Execution Copy
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement") made as of this 30th day
of September, 2005 (the "Effective Date"), by and among ShowToGo, LLC, a
Delaware limited liability company that will have been converted into a Delaware
corporation effective immediately prior to the Closing (as defined in Section
2.6 below) with its principal address at 214 Fairview Road Narberth,
Pennsylvania 19072 (hereinafter, referred to collectively as "STG" unless
specified otherwise); David Solomon ("Solomon"), the sole equity holder of STG;
and Lincoln International Corporation ("LNLA"), a Delaware corporation with its
principal address at 641 Lexington Avenue, 25th Floor, New York, New York 10022,
and Nathan Low (solely as to Section 8.2).
INTRODUCTION
WHEREAS LNLA is a publicly traded corporation currently listed on the
NASD Over-the-Counter Bulletin Board under the symbol "LCNAE";
WHEREAS, STG is a limited liability company that is engaged in
providing DVD rental and sales through fully automated DVD-dispensing machines;
WHEREAS, immediately prior to the Closing, STG will have been
reconstituted as a Delaware corporation;
WHEREAS, Solomon owns all of the membership interests in STG as
presently constituted as a limited liability company and will own all of the
issued and outstanding shares of capital stock of STG upon being reconstituted
as a corporation;
WHEREAS, Solomon desires to exchange (the "Exchange") all of his shares
of the capital stock of STG for an aggregate of 22,968,000 of the common stock
of LNLA, par value $.001 (the "LNLA Stock") with the result being that Solomon
will, at the Closing, become the holder of 88% of the issued and outstanding
common stock of LNLA, on a fully diluted, post merger but pre-Offering (as
defined below) basis taking into account any dividends or splits of the LNLA
Stock (the "Solomon Shares") and Sunrise Securities Corp. and/or its designees
shall receive an aggregate of 522,000 shares of the LNLA Stock, such amount of
shares constituting, at the Closing, 2% of the issued and outstanding LNLA
Stock, on a fully diluted, post merger but pre-Offering basis taking into
account any dividends or splits of the LNLA Stock (the "Sunrise Shares") (the
Solomon Shares and the Sunrise Shares collectively referred to hereinafter as
the "Exchange Shares"); and
WHEREAS, there shall be an offering to sell up to a maximum of 140
units (the "Units") at a price of $25,000 per Unit, each Unit consisting of
131,579 shares of LNLA Stock and Warrants to purchase 131,579 shares of the LNLA
Stock at an exercise price of $0.26 per share, for an aggregate purchase price
of up to a maximum of $3,500,000 (the "Offering") with the Closing of the
Exchange occurring upon the receipt and acceptance of at least $2,000,000 in
subscriptions (representing a minimum of 80 Units) having been placed into
escrow;
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be bound hereby, do mutually agree as follows:
ARTICLE I
DEFINITIONS, DISCLOSURE SCHEDULE
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the meanings indicated below:
"Contract" shall mean any agreement, contract, license, indenture,
lease, mortgage, license, plan, arrangement, commitment or instrument including
any note or other debt instrument (whether written or oral).
"Enforceability Exceptions" shall mean the extent to which
enforceability of an Obligation may be limited by applicable bankruptcy,
insolvency, re-organization or other similar laws affecting the enforcement of
creditors' rights generally and by principles of equity regarding the
availability of remedies.
"GAAP" shall refer to generally accepted accounting principles as
applicable in the United States.
"Knowledge" shall mean with respect to a party's awareness of the
presence or absence of a fact, event or condition (a) actual knowledge plus, if
different, (b) the knowledge that would be obtained if such party conducted
itself faithfully and exercised sound discretion in the management of his own
affairs.
"Laws" shall mean all laws, common laws, rules, regulations, ordinances,
codes, judgments, injunctions, orders, writs, decrees, permits, policies and
other requirements of the United States and other jurisdictions to which STG and
LNLA, as applicable, are subject.
"Liabilities" shall mean any indebtedness, liability, loss, damage,
deficiency, Obligation or responsibility, fixed or unfixed, choate or inchoate,
liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent
or otherwise, whether or not of a kind required by generally accepted accounting
principles to be set forth on a financial statement including the notes thereto.
"Lien" means any mortgage, pledge, lien, encumbrance, charge, adverse
claim or restriction of any kind affecting title or resulting in an encumbrance
against property, real or personal, tangible or intangible, or a security
interest of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any third party option or other
agreement to sell and any filing of or agreement to give, any financing
statement under the Uniform Commercial Code (or equivalent statute) of any
jurisdiction).
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"LNLA Disclosure Documents" shall refer to the disclosures made in the
SEC Filings (as hereinafter defined) as well as the Schedule of Exceptions (as
hereinafter defined) for LNLA updated as of Closing.
"LNLA Holders" shall mean the shareholders of record of LNLA Stock
immediately prior to the Closing of the Exchange.
"Material Adverse Effect" or "Material Adverse Change" with respect to a
party means an adverse change which would in the aggregate have material adverse
effect on the assets, Liabilities (whether absolute, accrued, contingent or
otherwise), condition (financial or otherwise), results of operations, business
or prospects on a consolidated or combined basis of such party.
"Obligations" shall mean all Liabilities, debts, amounts due, or
contracts existing as of the Closing and any claims or causes of action arising
out of or as a result of actions taken prior to Closing, as well as any and all
expenses and costs related thereto.
"Private Placement Memorandum" shall mean that certain Private Placement
Memorandum relating to the Offering.
"Person" shall mean any natural person, corporation, division of a
corporation, partnership, trust, joint venture, association, company, estate,
unincorporated organization or governmental entity.
"Schedule of Exceptions" shall mean the schedule that may be attached to
and made part of this Agreement containing any exceptions to any representations
made in this Agreement, which such schedule shall be organized into paragraphs
corresponding to the sections of this Agreement.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC Filings" shall mean all registration statements filed pursuant to
the Securities Act or reports filed by LNLA pursuant to the Securities Exchange
Act since August 6, 2003.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"STG Disclosure Documents" shall refer to the disclosures made in the
Private Placement Memorandum and the Schedule of Exceptions for STG updated as
of Closing.
"Subsidiary" shall refer to any corporations or other entities in which
a Person has a majority interest or which is otherwise controlled by such
Person.
