EXCHANGE AGREEMENT
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THIS EXCHANGE AGREEMENT made and entered into this 19th day of July,
1999, by and between AMERICAN PACIFIC FINANCIAL SERVICES, a Nevada corporation,
(hereinafter referred to as "AMPA") and XXXX CONSULTANTS INC., a California
corporation, (hereinafter referred to as "DCI"), and BELFAIR INTERNATIONAL INC.,
a corporation organized pursuant to the laws of the Isle of Jersey (hereinafter
referred to as "BII").
WITNESSETH:
WHEREAS, the balance sheet and financial statements of AMPA for the
periods ended December 31, 1997 and 1998 and the stub period ended April 30,
1999 are attached hereto as Exhibit "A" and incorporated herein by this
reference; and
WHEREAS, the authorized capital stock of AMPA consists of 100,000,000
shares of common stock, par value $0.001 per share, of which 7,792,658 shares
are issued and outstanding; and
WHEREAS, AMPA, DCI and BII agree that it would be to their mutual
benefit for AMPA to acquire certain assets of DCI and BII in exchange for
7,013,392 shares of common stock of AMPA after giving effect to a ten (10) for
one (1) reverse split as hereinafter described; and WHEREAS, the parties have
entered into an Agreement in Principle dated July 19, 1999 and wish to set forth
the terms of their agreement in greater detail,
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto hereby agree as follows:
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1. [REPRESENTATIONS OF AMPA] AMPA hereby represents to DCI and BII that
to the best of its knowledge:
(a) AMPA owns on the date hereof, and on the Closing Date hereinafter
provided, will own free and clear of all liens, charges and encumbrances, all of
the assets set forth on Exhibit "A".
(b) AMPA has heretofore furnished to DCI and BII copies of the
financial statements of AMPA which are attached hereto and marked Exhibit "A".
Said financial statements accurately set forth the financial condition of AMPA
as of the dates thereof, prepared in conformity with generally accepted
accounting principles consistently applied.
(c) AMPA has good and marketable title to all of their property and
assets (except property and assets disposed of since such date in the usual and
ordinary course of business), subject to no mortgage, pledge, lien or other
encumbrance except as disclosed in such financial statements.
(d) AMPA has no obligations, liabilities or commitments, contingent or
otherwise, of a material nature which were not provided for, except as set forth
in Exhibit "A".
(e) AMPA is not a party to any employment contract, or to any lease,
agreement or other commitment not in the usual and ordinary course of business,
nor to any pension, insurance, profit-sharing or bonus plan, except as disclosed
in Exhibit "A".
(f) AMPA is not a defendant, nor a plaintiff against whom a
counterclaim has been asserted, in any litigation, pending or threatened, nor
has any material claim been made or asserted against AMPA, nor are there any
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proceedings threatened or pending before any federal, state or municipal
government, or any department, board, body or agency thereof, involving AMPA
except as disclosed in Exhibit "A".
(g) AMPA is not in default under any agreement to which it is a party
nor in the payment of any of its obligations.
(h) Between the date of the financial statements referred to in
subparagraph "d" hereof and the Closing, AMPA will not have (i) mortgaged or
pledged or subjected to any lien, charge or other encumbrance any of their
assets, tangible or intangible, except in the usual and ordinary course of
business or (ii) sold, leased, or transferred or contracted to sell, lease or
transfer any assets, tangible or intangible, or entered into any other
transactions, except in the usual and ordinary course of business, or (iii) made
any material change in any existing employment agreement or increased the
compensation payable or made any arrangement for the payment of any bonus to any
officer, director, employee or agent, except as set forth in Exhibit "A" hereof.
(i) This Exchange Agreement has been duly executed by AMPA and the
execution and performance of this Exchange Agreement will not violate, or result
in a breach of, or constitute a default in any agreement, instrument, judgment,
order or decree to which AMPA is a party or to which AMPA is subject nor will
such execution and performance constitute a violation of or conflict with any
fiduciary duty to which AMPA is subject, to the best of AMPA's knowledge.
(j) AMPA has timely filed or obtained the necessary extensions with the
appropriate governmental authorities, all tax and other returns required to be
filed by it. Such returns are true and complete and all taxes shown thereon to
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be due have been paid. All material, federal, state, local, county, franchise,
sales, use, excise and other taxes assessed or due have been duly paid or
reserves for unpaid taxes have been set up as required on the basis of the facts
and in accordance with generally accepted accounting principles.
