Share Exchange Agreement

Exhibit 10.2


AGREEMENT


THIS AGREEMENT ("Agreement") is made this ________ day of May, 2003, by, among and between Ginseng Forest, Inc., a Nevada corporation ("Ginseng"), John cathcart ("Cathcart"), CARROLL SHELBY, Trustee of the Carroll Hall Shelby Trust, as the sole owner and security holder (collectively "Shelby Security Holder") of all the issued and outstanding shares of stock in CARROLL SHELBY LICENSING, INC., a Texas corporation, and SHELBY AUTOMOBILES, INC., a Nevada corporation (collectively "Shelby Companies"), hereinafter collectively the "Parties".


WHEREAS, Ginseng desires to acquire all of the issued and outstanding common stock of the Shelby Companies from the Shelby Security Holder in exchange for newly issued unregistered shares of common stock of Ginseng and other valuable consideration, as set forth herein below;


WHEREAS, Shelby desires to assist Ginseng in acquiring all of the issued and outstanding common stock of the Shelby Companies pursuant to the terms of this Agreement; and


WHEREAS, the Shelby Security Holder has executed a Subscription Agreement in the form attached as Exhibit 1.2 hereto, and the Parties have agreed that all issued and outstanding common shares of the Shelby Companies shall be exchanged for (i) seventy percent (70%) or 9,087,866 of the issued and outstanding common shares of Ginseng, plus (ii) cash paid to the Shelby Security Holder of U.S. Two Million Dollars ($2,000,000)(payable in accordance with the terms and conditions of a secured promissory note all due and payable in no more than six (6) months from the date of this Agreement, plus (iii) a promise by Cathcart to use best efforts to invest or cause to be invested into the Shelby Companies sufficient paid in capital to meet the working capital and other reasonable financial needs and requirements of said companies so as to meet the business goals and objectives of the Shelby Companies.


NOW, THEREFORE, in consideration of the mutual promises, covenants and representations contained herein, THE PARTIES HERETO AGREE AS FOLLOWS:


ARTICLE I


Exchange of Securities


1.1 Whereas Paragraphs. The "Whereas" paragraphs, above, are incorporated herein by this reference and made a part of this Agreement as though set forth in full at this point.


1.2. Issuance of Securities. Subject to the terms and conditions of this Agreement, Ginseng agrees to issue and exchange 9,087,866 fully paid and nonassessable unregistered shares of Ginseng's $.001 par value common stock, which equals seventy percent (70%) of the issued and outstanding shares of all classes of Ginseng stock (the "Ginseng Shares") for all of the issued and outstanding shares of the common stock of the Shelby Companies (the "Shelby Shares") held by the Shelby Security Holder. All Ginseng common stock will be issued directly to the Shelby Security Holder on the Closing Date, pursuant to the schedule set forth in Exhibit 1.1.


1.3 Corporate Action by Ginseng. Subsequent to the closing of the transaction contemplated in this Agreement (the "Closing"), Ginseng will change its name to "Carroll Shelby International, Inc." ("CSI") or a derivative thereof.


1.4 Exemption from Registration. The parties hereto intend that all Ginseng common stock to be issued to the Shelby Security Holder shall be exempt from the registration requirements of the Securities Act of 1933, as amended (the "Act"), pursuant to Section 4(2) of the Act and the rules and regulations promulgated thereunder. In furtherance thereof, the Shelby Security Holder will execute and deliver to Ginseng on the Closing Date a copy of the Subscription Agreement set forth in Exhibit 1.2 hereto.


ARTICLE II


Representations and Warranties of Shelby


Shelby hereby represents and warrants to Ginseng that:


2.1 Organization. The Shelby Companies are corporations duly organized, validly existing and in good standing under the laws of the States of Texas (Carroll Shelby Licensing, Inc.) and Nevada (Shelby Automobiles, Inc.), have all necessary corporate powers to own its properties and to carry on its business as now owned and operated by it, and is duly qualified to do business and are in good standing in each of the states where its business requires qualification.