"Taxes" shall mean any income, alternative or add-on minimum, business,
employment, franchise, occupancy, payroll, property, sales, transfer, use, value
added, withholding or other tax, levy, impost, fee, imposition, assessment or
similar charge together with any related addition to tax, interest, penalty or
fine thereon.
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"Transactions" shall mean, in respect of any party, all transactions set
forth in or contemplated by this Agreement that involve, relate to or affect
such party, including, without limitation, the Exchange.
ARTICLE II
THE TRANSACTIONS
2.1 The Exchange. At the Closing (as defined in Section 2.6), Solomon shall
receive such shares representing an aggregate of eighty-eight percent (88%) of
the issued and outstanding LNLA Stock (on a fully diluted, post-merger but
pre-Offering basis taking into account any dividends or splits of the LNLA Stock
occurring prior to the Closing) and Sunrise Securities Corp. and/or its
designees shall receive an aggregate of two percent (2%) of the issued and
outstanding LNLA Stock (on a fully diluted, post-merger but pre-Offering basis
taking into account any dividends or splits of the LNLA Stock occurring prior to
the Closing) as set forth on the attached Exhibit A, in exchange, LNLA shall
receive shares of STG representing all of the outstanding capital stock of STG.
2.2 Transfer of Board Control and Public Notice. At the Closing, Derek
Caldwell and Samir N. Masri shall have submitted their written resignations from
the Board of LNLA effective as of that date and, as requested to do so by STG or
Solomon, shall have elected its nominees to the Board of Directors of LNLA (the
"Board") effective on Closing. Within the time prescribed by Rule 14f-1 of the
Securities Exchange Act, counsel to STG shall prepare, and LNLA shall file, an
Information Statement on Schedule 14f-1 pursuant to the Securities Exchange Act
regarding the election of directors as designated by Solomon and the concurrent
resignation of those directors of LNLA to be effected at the Closing.
2.3 Payment. In consideration for the Exchange, STG shall make the
following payments at Closing: (a) the sum of One Hundred Eleven Thousand
Dollars ($111,000), less (i) all expenses paid by the LNLA Holders on behalf of
LNLA prior to the Closing (the "LNLA Expenses") and (ii) the PZGP Fees as
defined in Section 9.1, pro-rata to each of the LNLA Holders immediately prior
to the Closing based on the number of shares of LNLA Stock owned by each of them
immediately prior to Closing; and (b) the sum of Sixty-Five Thousand Dollars
($65,000) to Nathan Low ("Low") in redemption of the convertible notes issued by
LNLA to Low (the "Low Notes"). The amounts paid by STG net of the adjustments
set forth in this paragraph 2.3 shall be distributed to the LNLA Holders
promptly following the Closing of the Exchange, pro rata based on the relative
number of shares of LNLA Stock owned by each of them immediately prior to the
Closing.
2.4 Cancellation of Rights.
(a) On or before the Closing, LNLA shall cancel or redeem all
outstanding options, warrants or rights to purchase or subscribe for any equity
securities, or other ownership interests of LNLA, Obligations of LNLA, whether
absolute or contingent, to issue any shares of equity securities or other
ownership interests, debt or equity securities directly or indirectly
convertible into any equity securities of LNLA, and any shareholder agreements,
options, rights of first refusal or other similar rights with respect to the
capital stock of LNLA.
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(b) On or before the Closing, STG shall cancel, redeem or otherwise
agree to have LNLA assume, post-Closing, all outstanding rights to purchase or
subscribe for any membership interest, equity securities, or other ownership
interests of STG, Obligations of STG, whether absolute or contingent, to issue
any shares of equity securities or other ownership interests, debt or equity
securities directly or indirectly convertible into any equity securities of STG,
and any agreements, options, rights of first refusal or other similar rights
with respect to the membership interests of STG.
2.5 Redemption of Convertible Note. Upon receipt of the payment set
forth in Section 2.3(b), Low shall surrender to STG the Low Notes marked "Paid
in Full" and "Cancelled."
2.6 Closing. The closing of the transaction contemplated by this
Agreement (the "Closing") shall occur as soon as practicable after the date when
at least $2,000,000 has been placed in escrow in connection with the Offering or
on such date as the parties hereto may agree, provided that the parties have
made the deliveries required in Article III hereof and all conditions set forth
in Articles VI and VII have been fulfilled or waived in writing and this
Agreement has not been terminated pursuant to Section 9.12 hereof. The Closing
shall be held at the offices of Flamm, Boroff & Bacine, P.C., 794 Penllyn Pike,
Blue Bell, Pennsylvania 19422 or such other place as the parties may mutually
agree but in no event shall the Closing occur later than sixty (60) days after
the Private Placement Memorandum is first sent to prospective investors for the
Offering (unless such date shall be extended by the mutual written agreement of
the parties hereto) and may be effected by the exchange of fax copies or
overnight delivery of executed documents by the respective parties. The date
upon which such Closing shall occur shall be referred to as the "Closing Date."
2.7. Conversion to Corporate Form. STG shall have been reconstituted as
a Delaware corporation immediately prior to the Closing.
2.8. Standstill. Between execution of this Agreement and Closing,
Solomon shall not, directly or indirectly, sell, transfer or assign any of his
interest in STG.
2.9 Best Efforts. Each party shall have used its best efforts to do all
other acts within its power and control as may be necessary for the Closing to
occur.
2.10. Conflicts of Interest. The parties hereby acknowledge that Nathan
Low, the principal shareholder of LNLA, is also the President and sole
shareholder of Sunrise Securities Corp, the placement agent for the Offering,
and hereby waive any potential conflict of interest arising therefrom. The
parties further acknowledge and agree that this Agreement and the transactions
contemplated hereby were negotiated and conducted on an arms length basis.
