SHARE EXCHANGE AGREEMENT
THIS AGREEMENT is made this 4th day of May, 1999 by and among DCC
Acquisition Corp., a Nevada corporation, hereinafter called "DCC", New Cinema
Partners Inc., an Ontario, Canada corporation, hereinafter called "NCPI:, and
The Pueblo Trust, the sole registered shareholder of NCPI, hereinafter called
the "SELLING SHAREHOLDER".
RECITALS:
WHEREAS DCC desires to acquire 100% of the issued and outstanding shares of
the common stock of NCPI in exchange for 4,000,000 authorized but unissued
shares of the common stock of DCC, pursuant to a plan of reorganization within
the meaning of IRC (1986), Section 369(a)(1)(B), as amended; and
WHEREAS the SELLING SHAREHOLDER desire to exchange 100% of the issued and
outstanding shares of the common stock of NCPI, currently owned by the SELLING
SHAREHOLDER, in exchange for said 4,000,000 shares of DCC,
NOW THEREFORE, in consideration of the mutual promises, covenants and
representations contained herein, and to consummate the foregoing plan of
reorganization, the parties hereby adopt said plan of organization and agree as
follows:
ARTICLE 1
EXCHANGE OF SECURITIES
1.01 Issuance of DCC Shares. Subject to all of the terms and conditions of this
Agreement, DCC agrees to issue to the SELLING SHAREHOLDER 4,000,000 fully paid
and non-assessable unregistered shares of DCC common stock in exchange for 100%
of the outstanding NCPI common stock, 4,000,000 common shares, all of which are
currently owned by the SELLING SHAREHOLDER.
1.02 Transfer of NCPI Shares. In exchange for DCC"s stock being issued to the
SELLING SHAREHOLDER as above described, the SELLING SHAREHOLDER shall on the
closing date and concurrent with such issuance of DCC"s common stock, deliver to
JDCC 100% of the outstanding common stock of NCPI.
ARTICLE II
REPRESENTATIONS, AGREEMENTS AND WARRANTIES OF
THE SELLING SHAREHOLDERS AND NCPI
The SELLING SHAREHOLDER and NCPI hereby represent, agree and warrant that:
2.01 Organization. NCPI is a corporation duly organized, validly existing,
and in good standing under the laws of Ontario, Canada, has all necessary
corporate powers
Page 2
to own its properties and to carry on its business as now owned and operated by
it, is duly qualified to do business and is in good standing in any jurisdiction
its business and is in good standing in any jurisdiction its business requires
qualification.
2.02 Capital. The authorized capital stock of NCPI consists of an unlimited
number of common shares of which 4,000,000 common shares are currently issued
and outstanding shares are validly issued, fully paid and non-assessable.
2.03 Absence of Undisclosed Liabilities. As of the date hereof, NCPI does
not have any material debt, liability or obligation of any nature, whether
accrued, absolute, contingent or otherwise, and whether due or to become due.
2.04 Investigation of Financial Condition. Without in any manner reducing
or otherwise mitigating the representations contained herein, DCC and/or its
attorneys shall have the opportunity to meet with accountants and attorneys to
discuss the financial condition of NCPI. NCPI shall make available to DCC and/or
its attorneys all books and records of NCPI. If the transaction contemplated
hereby is not completed, all documents received by DCC and/or its attorneys
shall be returned to NCPI and all information so received shall be treated as
confidential.
2.05 Patents, Trade Names and Rights. NCPI owns or holds or has adequate
license rights in respect of all necessary patents, trademarks, service marks,
trade names, copyrights and other rights necessary to the conduct or proposed
conduct of its business.
2.06 Compliance with Laws. NCPI has complied with, and is not in violation
of, applicable federal, state or local statutes, laws and regulations affecting
its properties or the operation of its business as well as SEC requirements.
2.07 Litigation. NCPI is not a party to, nor to the best of its knowledge
is there pending or threatened, any suite, action, arbitration or legal,
administrative or other proceeding, or governmental investigation concerning its
business, assets or financial condition. NCPI is not in default with respect to
any order, writ, injunction or decree of any federal, state, local or foreign
court or agency, nor is it engaged in any lawsuits to recover monies due to it.
2.08 Authority. The Board of Directors of NCPI authorized the execution of
this Agreement and the consummation of the transactions contemplated herein and
has full power and authority to execute, deliver and perform this Agreement.
