EX-10.1
 
 
SHARE EXCHANGE AGREEMENT
 
BY AND AMONG
 
BTHC X, INC.,
 
SUR-AMERICA VENTURES, INC.
 
AND ITS SHAREHOLDERS
 
 
May 21, 2009

 
 
SHARE EXCHANGE AGREEMENT
 
 
This SHARE EXCHANGE AGREEMENT (this “Agreement”), dated as of May 21, 2009, is
by and among BTHC X, Inc., a Delaware corporation, (the “Parent”), Sur- America
Ventures, Inc., a Delaware corporation (the “Company”), and the Shareholders of
the Company identified on Annex A hereto (each, a “Shareholder”, and together,
the “Shareholders”). Each of the parties to this Agreement is individually
referred to herein as a “Party” and collectively, as the “Parties.”
 
 
BACKGROUND
 
 
The Company has 1,000 shares of capital stock (the “Company Stock”) outstanding,
all of which are held by the Shareholders. Each Shareholder is the record and
beneficial owner of the number of shares of Company Stock set forth opposite
such Shareholder’s name on Annex A hereto. Each Shareholder has agreed to
transfer all of his, her or its (hereinafter “its”) shares of Company Stock in
exchange for 1,576,782 newly issued shares of the Common Stock, par value $0.001
per share, of the Parent (the “Parent Stock”) that will, in the aggregate,
constitute approximately 90% of the issued and outstanding capital stock of the
Parent on a fully-diluted basis as of and immediately after the Closing (as
defined hereinafter). The number of shares of Parent Stock to be received by
each Shareholder is listed opposite each such Shareholder’s name on Annex A. The
aggregate number of shares of Parent Stock that is reflected on Annex A is
referred to herein as the “Shares”.
 
 
The exchange of Company Stock for Parent Stock is intended to constitute a
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986 (the “Code”), as amended.
 
 
The board of directors of the Parent and the Company have determined that it is
desirable to effect this plan of reorganization and share exchange.
 
 
AGREEMENT
 
 
NOW THEREFORE, the Parties agree as follows:
 
ARTICLE I.
Exchange of Shares

 
Section 1.01. Exchange by Shareholders. At the Closing (as defined in Section
1.02), each of the Shareholders shall sell, transfer, convey, assign and deliver
to the Parent its Company Stock free and clear of all Liens (as defined below)
in exchange for the Parent Stock listed on Annex A opposite such Shareholder’s
name.
 
 
Section 1.02. Closing. The closing (the “Closing”) of the transactions
contemplated hereby (the “Transactions”) shall take place at the offices of the
Parent commencing at 9:00 a.m. local time on the business day following the
satisfaction or waiver of all conditions to the obligations of the parties to
consummate the Transactions contemplated hereby (other than conditions with
respect to actions the respective parties will take at the Closing itself), or
such other date and time as the parties may mutually determine (the “Closing
Date”).
 
 
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ARTICLE II.
Representations and Warranties of Shareholders

 
Each of the Shareholders hereby severally (and not jointly) represents and
warrants to the Parent with respect to itself, as follows:
 
 
Section 2.01. Good Title. Each Shareholder is the record and beneficial owner,
and has good title to its Company Stock, with the right and authority to sell
and deliver such Company Stock. Upon delivery of any certificate or certificates
duly assigned, representing the same as herein contemplated and/or upon
registering of the Parent as the new owner of such Company Stock in the share
register of the Company, the Parent will receive good title to such Company
Stock, free and clear of all liens, security interests, pledges, equities and
claims of any kind, voting trusts, shareholder agreements and other encumbrances
(collectively, “Liens”).
 
 
Section 2.02. Power and Authority. All acts required to be taken by the
Shareholder to enter into this Agreement and to carry out the Transactions have
been properly taken. This Agreement constitutes a legal, valid and binding
obligation of the Shareholder, enforceable against such Shareholder in
accordance with the terms hereof.
 
 
Section 2.03. No Conflicts. The execution and delivery of this Agreement by the
Shareholder and the performance by the Shareholder of its obligations hereunder
in accordance with the terms hereof: (a) will not require the consent of any
third party or any central, provincial, regional, local, municipal or foreign
government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign (“Governmental Entity”) under any statutes, laws, ordinances, rules,
regulations, orders, writs, injunctions, judgments, or decrees (collectively,
“Laws”); (b) will not violate any Laws applicable to such Shareholder and (c)
will not violate or breach any contractual obligation to which such Shareholder
is a party.
 
 
Section 2.04. No Finder’s Fee. No Shareholder has created any obligation for any
finder’s, investment banker’s or broker’s fee in connection with the
Transactions.
 
 
Section 2.05. Purchase Entirely for Own Account. The Parent Stock proposed to be
acquired by the Shareholder hereunder will be acquired for investment for its
own account, and not with a view to the resale or distribution of any part
thereof, and the Shareholder has no present intention of selling or otherwise
distributing the Parent Stock, except in compliance with applicable securities
laws.
 
 
Section 2.06. Available Information. The Shareholder has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of investment in the Parent.
 
 
Section 2.07. Non-Registration. The Shareholder understands that the Parent
Stock has not been registered under the Securities Act of 1933, as amended (the
“Securities Act”) and, if issued in accordance with the provisions of this
Agreement, will be issued by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of the
Shareholder’s representations as expressed herein. The non-registration shall
have no prejudice with respect to any rights, interests, benefits and
entitlements attached to the Parent Stock in accordance with the Parent charter
documents or the laws of its jurisdiction of incorporation.
 
 
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Section 2.08. Restricted Securities. The Shareholder understands that the Parent
Stock is characterized as “restricted securities” under the Securities Act
inasmuch as this Agreement contemplates that, if acquired by the Shareholder
pursuant hereto, the Parent Stock would be acquired in a transaction not
involving a public offering. The Shareholder further acknowledges that if the
Parent Stock is issued to the Shareholder in accordance with the provisions of
this Agreement, such Parent Stock may not be resold without registration under
the Securities Act or the existence of an exemption therefrom. The Shareholder
represents that it is familiar with Rule 144 promulgated under the Securities
Act, as presently in effect (“Rule 144”), and understands the resale limitations
imposed thereby and by the Securities Act.
 
 
Section 2.09. Accredited Investor. The Shareholder is an “accredited Investor”
within the meaning of Rule 501 under the Securities Act and the Shareholder was
not organized for the specific purpose of acquiring the Parent Stock.
 
