<PAGE>
EXHIBIT 99.1
SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement ("Agreement") between TECHNOLOGY SYSTEMS
INTERNATIONAL INC., a Florida corporation ("TSYN"), and the persons listed in
EXHIBIT A hereof (collectively the "Shareholders"), being the owners of record
of all of the issued and outstanding stock of ITS S.L., a Spanish corporation
("ITS"), is entered into as of December 22, 2000.
RECITALS
A. ITS is a telecommunications company which has been in
existence since 1995.
B. The Shareholders own all of the issued and outstanding shares
of common stock of ITS (the "ITS Shares").
C. The Shareholders have agreed to sell to TSYN, and TSYN has
agreed to purchase, the ITS Shares from the Shareholders in exchange for shares
of the outstanding common shares of TSYN, pursuant to the terms and conditions
set forth in this Agreement.
D. ITS will become a wholly-owned subsidiary of TSYN.
In consideration of the mutual representations, warranties, covenants
and agreements contained in this Agreement, the parties agree as follows:
1. EXCHANGE OF STOCK.
(a) The Shareholders agree to transfer to TSYN, and TSYN agrees to
purchase from the Shareholders, all of the Shareholders'
right, title and interest in their ITS Stock, representing
100% of the issued and outstanding stock of ITS, free and
clear of all mortgages, liens, pledges, security interests,
restrictions, encumbrances, or adverse claims of any nature.
(b) At the Closing (as defined in Section 2 below), upon surrender
by the Shareholders of the certificates evidencing the ITS
Stock duly endorsed for transfer to TSYN or accompanied by
stock powers executed in blank by the Shareholders, TSYN will
cause 16,866,667 shares (subject to adjustment for
fractionalized shares as set forth below) of the common voting
stock, par value $0.001 of TSYN (the "TSYN Stock") to be
issued to the Shareholders, in full satisfaction of any right
or interest which each Shareholder held in the ITS Stock. The
TSYN Stock will be issued to the
1
<PAGE>
Shareholders on a pro rata basis, in the same proportion as
the percentage of their ownership interest in the ITS Stock,
as set forth on EXHIBIT A. Any fractional shares that will
result due to such pro rata distribution will be rounded up to
the next highest whole number. As a result of the exchange of
the ITS Stock in exchange for the TSYN Stock, ITS will become
a wholly-owned subsidiary of TSYN.
TSYN intends to change its name to ITS Incorporated and the
stock certificates to be issued to the shareholders may be
issued in the name of TSYN or ITS Incorporated.
2. CLOSING.
(a) The parties to this Agreement will hold a closing (the
"Closing") for the purpose of executing and exchanging all of
the documents contemplated by this Agreement and otherwise
effecting the transactions contemplated by this Agreement. The
Closing will be held as soon as possible but not later than
December 22, 2000, at the offices Company in Wrightstown, New
Jersey, unless another place or time is mutually agreed upon
in writing by the parties. All proceedings to be taken and all
documents to be executed and exchanged at the Closing will be
deemed to have been taken, delivered and executed
simultaneously, and no proceeding will be deemed taken nor
documents deemed executed or delivered until all have been
taken, delivered and executed. If agreed to by the parties,
the Closing may take place through the exchange of documents
by fax and/or express courier.
(b) With the exception of any stock certificates which must be in
their original form, any copy, fax, e-mail or other reliable
reproduction of the writing or transmission required by this
Agreement or any signature required thereon may be used in
lieu of an original writing or transmission or signature for
any and all purposes for which the original could be used,
provided that such copy, fax, e-mail or other reproduction is
a complete reproduction of the entire original writing or
transmission or original signature, and the originals are
promptly delivered thereafter.
3. REPRESENTATIONS AND WARRANTIES OF TSYN.
TSYN represents and warrants as follows:
(a) TSYN is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Florida and is
licensed or qualified as a foreign corporation in all states
in which the nature of its business or the character or
ownership of its properties makes such licensing or
qualification necessary.
(b) The authorized capital stock of TSYN consists of (i)
25,000,000 shares of common stock, $0.001 par value per share,
of which, based on the records of TSYN's stock transfer agent,
4,450,000 shares are issued and outstanding as of December 22,
2000,
2
<PAGE>
and (ii) 5,000,000 shares of preferred stock, $0.001 par value
per share, of which no shares are issued and outstanding. To
the knowledge of TSYN, all issued and outstanding shares of
TSYN's common stock are fully paid and nonassessable.
(c) TSYN has no subsidiaries.