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ARTICLE III
CLOSING DELIVERIES
3.1 Closing Deliveries by STG. At the Closing, in addition to documents
referred to elsewhere herein, STG shall deliver, or cause to be delivered to
LNLA in a form reasonably satisfactory to LNLA and its counsel:
(a) Stock Certificate(s) owned by Solomon representing all the
shares of capital stock of STG to be transferred to LNLA as set forth in Section
2.1 of this Agreement;
(b) a Certificate of Solomon affirming the accuracy of STG's
and his representations and warranties, as of the Closing Date and that all
conditions required to be fulfilled by STG have been fully performed and
complied with by, the Closing Date;
(c) the Opinion of Counsel for STG as provided for in Section
7.6 hereof;
(d) a Certificate of the chief executive officer of STG that
the Vending Agreement between STG and Albertson's Inc., a Delaware corporation,
dated April 30, 2005, regarding the distribution of STG's products: (i) is in
full force and effect, (ii) has not been amended in any way, (iii) that there is
no outstanding breach of such agreement, and (iv) that no condition exists that
with the passing of time or the giving of notice would result in a breach of
such agreement;
(e) a Certificate of the chief executive officer of STG that
the Purchase Agreement between STG and Y.A.F. Automatic Video Machines LTD, an
Israeli company, dated February 1, 2005, for the exclusive distribution of
Y.A.F. Automatic Video Machines LTD's DVD machines in the United States (i) is
in full force and effect, (ii) has not been amended in any way, (iii) that there
is no outstanding breach of such agreement, and (iv) that no condition exists
that with the passing of time or the giving of notice would result in a breach
of such agreement;
(f) the sum of One Hundred Eleven Thousand Dollars ($111,000),
minus the LNLA Expenses and the PZGP Fees (as defined in Section 9.1), paid by
STG or Solomon by wire or certified check to the LNLA Holders, pro rata based on
the respective number of shares of LNLA Stock held immediately prior to Closing;
(g) the sum of Sixty-Five Thousand Dollars ($65,000) paid to
Nathan Low by STG or Solomon with respect to the Low Notes by wire or certified
check;
(h) proof satisfactory to legal counsel for LNLA that all
outstanding rights to acquire membership interests in STG or similar rights have
been terminated; and
(i) such other documents as LNLA or its counsel may reasonably
request.
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3.2 Closing Deliveries by LNLA. At the Closing, LNLA shall deliver or
cause to be delivered to STG or to others at the direction of Solomon, from LNLA
or other third parties, including officers of LNLA, in a form reasonably
satisfactory to STG and its counsel:
(a) Certified copies of resolutions of the Board and LNLA
Holders holding at least a majority of the outstanding shares of LNLA Stock
approving the Exchange and all related transactions and documents as of the date
of execution hereof and approving and authorizing, as of the Closing date: (i)
the cancellation of all derivative securities rights pursuant to paragraph 2.4
hereof and (ii) the election of the nominees of STG or Solomon to the Board;
(b) Proof of filing with the SEC of the Information Statement
on Schedule 14f-1;
(c) Certificates representing the Exchange Shares to be issued
pursuant to the Exchange;
(d) Certificate of the authorized Officer of LNLA affirming
the accuracy of LNLA's representations and warranties as of the Closing Date and
that all conditions required to be fulfilled by LNLA have been fully performed
and complied with by, the Closing Date;
(e) the resignations of Derek Caldwell and Samir Masri as
directors and officers of LNLA;
(f) the Low Notes marked "Paid in Full" and "Cancelled";
(g) the Opinion of Counsel for LNLA as provided for in Section
6.7 hereof;
(h) proof satisfactory to legal counsel for STG that all
outstanding options, warrants or other similar rights to acquire securities of
LNLA have been terminated; and
(i) such other documents as Solomon or counsel to STG may
reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF LNLA
Except as set forth in the LNLA Disclosure Documents, LNLA makes the
following representations and warranties to STG and Solomon on and as of the
date hereof with the knowledge and understanding that STG and Solomon are
relying materially upon such representations and warranties:
4.1 Organization and Standing of LNLA. LNLA is a corporation duly
organized, validly existing and in good standing under the laws of Delaware.
LNLA has the corporate power to carry on its business as now conducted and to
own its assets and is duly qualified to transact business as a foreign
corporation in each jurisdiction where such qualification is necessary except
where the failure to qualify will not have a Material Adverse Effect. The copies
of the Certificates of Incorporation and By-laws of LNLA as amended to date, and
made available to STG, are true and complete copies of those documents as now in
effect.
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4.2 Capitalization. The authorized capital stock of LNLA, consists of
500,000,000 shares of common stock of which 2,610,000 shares are issued and
outstanding and 50,000,000 shares of blank check preferred of which no shares
are issued. The shares of LNLA Stock that are issued and outstanding are duly
authorized, validly issued and outstanding, fully paid and nonassessable, are
not subject to any Lien and were not issued in violation of the preemptive
rights of any person. Notwithstanding the Exchange contemplated by this
Agreement and except as contemplated by the Low Notes or as set forth in the
Disclosure Documents, there are no outstanding (a) options, warrants or rights
to purchase or subscribe for any equity securities, or other ownership interests
of LNLA, (b) Obligations of LNLA, whether absolute or contingent, to issue any
shares of equity securities or other ownership interests (other than as
contemplated by the Offering post-Closing of the Exchange), (c) debt or equity
securities directly or indirectly convertible into any equity securities of LNLA
or (d) any shareholder agreements, options, rights of first refusal or other
similar rights with respect to the capital stock of LNLA. Until the earlier of
the Closing or the termination of this Agreement pursuant to Section 9.12
hereof, LNLA shall not authorize any dividend, stock split, options, warrants or
other stock rights to any party other than STG.
4.3 No Other Subsidiaries. LNLA has no Subsidiary and no interest in
any other corporation, partnership, joint venture or other entity.
4.4 Authority. LNLA has the requisite authority to execute, deliver and
perform this Agreement. This Agreement constitutes, when executed and delivered
by LNLA in accordance herewith, the legal, valid and binding Obligations of
LNLA, enforceable in accordance with its respective terms, subject to the
Enforceability Exceptions.
4.5 Contracts. There are no Contracts to which LNLA is a party or by
which it is bound.
4.6 Litigation. There is no claim, action, proceeding, or investigation
pending or, to its Knowledge, threatened against or affecting LNLA before or by
any court, arbitrator or governmental agency or authority. There are no decrees,
injunctions or orders of any court, governmental department, agency or
arbitration outstanding against LNLA and with respect to any action or claim
covered by insurance, LNLA has complied with all requirements of any such policy
which are conditions to the defense and continued defense of such claim or
action.