 
Section 2.10. Legends. It is understood that the Parent Stock will bear the
following legend or one that is substantially similar to the following legend:
 
 
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE
OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION STATEMENT IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
 
 
Additionally, the Parent Stock will bear any legend required by the “blue sky”
laws of any state to the extent such laws are applicable to the securities
represented by the certificate so legended.
 
ARTICLE III.
Representations and Warranties of the Company

 
The Company represents and warrants as follows to the Parent that, except as set
forth in the letter delivered from the Company to the Parent concurrently
herewith (the “Company Disclosure Letter”), regardless of whether or not the
Company Disclosure Letter is referenced below with respect to any particular
representation or warranty:
 
 
Section 3.01. Organization, Standing and Power. Each of the Company and its
subsidiaries (the “Company Subsidiaries”) is duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it is organized
and has the corporate power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to enable
it to own, lease or otherwise hold its properties and assets and to conduct its
businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually or in the
aggregate, has not had and would not reasonably be expected to have a material
adverse effect on the Company, a material adverse effect on the ability of the
Company to perform its obligations under this Agreement or on the ability of the
Company to consummate the Transactions (a “Company Material Adverse Effect”).
The Company and each Company Subsidiary is duly qualified to do business in each
jurisdiction where the nature of its business or its ownership or leasing of its
properties make such qualification necessary except where the failure to so
qualify would not reasonably be expected to have a Company Material Adverse
Effect. The Company has delivered to the Parent true and complete copies of the
Articles of Incorporation of the Company and such other constituent instruments
of the Company as may exist, each as amended to the date of this Agreement (as
so amended, the “Company Constituent Instruments”), and the comparable charter,
organizational documents and other constituent instruments of each Company
Subsidiary, in each case as amended through the date of this Agreement.
 
 
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Section 3.02.   Company Subsidiaries; Equity Interests.
 
(a) All the outstanding shares of capital stock or equity investments of each
Company Subsidiary have been validly issued and are fully paid and nonassessable
and are as of the date of this Agreement owned by the Company, by another
Company Subsidiary or by the Company and another Company Subsidiary, free and
clear of all Liens.
 
 
(b) Except for its interests in the Company Subsidiaries, the Company does not
as of the date of this Agreement own, directly or indirectly, any capital stock,
membership interest, partnership interest, joint venture interest or other
equity interest in any person.
 
 
Section 3.03. Capital Structure. The authorized capital stock of the Company
consists of 1,000 shares of common stock, all of which are issued and
outstanding. Except as set forth above, no shares of capital stock or other
voting securities of the Company are issued, reserved for issuance or
outstanding. The Company is the sole record and beneficial owner of all of the
issued and outstanding capital stock of each Company Subsidiary. All outstanding
shares of the capital stock of the Company and each Company Subsidiary are duly
authorized, validly issued, fully paid and nonassessable and not subject to or
issued in violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the applicable corporate laws of the State of Delaware, the Company Constituent
Instruments or any Contract (as defined in Section 3.05) to which the Company is
a party or otherwise bound. There are not any bonds, debentures, notes or other
indebtedness of Company or any Company Subsidiary having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which holders of Company Stock or the common stock of any Company
Subsidiary may vote (“Voting Company Debt”). Except as set forth above, as of
the date of this Agreement, there are not any options, warrants, rights,
convertible or exchangeable securities, “phantom” stock rights, stock
appreciation rights, stock-based performance units, commitments, Contracts,
arrangements or undertakings of any kind to which the Company or any Company
Subsidiary is a party or by which any of them is bound (a) obligating the
Company or any Company Subsidiary to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity
interests in, or any security convertible or exercisable for or exchangeable
into any capital stock of or other equity interest in, the Company or any
Company Subsidiary or any Voting Company Debt, (b) obligating the Company or any
Company Subsidiary to issue, grant, extend or enter into any such option,
warrant, call, right, security, commitment, Contract, arrangement or undertaking
or (c) that give any person the right to receive any economic benefit or right
similar to or derived from the economic benefits and rights occurring to holders
of the capital stock of the Company or of any Company Subsidiary. As of the date
of this Agreement, there are not any outstanding contractual obligations of the
Company to repurchase, redeem or otherwise acquire any shares of capital stock
of the Company.
 
 
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Section 3.04. Authority; Execution and Delivery; Enforceability. The Company has
all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the Transactions. The execution and delivery by the
Company of this Agreement and the consummation by the Company of the
Transactions have been duly authorized and approved by the board of directors of
the Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement and the Transactions. When executed and
delivered, this Agreement will be enforceable against the Company in accordance
with its terms
 
Section 3.05. No Conflicts; Consents.
 
 
(a) The execution and delivery by the Company of this Agreement does not, and
the consummation of the Transactions and compliance with the terms hereof and
thereof will not, conflict with, or result in any violation of or default (with
or without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of the Company or any Company Subsidiary under, any
provision of (i) the Company Constituent Instruments or the comparable charter
or organizational documents of any Company Subsidiary, (ii) any material
contract, lease, license, indenture, note, bond, agreement, permit, concession,
franchise or other instrument (a “Contract”) to which the Company or any Company
Subsidiary is a party or by which any of their respective properties or assets
is bound or (iii) subject to the filings and other matters referred to in
Section 3.05(b), any material judgment, order or decree (“Judgment”) or material
Law applicable to the Company or any Company Subsidiary or their respective
properties or assets, other than, in the case of clauses (ii) and (iii) above,
any such items that, individually or in the aggregate, have not had and would
not reasonably be expected to have a Company Material Adverse Effect.
 
 
(b) Except for required filings with the Securities and Exchange Commission (the
“SEC”) and applicable “Blue Sky” or state securities commissions, no material
consent, approval, license, permit, order or authorization (“Consent”) of, or
registration, declaration or filing with, or permit from, any Governmental
Entity is required to be obtained or made by or with respect to the Company or
any Company Subsidiary in connection with the execution, delivery and
performance of this Agreement or the consummation of the Transactions.
 
Section 3.06. Taxes.
 
 
(a) Each of the Company and each Company Subsidiary has timely filed, or has
caused to be timely filed on its behalf, all Tax Returns (as defined below)
required to be filed by it, and all such Tax Returns are true, complete and
accurate, except to the extent any failure to file or any inaccuracies in any
filed Tax Returns, individually or in the aggregate, have not had and would not
reasonably be expected to have a Company Material Adverse Effect. All Taxes (as
defined below) shown to be due on such Tax Returns, or otherwise owed, have been
timely paid, except to the extent that any failure to pay, individually or in
the aggregate, has not had and would not reasonably be expected to have a
Company Material Adverse Effect. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.
 