2.09 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by NCPI and the performance of its obligations hereunder in the time
and manner contemplated will not cause, constitute or conflict with or result in
(I) any breach of the provisions of any license, indenture, mortgage, charter,
instrument, certificate of incorporation, bylaw or other agreement or instrument
to which it is a party or by which
Page 3
it may be bound, nor will any consents or authorizations of any party other than
those hereto by required, (ii) an event that would permit any party to any
agreement or instrument to terminate would permit any party to any agreement or
instrument to terminate it or to accelerate the maturity of any indebtedness or
other obligation, or (iii) an event that would result in the creation or
imposition of any lien, charge or encumbrance on any asset.
2.10 Full Disclosure None of the representations and warranties made by the
SELLING SHAREHOLDER or NCPI herein or in any exhibit, certificate or memorandum
furnished or to be furnished by the SELLING SHAREHOLDER or NCPI, or on eithers
behalf, contains or will contain any untrue statement of material fact, or omits
any material fact, the omission of which would be misleading.
2.11 Assets. NCPI has good marketable title to all of its property free and
clear of any and all liens, claims or encumbrances.
2.12 Indemnification. The SELLING SHAREHOLDER and NCPI agree to defend and
hold DCC and its officers and directors harmless against and in respect of any
and all claims, demands, losses, costs, expenses, obligations, liabilities or
damages, including interest, penalties and reasonable attorneys" fees, that it
shall incur or suffer, which arise out of, result from or relate to any breach
of this Agreement or failure by the SELLING SHAREHOLDER or NCPI to perform with
respect to any of its representations, warranties or covenants contained in this
Agreement or in any exhibit or other instrument furnished or to be furnished
under this Agreement.
2.13 Authority to Exchange. As of date of this Agreement, the SELLING
SHAREHOLDER holds 100% of the shares of NCPI common stock. Such shares are owned
of record by the SELLING SHAREHOLDER and such shares are not subject to any
lien, encumbrance or pledge. The SELLING SHAREHOLDER holds authority to exchange
such shares pursuant to this Agreement.
2.14 Investment Intent. The SELLING SHAREHOLDER understands and
acknowledges that the shares of DCC common stock offered for exchange or sale
pursuant to this Agreement are being offered in reliance upon the exemption from
registration requirements of the Securities Act of 1933, as amended (the "Act")
pursuant to Section 4(2) of the Act on the rules and regulations, promulgated
thereunder for non-public offerings and make the following representations,
agreements and warranties with the intent that the same may be relied upon in
determining the suitability of the SELLING SHAREHOLDER as a purchaser of JACKAL
common stock:
Page 4
(a) The shares of DCC common stock are being acquired solely for the
account of the SELLING SHAREHOLDER, for investment purposes only, and not with a
view to, or for sale in connection with, any distribution thereof, and with no
present intention of distributing or reselling any part of the DCC common stock
acquired.
(b) The SELLING SHAREHOLDER agrees not to dispose of its DCC common stock
or any portion thereof unless and until counsel for SELLING SHAREHOLDER shall
have determined that the intended disposition is permissible and does not
violate the Act or any applicable Federal or state securities Laws, or the rules
and regulations thereunder.
(c) The SELLING SHAREHOLDER agrees that the certificates evidencing the DCC
common stock acquired pursuant to this Agreement will have a legend placed
thereon stating that they have not been registered under the Act or any state
securities laws and setting forth or referring to the restrictions on
transferability and sale of the DCC common stock, and that stop transfer
instructions shall be placed with the transfer agent for said certificate.
(d) The SELLING SHAREHOLDER acknowledges that DCC has made all records and
documentation pertaining to DCC common stock available to them and to their
qualified representatives, if any, and has offered such person or persons an
opportunity to ask questions and further discuss the proposed acquisition of DCC
common stock, and any available information pertaining thereto, with the
officers and directors of DCC, and that all such questions and information
requested have been answered by DCC and its officers and directors to the
SELLING SHAREHOLDER"S satisfaction.
(e) The SELLING SHAREHOLDER has carefully evaluated its financial resources
and investment position and the risks associated with this transaction and are
able to bear the economic risks of this transaction: and it has substantial
knowledge and experience in financial, business and investment matters and are
qualified as sophisticated investors, and is capable of evaluating the merits
and risks of this transaction; and it desires to acquire the DCC common stock on
the terms and condition"s set forth.
(f) The SELLING SHAREHOLDER is able to bear the economic risk of an
investment in the DCC common stock.
(g) The SELLING SHAREHOLDER understands has no need for liquidity in this
investment.