4.7 Taxes. LNLA has duly filed all returns required, in the opinion of
its tax accountants, to be filed by it. To the Knowledge of LNLA such returns
were, when filed, and are, accurate and complete in all material respects and
were prepared in conformity with applicable laws and regulations. LNLA has paid
or will pay in full or has adequately reserved against all Taxes otherwise
assessed against it through the Closing Date. LNLA is not a party to any pending
action or proceeding by any governmental authority for the assessment of any
Tax, and, to the best of its Knowledge, no claim for assessment or collection of
any Tax related to LNLA has been asserted against LNLA that has not been paid.
There are no Tax liens upon the assets (other than the lien of property taxes
not yet due and payable) of LNLA. There is no valid basis, to the best of its
Knowledge for any assessment, deficiency, notice, or similar intention to assess
any Tax to be issued to LNLA by any governmental authority.
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4.8 No Conflict. The execution and performance of this Agreement and
any other agreements contemplated hereby will not (i) conflict with or violate
the Certificate of Incorporation or the By-laws of LNLA or (ii) violate in any
material respect any Laws.
4.9 Filings. LNLA is current in its reporting to the SEC and the SEC
Filings of LNLA are true and correct and contain no material misstatement of
fact as of the date of filing.
4.10 Financial Documents. The financial statements that are part of the
SEC Filings are true and complete copies of the financial statements of LNLA.
These financial statements (i) have been prepared from the books and records of
LNLA in accordance with GAAP consistently applied with prior periods, and (ii)
are complete and correct and fairly reflect, in each case in all material
respects, the financial condition and results of operations of LNLA as of the
dates and for the periods indicated thereon.
4.11 Compliance With Laws. LNLA materially complies with all material
Laws applicable to it.
4.12 Employee Benefit Plans. Except as set forth in the LNLA Disclosure
Documents, LNLA has not with the past three (3) years maintained or contributed
to any employee benefit plan, or any stock purchase plan, stock option plan,
fringe benefit plan, bonus plan or any other deferred compensation agreement,
plan or funding arrangement, whether or not such plan has been terminated and
whether or not such plan is of legally binding nature in the form of an informal
understanding. With respect to the plans, the laws as applicable, have been
fulfilled in all material respects and no event has occurred nor does any
condition exist which would subject LNLA or Solomon to any material penalty,
excise tax or liability.
4.13 Consents. Except as may be required by federal securities laws and
regulations, no authorization, license, franchise, approval, order or consent
of, and no registration, declaration or filing by LNLA with, any governmental
authority, domestic or foreign, federal, state or local, is required in
connection with the execution, delivery and performance of this Agreement, and
consummation of the Transaction.
4.14 Liabilities. Except as otherwise disclosed in the LNLA Disclosure
Documents, LNLA has no Liabilities, contingent or otherwise other than
Liabilities not to exceed $15,000 in the aggregate, consisting of federal or
state Taxes and SEC reporting costs and professional fees related thereto and
which have been fully and adequately reflected or reserved against on its
balance sheet.
4.15 No Commissions. Except as otherwise disclosed in the LNLA
Disclosure Documents, LNLA has not incurred any Obligation for any finder's or
broker's or agent's fees or commissions or similar compensation in connection
with the transactions contemplated hereby.
4.16 Accuracy of Representations. None of the representations or
warranties contained in this Agreement, including the LNLA Disclosure Documents,
contains, or will contain at the Closing Date, any false or misleading
statement, or omits, or will omit at the Closing Date, any fact or statement
necessary to make the other statements or facts set forth herein or therein not
false or misleading.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF STG AND
CONTROLLING SHAREHOLDER OF STG
Except as set forth in the STG Disclosure Documents, Solomon, with
respect to Sections 5.4, 5.5 and 5.6, and STG with respect to all other sections
of this Article V, represents and warrants to, and agrees with, LNLA as follows
as of the date hereof with the knowledge and understanding that LNLA is relying
materially upon such representations and warranties:
5.1 Organization and Standing of STG.
(a) As of the Effective Date, STG is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite power to carry on its business as now conducted
and to own its assets and is duly qualified to transact business as a foreign
entity in each state where such qualification is necessary except where the
failure to qualify will not have a Material Adverse Effect.
(b) As of the Closing, STG will be a corporation, validly existing and
in good standing under the laws of the State of Delaware and will have the
requisite corporate power to carry on its business as then currently conducted
and to own its assets and will be duly qualified to transact business as a
foreign corporation in each state where such qualification is necessary except
where the failure to qualify will not have a Material Adverse Effect.
5.2 Subsidiaries. STG has no Subsidiaries and no interest in any
other corporation, partnership, joint venture or other entity.
5.3 Capitalization.
(a) As of the Effective Date, the membership interests in STG are not
certificated but are set forth in STG's operating agreement. Except as set forth
on Schedule 5.3(a), there are no outstanding (i) rights to purchase or subscribe
for any membership interests, or other ownership interests of STG, (ii)
Obligations of STG, whether absolute or contingent, to issue any equity
securities or other ownership interests, (iii) debt or equity securities
directly or indirectly convertible into any equity securities of STG or (iv) any
agreements, options, rights of first refusal or other similar rights with
respect to the membership interests of STG. Further, except as required in this
Agreement, prior to the Closing, STG will take no action to authorize the
issuance of any options, warrants, rights, or any securities convertible into
membership interests of STG.
(b) As of the Closing, the authorized capital stock of STG will consist
of 110,000 shares, comprised of 100,000 shares of common stock of which 1,000
shares will be issued and outstanding and 10,000 shares of preferred stock of
which no shares will have been issued. The shares of common stock of STG that
are issued and outstanding as of the Closing will be duly authorized, validly
issued and outstanding, fully paid and nonassessable, and will not have been
issued in violation of the preemptive rights of any person. As of the Closing,
there will be no outstanding (i) options, warrants or rights to purchase or
subscribe for any equity securities, or other ownership interests of STG, (ii)
Obligations of STG, whether absolute or contingent, to issue any shares of
equity securities or other ownership interests, (iii) debt or equity securities
directly or indirectly convertible into any equity securities of STG or (iv) any
shareholder agreements, options, rights of first refusal or other similar rights
with respect to the capital stock of STG. Further, except as required in this
Agreement, prior to the Closing, STG will take no action to authorize the
issuance of any options, warrants, stock rights, stock dividends, or any
securities convertible into capital stock of STG.
