EXHIBIT 1
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT, dated May 19, 1999, is among BIDHIT.COM, INC., a
Washington corporation ("BidHit Washington"), BIDHIT.COM, INC., a Nevada
corporation ("BidHit Nevada"), and TIM BLACK ("Black") (collectively, the
"Parties").
WHEREAS:
A. BidHit Washington has acquired all right, title and interest to Interactive
Auction Online which was previously operated as a sole proprietorship by Black.
B. Black is the sole shareholder of BidHit Washington.
C. BidHit Nevada wishes to acquire all of the issued and outstanding common
shares of BidHit Washington in consideration for cash and shares of BidHit
Nevada.
THIS AGREEMENT WITNESSES THAT in consideration of the mutual premises, covenants
and agreements set forth in this Agreement, the Parties hereto covenant and
agree as follows:
ARTICLE ONE
SHARE EXCHANGE
1.1 SHARE EXCHANGE. Black shall exchange all of the issued and outstanding
common shares of BidHit Washington (the "BidHit Washington Shares") for $300,000
and 926,250 common shares of BidHit Nevada (the "BidHit Nevada Shares").
1.2 INSTRUMENTS OF CONVEYANCE AND TRANSFER. Upon closing, Black shall deliver a
share certificate for 100 shares registered in the name of BidHit Nevada
representing the BidHit Washington Shares. BidHit Nevada has advanced $300,000
to Black prior to execution of this Agreement and shall deliver a share
certificate representing the BidHit Nevada Shares.
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES OF
BLACK AND BIDHIT WASHINGTON
2.1 Black and BidHit Washington represent and warrant to BidHit Nevada, with the
intent that BidHit Nevada will rely upon representations and warranties in
entering into this Agreement and completing the transaction contemplated that:
(a) BidHit Washington is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Washington. It has all requisite corporate power, franchises,
licenses, permits, and authority to own its properties and
assets and to carry on its business as it has been and is
being conducted. BidHit Washington is duly qualified and in
good standing in each jurisdiction in which it conducts
business.
(b) OWNERSHIP OF COMPANY SHARES. BidHit Washington is authorized
to issue 100 common shares of which 100 common shares are
validly issued and outstanding
as fully paid and non-assessable shares. Black is the
registered and beneficial owner of the BidHit Washington
Shares and owns the BidHit Washington Shares free and clear of
any liens, charges, pledges, encumbrances, restrictions on
transfer and adverse claims whatsoever.
(c) NO OPTION. No person, firm or corporation has any agreement or
option or any right capable of becoming an agreement or option
for the acquisition of any of the BidHit Washington Shares or,
to the knowledge of Black, for the purchase, subscription or
issuance of any of the unissued shares in the capital of
BidHit Washington.
(d) CAPACITY. Black has full right, power and authority to enter
into this Agreement on the terms and conditions contained and
to transfer and cause the transfer of full legal, registered
and beneficial title and ownership of the BidHit Washington
Shares to BidHit Nevada.
(e) NO RESTRICTIONS. There are no restrictions on the transfer,
sale or other disposition of the BidHit Washington Shares
contained in the charter documents of BidHit Washington or
under any agreement, and the BidHit Washington Shares may be
freely traded and transferred to BidHit Nevada under all
applicable laws and regulations.
(f) AUTHORIZATION AND ENFORCEABILITY. The execution and delivery
of this Agreement, and the transfer of the BidHit Washington
Shares contemplated , have been duly and validly authorized by
all necessary corporate action on the part of BidHit
Washington and this Agreement constitutes a legal, valid and
binding obligation of Black and BidHit Washington and is
enforceable against them in accordance with its terms.
(g) NO COMPANY DEBT TO RELATED PARTIES. BidHit Washington is not,
and on Closing will not be, indebted to Black, any officer or
director of BidHit Washington, nor to any corporation or other
business entity in which Black holds a direct or indirect
interest.