 
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(b) The Company Financial Statements (as defined in Section 3.15) reflect an
adequate reserve for all Taxes payable by the Company and the Company
Subsidiaries (in addition to any reserve for deferred Taxes to reflect timing
differences between book and Tax items) for all Taxable periods and portions
thereof through the date of such financial statements. No deficiency with
respect to any Taxes has been proposed, asserted or assessed against the Company
or any Company Subsidiary, and no requests for waivers of the time to assess any
such Taxes are pending, except to the extent any such deficiency or request for
waiver, individually or in the aggregate, has not had and would not reasonably
be expected to have a Company Material Adverse Effect.
 
 (c) For purposes of this Agreement:
 
 
“Taxes” includes all forms of taxation, whenever created or imposed, and whether
of the United States or elsewhere, and whether imposed by a local, municipal,
governmental, provincial, foreign, central or other Governmental Entity, or in
connection with any agreement with respect to Taxes, including all interest,
penalties and additions imposed with respect to such amounts.
 
 
“Tax Return” means all central, provincial, regional, local, municipal and
foreign Tax returns, declarations, statements, reports, schedules, forms and
information returns and any amended Tax return relating to Taxes.
 

  Section 3.07. Benefit Plans.

 
(a) The Company does not have or maintain any bonus, pension, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan, arrangement or understanding
(whether or not legally binding) providing benefits to any current or former
employee, officer or director of the Company or any Company Subsidiary
(collectively, “Company Benefit Plans”). As of the date of this Agreement there
are not any severance or termination agreements or arrangements between the
Company or any Company Subsidiary and any current or former employee, officer or
director of the Company or any Company Subsidiary, nor does the Company or any
Company Subsidiary have any general severance plan or policy.
 
 
(b) Since March 31, 2009, there has not been any adoption or amendment in any
material respect by the Company or any Company Subsidiary of any Company Benefit
Plan.
 
 
Section 3.08. Litigation. There is no action, suit, inquiry, notice of
violation, proceeding (including any partial proceeding such as a deposition) or
investigation pending or threatened in writing against or affecting the Company,
any subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency, regulatory authority
(central, provincial, regional, local, municipal or foreign), stock market,
stock exchange or trading facility (“Action”) which (a) adversely affects or
challenges the legality, validity or enforceability of any of this Agreement or
the Shares or (b) could, if there were an unfavorable decision, individually or
in the aggregate, have or reasonably be expected to result in a Company Material
Adverse Effect. Neither the Company nor any Company Subsidiary, nor any director
or officer thereof (in his or her capacity as such), is or has been the subject
of any Action involving a claim or violation of or liability under central or
provincial securities laws or a claim of breach of fiduciary duty.
 
 
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Section 3.09. Compliance with Applicable Laws. The Company and the Company
Subsidiaries are in compliance with all applicable Laws, including those
relating to occupational health and safety and the environment, except for
instances of noncompliance that, individually and in the aggregate, have not had
and would not reasonably be expected to have a Company Material Adverse Effect.
The Company has not received any written communication during the past two years
from a Governmental Entity that alleges that the Company is not in compliance in
any material respect with any applicable Law. This Section 3.09 does not relate
to matters with respect to Taxes, which are the subject of Section 3.06.
 
 
Section 3.10. Brokers; Schedule of Fees and Expenses. Except as set forth in the
Company Disclosure Letter, no broker, investment banker, financial advisor or
other person is entitled to any broker’s, finder’s, financial advisor’s or other
similar fee or commission in connection with the Transactions based upon
arrangements made by or on behalf of the Company.
 
 
Section 3.11. Contracts. There are no Contracts that are material to the
business, properties, assets, condition (financial or otherwise), results of
operations or prospects of the Company and its subsidiaries taken as a whole.
Neither the Company nor any Company Subsidiary is in violation of or in default
under (nor does there exist any condition which upon the passage of time or the
giving of notice would cause such a violation of or default under) any Contract
to which it is a party or by which it or any of its properties or assets is
bound, except for violations or defaults that would not, individually or in the
aggregate, reasonably be expected to result in a Company Material Adverse
Effect.
 
 
Section 3.12. Title to Properties. The Company and the Company Subsidiaries do
not own any real property. Each of the Company and the Company Subsidiaries has
sufficient title to, or valid leasehold interests in, all of its properties and
assets used in the conduct of its businesses. All such assets and properties,
other than assets and properties in which the Company or any of the Company
Subsidiaries has leasehold interests, are free and clear of all Liens, except
for Liens that, in the aggregate, do not and will not materially interfere with
the ability of the Company and the Company Subsidiaries to conduct business as
currently conducted.
 
 
Section 3.13. Intellectual Property. The Company and the Company Subsidiaries
own, or are validly licensed or otherwise have the right to use, all patents,
patent rights, trademarks, trademark rights, trade names, trade name rights,
service marks, service mark rights, copyrights and other proprietary
intellectual property rights and computer programs (collectively, “Intellectual
Property Rights”) which are material to the conduct of the business of the
Company and the Company Subsidiaries taken as a whole. The Company Disclosure
Letter sets forth a description of all Intellectual Property Rights which are
material to the conduct of the business of the Company and the Company
Subsidiaries taken as a whole. There are no claims pending or, to the knowledge
of the Company, threatened that the Company or any of the Company Subsidiaries
is infringing or otherwise adversely affecting the rights of any person with
regard to any Intellectual Property Right. To the knowledge of the Company, no
person is infringing the rights of the Company or any of the Company
Subsidiaries with respect to any Intellectual Property Right.
 
 
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Section 3.14. Labor Matters. There are no labor union agreements to which the
Company or any of the Company Subsidiaries is a party or by which any of them is
bound. No material labor dispute exists or, to the knowledge of the Company, is
imminent with respect to any of the employees of the Company.
 

  Section 3.15. Insurance. The Company and the Company Subsidiaries are not
currently insured.

 
Section 3.16. Transactions with Affiliates and Employees. None of the officers
or directors of the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any transaction with the
Company or any subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.
 
 
Section 3.17. Internal Accounting Controls. The Company is establishing
disclosure controls and procedures for the Company and designing such disclosure
controls and procedures to ensure that material information relating to the
Company, including the Company Subsidiaries, is made known to the officers by
others within those entities.
 
 
Section 3.18. No Additional Agreements. The Company does not have any agreement
or understanding with the Shareholders with respect to the Transactions other
than as specified in this Agreement.
 
 
Section 3.19. Investment Company. The Company is not, and is not an affiliate
of, and immediately following the Closing will not have become, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.
 