(d) Execution of this Agreement and performance by TSYN hereunder
has been duly authorized by all requisite corporate action on
the part of TSYN, and this Agreement constitutes a valid and
binding obligation of TSYN, and TSYN's performance hereunder
will not violate any provision of any charter, bylaw,
indenture, mortgage, lease, or agreement, or any order,
judgment, decree, or, to TSYN's knowledge any law or
regulation, to which any property of TSYN is subject or by
which TSYN is bound.
(e) TSYN has full corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder, and will
deliver at the Closing a certified copy of resolutions of its
board of directors authorizing execution of this Agreement by
its officers and performance hereunder.
(f) TSYN has provided all financial statements and financial
information in its possession as has been requested by the
Shareholders.
(g) There is no litigation or proceeding pending, or to the
Company's knowledge threatened, against or relating to TSYN,
its properties or business.
(h) TSYN is acquiring the ITS shares to be transferred to it under
this Agreement for investment and not with a view to the sale
or distribution thereof.
4. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS.
The Shareholders, jointly and severally, represent and warrant as
follows:
(a) ITS is a corporation duly organized, validly existing, and in
good standing under the laws of Spain and is licensed or
qualified as a foreign corporation in all places in which the
nature of its business or the character or ownership of its
properties makes such licensing or qualification necessary.
(b) There are no agreements purporting to restrict the transfer of
the ITS Shares, nor any voting agreements, voting trusts or
other arrangements restricting or affecting the voting of the
ITS Shares. The ITS Shares held by the Shareholders are duly
and validly issued, fully paid and non-assessable, and issued
in full compliance with all federal, state, and local laws,
rules and regulations. There are no subscription rights,
3
<PAGE>
options, warrants, convertible securities, or other rights
(contingent or otherwise) presently outstanding, for the
purchase, acquisition, or sale of the capital stock of ITS, or
any securities convertible into or exchangeable for capital
stock of ITS or other securities of ITS, from or by ITS.
(c) The Shareholders have full right, power and authority to sell,
transfer and deliver the ITS Shares, and upon delivery of the
certificates therefor as contemplated in this Agreement, the
Shareholders will transfer to TSYN valid and marketable title
to the ITS Shares, including all voting and other rights to
the ITS Shares, free and clear of all pledges, liens, security
interests, adverse claims, options, rights of any third party,
or other encumbrances. Each of the Shareholders owns and holds
that the number or percentage of ITS Shares which are listed
opposite their names on Exhibit A attached hereto.
(d) There is no litigation or proceeding pending, or to any
Shareholder's knowledge, threatened, against or relating to
ITS or to the ITS Shares.
(e) ITS has filed in correct form all tax returns of every nature
required to be filed by it and has paid all taxes as shown on
such returns and all assessments, fees and charges received by
it to the extent that such taxes, assessments, fees and
charges have become due. ITS has also paid all taxes which do
not require the filing of returns and which are required to be
paid by it. To the extent that tax liabilities have accrued,
but have not become payable, they have been adequately
reflected as liabilities on the books of ITS.
(f) The current residence address or principal place of business
(for any non-individual shareholder) of the ITS Shareholders
is as listed on EXHIBIT A attached hereto.
(g) The ITS Shareholders have had the opportunity to perform all
due diligence investigations of TSYN and its business as they
have deemed necessary or appropriate and to ask questions of
TSYN's officers and directors and have received satisfactory
answers to all of their questions. The Shareholders have had
access to all documents and information about TSYN and have
reviewed sufficient information to allow them to evaluate the
merits and risks of the acquisition of the TSYN Stock.
(h) The Shareholders are acquiring the TSYN Stock for their own
account (and not for the account of others) for investment and
not with a view to the distribution therefor. The Shareholders
will not sell or otherwise dispose of the TSYN Stock without
registration under the Securities Act of 1933, as amended, or
an exemption therefrom, and the certificate or certificates
representing the TSYN Stock will contain a legend to the
foregoing effect.
5. CONDUCT PRIOR TO THE CLOSING.
4
<PAGE>
TSYN and the Shareholders covenant that between the date of this
Agreement and the Closing as to each of them:
(a) No change will be made in the charter documents, by-laws, or
other corporate documents of TSYN or ITS, except as provided
in Section 5(a) above.
(2) TSYN and ITS will each use its best efforts to maintain and
preserve its business organization, employee relationships,
and goodwill intact, and ITS will not enter into any material
commitment except in the ordinary course of business.
(3) None of the Shareholders will sell, transfer, assign,
hypothecate, lien, or otherwise dispose or encumber the ITS
Shares owned by them.