(h) NO RELATED PARTY DEBT TO BIDHIT WASHINGTON. Black is not
indebted to or under financial obligation to BidHit Washington
on any account whatsoever.
(i) NO MATERIAL CONTRACTS WITH BLACK. With the exception of his
employment contract, Black is not a party to any material
contract with BidHit Washington, whether directly or
indirectly or through any corporation owned or controlled by
Black.
(j) NO CHARGE ON ASSETS. Black has no claim to any of the assets
of BidHit Washington.
2.2 BidHit Nevada represents and warrants to BidHit Washington and Black, with
the intent that BidHit Washington and Black will rely upon representations and
warranties in entering into this Agreement and completing the transaction
contemplated that:
(a) BidHit Nevada is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Nevada. It has all requisite corporate power, franchises,
licenses, permits, and authority to own its properties and
assets and to carry on its business as it has been and is
being conducted.
(b) BidHit Nevada is an "Accredited Investor" as defined in
Regulation D of the United States Securities Act of 1933 (the
"Act").
(c) BidHit Nevada is acquiring the BidHit Washington Shares solely
for BidHit Nevada's own account as principal, for investment
purposes only and not with a view to the resale or
distribution, in whole or in part, and no other person or
entity has a direct or indirect beneficial interest in the
BidHit Washington Shares.
(d) BidHit Nevada will not sell or otherwise transfer the BidHit
Washington Shares without registration under the Act or an
exemption therefrom and fully understands that BidHit Nevada
must bear the economic risk of BidHit Nevada's purchase for an
indefinite period of time because, among other reasons, the
Shares have not been registered under the Act or under the
securities laws of any state and, therefore, cannot be resold,
pledged, assigned or otherwise disposed of unless they are
registered under the Act and under the applicable securities
laws of such states or unless an exemption from that
registration is available.
(e) At Closing as defined in Section 4.1 below, Black shall
transfer title in and to the BidHit Washington Shares to
BidHit Nevada free and clear of all liens, security interests,
pledges, encumbrances, charges, restrictions, demands and
claims, of any kind, whether direct or indirect or contingent,
other than any legends required by securities laws and
regulations.
ARTICLE THREE
CONDITIONS PRECEDENT
CONDITIONS PRECEDENT OF BLACK AND BIDHIT WASHINGTON
3.1 Black and BidHit Washington's obligations to carry out the transactions
contemplated hereby is subject to the fulfilment of each of the following
conditions precedent on or before the Closing:
(a) all documents or copies of documents required to be executed
and delivered to Black and BidHit Washington hereunder will
have been so executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement
to be complied with or performed by BidHit Nevada at or prior
to the Closing will have been complied with or performed; and
(c) the representations and warranties of BidHit Nevada set forth
in section 2.2 will be true and correct at the Closing with
the same effect as if made as of the Closing.
WAIVER BY BIDHIT WASHINGTON AND BLACK
3.2 The conditions precedent set out in section 3.1 are inserted for the
exclusive benefit of Black and BidHit Washington and any condition may be waived
in whole or in part by Black and BidHit Washington at or prior to the Closing by
delivering to BidHit Nevada a written waiver to that effect signed by Black and
BidHit Washington. If Black and BidHit Washington waive compliance with any
condition, Black and BidHit Washington may not allege any breach of that
condition so waived.
CONDITIONS PRECEDENT OF BIDHIT NEVADA
3.3 The obligation of BidHit Nevada to carry out the transactions contemplated
hereby is subject to the fulfilment of each of the following conditions
precedent on or before the Closing:
(a) all funds, documents or copies of documents required to be
executed and delivered to BidHit Nevada hereunder have been
executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement
to be complied with or performed by Black and BidHit
Washington by the Closing have been complied with or
performed; and
(c) the representations and warranties of Black and BidHit
Washington set forth in section 2.1 will be true and correct
at the Closing with the same effect as if made as of the
Closing.