 
Section 3.20. Disclosure. The Company confirms that neither it nor any person
acting on its behalf has provided any Shareholder or its respective agents or
counsel with any information that the Company believes constitutes material,
non-public information except insofar as the existence and terms of the proposed
transactions hereunder may constitute such information and except for
information that will be disclosed by the Parent under a current report on Form
8-K filed within four business days after the Closing.
 
 
Section 3.21. Foreign Corrupt Practices Act. Neither the Company, nor any of its
subsidiaries, nor, to the Company’s knowledge, any director, officer, agent,
employee or other person acting on behalf of the Company or any Company
Subsidiary has, in the course of its actions for, or on behalf of, the Company
(a) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity; (b) made any direct
or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (c) violated or is in violation of any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (d) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.
 
 
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ARTICLE IV.
Representations and Warranties of the Parent

 
The Parent represents and warrants as follows to each Shareholder and the
Company that, except as set forth in the reports, schedules, forms, statements
and other documents filed by the Parent with the SEC and publicly available
prior to the date of this Agreement (the “Parent SEC Documents”):
 
 
Section 4.01. Organization, Standing and Power. The Parent is duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has full corporate power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to enable
it to own, lease or otherwise hold its properties and assets and to conduct its
businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually or in the
aggregate, has not had and would not reasonably be expected to have a material
adverse effect on the Parent, a material adverse effect on the ability of the
Parent to perform its obligations under this Agreement or on the ability of the
Parent to consummate the Transactions (a “Parent Material Adverse Effect”). The
Parent is duly qualified to do business in each jurisdiction where the nature of
its business or their ownership or leasing of its properties make such
qualification necessary and where the failure to so qualify would reasonably be
expected to have a Parent Material Adverse Effect. The Parent has delivered to
the Company true and complete copies of the certificate or articles of
incorporation of the Parent, as amended to the date of this Agreement (as so
amended, the “Parent Charter”), and the Bylaws of the Parent, as amended to the
date of this Agreement (as so amended, the “Parent Bylaws”).
 
 
Section 4.02. Subsidiaries; Equity Interests. The Parent does not own, directly
or indirectly, any capital stock, membership interest, partnership interest,
joint venture interest or other equity interest in any person.
 
 
Section 4.03. Capital Structure. The authorized capital stock of the Parent
consists of 100,000,000 shares of Parent Stock, and 10,000,000 shares of
preferred stock, par value $0.001 per share. As of the date of this Agreement
(a) 175,198 shares of Parent Stock are issued and outstanding; (b) no shares of
preferred stock are outstanding and (c) no shares of Parent Stock or preferred
stock are held by the Parent in its treasury. Except as set forth above, no
shares of capital stock or other voting securities of the Parent are issued,
reserved for issuance or outstanding. All outstanding shares of the capital
stock of the Parent are, and all such shares that may be issued prior to the
date hereof will be when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to or issued in violation of any purchase option,
call option, right of first refusal, preemptive right, subscription right or any
similar right under any provision of the General Corporation Law of the State of
Delaware, the Parent Charter, the Parent Bylaws or any Contract to which the
Parent is a party or otherwise bound. There are not any bonds, debentures, notes
or other indebtedness of the Parent having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any matters
on which holders of Parent Stock may vote (“Voting Parent Debt”). There are not
any options, warrants, rights, convertible or exchangeable securities, “phantom”
stock rights, stock appreciation rights, stock-based performance units,
commitments, Contracts, arrangements or undertakings of any kind to which the
Parent is a party or by which it is bound (a) obligating the Parent to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other equity interests in, or any security convertible or
exercisable for or exchangeable into any capital stock of or other equity
interest in, the Parent or any Voting Parent Debt, (b) obligating the Parent to
issue, grant, extend or enter into any such option, warrant, call, right,
security, commitment, Contract, arrangement or undertaking or (c) that give any
person the right to receive any economic benefit or right similar to or derived
from the economic benefits and rights occurring to holders of the capital stock
of the Parent. As of the date of this Agreement, there are not any outstanding
contractual obligations of the Parent to repurchase, redeem or otherwise acquire
any shares of capital stock of the Parent.
 
 
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Section 4.04. Authority; Execution and Delivery; Enforceability. The execution
and delivery by the Parent of this Agreement and the consummation by the Parent
of the Transactions have been duly authorized and approved by the board of
directors of the Parent and no other corporate proceedings on the part of the
Parent are necessary to authorize this Agreement and the Transactions. This
Agreement constitutes a legal, valid and binding obligation of the Parent,
enforceable against the Parent in accordance with the terms hereof.
 

  Section 4.05. No Conflicts; Consents.

 
(a) The execution and delivery by the Parent of this Agreement, does not, and
the consummation of Transactions and compliance with the terms hereof and
thereof will not, conflict with, or result in any violation of or default (with
or without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or to increased, additional, accelerated or guaranteed
rights or entitlements of any person under, or result in the creation of any
Lien upon any of the properties or assets of the Parent under, any provision of
(i) the Parent Charter or Parent Bylaws, (ii) any material Contract to which the
Parent is a party or by which any of its properties or assets is bound or (iii)
subject to the filings and other matters referred to in Section 4.05(b), any
material Judgment or material Law applicable to the Parent or its properties or
assets, other than, in the case of clauses (ii) and (iii) above, any such items
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a Parent Material Adverse Effect.
 
 
(b) Except as otherwise disclosed in the Parent SEC Documents, no Consent of, or
registration, declaration or filing with, or permit from, any Governmental
Entity is required to be obtained or made by or with respect to the Parent in
connection with the execution, delivery and performance of this Agreement or the
consummation of the Transactions, other than filings under state “blue sky”
laws, as may be required in connection with this Agreement and the Transactions.
 

  Section 4.06. SEC Documents; Undisclosed Liabilities.

 
(a) The Parent has filed all reports, schedules, forms, statements and other
documents required to be filed by the Parent with the SEC (the “Parent SEC
Documents”) pursuant to Sections 13(a), 14(a) and 15(d) of the Exchange Act.
 
 
(b) As of its respective filing date, each Parent SEC Document complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to such Parent SEC
Document, and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Except to the extent that information contained in any
Parent SEC Document has been revised or superseded by a later Parent SEC
Document, none of the Parent SEC Documents contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of the Parent included in the Parent SEC Documents comply
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with the U.S. generally accepted accounting principles
(“GAAP”) (except, in the case of unaudited statements, as permitted by the rules
and regulations of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of the Parent and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods shown (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
 
 
10
 
 
 
 

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(c) Except as set forth in the Parent SEC Documents, the Parent has no
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) required by GAAP to be set forth on a balance sheet of the Parent
or in the notes thereto. Except for its agreement with Securities Transfer
Corporation to act as the Parent’s stock transfer agent, the Parent has no
financial or contractual obligations and liabilities (including any obligations
to issue capital stock or other securities of the Parent) due after the date
hereof. All liabilities of the Parent shall have been paid off and shall in no
event remain liabilities of the Parent, the Company or the Shareholders
following the Closing.
 