6. CONDITIONS TO OBLIGATIONS OF SHAREHOLDERS.
The Shareholder's obligation to complete the transactions contemplated
herein is subject to fulfillment on or before the Closing of each of the
following conditions, unless waived in writing by the Shareholders as
appropriate:
(a) The representations and warranties of TSYN set forth herein
will be true and correct the Closing as though made at and as
of that date, except as affected by transactions contemplated
hereby.
(b) TSYN will have performed all covenants required by this
Agreement to be performed by it on or before the Closing.
(c) This Agreement will have been approved by the Board of
Directors of TSYN.
(d) TSYN will have delivered to the Shareholders the documents set
forth below in form and substance reasonably satisfactory to
counsel for the Shareholders, to the effect that:
(i) TSYN is a corporation duly organized, validly
existing, and in good standing;
(ii) TSYN's authorized capital stock is as set forth
herein;
(iii) Certified copies of the resolutions of the board of
directors of TSYN authorizing the execution of this
Agreement and the consummation hereof; and
(iv) Any further document as may be reasonably requested
by counsel to the Shareholders in order to
substantiate any of the representations or warranties
of TSYN set forth herein.
5
<PAGE>
(e) There will have occurred no material adverse change in the
business, operations or prospects of TSYN.
7. CONDITIONS TO OBLIGATIONS OF TSYN.
TSYN's obligation to complete the transaction contemplated herein will
be subject to fulfillment on or before the Closing of each of the following
conditions, unless waived in writing by the TSYN, as appropriate:
(a) The representations and warranties of the Shareholders set
forth herein will be true and correct at the Closing as though
made at and as of that date, except as affected by
transactions contemplated hereby.
(b) The Shareholders will have performed all covenants required by
this Agreement to be performed by them on or before the
Closing.
(c) The Shareholders will have delivered to TSYN the documents set
forth below in form and substance reasonably satisfactory to
counsel for TSYN, to the effect that:
(i) ITS is a corporation duly organized, validly
existing, and in good standing;
(ii) ITS's authorized capital stock is owned as set forth
herein and Exhiibit A hereto; and
(iii) Any further document as may be reasonably requested
by counsel to the Shareholders in order to
substantiate any of the representations or warranties
of TSYN set forth herein.
(d) There will have occurred no material adverse change in the
business, operations or prospects of ITS.
8. ADDITIONAL COVENANTS.
(a) Between the date of this Agreement and the Closing, the
Shareholders, with respect to ITS, and TSYN, with respect to
itself, will, and will cause their respective representatives
to, (i) afford the other party and its representatives access
to their personnel, properties, contracts, books and records,
and other documents and data, as reasonably requested by the
other party; (ii) furnish the other party and its
representatives with copies of all such contracts, books and
records, and other existing documents and data as the other
may reasonably request in connection with the transaction
contemplated by this Agreement; and (iii) furnish the other
party and its representatives with such additional financial,
operating, and other data and information as the other may
reasonably request. The Shareholders will cause ITS
6
<PAGE>
to, and TSYN will provide the Shareholders, with complete
copies of all material contracts and other relevant
information on a timely basis in order to keep the other party
fully informed of the status of their respective business and
operations.
(b) TSYN and the ITS Shareholders will cooperate with each other
in the preparation of a Form 8-K to be filed with the SEC
describing the transaction contemplated by this Agreement and
such other items as are required by the SEC rules and
regulations.
(c) TSYN will deliver TSYN's corporate books and records,
including all records relating to TSYN's audited financial
statements, to the ITS Shareholders at Closing.
(d) The parties agree that they will not make, and the
Shareholders will not permit ITS to make, any public
announcements relating to this Agreement or the transactions
contemplated herein without the prior written consent of the
other party, except as may be required upon the written advice
of counsel to comply with applicable laws or regulatory
requirements after consulting with the other party hereto and
seeking their consent to such announcement.
9. TERMINATION.
This Agreement may be terminated (1) by mutual consent in writing; (2)
by either the Shareholders or TSYN if there has been a material
misrepresentation or material breach of any warranty or covenant by any other
party that is not cured by December 31, 2000; or (3) by any of the Shareholders
or TSYN if the Closing has not taken place within ten business days following
execution of this Agreement, unless adjourned to a later date by mutual consent
in writing.
10. EXPENSES.
Whether or not the Closing is consummated, each of the parties will pay
all of his, her, or its own legal and accounting fees and other expenses
incurred in the preparation of this Agreement and the performance of the terms
and provisions of this Agreement.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Shareholders and TSYN set out
in this Agreement will survive the Closing for a period of thirty days.