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5.4 Equity/Share Ownership.
(a) As of the Effective Date, Solomon is the record and beneficial
owner of all of the membership interests of STG free and clear of all Liens of
any kind.
(b) As of the Closing and upon the conversion of STG to a corporation,
Solomon will be the record and beneficial owner of all of the outstanding
capital stock of STG free and clear of all Liens of any kind. Upon execution of
this Agreement and delivery at Closing of the certificates for the Exchange
Shares and rights to shares pursuant to the Exchange, LNLA shall receive
marketable title to such shares free and clear of all Liens of third parties.
5.5 Investment. Solomon hereby represents, warrants and agrees that he
will be acquiring the Solomon Shares, for investment, for his own account, and
not with a view to the distribution of the Solomon Shares. In such connection,
Solomon further represents and warrants that he understands that LNLA is issuing
the Solomon Shares to him in reliance upon an exemption from the registration
requirements pursuant to Section 5 of the Securities Act and the rules and
regulations thereunder. Solomon agrees that the Solomon Shares may not be sold,
transferred, pledged, hypothecated, assigned or otherwise disposed of by him
unless LNLA shall have been supplied with evidence satisfactory to it and its
counsel that such transfer is not in violation of the Securities Act.
Furthermore, Solomon understands that the certificates for the Solomon Shares
shall bear an appropriate restrictive legend to reflect the foregoing
restrictions and that stop transfer instructions will be placed against the
Solomon Shares with respect thereto. Solomon consents to the placing of such
legend on the certificates for the Solomon Shares. Furthermore, Solomon hereby
represents and warrants that he is acquiring the Solomon Shares hereunder solely
for investment and not with a view to, or for sale in connection with, any
distribution thereof in any transaction or series of transactions that would be
in violation of the securities laws of the United States or any state thereof.
5.6 Accredited Investor. Solomon hereby represents and warrants to LNLA
that he is an "accredited investor" within the meaning of Rule 501(a) of
Regulation D of the Securities Act. Furthermore, Solomon hereby represents and
warrants that he is familiar with the business and financial condition,
properties, operation and prospects of LNLA and that he has been granted the
opportunity to ask questions of, and receive answers from, representatives of
LNLA and to obtain any additional information that he deems necessary or
appropriate. Solomon hereby represents and warrants that (i) his financial
situation is such that he can afford to bear the economic risk of holding the
Solomon Shares for an indefinite period, (ii) he can afford to suffer the
complete loss of his investment in the Solomon Shares, (iii), he has adequate
means of providing for his and his dependents' current needs and possible
personal contingencies, (iv) he has no need for liquidity in this investment,
and (v) can afford a complete loss of such investment.
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5.7 Governmental Approval; Consents. No authorization, license, permit,
franchise, approval, order or consent of, and no registration, declaration or
filing by STG with, any governmental authority, domestic or foreign, federal,
state or local, is required in connection with the execution, delivery and
performance of this Agreement and consummation of the transaction. No consent,
approval, authorization of, or declaration of any other parties are required to
be received by or on the part of STG to enable it to enter into and carry out
this Agreement.
5.8 Authority. STG has the requisite authority to execute, deliver and
perform the this Agreement. This Agreement constitutes, and all other agreements
contemplated hereby will constitute, when executed and delivered by STG in
accordance herewith, the legal, valid and binding Obligations of STG enforceable
in accordance with their respective terms, subject to the Enforceability
Exceptions.
5.9 Litigation. There is no claim, action, proceeding, or investigation
pending or, to its Knowledge, threatened against or affecting STG before or by
any court, arbitrator or governmental agency or authority. There are no decrees,
injunctions or orders of any court, governmental department, agency or
arbitration outstanding against STG.
5.10 No Commissions. STG has not incurred any Obligation for any
finder's or broker's or agent's fees or commissions or similar compensation in
connection with the transactions contemplated hereby, other than the issuance
pursuant to the Investment Banking Agreement between Sunrise and STG dated
October 26, 2004, as amended to Sunrise Securities Corp. and/or its designees of
2% of the fully diluted shares of LNLA Stock on a post-Exchange pre-Offering
basis as set forth on Exhibit A attached hereto.
5.11 Accuracy of Representations. None of the representations or
warranties contained in this Agreement contain or will contain at the Closing
any false or misleading statement, or omits, or will omit at the Closing any
fact or statement necessary to make the other statements or facts set forth
herein or therein not false or misleading.
5.12 Taxes. STG has duly filed all returns required, in the opinion of
its tax accountants, to be filed by it. To the Knowledge of STG such returns
were, when filed, and are, accurate and complete in all material respects and
were prepared in conformity with applicable laws and regulations. STG has paid
or will pay in full or has adequately reserved against all Taxes otherwise
assessed against it through the Closing Date. STG is not a party to any pending
action or proceeding by any governmental authority for the assessment of any
Tax, and, to the best of its Knowledge, no claim for assessment or collection of
any Tax related to STG has been asserted against STG that has not been paid.
There are no Tax liens upon the assets (other than the lien of property Taxes
not yet due and payable) of STG. There is no valid basis, to the best of its
Knowledge for any assessment, deficiency, notice, or similar intention to assess
any Tax to be issued to STG by any governmental authority.
12
5.13 Liabilities. Except as set forth in the STG Disclosure Documents
or as incurred in the ordinary course of business, STG has no Liabilities,
contingent or otherwise.
5.14 Financial Statements: No Material Adverse Change.
(a) STG has made available to LNLA its audited financial
statements for the periods ending December 31, 2004 and December 31, 2003 and
its unaudited financial statements including balance sheet at June 30, 2005
(collectively, the "Financial Statements" and June 30, 2005 is the "Balance
Sheet Date"). The Financial Statements have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods indicated, except that
the unaudited Financial Statements may not contain all footnotes required by
GAAP. The Financial Statements fairly present the financial condition and
operating results of STG as of the dates, and for the periods, indicated
therein.