2.15 Public "Shell" Corporation. NCPI and the SELLING SHAREHOLDER are aware
that DCC has public shareholders and is a "shell" corporation without
significant assets or liabilities, and further that public companies are subject
to extensive and complex state, federal and other regulations. Among other
requirements, the SELLING SHAREHOLDER and NCPI are aware that a Form 8-K must be
Page 5
filed with the United States Securities and Exchange Commission within fifteen
days after closing which filing requires that audited financial statements be
filed within sixty days after the filing of the 8-K, and they agree that such
responsibility shall be the sole responsibility of the new officers and
directors of DCC. The SELLING SHAREHOLDER and NCPI are aware of the legal
requirements and obligations of public companies, understand that regulatory
efforts regarding public shell transactions similar to the transaction
contemplated herein has been and is currently being exerted by some states, to
U.S. Securities and Exchange Commission and the National Association of
Securities Dealers, Inc. (NASD), and are fully aware of their responsibilities,
following closing, to fully comply will all securities laws and regulations, and
agree to do so.
2.16 No Assurances of Warranties. The SELLING SHAREHOLDER and NCPI
acknowledge that there can be no assurance regarding the tax consequences of
this transaction, nor can there be any assurance that the Internal Revenue Code
or the regulations promulgated thereunder will not be amended in such manner as
to deprive them of any tax benefit that might otherwise be received. The SELLING
SHAREHOLDER and NCPI are relying upon the advise of their own tax advisors with
respect to the tax aspects of this transaction. No representations or warranties
have been made by DCC as to the benefits to be derived by the SELLING
SHAREHOLDER or NCPI in completing this transaction, nor has DCC made any
warranty or agreement, expressed or implied, as to the tax or securities
consequences of the transactions contemplated by this Agreement or the tax or
securities consequences of the transactions contemplated by this Agreement or
the tax or securities consequences of any action pursuant to or growing out of
this Agreement.
ARTICLE III
REPRESENTATIONS, AGREEMENTS AND WARRANTIES OF DOC
DCC Represents, agrees and warrants that:
3.01 Organization DCC is a corporation duly organized, validly existing,
and in good standing under the laws of Nevada, has all necessary corporate
powers to own properties and o carry on its business as now owned and operated
by it, is duly qualified to do business and is in good standing in each of the
jurisdictions where its business requires qualification.
3.02 Capital All of the issued and outstanding shares of DCC are validly
issued, fully paid and non-assessable. All currently outstanding shares of DCC
Common Stock have been issued in compliance with applicable federal and state
securities laws.
3.03 Subsidiaries. DCC has no subsidiaries and does not own any interest in
any other enterprise, whether or not such enterprise is a corporation.
3.04 Financial Statements. Exhibit 3.04 to this Agreement includes DCC"s
audited financial statements for its most recent fiscal year end. The financial
statements have been prepared in accordance with generally accepted accounting
principles and practices consistently followed throughout the period indicated
and fairly present the financial position of DCC as of the dates of the balance
sheets included in the financial statements and the results of operations for
the periods indicated.
Page 6
3.05 Absence of Changes. Since the date of DCC"s most recent financial
statements, there has not been any change in its financial condition or
operations except for changes in the ordinary course of business.
3.06 Absence of Undisclosed Liabilities. As of the date of DCC"s most
recent balance sheet, included in Exhibit 3.04, it did not have any material
debt, liability or obligation of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due, that is not reflected
in such balance sheet.
3.07 Tax Return. Within the times and in the manner prescribed by law, DCC
has filed all federal, state or local tax returns required by law, has paid all
taxes, assessments and penalties due and payable and has made adequate provision
on its most recent balance sheet for any unpaid taxes. There are not present
disputes as to taxes of any nature payable by DCC.
3.08 Investigation of Financial Condition. Without in any manner reducing
or otherwise mitigating the representations contained herein, NCPI and the
SELLING SHAREHOLDER shall have the opportunity to meet with DCC"s accountants
and attorneys to discuss the financial condition of DCC. DCC shall make
available to NCPI and the SELLING SHAREHOLDER all books and records of DCC.
3.09 Patents, Trade Names and Rights. DCC does not use any patents, trade
marks, service marks, trade names or copyrights in its business.
3.10 Compliance with Laws. DCC has complied with, and is not in violation
of, applicable federal, state or local statues, laws and regulations affecting
its properties, securities or the operation of its business.