WAIVER BY BIDHIT NEVADA
3.4 The conditions precedent set out in section 3.3 are inserted for the
exclusive benefit of BidHit Nevada and any condition may be waived in whole or
in part by BidHit Nevada before the Closing by delivering to Black and BidHit
Washington a written waiver to that effect signed by BidHit Nevada. If BidHit
Nevada waives compliance with any condition, BidHit Nevada may not allege any
breach of that condition so waived.
NATURE OF CONDITIONS PRECEDENT
3.5 The conditions precedent set forth in this Article 3 are conditions of
completion of the transactions contemplated by this Agreement and are not
conditions precedent to the existence of a binding agreement. Each party
acknowledges receipt of the sum of $1.00 and other good and valuable
consideration as separate and distinct consideration for agreeing to the
conditions precedent in favour of the other party or parties set forth in this
Article 3.
ARTICLE FOUR
CLOSING AND DELIVERY OF DOCUMENTS
4.1 The exchange of BidHit Washington Shares for BidHit Nevada Shares and the
other transactions contemplated by this Agreement will be closed on the 10th
business day following the date on which all conditions precedent in this
Agreement have been satisfied or waived by the Parties (the "Closing"). The
Closing will take place at 10:00 a.m. at the offices of Jeffs & Company being
Suite 420, 1090 West Pender Street, Vancouver, B.C.
DOCUMENTS TO BE DELIVERED BY BLACK AND BIDHIT WASHINGTON
4.2 By the Closing, Black and BidHit Washington will deliver or cause to be
delivered to BidHit Nevada:
(a) the records book for BidHit Washington containing all original
share certificates representing previous issuances of shares
of BidHit Washington duly endorsed for transfer to BidHit
Nevada as required, together with a duly executed share
certificate representing the BidHit Washington Shares issued
to BidHit Nevada and recorded in the share register of BidHit
Washington;
(b) certified copies of resolutions of the shareholders and
directors of BidHit Washington as are required to be passed to
authorize the execution, delivery and implementation of this
Agreement and the appointment of Mr. Tim Black as President,
Secretary, Treasurer and the sole director of BidHit
Washington;
(c) all other documents as BidHit Nevada may reasonably require to
give effect to the terms and intention of this Agreement.
DOCUMENTS TO BE DELIVERED BY BIDHIT NEVADA
4.3 By the Closing, BidHit Nevada shall deliver or cause to be delivered to
BidHit Washington and Black:
(a) a certified resolution of the directors of BidHit Nevada
approving the transactions contemplated by this Agreement;
(b) a share certificate of BidHit Nevada registered in the name of
Tim Black for 926,250 common shares of BidHit Nevada bearing a
legend restricting their trading under Rule 144 of the Act;
(c) all other documents as BidHit Washington or Black may
reasonably require to give effect to the terms and intention
of this Agreement.
DELIVERY OF DOCUMENTS IN ESCROW
4.4 Upon execution of this Agreement, BidHit Nevada, Black and BidHit Washington
shall use their best efforts to deliver the closing documents set out in
subparagraphs 4.2 and 4.3 to BidHit Nevada's solicitor in escrow. All closing
documents delivered to BidHit Nevada's solicitors in escrow will be held until
all conditions precedent set out in Article 3 of this Agreement have been
satisfied or waived by Black, BidHit Nevada and BidHit Washington as
applicable. Upon satisfaction of all conditions precedent, BidHit Nevada's
solicitors shall be entitled to release the closing documents to BidHit Nevada,
BidHit Washington and Black.
ARTICLE FIVE
GENERAL PROVISIONS
5.1 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding of the Parties with respect to the transactions contemplated, and
supersedes all prior agreements, arrangements and understandings related to the
subject matter. 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.