(b) Except as set forth in the STG Disclosure Documents, since
the Balance Sheet Date, there has not been (i) any Material Adverse Change to
STG, (ii) any incurrence, satisfaction or discharge of any lien on any asset or
property of STG, (iii) any waiver or compromise of any valuable right of STG, or
the cancellation of any material debt or material claim held by STG, (iv) any
payment of dividends on, or other distributions with respect to, or any direct
or indirect redemption or acquisition of, any shares of the capital stock of
STG, or any agreement or commitment therefore, (v) any mortgage, pledge, sale,
assignment or transfer of any material tangible or intangible assets of STG,
except in the ordinary course of business, (vi) any loan or guaranty by STG to
or for the benefit of any officer, director, employee, consultant or
stockholder, or any member of their immediate families, or any agreement or
commitment therefore, other than travel expense advances made by STG to its
officers, directors, employees, consultants or stockholders in the ordinary
course of business, (vii) any material damage, destruction or loss (whether or
not covered by insurance) affecting the assets of STG, (viii) any increase,
direct or indirect, in the compensation (including salary, bonus, insurance or
pension benefits) paid or payable to or for the benefit of any officer,
director, employee or consultant of STG other than in the ordinary course of
business, (ix) any material change to a material contract or agreement by which
STG or any of its assets is bound or subject, (x) any sale, assignment or
transfer of any intellectual property rights or any other material intangible or
tangible assets, other than in the ordinary course of business, (xi) any
resignation or termination of employment of any officer or key employee of STG;
and STG, is not aware of any impending resignation or termination of employment
of any such officer or key employee, (xii) any change or amendment to any of the
governing documents of STG, or (xiii) any arrangement or commitment by STG to do
any of the things described in this Section 5.14.
(c) Except as set forth in the STG Disclosure Documents, since
the Balance Sheet Date, STG has not incurred any Liabilities or Obligations
(whether absolute, accrued, fixed, contingent, liquidated, unliquidated or
otherwise and whether due or to become due) of any nature, except for
Liabilities, Obligations or contingencies (i) which are reflected in the
Financial Statements, (ii) which were incurred in the ordinary course of
business after the Balance Sheet Date and consistent with past practices, (iii)
which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect or (iv) which arise as a result of the
Transactions. Since the Balance Sheet Date, there has been no change in any
significant accounting (including tax accounting) policies, practices or
procedures of STG.
13
5.15 Contracts. Except as set forth in the STG Disclosure Documents,
STG is not a party to any written or oral (a) Contract with any labor union; (b)
material Contract for the future purchase of fixed assets or for the future
purchase of materials, supplies or equipment in excess of normal operating
requirements; (c) Contract for the employment of any officer, individual
employee or other person on a full-time basis or any contract with any Person on
a consulting basis providing for a payment to such officer, employee or other
person in excess of $10,000 per year; (d) agreement or indenture relating to the
borrowing of money or to the mortgaging, pledging or otherwise placing a
material lien on any assets of STG; (e) guaranty of any material Obligation for
borrowed money; (f) material lease or agreement under which STG is lessee of or
holds or operates any property, real or personal, owned by any other party; (g)
material lease or agreement under which STG is lessor of or permits any third
party to hold or operate any property, real or personal, owned or controlled by
STG; (h) agreement or other commitment for capital expenditures in excess of
$10,000; (i) Contract, agreement or commitment under which STG is obligated to
pay any broker's fees, finder's fees or any such similar fees, to any third
party in connection with the Transactions; (j) Contract with any present or
former officer, director, stockholder or affiliate of STG; or (k) any other
Contract, agreement, arrangement or understanding, other than customer
contracts, which is material to the business of STG including, without
limitation, for the issuance of any securities of LNLA post-Exchange that are
not otherwise contemplated by this Agreement. All such Contracts constitute the
valid and binding Obligations of STG and, to the knowledge of STG, the other
parties thereto, enforceable in accordance with their terms, except as
enforcement may be limited by the Enforceability Exceptions.
5.16 Intellectual Property. STG owns or possesses adequate licenses or
other rights to use all intellectual property material to its business as
currently conducted and as proposed to be conducted, and STG has not received
any written notice of infringement of or conflict with asserted rights of others
with respect to the use of any intellectual property. To the knowledge of STG,
all intellectual property material to its business as currently conducted and as
proposed to be conducted are valid and enforceable and STG has performed all
acts and has paid all required fees and Taxes to maintain all registrations and
applications of such intellectual property in full force and effect. STG does
not, in the conduct of its business as now conducted or as proposed to be
conducted, infringe or conflict with any right of any third party, known to STG,
where such infringement or conflict would reasonably be expected to result in
any Material Adverse Effect. STG is not, nor will it be as a result of the
execution and delivery of this Agreement or the performance of any Obligations
hereunder, be in breach of any license or other agreement relating to any
intellectual property, except as would not have a Material Adverse Effect. To
the knowledge of STG, no third party is infringing or has infringed any
intellectual property of STG.
5.17 Schedule 14f-1. STG (or its counsel) shall promptly, following the
execution of this Agreement, either (i) draft and submit to LNLA's counsel for
review a Schedule 14f-1 with respect to the transactions contemplated by this
Agreement or (ii) provide to LNLA (or its counsel) all information and
assistance reasonably requested by LNLA or its counsel to prepare such Schedule
14f-1.
5.18. No Conflict. The execution and performance of this Agreement and
any other agreements contemplated hereby will not (i) conflict with or violate
the Limited Liability Operating Agreement of STG or, upon conversion to a
corporation, the Certificate of Incorporation or the by-laws of STG or (ii)
violate in any material respect any Laws.
14
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF STG AND SOLOMON
In addition to the deliveries provided for in Article III, the
obligation to consummate the Closing by STG and Solomon is subject to the
following conditions:
6.1 Compliance by LNLA. LNLA shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or complied
with by LNLA prior to or on the Closing Date.
6.2 New Directors and Officers. Effective as of the Closing, Derek
Caldwell ("Caldwell"), Samir N. Masri ("Masri"), and all other current directors
of LNLA, shall have elected two (2) nominees of STG and/or Solomon and,
simultaneously therewith, Caldwell and Masri shall have tendered to the board of
directors of LNLA, their resignations, in writing, as directors of LNLA. Also
effective as of the Closing, all current officers of LNLA shall have tendered
their resignations, in writing, to LNLA.
6.3 Continued Market for Shares. As of the Closing, the shares of LNLA
Stock shall continue to be eligible for quotation on the NASD Over the Counter
Bulletin Board and not subject to any contemplated delisting, trading halt, or
other restriction on trading.