3.11 Litigation. DCC is not a party to, nor to the best of its knowledge is
there pending or threatened, any suite, action, arbitration or legal,
administrative or other proceedings, or governmental investigation concerning
its business, assets or financial condition. DCC is not in default with respect
to any order, write, injunction or decree of any federal, state local or foreign
court or agency, nor is it engaged in, nor does it anticipate it will be
necessary to engage in, any lawsuits to recover money or real or personal
property.
3.12 Authority. The Board of Directors of DCC has authorized the execution
of this Agreement and the transactions contemplated herein, and it has full
power and authority to execute, deliver and perform this Agreement.
3.13 Ability to Carry Out Obligations. This execution and delivery of this
Agreement By DCC and the performance of its obligations hereunder will not
cause, constitute, conflict with or result in (I) any breach of the provisions
of any license, indenture, mortgage, charter, instrument, certificate of
incorporation, bylaw or other agreement or instrument to which it is a party or
by which it may be bound, nor will any
Page 7
consents or authorizations of any party other that those here to required (ii)
an event that would permit any party to any agreement or instrument to terminate
it or to accelerate the maturity of any indebtedness or other obligation, or
(iii) an event that would result in a creation or imposition of any lien, charge
or encumbrance on any asset.
3.14 Full Disclosure. None of the representations and warranties made by
DCC herein, or in any exhibit, certificate or memorandum furnished or to be
furnished by it or on its behalf, contains or will contain any untrue statement
of a material fact, or omits any material fact the omission of which would be
misleading.
3.15 Assets. DCC has good and marketable title to all of its property free
and clear of any and all liens, claims and encumbrances.
3.16 Indemnification. DCC agrees to indemnify, defend and hold the SELLING
SHAREHOLDER and NCPI harmless against and in respect to any and all claims,
demands, losses, cost, expenses, obligations, liabilities or damages, including
interest, penalties and reasonable attorneys fees, incurred or suffered, which
arise out of, result from or relate to any breach of, or failure by DCC to
perform, any of its representations, warranties or covenants in this Agreement
or in any exhibit or other instrument furnished or to be furnished under this
Agreement.
3.17 Validity of DCC Shares. The shares of DCC common stock to be issued
pursuant to this Agreement will be duly authorized, validly issued, fully paid
and non-assessable under Nevada law.
3.18 Trading. The common stock of DCC trades on the National Association of
Securities Dealers" Bulletin Board.
ARTICLE IV
ACTIONS PRIOR TO CLOSING
4.01 Investigative Rights. Prior to the Closing Date each party shall
provide to the other parties, including the parties" counsel, accountants and
other authorized representatives, full access during normal business hours (upon
reasonable advance written notice) to such parties" books and records.
4.02 Conduct of Business. Prior to Closing Date, each party shall conduct
its business in the normal course and shall not see, pledge or assign any
assets, without the prior written approval of the other parties. No party shall
amend its certificate of incorporation or bylaws, declare dividends, redeem or
sell stock or other securities, incur additional liabilities, acquire or dispose
of fixed assets, change employment terms, enter into any material or long-term
contract, guarantee obligations of any third party, settle or discharge any
balance sheet receivable for less
Page 8
than its stated amount, payor on any liability than its stated amount or enter
into any other transaction other than in the regular course of business.
ARTICLE V
CLOSING
5.01 Closing. The closing (the "Closing) of this transaction shall be held
at the offices of DCC, or such other place as shall be mutually agreed upon, on
or about May 18, 1999 (the "Closing Date"):
(a) DCC shall issue 4,000,000 shares of its common stock in a certificate
or certificates representing such shares.
(b) The SELLING SHAREHOLDER shall deliver the certificates representing
100% of the shares of NCPI common stock (4,000,000 common shares).
(c) DCC shall deliver a signed consent or minutes of its Board of
Directors, approving this Agreement and authorizing the matters set forth
herein.
(d) NCPI shall deliver a signed consent or minutes of its Board of
Directors approving this Agreement and authorizing the matters set forth herein.
(e) DCC"s existing Board of Directors will (i) elect new directors, as
named by the SELLING SHAREHOLDER, to act as officers and directors of DCC, and
(ii) the current directors will resign their positions with DCC effective the
Closing Date.
ARTICLE VI
MISCELLANEOUS
6.01 Captions and Headings. The article and paragraph headings throughout
this Agreement are for convenience of reference only and shall not be deemed to
define, limit or add to the meaning of any provision of this Agreement.
6.02 No Oral Change. This Agreement may not be changed or modified except
in writing signed by the party against whom enforcement of any change or
modification is sought.