5.2 NOTICES. Any notice, request, instruction, or other document required by
the terms of this Agreement, or deemed by any of the Parties be desirable, to be
given to any other Party hereto must be in writing and delivered personally by
facsimile to the following addresses:
If to BidHit Washington or Black: BidHit.com, Inc. (Washington)
Suite 204
18702 North Creek Parkway
Bothell, Washington 98011
Attention: Mr. Tim Black
Fax: (425)424-3661
If to BidHit Nevada: BidHit.com, Inc. (Nevada)
Suite 2500
1177 West Hastings Street
Vancouver, B.C.
V6E 2K3
Attention: Mr. Jason John
Fax: (604)687-0853
With copies to: Jeffs & Company
Law Corporation
Suite 420
1090 West Pender Street
Vancouver, B.C.
V6E 2N7
Attention: Mr. Gerald R. Tuskey
Fax: (604)664-0671
The persons and addresses set forth above may be changed from time to time by a
notice sent as previously referred to. If notice is given by facsimile, personal
delivery, or overnight delivery in accordance with the provisions of this
Section, the notice is conclusively deemed given at the time of delivery.
5.3 WAIVER AND AMENDMENT. Any term, provision, covenant, representation,
warranty of condition of this Agreement may be waived, but only by a written
instrument signed by the party entitled to the benefits. The failure or delay of
any party at any time to require performance of any provision or to exercise its
rights with respect to any provision in no manner operates as a waiver of or
affects the party's right at a later time to enforce the performance. No waiver
by any party of any condition, or of the breach of any term, provision,
covenant, representation or warranty contained in this Agreement, in any one or
more instances, is deemed to be a further or continuing waiver of any condition
or breach or waiver of any other condition or of the breach of any other term,
provision, covenant, representation or warranty. No modification or amendment of
this Agreement is valid and binding unless it is in writing and signed by the
Parties.
5.4 CHOICE OF LAW. This Agreement and the rights of the Parties are governed by
the laws of the State of Washington including all matters of construction,
validity, performance, and enforcement and without giving effect to the
principles of conflict of laws.
5.5 JURISDICTION. The parties submit to the jurisdiction of the courts of the
State of Washington for the resolution of all legal disputes arising under the
terms of this Agreement.
5.6 COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed in one or
more counterparts, each of which is deemed an original, but all of which
together constitute one instrument. Facsimile signatures of this Agreement are
deemed a valid and binding execution of this Agreement.
5.7 ATTORNEYS' FEES. Except as otherwise provided herein, if a dispute should
arise between the parties including, but not limited to arbitration, the
prevailing party shall be reimbursed by the non-prevailing party for all
reasonable expenses incurred in resolving such dispute, including reasonable
attorneys' fees exclusive of such amount of attorneys' fees as shall be a
premium for result or for risk of loss under a contingency fee arrangement.
5.8 TAXES. Any income taxes required to be paid in connection with the payments
due hereunder, shall be borne by the party required to make such payment. Any
withholding taxes in the nature of a tax on income shall be deducted from
payments due, and the party required to withhold such tax shall furnish to the
party receiving such payment all documentation necessary to prove the proper
amount to withhold of such taxes and to prove payment to the tax authority of
such required withholding.
5.9 SHAREHOLDER AND DIRECTOR APPROVAL. All of the provisions of this Agreement,
including the Closing, are expressly contingent upon the approval of the
shareholders and directors of both BidHit Nevada and BidHit Washington. These
approvals must be evidenced by an executed certificate of the respective
corporate secretaries. If any required approvals are not received, this
Agreement automatically and immediately terminates and all Parties shall
return or cause to be returned any documents or items of value received in
connection with this Agreement. Further, the Parties will keep the terms and
subject of this Agreement confidential.
IN WITNESS WHEREOF, the Parties have executed this Agreement, as of the
date first written above.
BIDHIT NEVADA BIDHIT WASHINGTON
BIDHIT.COM, INC., BIDHIT.COM, INC.,
A Nevada corporation A Washington corporation
/s/ Jason John, President /s/ Tim Black, President
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/s/ Tim Black
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