 
Section 4.07. Absence of Certain Changes or Events. Except as disclosed in the
Parent SEC Documents, from the date of the most recent audited financial
statements included in the Parent SEC Documents to the date of this Agreement,
the Parent has conducted its business only in the ordinary course, and during
such period there has not been:
 
 
(a) any change in the assets, liabilities, financial condition or operating
results of the Parent from that reflected in the Parent SEC Documents, except
changes in the ordinary course of business that have not caused, in the
aggregate, a Parent Material Adverse Effect;
 
 
(b) any damage, destruction or loss, whether or not covered by insurance, that
would have a Parent Material Adverse Effect;
 
 
(c) any waiver or compromise by the Parent of a valuable right or of a material
debt owed to it;
 
 
(d) any satisfaction or discharge of any Lien, claim, or encumbrance or payment
of any obligation by the Parent, except in the ordinary course of business and
the satisfaction or discharge of which would not have a Parent Material Adverse
Effect;
 
 
(e) any material change to a material Contract by which the Parent or any of its
assets is bound or subject;
 
 
(f) any material change in any compensation arrangement or agreement with any
employee, officer, director or shareholder;
 

    (g) any resignation or termination of employment of any officer of the
Parent;

 
(h) any mortgage, pledge, transfer of a security interest in, or Lien, created
by the Parent, with respect to any of its material properties or assets, except
Liens for taxes not yet due or payable and Liens that arise in the ordinary
course of business and do not materially impair the Parent’s ownership or use of
such property or assets;
 
 
(i) any loans or guarantees made by the Parent to or for the benefit of its
employees, officers or directors, or any members of their immediate families,
other than travel advances and other advances made in the ordinary course of its
business;
 
 
(j) any declaration, setting aside or payment or other distribution in respect
of any of the Parent’s capital stock, or any direct or indirect redemption,
purchase, or other acquisition of any of such stock by the Parent;
 

   (k) any alteration of the Parent’s method of accounting or the identity of
its auditors;

 
(l) any issuance of equity securities to any officer, director or affiliate,
except pursuant to existing Parent stock option plans; or
 
 
(m) any arrangement or commitment by the Parent to do any of the things
described in this Section 4.07.
 

  Section 4.08. Taxes.

 
(a) The Parent has timely filed, or has caused to be timely filed on its behalf,
all Tax Returns required to be filed by it, and all such Tax Returns are true,
complete and accurate, except to the extent any failure to file or any
inaccuracies in any filed Tax Returns, individually or in the aggregate, have
not had and would not reasonably be expected to have a Parent Material Adverse
Effect. All Taxes shown to be due on such Tax Returns, or otherwise owed, has
been timely paid, except to the extent that any failure to pay, individually or
in the aggregate, has not had and would not reasonably be expected to have a
Parent Material Adverse Effect.
 
 
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(b) The most recent financial statements contained in the Parent SEC Documents
reflect an adequate reserve for all Taxes payable by the Parent (in addition to
any reserve for deferred Taxes to reflect timing differences between book and
Tax items) for all Taxable periods and portions thereof through the date of such
financial statements. No deficiency with respect to any Taxes has been proposed,
asserted or assessed against the Parent, and no requests for waivers of the time
to assess any such Taxes are pending, except to the extent any such deficiency
or request for waiver, individually or in the aggregate, has not had and would
not reasonably be expected to have a Parent Material Adverse Effect.
 
 
(c) There are no Liens for Taxes (other than for current Taxes not yet due and
payable) on the assets of the Parent. The Parent is not bound by any agreement
or Lien under which the Parent could become liable for a tax liability of any
person other than the Parent.
 
 
Section 4.09. Absence of Changes in Benefit Plans. From the date of the most
recent audited financial statements included in the Parent SEC Documents to the
date of this Agreement, there has not been any adoption or amendment in any
material respect by the Parent of any collective bargaining agreement or any
bonus, pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, medical or
other plan, arrangement or understanding (whether or not legally binding)
providing benefits to any current or former employee, officer or director of the
Parent (collectively, “Parent Benefit Plans”). As of the date of this Agreement
there are not any employment, consulting, indemnification, severance or
termination agreements or arrangements between the Parent and any current or
former employee, officer or director of the Parent, nor does the Parent have any
general severance plan or policy.
 
 
Section 4.10. ERISA Compliance; Excess Parachute Payments. The Parent does not,
and since its inception never has, maintained, or contributed to any “employee
pension benefit plans” (as defined in Section 3(2) of ERISA), “employee welfare
benefit plans” (as defined in Section 3(1) of ERISA) or any other Parent Benefit
Plan for the benefit of any current or former employees, consultants, officers
or directors of the Parent.
 
 
Section 4.11. Litigation. Except as disclosed in the Parent SEC Documents, there
is no Action which (a) adversely affects or challenges the legality, validity or
enforceability of any of this Agreement or the Shares or (b) could, if there
were an unfavorable decision, individually or in the aggregate, have or
reasonably be expected to result in a Parent Material Adverse Effect. Neither
the Parent nor any subsidiary, nor any director or officer thereof (in his or
her capacity as such), is or has been the subject of any Action involving a
claim or violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty.
 
 
Section 4.12. Compliance with Applicable Laws. Except as disclosed in the Parent
SEC Documents, the Parent is in compliance with all applicable Laws, including
those relating to occupational health and safety, the environment, export
controls, trade sanctions and embargos, except for instances of noncompliance
that, individually and in the aggregate, have not had and would not reasonably
be expected to have a Parent Material Adverse Effect. Except as set forth in the
Parent SEC Documents, the Parent has not received any written communication
during the past two years from a Governmental Entity that alleges that the
Parent is not in compliance in any material respect with any applicable Law. The
Parent is in compliance with all effective requirements of the Sarbanes-Oxley
Act of 2002, as amended, and the rules and regulations thereunder, that are
applicable to it, except where such noncompliance could not have or reasonably
be expected to result in a Parent Material Adverse Effect. This Section 4.12
does not relate to matters with respect to Taxes, which are the subject of
Section 4.08.
 
