see Rule 3a-11-1 under the Securities Exchange
Act of 1934.
9.6 ERISA - the Employee Retirement Income Security Act of 1974, as
amended
9.7 Governmental Body - any domestic or foreign national, state or
municipal or other local government or multi-national body, any
subdivision, agency, commission or authority thereof.
9.8 Knowledge - actual knowledge, after reasonable investigation.
9.9 Person - any individual, corporation, partnership, joint venture,
trust, association, unincorporated organization, other entity, or
governmental body.
9.10 Subsidiary - with respect to any person, any corporation of which
securities having the power to elect a majority of that
corporation's Board of Directors (other than securities having
that power only upon the happening of a contingency that has not
occurred) are held by such person or one or more of its
subsidiaries.
10. Termination.
10.1 Termination. This Agreement may be terminated before the Closing
occurs only as follows:
10.1.1 By written agreement of DR and BTUS at any time;
10.1.2 By BTUS, by notice to DR at any time, if one or more of the
conditions specified in Section 4 hereof is not satisfied
at the time at which the Closing (as it may be deferred
pursuant to Section 2.1) would otherwise occur or if
satisfaction of such a condition is or becomes impossible.
10.1.3 By DR, by notice to BTUS at any time, if one or more of the
conditions specified in Section 3 hereof is not satisfied
at the time at which the Closing (as it may be deferred
pursuant to Section 2.1), would otherwise occur or if
satisfaction of such a condition is or becomes impossible.
10.2 Effect of termination. If this Agreement is terminated pursuant to
Section10.1, this Agreement shall terminate without any liability
or further obligations of any party to another.
11. Notices. All notices, consents, assignments and other communications
under this Agreement shall be in writing and shall be deemed to have been
duly given when (a) delivered by hand, (b) sent by telex or facsimile
(with receipt confirmed), provided that a copy is mailed by registered
mail, return receipt requested or (c) received by
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the delivery service (receipt requested), in each case to the appropriate
addresses, telex numbers and facsimile numbers set forth below (or to
such other addresses, telex numbers and facsimile numbers as a party may
designate as to itself by notice to the other parties).
11.1 If to BTUS:
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
11.2 If to DR:
1900 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
12. Miscellaneous.
12.1 Expenses. Each party shall bear its own expenses incident to the
preparation, negotiation, execution and delivery of this Agreement
and the performance of its obligations hereunder.
12.2 Captions. The captions in this Agreement are for convenience of
reference only and shall not be given any effect in the
interpretation of this agreement.
12.3 No Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be
considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of
this Agreement. Any waiver must be in writing.
12.4 Exclusive Agreement; Amendment. This Agreement supersedes all
prior agreements among the parties with respect to its subject
matter with respect thereto and cannot be changed or terminated
orally.
12.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be considered an original, but
all of which together shall constitute the same instrument.
12.6 Governing Law. This Agreement and (unless otherwise provided) all
amendments hereof and waivers and consents hereunder shall be
governed by the law of Nevada.
12.7 Binding Effect. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors
and assigns, provided that neither party may assign its rights
hereunder without the consent of the other.
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IN WITNESS WHEREOF, the corporate parties have caused this Agreement to
be executed by their respective officers, hereunto duly authorized, and entered
into as of the date first above written.
BERTEN USA HOLDINGS, INC. DIGITALREACH INTERNATIONAL, INC.
By: By:
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Xxxxxxxx Xxxxxxx Xxxxxxxx Xxxxxxx
CEO-President Director
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Exhibit A
DR SHAREHOLDERS
Name No. of Shares
---- --------------
Xxxxxxxxx X. Xxxxx 250,000
Danah Xxx Xxxx 250,000
Xxxxx X. Maglante 250,000
Xxxxxxx Xxxxx 250,000
Xxxxx Xxxxxx 250,000
Xxxxxxxxxx X. Xxxxxx 250,000
Xxxxxx Taguimacon 250,000
Xxxx Xxxx Mayordo 250,000
Xxxxxxx Xxxxxx 250,000
Xxxxxx Xxxxxxxx 250,000
Xxxxxx Apungan 250,000
Xxxxxxx X. Xxxx 250,000
Trifina de Rama 250,000
Xxxxxx Xxxxxxxxxx 250,000
Xxxxxx X. Xxxxxxxx 250,000
Xxxxxxx xx Xxxx 250,000
Xxxxxx Xxxxx 250,000
Xxxxxxxx Xxxxxx 250,000
Xxxxxx X. Xxxx 250,000
Xxxxx Xxxxxx 250,000
---------
Total 5,000,000
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