(k) AMPA is not in default with respect to any order, writ, injunction
, or decree of any court or federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, and there are
no actions, suits, claims, proceedings or investigations pending or, to the
knowledge of AMPA threatened against or affecting AMPA, at law or in equity, or
before or by any federal, state, municipal or other governmental court,
department commission, board, bureau, agency or instrumentality, domestic or
foreign. AMPA has complied in all material respects with all laws, regulations
and orders applicable to its business.
(l) No representation in this section, nor statement in any document,
certificate or schedule furnished or to be furnished pursuant to this Exchange
Agreement by AMPA, or in connection with the transactions contemplated hereby,
contains or contained any untrue statement of material fact, nor does or will
omit to state a material fact necessary to make any statement of fact contained
herein or therein not misleading.
2. [REPRESENTATIONS OF DCI AND BII] DCI and BII represent to AMPA that:
(a) DCI is a corporation duly organized and validly existing and in
good standing under the laws of the State of California; is qualified to
transact business in California and no other state;
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(b) BII is a corporation duly organized and validly existing and in
good standing under the laws of the Isle of Jersey.
(c) DCI and BII have delivered to AMPA a schedule of assets attached
hereto and marked Exhibit "B", which assets consist of $50,000 in cash and at
least $525,000 in intellectual property valued at cost or predecessor cost
prepared in conformity with generally accepted accounting principles
consistently applied.
(d) DCI and BII have good and marketable title to all of its property
and assets appearing on Exhibit "B" attached hereto.
(e) DCI and BII warrant with regard to the assets described in Exhibit
"B" that there are no obligations, liabilities or commitments, contingent or
otherwise, of a material nature with regard thereto.
(f) DCI and BII are not in default under any agreement to which either
may be a party nor in the payment of any of their obligations which would affect
their title to the assets described in Exhibit "B".
(g) This Exchange Agreement has been duly executed by DCI and BII and
the execution and performance of this Exchange Agreement will not violate, or
result in a breach of, or constitute a default in any agreement, instrument,
judgment, order or decree to which it is a party or to which it is subject nor
will such execution and performance constitute a violation of or conflict with
any fiduciary duty to which it is subject.
(h) No representation in this section, nor statement in any document,
certificate or schedule furnished or to be furnished pursuant to this Exchange
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Agreement by DCI and BII, or in connection with the transactions contemplated
hereby, contains or contained any untrue statement of a material fact, nor does
or will omit to state a material fact necessary to make any statement of fact
contained herein or therein not misleading.
3. [DATE AND TIME OF CLOSING] The closing shall be held on July 19,
1999, at 10:00 a.m., local time, at Xxxxx 000, 00 Xxxx Xxxxxxx Xxxxxx, Xxxx,
Xxxxxx 00000, or at such other time and place as may be mutually agreed upon
between the parties in writing (hereinafter "the Closing").
4. [BOARD OF DIRECTORS MEETING OF AMPA] AMPA will call a special
meeting of the Board of Directors on Monday, July 19, 1999 at 8:00 o'clock a.m.,
local time, at Xxxxx 000, 00 Xxxx Xxxxxxx Xxxxxx, Xxxx, Xxxxxx 00000 to take the
following action:
(a) To ratify, approve and carry out the terms of this
Exchange Agreement
(b) To call and convene a special stockholders meeting to be
held at 9:00 a.m., local time, at Xxxxx 000, 00 Xxxx
Xxxxxxx Xxxxxx, Xxxx, Xxxxxx for the following purposes:
(1) To approve an Amendment to the Articles of Incorporation
to provide as follows:
(aa) To provide for a reverse split of the present common
stock on a ten (10) for one (1) basis;
(bb) To change the corporate name to FilmWorld, Inc.
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(cc) To amend the Articles of Incorporation to authorize a
capitalization of 100,000,000 shares of common stock and
10,000,000 shares of preferred stock.
5. [STOCKHOLDERS MEETING OF AMPA] AMPA will call and convene a special
stockholders meeting at 9:00 a.m., local time, at Xxxxx 000, 00 Xxxx Xxxxxxx
Xxxxxx, Xxxx, Xxxxxx 00000 for the following purposes:
(a) To approve an Amendment to the Articles of Incorporation
to provide as follows:
(1) For a reverse split of the present common stock on a ten
(10) for one (1) basis;
(2) To change Article I to provide that the name shall be:
FILMWORLD, INC.