 
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Section 4.13. Contracts. Except as disclosed in the Parent Filed SEC Documents,
there are no Contracts that are material to the business, properties, assets,
condition (financial or otherwise), results of operations or prospects of the
Parent taken as a whole. The Parent is not in violation of or in default under
(nor does there exist any condition which upon the passage of time or the giving
of notice would cause such a violation of or default under) any Contract to
which it is a party or by which it or any of its properties or assets is bound,
except for violations or defaults that would not, individually or in the
aggregate, reasonably be expected to result in a Parent Material Adverse Effect.
 
 
Section 4.14. Title to Properties. The Parent has good title to, or valid
leasehold interests in, all of its properties and assets used in the conduct of
its businesses. All such assets and properties, other than assets and properties
in which the Parent has leasehold interests, are free and clear of all Liens,
except for Liens that, in the aggregate, do not and will not materially
interfere with the ability of the Parent to conduct business as currently
conducted. The Parent has complied in all material respects with the terms of
all material leases to which it is a party and under which it is in occupancy,
and all such leases are in full force and effect. The Parent enjoys peaceful and
undisturbed possession under all such material leases.
 
 
Section 4.15. Intellectual Property. The Parent does not own or license any
Intellectual Property Rights. No claims are pending or, to the knowledge of the
Parent, threatened that the Parent is infringing or otherwise adversely
affecting the rights of any person with regard to any Intellectual Property
Right.
 
 
Section 4.16. Labor Matters. There are no collective bargaining or other labor
union agreements to which the Parent is a party or by which it is bound. No
material labor dispute exists or, to the knowledge of the Parent, is imminent
with respect to any of the employees of the Parent.
 
 
Section 4.17. Market Makers. The Parent has at least three (3) market makers for
its common shares and such market makers have obtained all permits and made all
filings necessary in order for such market makers to continue as market makers
of the Parent.
 
 
Section 4.18. Transactions With Affiliates and Employees. Except as set forth in
the Parent SEC Documents, none of the officers or directors of the Parent and,
to the knowledge of the Parent, none of the employees of the Parent is presently
a party to any transaction with the Parent or any subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Parent, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
 
 
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Section 4.19. Internal Accounting Controls. The Parent has implemented and
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (a) transactions are executed in accordance with
management’s general or specific authorizations, (b) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(c) access to assets is permitted only in accordance with management’s general
or specific authorization, and (d) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The Parent has established disclosure
controls and procedures for the Parent and designed such disclosure controls and
procedures to ensure that material information relating to the Parent is made
known to the officers by others within those entities. The Parent’s officers
have evaluated the effectiveness of the Parent’s controls and procedures. Since
March 31, 2008, there have been no significant changes in the Parent’s internal
controls or, to the Parent’s knowledge, in other factors that could
significantly affect the Parent’s internal controls.
 
 
Section 4.20. Solvency. Based on the financial condition of the Parent as of the
Closing Date (and assuming that the Closing shall have occurred), (a) the
Parent’s fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of the Parent’s existing debts and other
liabilities (including known contingent liabilities) as they mature, (b) the
Parent’s assets do not constitute unreasonably small capital to carry on its
business for the current fiscal year as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Parent, and projected capital
requirements and capital availability thereof, and (c) the current cash flow of
the Parent, together with the proceeds the Parent would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid. The Parent does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).
 
 
Section 4.21. Application of Takeover Protections. The Parent has taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Parent’s
charter documents or the laws of its state of incorporation that is or could
become applicable to the Shareholders as a result of the Shareholders and the
Parent fulfilling their obligations or exercising their rights under this
Agreement, including, without limitation, the issuance of the Shares and the
Shareholders’ ownership of the Shares.
 
 
Section 4.22. No Additional Agreements. The Parent does not have any agreement
or understanding with the Shareholders with respect to the transactions
contemplated by this Agreement other than as specified in this Agreement.
 
 
Section 4.23. Investment Company. The Parent is not, and is not an affiliate of,
and immediately following the Closing will not have become, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.
 
 
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Section 4.24. Disclosure. The Parent confirms that neither it nor any person
acting on its behalf has provided any Shareholder or its respective agents or
counsel with any information that the Parent believes constitutes material,
non-public information except insofar as the existence and terms of the proposed
transactions hereunder may constitute such information and except for
information that will be disclosed by the Parent under a current report on Form
8-K filed within four business days after the Closing. The Parent understands
and confirms that the Shareholders will rely on the foregoing representations
and covenants in effecting transactions in securities of the Parent. All
disclosure provided to the Shareholders regarding the Parent, its business and
the transactions contemplated hereby, furnished by or on behalf of the Parent
(including the Parent’s representations and warranties set forth in this
Agreement) are true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
 
 
Section 4.25. Listing and Maintenance Requirements. The Parent is, and has no
reason to believe that it will not in the foreseeable future continue to be, in
compliance with the listing and maintenance requirements for continued listing
of the Parent Stock on the trading market on which the Parent Stock are
currently listed or quoted. The issuance and sale of the Shares under this
Agreement does not contravene the rules and regulations of the trading market on
which the Parent Stock are currently listed or quoted, and no approval of the
shareholders of the Parent is required for the Parent to issue and deliver to
the Shareholders the Shares contemplated by this Agreement.
 
 
Section 4.26. No Undisclosed Events, Liabilities, Developments or Circumstances.
No event, liability, development or circumstance has occurred or exists, or is
contemplated to occur with respect to the Parent, its subsidiaries or their
respective business, properties, prospects, operations or financial condition,
that would be required to be disclosed by the Parent under applicable securities
laws on a registration statement filed with the SEC relating to an issuance and
sale by the Parent of the Parent Stock and which has not been publicly
announced.
 
 
Section 4.27. Foreign Corrupt Practices. Neither the Parent, nor to the Parent’s
knowledge, any director, officer, agent, employee or other person acting on
behalf of the Parent or any of its subsidiaries has, in the course of its
actions for, or on behalf of, the Parent (a) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; (b) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (c)
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (d) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.
 
 
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ARTICLE V.
Deliveries

 

 

  Section 5.01. Deliveries of the Shareholders.

 
(a) Concurrently herewith each Shareholder is delivering to the Parent and to
the Company this Agreement executed by the Shareholder.
 

   (b) At or prior to the Closing, each Shareholder shall deliver to the Parent:

 
 (i) certificate(s) representing its Company Stock; and
 
(ii) a duly executed instrument of transfer for transfer by the Shareholder of
its Company Stock to the Parent.
 

  Section 5.02. Deliveries of the Parent.

 
(a) Concurrently herewith, the Parent is delivering to the Company and to each
Shareholder a copy of this Agreement executed by the Parent.
 