6.4 Accuracy of LNLA Representations. The representations and
warranties of LNLA (including any exhibit hereto and the LNLA Disclosure
Schedule) or any schedule, certificate, or other instrument delivered pursuant
to the provisions hereof or in connection with the transactions contemplated
hereby shall be true in all material respects at and as of the Closing Date.
6.5 Litigation. No litigation seeking to enjoin the transactions
contemplated by this Agreement or to obtain damages on account hereof shall be
pending or threatened.
6.6 Documents. All documents and instruments to be delivered by LNLA to
STG at the Closing pursuant to Section 3.2 shall have been delivered in
accordance with such section.
6.7 Opinion of Counsel. LNLA shall provide to STG the written opinion
of its legal counsel in substantially the form of opinion attached hereto as
Exhibit C.
6.8 Filings. All documents that are necessary to be filed prior to the
closing of the transactions contemplated hereby shall have been filed with the
applicable governmental and regulatory authorities, including, without
limitation, the SEC.
15
ARTICLE VII
CONDITIONS TO LNLA'S OBLIGATIONS
In addition to the deliveries provided for in Article 3, LNLA's
obligation to consummate the Closing is subject to the following conditions:
7.1 Compliance by STG. STG shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or complied
with by STG prior to or on the Closing Date.
7.2 Payment. STG shall have paid all amounts as provided for in
Section 2.3 of this Agreement.
7.3 Accuracy of STG Representations. The representations and warranties
of STG contained in this Agreement or any schedule, certificate, or other
instrument delivered pursuant to the provisions hereof or in connection with the
transactions contemplated hereby shall be true in all material respects.
7.4 Litigation. No litigation seeking to enjoin the transactions
contemplated by this Agreement or to obtain damages on account hereof shall be
pending or, to STG's Knowledge, be threatened.
7.5 Documents. All documents and instruments to be delivered to LNLA by
STG at the Closing shall have been delivered pursuant to Section 3.1 and in
accordance with such section.
7.6. Opinion of Counsel. STG shall provide to LNLA the written opinion
of its legal counsel in substantially the form of opinion attached hereto as
Exhibit D.
7.7 Closing of the Offering. Prior to the Closing, STG shall have
received at least two million dollars ($2,000,000) into escrow in the Offering
and all closing conditions for the Offering, other than the Closing of the
Exchange, shall have been satisfied or waived. In the event this condition is
not satisfied or waived within sixty (60) days after the Private Placement
Memorandum is first sent to prospective investors (unless such date shall be
extended by the mutual written agreement of the parties hereto), either party
may terminate this Agreement without further obligation of any kind.
7.8 Solomon Employment Agreement. LNLA will have assumed that certain
Employment Agreement by and between STG and Solomon dated as of the Closing in
substantially the form provided to and agreed to by counsel for LNLA.
16
7.9 Lock-Up Agreement. Solomon shall enter into a Lock-Up Agreement
in substantially the form of Exhibit B attached hereto.
7.10 Filings. All documents that are necessary to be filed prior to the
closing of the transactions contemplated hereby shall have been filed with the
applicable governmental and regulatory authorities.
ARTICLE VIII
POST-CLOSING COVENANTS
8.1 Post-Closing Capitalization. After the Exchange but prior to the
closing of the Offering, STG shall have a capitalization as reflected on Exhibit
A attached hereto.
8.2 Shareholder Claims. If any shareholder(s) of LINLA raises a claim
or action for damages or harm caused to them by the failure by LNLA to make
filing(s) required to be made by it prior to Closing with the SEC or the
omission of an auditor's review of such filings and take action against the
Company, and as a result of such action(s), the Company or its management or
directors incur any fees, damages, penalties or related costs defending itself
from any and all such claims and actions (including attorneys fees or other
professional fees), then the amounts paid pursuant to paragraph 2.3 of this
Agreement shall be adjusted downward by the total amount of such fees, damages,
penalties and related costs up to a maximum of the amounts paid by STG as stated
in paragraph 2.3 and there shall be a refund to STG equal to such adjustment.
8.3 Further Assurances. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby. Each of
the parties shall use commercially reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Exchange and the other transactions contemplated by this Agreement, including
(A) the obtaining of all other necessary actions or nonactions, waivers,
consents, licenses, permits, authorizations, orders and approvals from
governmental authorities and the making of all other necessary registrations and
filings (including filings with governmental authorities, if any) and (B) the
obtaining of all consents, approvals or waivers from third parties related to or
required in connection with the Exchange that are necessary to consummate the
Exchange and the transactions contemplated hereby.
8.4 Payment to LNLA Holders. Each of the parties hereto agrees to do
such things as reasonably necessary to ensure that each of the LNLA Holders
receive, promptly after the Closing (and in any event, within three business
days thereafter), the payments to which they are entitled pursuant to this
Agreement.
17
ARTICLE IX
MISCELLANEOUS
9.1 Expenses. Each party shall bear its own costs in respect of the
Transactions. Notwithstanding the foregoing, all legal fees of Pedley Zielke
Gordinier & Pence, PLLC, counsel to LNLA, and other associated costs (the "PZGP
Fees") shall be paid out of the $86,000 to be transferred to the LNLA Holders at
the Closing and shall be paid by wire transfer directly to Pedley Zielke
Gordinier & Pence, PLLC at the Closing.
9.2 Survival of Representations, Warranties and Covenants. All
statements contained in this Agreement or in any certificate delivered by or on
behalf of STG, LNLA, or Solomon pursuant hereto, or in connection with the
transactions contemplated hereby shall be deemed representations, warranties and
covenants by STG, LNLA, or Solomon, as the case may be, hereunder. All
representations, warranties, and covenants made by STG, LNLA, or Solomon in this
Agreement, or pursuant hereto shall terminate two (2) years from the Closing
Date.
9.3 Succession and Assignments; Third Party Beneficiaries. This
Agreement may not be assigned (either voluntarily or involuntarily) by any party
hereto without the express written consent of the other party or parties. Any
attempted assignment in violation of this section 9.3 shall be void and
ineffective for all purposes. In the event of an assignment permitted by this
section 9.3, this Agreement shall be binding upon the heirs, successors and
assigns of the parties hereto. There shall be no third party beneficiaries of
this Agreement.