(3) To change Article IV to provide for a capitalization of
100,000,000 shares of common stock and 10,000,000 shares
of preferred stock with all other provisions of this
Article IV to remain as written.
6. [BOARD OF DIRECTORS MEETING OF AMPA] AMPA will call and convene a
special meeting of the Board to be held at 10:00 o'clock a.m., local time, at
Xxxxx 000, 00 Xxxx Xxxxxxx Xxxxxx, Xxxx, Xxxxxx for the following purposes:
(a) To deliver 7,013,392 shares of common stock to the
following:
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Name No. Shares
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Xxxx Consultants, Inc. 2,922,247
Belfair International, Inc. 2,922,247
Xxxx Xxxxxx 1,168,898
It is understood that all such shares shall be restricted securities, as that
term is known and used in the securities industry, and the resale of such shares
shall be limited by a restrictive legend placed on certificates representing
such shares. Further, each of the recipients listed above shall be required to
execute an investment letter agreement in the form attached hereto as Exhibit
"C".
(b) To elect the following persons to constitute the Board
of Directors and to elect such persons to the office set
forth after their name:
Xxxxxxx Xxxxx, Chairman of the Board
Xxxx Xxxx, President
Xxxxxxxxx X. Xxxxxx, Xx., Secretary
Xxxx Xxxxxx, Treasurer
(c) To approve and sign a transfer agent agreement
appointing Nevada Agency and Trust Company as the
corporation's transfer agent and registrar, as well as
resident agent in the State of Nevada.
7. [FINDER'S FEE] AMPA, DCI and BII represent to each other that they
have not employed any broker or agent or entered into any other agreement for
the payment of any finder's fees or compensation to any other person, firm or
corporation in connection with this transaction, except Hidden Splendor
Resources shall be paid $150,000 in cash as a finder's fee and for all expenses,
including, but not limited to, filing fees, accountants' audit charges, legal
expenses and all other expenditures pertaining to this corporate reorganization
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and the company's submission of a Form 10-SB with the Securities and Exchange
Commission. Such expenses shall be limited to those selected and/or authorized
by Hidden Splendor Resources..
8. [NOTICES] Any notice under this Agreement shall be deemed to have
been sufficiently given if sent by Federal Express, registered or certified
mail, postage prepaid, addressed as follows:
If to American Pacific Financial Services:
Xxxxxxxxx X. Xxxxxx, Xx.
00 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx, Xxxxxx 00000
If to Xxxx Consultants, Inc.:
Xxxx Xxxx
0000 Xxxxxxxx, Xxxxx 000 Xxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
If to Belfair International, Inc.:
Xxxxxxx Xxxxx
000 X. Xxxxxx Xxxxxx, #000
Xxx Xxxxxxx, XX 00000
or to any other address which may hereafter be designated by either party by
notice given in such manner. All notices shall be deemed to have been given as
of the date of receipt.
9. [COUNTERPARTS] This Exchange Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be an original,
but all such counterparts shall constitute one and the same instrument.
10. [MERGER CLAUSE] This Exchange Agreement supersedes all prior
agreements and understandings between the parties and may not be changed or
terminated orally, and no attempted change, termination or waiver of any of the
provisions hereof shall be binding unless in writing and signed by the parties
hereto.
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11. [GOVERNING LAW] This Agreement shall be governed by and construed
according to the laws of the State of Nevada, being the corporate domicile of
AMPA.
IN WITNESS WHEREOF, the parties hereto have caused this Exchange
Agreement to be executed the day and year first above written.
AMERICAN PACIFIC FINANCIAL SERVICES
A Nevada Corporation
By /s/ Xxxxxxxxx X. Xxxxxx, Xx.
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Xxxxxxxxx X. Xxxxxx, Xx.
Its Secretary
(Hereunto duly authorized)
XXXX CONSULTANTS, INC.
A California Corporation
By /s/ Xxxx Xxxx
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Xxxx Xxxx
(Hereunto duly authorized)
BELFAIR INTERNATIONAL, INC.
An Isle of Jersey corporation
By /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
(Hereunto duly authorized)
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