6.03 Non-Waiver. Except as otherwise expressly provided herein, no waiver
of a covenant, condition or provision of this Agreement shall be deemed to have
been made unless executed in writing and signed by the party against whom such
waiver is charged. The failure of any party to insist in any one or more cases
upon the performance of any covenant, condition or
Page 9
provision of this Agreement shall not be construed as a waiver or relinquishment
for the future of any such covenant, condition or provision. No waiver by any
party of one breach by the other shall be construed as a waiver with respect to
a subsequent breach.
6.04 Time of Essence. Time is of the essence of this Agreement and of each
and every provision hereof.
6.05 Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings.
6.06 Choice of Law/Arbitration. This Agreement and its application, shall
be governed under the laws of the State of Nevada. Any and all disputes and
controversies of every kind and nature between the parties hereto arising out of
or relating to this Agreement relating to the existence, construction, validity,
interpretation or meaning, performance, non-performance, enforcement, operation,
breach, continuance or termination thereof shall be subject to an arbitration
mutually agreeable to the parties or, in the absence of such mutual agreement,
then subject to arbitration in accordance with the rules of the American
Arbitration Association. It is the intent of the parties hereto and the purpose
of this provision to make the submission to arbitration of any dispute or
controversy arising hereunder an express condition precedent to any legal or
equitable action or proceeding of any nature whatsoever.
6.07 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.
6.08 Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been given
on the date of service if served personally on the party to whom notice is to be
given, or on the third day after mailing if mailed to the party to whom notice
is to be given, by first class mail, registered or certified, postage prepaid,
and properly addressed as follows:
DCC:
▇/▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
NCPI and the SELLING SHAREHOLDER:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
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6.09 Expenses. The parties will pay their own legal accounting and other
expenses incurred in connection with this Agreement.
6.10 Survival of Representations and Warranties. The representations,
warranties and covenants set forth in this Agreement or in any instrument,
certificate, opinion or other writing provided for in it, shall survive the
Closing Date.
6.11 Further Documents. The parties agree to execute any and all other
documents and to take such other action or corporate proceedings as may be
necessary or desirable to carry out the term hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement the date first
above written.
DCC ACQUISTION CORP.
Per: s/s ▇▇▇ ▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇
Title: Acting President
I have authority to bind DCC.
NEW CINEMA PARTNERS INC.
Per: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
I have authority to bind NCPI.
THE PUEBLO TRUST
Per: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Trustee
I have authority to bind the Trust.
(NAME OF FOUNDATION)
(ADDRESS OF FOUNDATION)
June 3, 1999
"STRICTLY PRIVATE & CONFIDENTIAL"
(NAME OF TRUSTEE), in trust
▇/▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
Dear Sirs:
RE: Share Purchase Transaction
This letter will serve to confirm our agreement regarding the purchase by
____________ (the "Foundation") of _____________ shares (the "Purchased Shares")
of the common stock of DCC Acquisition Corp. from _________________ (the
"Vendor").
1. On the Closing Date (as the term is hereinafter defined), the Vendor
will execute and deliver to the Foundation a share transfer in the form annexed
hereto as Schedule "A".
2. The purchase price (the "Purchase Price") payable by the Foundation to
the Vendor for the Purchased Shares will be ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars (USD $175,000).
3. Concurrently with the execution and delivery of this letter, the
Foundation will pay to _________________ the Vendor's legal counsel, in trust,
by certified cheque or bank draft, the sum of USD $50,000 (the "Deposit)" as a
deposit.
(i) If the purchase and sale of the Purchased Shares is not completed on
or before the Closing Date, by fault of DCC acquisition, the Deposit
will be released from trust and returned to the Foundation without
interest or deduction.
(ii) If the purchase and sale of Purchased Shares is completed on or before
the Closing Date, the Deposit will be released from trust and applied
toward satisfaction of the Purchase Price.
Page 2
4. The Foundation will pay to the Vendor, by certified cheque or bank
draft, the sum of USD $125,000 in satisfaction of the balance of the Purchase
Price within thirty (30) days following the closing date. If such payment is not
received by June 7, 1999 or 30 days from closing, a confession of judgement will
be consented, filed by both parties.
5. The completion of the purchase and sale of the Purchased Shares will
take place on May 18, 1999 (the "Closing Date").
If the foregoing accurately sets out the term of our agreement, kindly
execute the duplicate copy of this letter delivered to you herewith and return
it to the undersigned.
Yours truly,
Per:
------------------------------
Name:
Title:
TERMS ACCEPTED this 4th day of May, 1999.
-----------------------------
Milan Capital Group for
DCC Acquisition