9.4 Notices. All notices, requests, demands, or other communications
with respect to this Agreement shall be in writing and shall be (a) sent by
facsimile transmission, (b) or with respect of notices from the United States
sent by the United States Postal Service, registered or certified mail, return
receipt requested, or (c) personally delivered by a nationally recognized
express overnight courier service, charges prepaid, to the following addresses
(or such other addresses as the parties may specify from time to time in
accordance with this Section):
(i) If to STG: ShowToGo, LLC.
815 Summit Road
Narberth, Pennsylvania 19072
Attn: David Solomon
Fax: (610) 660-0653
With a copy to: Flamm, Boroff & Bacine, P.C.
794 Penllyn Pike
Blue Bell, Pennsylvania 19422
Attn: Dominic Liberi, Esq.
Fax No.: (267) 419-1560
(ii) If to LNLA: Lincoln International Corporation
641 Lexington Avenue, 25th Floor
New York, New York 10022
Attn: Nathan Low
Fax: (212) 750-7277
With a copy to: David Pedley, Esquire
Pedley Zielke Gordinier & Pence, PLLC
2000 Meidinger Tower
462 South 4th Street
Louisville, KY 40202
Fax: (502) 584-0422
18
All such notices shall, when sent in accordance with the preceding sentence, be
deemed to have been given and received on the earliest of (A) the day delivered
to such address by hand, if personally delivered; or sent by facsimile
transmission provided such transmission has been confirmed as sent, (B) the
third (3rd) business day following the date deposited with the United States
Postal Service, or (C) the next business day after shipment overnight by
recognized courier service.
9.5 Governing Law; Construction. This Agreement shall be construed and
enforced in accordance with the internal laws of the State of Delaware without
giving effect to the principles of conflicts of law thereof.
9.6 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same Agreement. Facsimile counterpart signatures
to this Agreement shall be acceptable and binding.
9.7 No Implied Waiver; Remedies. No failure or delay on the part of the
parties hereto to exercise any right, power, or privilege hereunder or under any
instrument executed pursuant hereto shall operate as a waiver nor shall any
single or partial exercise of any right, power, or privilege preclude any other
or further exercise thereof or the exercise of any other right, power, or
privilege. All rights, powers, and privileges granted herein shall be in
addition to other rights and remedies to which the parties may be entitled at
law or in equity.
9.8 Entire Agreement. This Agreement, including any exhibits and
Disclosure Schedules attached hereto, sets forth the entire understandings of
the parties with respect to the subject matter hereof, and it incorporates and
merges any and all previous communications, understandings, oral or written as
to the subject matter hereof, and cannot be amended, waived or changed except in
writing, signed by the party to be bound thereby.
9.9 Waiver of Jury Trial. Each of the parties hereto expressly waives
its right to a jury trial with respect to any such suit, litigation or other
judicial proceeding.
9.10 Headings. The headings of the Sections of this Agreement, where
employed, are for the convenience of reference only and do not form a part
hereof and in no way modify, interpret or construe the meanings of the parties.
19
9.11 Severability. To the extent that any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted hereof and the
remainder of such provision and of this Agreement shall be unaffected and shall
continue in full force and effect.
9.12 Termination. This Agreement may be terminated by: (a) the mutual
written consent of LNLA and STG, (b) LNLA by written notice to STG if there has
been a material breach of the representations or warranties on the part of STG
or Solomon set forth in this Agreement and such material breach has not been
cured within five (5) days of notice of such material breach to STG or Solomon,
or (c) STG by written notice to LNLA if there has been a material breach of the
representations or warranties on the part of LNLA and such material breach has
not been cured within five (5) days of notice of such material breach to LNLA.
No termination of this Agreement pursuant to this Section 9.12 shall excuse any
breach by STG or LNLA of any provision of this Agreement occurring prior to such
termination. In the event of any such termination, the party initiating the
termination shall immediately deliver written notice of same to Sunrise
Securities Corp., Attn.: Nathan Low, President, via certified mail to 641
Lexington Avenue, New York, New York 10022 or via confirmed facsimile
transmission to (212)-750-7277.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
SIGNATURE PAGE TO FOLLOW]
20
IN WITNESS WHEREOF, the parties have executed this Share Exchange
Agreement as of the Effective Date.
LNLA:
LINCOLN INTERNATIONAL CORPORATION
By: /s/ DEREK CALDWELL
Name: DEREK CALDWELL
Title: President
STG:
SHOWTOGO, INC.
By: /s/ DAVID SOLOMON
Name: DAVID SOLOMON
Title:
/s/ DAVID SOLOMON
--------------------------------
DAVID SOLOMON
As to Section 8.2 only:
/s/ NATHAN LOW
--------------------------------
NATHAN LOW
Signature Page to Share Exchange Agreement
21
EXHIBIT A
POST-EXCHANGE PRE-OFFERING CAPITALIZATION TABLE
Shares of Ownership %
Common Stock of the Combined
and Warrants Company
LINLA Existing Shareholders: 2,610,000 10.00%
Show To Go, Inc.'s ("STG") shareholders to be issued shares of common stock 22,968,000 88.0%
("Common Stock") of LNLA upon the closing of the Merger, such shares
constituting the Solomon Shares:
Designees of Sunrise Securities Corp. to be issued shares of Common Stock of
LNLA upon the closing of the Merger, such shares constituting the Sunrise
Shares:
Nathan Low 247,950 0.95%
Amnon Mandelbaum 247,950 0.95%
David Goodfriend 26,100 0.10%
Total Pre Financing and Post Merger Shares of Common Stock outstanding on a 26,100,000 100%
fully diluted and converted basis
22
EXHIBIT B
LOCK-UP AGREEMENT
23
EXHIBIT C
FORM OF OPINION OF PZGP
24
EXHIBIT D
FORM OF OPINION OF FB&B
25
STG Schedule of Exceptions
5.3(a)
Investment Agreement dated January 2, 2005 by and between STG and Emmanuel Gill
whereby Mr. Gill has the right to convert the unpaid balance of his equipment
financings to STG of up to $1 million dollars at 80% of the offering price (in
the round of financing following the private offering contemplated in connection
with the Share Exchange Agreement) of securities of LNLA.
26