   (b) At or prior to the Closing, the Parent shall deliver to the Company:

 
(i) a letter of resignation of Timothy P. Halter as a director of the Parent, to
be effective 30 days following the Closing, and from all offices he holds with
the Parent effective upon the Closing;
 
 
(ii) evidence of the election of Gerard Pascale as a director of the Parent and
as the Chief Executive Officer, President, Secretary and Chief Financial Officer
of the Parent effective as of the Closing; and
 
 
(c) The Parent shall deliver to each Shareholder, a certificate or certificates
representing the new shares of Parent Stock issued to such Shareholder as set
forth opposite to his name on Annex A:
 
 
Section 5.03. Deliveries of the Company. Concurrently herewith, the Company is
delivering to the Parent this Agreement executed by the Company.
 
ARTICLE VI.
Conditions to Closing

 
Section 6.01. Shareholders and Company Conditions Precedent. The obligations of
the Shareholders and the Company to enter into and complete the Closing is
subject, at the option of the Shareholders and/or the Company, to the
fulfillment on or prior to the Closing Date of the following conditions.
 
 
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(a) Representations and Covenants. The representations and warranties of the
Parent contained in this Agreement shall be true in all material respects on and
as of the Closing Date with the same force and effect as though made on and as
of the Closing Date. The Parent shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by the Parent on or prior to the Closing Date.
 
 
(b) Litigation. No action, suit or proceeding shall have been instituted before
any court or governmental or regulatory body or instituted or threatened by any
governmental or regulatory body to restrain, modify or prevent the carrying out
of the Transactions or to seek damages or a discovery order in connection with
such Transactions, or which has or may have, in the reasonable opinion of the
Company or any Shareholders, a materially adverse effect on the assets,
properties, business, operations or condition (financial or otherwise) of the
Parent or the Company.
 
 
(c) No Material Adverse Change. There shall not have been any occurrence, event,
incident, action, failure to act, or transaction since September 30, 2008 which
has had or is reasonably likely to cause a Parent Material Adverse Effect.
 
 
(d) Post-Closing Capitalization. At and immediately after the Closing, the
authorized capitalization, and the number of issued and outstanding shares of
the capital stock of the Parent, on a fully-diluted basis, as indicated on a
schedule to be delivered by the Parties at or prior to the Closing, shall be
acceptable to the Company and the Shareholders in their sole and absolute
discretion.
 
 
(e) SEC Reports. The Parent shall have filed all reports and other documents
required to be filed by the Parent under the U.S. federal securities laws
through the Closing Date.
 
 
(f) OTCBB Quotation. The Parent shall have maintained its status as a Company
whose common stock is quoted on the Over-the-Counter Bulletin Board and no
reason shall exist as to why such status shall not continue immediately
following the Closing.
 
 
(g) No Suspensions of Trading in Parent Stock; Listing. Trading in the Parent
Stock shall not have been suspended by the SEC or any trading market (except for
any suspensions of trading of not more than one trading day solely to permit
dissemination of material information regarding the Parent) at any time since
the date of execution of this Agreement, and the Parent Stock shall have been at
all times since such date listed for trading on a trading market.
 
 
(h) Satisfactory Completion of Due Diligence. The Company and the Shareholders
shall have completed their legal, accounting and business due diligence of the
Parent and the results thereof shall be satisfactory to the Company and the
Shareholders in their sole and absolute discretion.
 

    (i) Deliveries. The deliveries specified in Section 5.02 shall have been
made by the Parent.

 
Section 6.02. Parent Conditions Precedent. The obligations of the Parent to
enter into and complete the Closing is subject, at the option of the Parent, to
the fulfillment on or prior to the Closing Date of the following conditions, any
one or more of which may be waived by the Parent in writing.
 
 
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(a) Representations and Covenants. The representations and warranties of the
Shareholders and the Company contained in this Agreement shall be true in all
material respects on and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date. The Shareholders and the Company
shall have performed and complied in all material respects with all covenants
and agreements required by this Agreement to be performed or complied with by
the Shareholders and the Company on or prior to the Closing Date.
 
 
(b) Litigation. No action, suit or proceeding shall have been instituted before
any court or governmental or regulatory body or instituted or threatened by any
governmental or regulatory body to restrain, modify or prevent the carrying out
of the Transactions or to seek damages or a discovery order in connection with
such Transactions, or which has or may have, in the reasonable opinion of the
Parent, a materially adverse effect on the assets, properties, business,
operations or condition (financial or otherwise) of the Company.
 
 
(c) No Material Adverse Change. There shall not have been any occurrence, event,
incident, action, failure to act, or transaction since October 31, 2008 which
has had or is reasonably likely to cause a Company Material Adverse Effect.
 
 
(d) Post-Closing Capitalization. At, and immediately after, the Closing, the
authorized capitalization, and the number of issued and outstanding shares of
the capital stock of the Parent, on a fully-diluted basis, as indicated on a
schedule to be delivered by the Parties at or prior to the Closing, shall be
acceptable to the Parent in its sole and absolute discretion.
 
 
(e) Satisfactory Completion of Due Diligence. The Parent shall have completed
its legal, accounting and business due diligence of the Company and the
Shareholders and the results thereof shall be satisfactory to the Parent in its
sole and absolute discretion.
 
 
(f) Deliveries. The deliveries specified in Section 5.01 and Section 5.03 shall
have been made by the Shareholders and the Company, respectively.
 
ARTICLE VII.
Covenants

 
Section 7.01. Blue Sky Laws. The Parent shall take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified) required to be taken under any applicable state securities laws in
connection with the issuance of Shares in connection with this Agreement
 
 
Section 7.02. Public Announcements. The Parent and the Company will consult with
each other before issuing, and provide each other the opportunity to review and
comment upon, any press release or other public statements with respect to this
Agreement and the Transactions and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by applicable Law, court process or by obligations pursuant to any
listing agreement with any national securities exchange.
 
 
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Section 7.03. Fees and Expenses. All fees and expenses incurred in connection
with this Agreement shall be paid by the Party incurring such fees or expenses,
whether or not this Agreement is consummated.
 
 
Section 7.04. Continued Efforts. Each Party shall use commercially reasonable
efforts to (a) take all action reasonably necessary to consummate the
Transactions, and (b) take such steps and do such acts as may be necessary to
keep all of its representations and warranties true and correct as of the
Closing Date with the same effect as if the same had been made, and this
Agreement had been dated, as of the Closing Date.
 