12. WAIVER.
Any failure on the part of either party hereto to comply with any of
its obligations, agreements, or conditions hereunder may be waived in writing by
the party to whom such compliance is owed.
7
<PAGE>
13. BROKERS.
Each party agrees to indemnify and hold harmless the other party
against any fee, loss, or expense arising out of claims by brokers or finders
employed or alleged to have been employed by the indemnifying party.
14. NOTICES.
All notices and other communications under this Agreement must be in
writing and will be deemed to have been given if delivered in person or sent by
prepaid first-class certified mail, return receipt requested, or recognized
commercial courier service, as follows:
If to TSYN, to: Technology Systems International, Inc.
1 Field Court
Wrightstown, New Jersey 08562
Attention: Stephen A. Beloyan, President
Phone: (609) 723-3200
If to the Shareholders, to: ITS S.L.
Fredrick Cohen, President
Edif, Marina Marbella, 3 A
Avda Severo Ocho 28
29600 Marbella, Spain
Phone: 34 95-277-2057
Fax: 34 95-277-4458
15. GENERAL PROVISIONS.
(a) This Agreement will be governed by and under the laws of the
State of Florida, USA without giving effect to conflicts of
law principles. If any provision hereof is found invalid or
unenforceable, that part will be amended to achieve as nearly
as possible the same effect as the original provision and the
remainder of this Agreement will remain in full force and
effect.
(b) Any dispute arising under or in any way related to this
Agreement will be submitted to binding arbitration before a
single arbitrator by the American Arbitration Association in
accordance with the Association's commercial rules then in
effect. The arbitration will be conducted in the State of
Florida. The decision of the arbitrator will set forth in
reasonable detail the basis for the decision and will be
binding on the parties. The arbitration award may be confirmed
by any court of competent jurisdiction.
8
<PAGE>
(c) In any adverse action, the parties will restrict themselves to
claims for compensatory damages and/or securities issued or to
be issued and no claims will be made by any party or affiliate
for lost profits, punitive or multiple damages.
(d) This Agreement constitutes the entire agreement and final
understanding of the parties with respect to the subject
matter hereof and supersedes and terminates all prior and/or
contemporaneous understandings and/or discussions between the
parties, whether written or verbal, express or implied,
relating in any way to the subject matter hereof. This
agreement may not be altered, amended, modified or otherwise
changed in any way except by a written agreement, signed by
both parties.
9
<PAGE>
(e) This Agreement will inure to the benefit of, and be binding
upon, the parties hereto and their successors and assigns;
provided, however, that any assignment by either party of its
rights under this Agreement without the written consent of the
other party will be void.
(f) The parties agree to take any further actions and to execute
any further documents which may from time to time be necessary
or appropriate to carry out the purposes of this Agreement.
(g) The headings of the Sections, paragraphs and subparagraphs of
this Agreement are solely for convenience of reference and
will not limit or otherwise affect the meaning of any of the
terms or provisions of this Agreement. The references in this
Agreement to Sections, unless otherwise indicated, are
references to sections of this Agreement.
(h) This Agreement may be executed in counterparts, each one of
which will constitute an original and all of which taken
together will constitute one document. This Agreement may be
executed by delivery of a signed signature page by fax to the
other parties hereto and such fax execution and delivery will
be valid in all respects.
SIGNATURE PAGE FOLLOWS
10
<PAGE>
EXECUTED:
TECHNOLOGY SYSTEMS INTERNATIONAL, INC.
By: s/Stephen A. Beloyan
---------------------------------
Stephen A. Beloyan, President
THE SHAREHOLDERS OF ITS S.L.:
CARNIVAL ENTERPRISES LIMITED
By: s/Yves Horoit
-----------------------------------
Yves Horoit, President
VOLIM HOLDING B.V.
By:
-----------------------------------
President
GEERIS HOLDING NEDERLAND B.V.
By:
-----------------------------------
President
11
<PAGE>
EXHIBIT A
TO
SHARE EXCHANGE AGREEMENT
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of TSYN Shares to be
% of Ownership issued to
Purchaser of ITS Shares Shareholder or its designees
----------------------------------------------------------------------------------------------
<S> <C> <C>
Carnival Enterprises Limited 66% 11,132,000
----------------------------------------------------------------------------------------------
Volim Holding B.V. 12% 2,024,000
----------------------------------------------------------------------------------------------
Gerris Holding Nederland B.V. 22% 3,710,667
----------------------------------------------------------------------------------------------
</TABLE>
12