 
Section 7.05. Exclusivity. The Parent shall not (a) solicit, initiate, or
encourage the submission of any proposal or offer from any person relating to
the acquisition of any capital stock or other voting securities of the Parent,
or any assets of the Parent (including any acquisition structured as a merger,
consolidation, share exchange or other business combination), (b) participate in
any discussions or negotiations regarding, furnish any information with respect
to, assist or participate in, or facilitate in any other manner any effort or
attempt by any person to do or seek any of the foregoing, or (c) take any other
action that is inconsistent with the Transactions and that has the effect of
avoiding the Closing contemplated hereby. The Parent shall notify the Company
immediately if any person makes any proposal, offer, inquiry, or contact with
respect to any of the foregoing.
 
 
Section 7.06. Filing of 8-K and Press Release. The Parent shall file, within
four (4) business days of the Closing Date, a current report on Form 8-K and
attach as exhibits all relevant agreements with the SEC disclosing the terms of
this Agreement and other requisite disclosure regarding the Transactions and
including the requisite audited consolidated financial statements of the Company
and the requisite Form 10 disclosure regarding the Company.
 
 
Section 7.07. Furnishing of Information. As long as any Shareholder owns the
Shares, the Parent covenants to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be
filed by the Parent after the date hereof pursuant to the Exchange Act. As long
as any Shareholder owns Shares, if the Parent is not required to file reports
pursuant to such laws, it will prepare and furnish to the Shareholders and make
publicly available in accordance with Rule 144(c), such information as is
required for the Shareholder to sell the Shares under Rule 144. The Parent
further covenants that it will take such further action as any holder of Shares
may reasonably request, all to the extent required from time to time to enable
such person to sell the Shares without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144.
 
 
Section 7.08. Access. Each Party shall permit representatives of each other
Party to have full access to all premises, properties, personnel, books, records
(including Tax records), contracts, and documents of or pertaining to such
Party.
 
 
Section 7.09. Preservation of Business. From the date of this Agreement until
the Closing Date, each of the Company and the Parent shall operate only in the
ordinary and usual course of business consistent with past practice (provided,
however, that Parent shall not issue any securities without the prior written
consent of the Company), and shall use reasonable commercial efforts to (a)
preserve intact its respective business organization, (b) preserve the good will
and advantageous relationships with customers, suppliers, independent
contractors, employees and other Persons material to the operation of its
respective business, and (c) not permit any action or omission which would cause
any of its respective representations or warranties contained herein to become
inaccurate or any of its respective covenants to be breached in any material
respect.
 
 
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ARTICLE VIII.
Miscellaneous

 

 
Section 8.01. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given upon receipt by the Parties at the following addresses (or at such other
address for a Party as shall be specified by like notice):
 

     
If to the Parent, to:
                     
Halter Financial Investments, L.P.
         
12890 Hill Top Road
         
Argyle, TX 76226
                     
If to the Company, to:
                     
Sur- America Ventures, Inc.
         
5521 Riviera Drive
         
Coral Gables, FL 33146
         
Attention: Pierre Gaoppi
                     
If to Shareholders at the addresses set forth in Annex A hereto.
   

 
Section 8.02. Amendments; Waivers; No Additional Consideration. No provision of
this Agreement may be waived or amended except in a written instrument signed by
the Company, the Parent and all Shareholders. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either Party to exercise any right hereunder in
any manner impair the exercise of any such right. No consideration shall be
offered or paid to any Shareholder to amend or consent to a waiver or
modification of any provision of any transaction document unless the same
consideration is also offered to all Shareholders who then hold Shares.
 
 
Section 8.03. Replacement of Securities. If any certificate or instrument
evidencing any Shares is mutilated, lost, stolen or destroyed, the Parent shall
issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Parent of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Shares. If a replacement
certificate or instrument evidencing any Shares is requested due to a mutilation
thereof, the Parent may require delivery of such mutilated certificate or
instrument as a condition precedent to any issuance of a replacement.
 
 
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Section 8.04. Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Shareholders, the Parent and the Company will be entitled to specific
performance under this Agreement. The Parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
 
 
Section 8.05. Limitation of Liability. Notwithstanding anything herein to the
contrary, each of the Parent and the Company acknowledge and agree that the
liability of a Shareholder arising directly or indirectly, under any transaction
document of any and every nature whatsoever shall be satisfied solely out of the
assets of such Shareholder, and that no trustee, officer, other investment
vehicle or any other affiliate of such Shareholder or any investor, shareholder
or holder of shares of beneficial interest of such Shareholder shall be
personally liable for any liabilities of such Shareholder.
 
 
Section 8.06. Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words “include”, “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation”.
 
 
Section 8.07. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule or Law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the Transactions contemplated hereby is not affected in any manner materially
adverse to any Party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the Parties as closely as possible in an acceptable manner to the end that
Transactions contemplated hereby are fulfilled to the extent possible.
 
 
Section 8.08. Counterparts; Facsimile Execution. This Agreement may be executed
in one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the Parties and delivered to the other Parties. Facsimile
execution and delivery of this Agreement is legal, valid and binding for all
purposes.
 
 
Section 8.09. Entire Agreement; Third Party Beneficiaries. This Agreement, taken
together with the Company Disclosure Letter, (a) constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, among the Parties with respect to the Transactions and (b) are not
intended to confer upon any person other than the Parties any rights or
remedies.
 
 
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Section 8.10. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof, except to the extent the laws of Nevada are mandatorily applicable to
the Transactions.
 
 
Section 8.11. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the Parties without the prior
written consent of the other Parties. Any purported assignment without such
consent shall be void. Subject to the preceding sentences, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the Parties and
their respective successors and assigns.
 
 
[Signature Page Follows]
 
 
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The Parties hereto have executed and delivered this Share Exchange Agreement as
of the date first above written.
 

     
BTHC X, Inc.
                     
By: ______________________
         
Name: Timothy P. Halter
         
Title: President
                     
Sur- America Ventures, Inc.
                     
By: ______________________
         
Name: Pierre Galoppi
         
Title: President
                     
SHAREHOLDERS:
                     
By: ______________________
         
Name: Pierre Galoppi, Sole Shareholder
   

 

 

 
 
[Signature Page to Share Exchange Agreement]
 
 
 
 

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ANNEX A
 
 
Shareholders of Sur- America Ventures, Inc.
 
Name and Address of Shareholder
Tax ID (if applicable)
Number of Shares of Company Stock Being Exchanged
Percentage of Total Company Shares Represented By Shares Being Exchanged
Number of Shares of Parent Stock to be Received by Shareholder
Pierre Galoppi
5521 Riviera Drive
Coral Gables, FL 33146
 
1,000
100%
1,576,782
         
Totals:
 
1,000
100%
1,576,782