2.2 Capital. The authorized capital stock of Carroll Shelby Licensing, Inc. and Shelby Automobiles, Inc. consist of 100,000, and 2500 authorized shares of $1.00, and no par value common stock, respectively, of which 1000 and 1000 shares, respectively, are issued and outstanding. All of the outstanding common stock of Shelby is duly and validly issued, fully paid and nonassessable. There are no outstanding subscriptions, options, rights, warrants, debentures, instruments, convertible securities or other agreements or commitments obligating Shelby to issue or to transfer from treasury any additional shares of its capital stock of any class.


2


2.3 Subsidiaries. The Shelby Companies do not have any subsidiaries or own any interest in any other enterprise.


2.4 Directors and Officers. The names and titles of the directors and officers of The Shelby Companies as of the date of this Agreement are as follows: (i) as to Carroll Shelby Licensing, Inc.: Carroll Shelby, Chief Executive Officer and Director; John Luft, President, Treasurer and Director; and M. Neil Cummings, Esq., Secretary and Director; and (ii) as to Shelby Automobiles, Inc: Carroll Shelby, President and Director; R. Brent Fenimore, Vice President and Director; M. Neil Cummings, Esq., Secretary and Director.


2.5 Financial Statements. Exhibit 2.5 hereto consists of the unaudited financial statements of Carroll Shelby Licensing, Inc. for the year ended December 31, 2002 and for the three months ended March 31, 2003, and the un-audited financial statement of Shelby Automobiles, Inc. from inception to date (the "Shelby Financial Statements"). The Shelby Financial Statements have been prepared in accordance with generally accepted accounting principles and practices consistently followed by Shelby throughout the periods indicated, and fairly present the financial position of Shelby as of the dates of the balance sheets included in the Shelby Financial Statements and the results of operations for the periods indicated.


2.6 Absence of Changes. Since March 31, 2003 there has not been any material change in the financial condition or operations of The Shelby Companies, except as contemplated by this Agreement.


2.7 Absence of Undisclosed Liabilities. As of March 31, 2003 The Shelby Companies did not have any material debt, liability or obligation of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due, that is not reflected in the Shelby Financial Statements.


2.8 Tax Returns. The Shelby Companies have filed all federal, state and local tax returns required by law and has paid all taxes, assessments and penalties due and payable. The provisions for taxes, if any, reflected in Exhibit 2.5 are adequate for the periods indicated. There are no present disputes as to taxes of any nature payable by The Shelby Companies.


2.9 Investigation of Financial Condition. Without in any manner reducing or otherwise mitigating the representations contained herein, Ginseng, its legal counsel and accountants shall have the opportunity to meet with The Shelby Companies' accountants and attorneys to discuss the financial condition of the Shelby Companies. The Shelby Companies shall make available to Ginseng all books and records of Shelby.


2.10 Intellectual Property Rights. Carroll Shelby Licensing, Inc. owns or has the exclusive right (granted to it under a license from the Shelby Security Holder) to all intellectual property rights necessary to conduct its business including the trademarks, service marks, trade names, copyrights and patents set forth in Exhibit 2.10.


3


2.11 Compliance with Laws. The Shelby Companies has complied with, and are not in violation of, applicable federal, state or local statutes, laws and regulations, including federal and state securities laws.


2.12 Litigation. The Shelby Companies are not a defendant in any suit, action, arbitration or legal, administrative or other proceeding, or governmental investigation which is pending or, to the best knowledge of The Shelby Companies, threatened against or affecting The Shelby Companies or its business, assets or financial condition. The Shelby Companies are not in default with respect to any order, writ, injunction or decree of any federal, state, local or foreign court, department, agency or instrumentality applicable to it. The Shelby Companies are not engaged in any material litigation to recover monies due to it.


2.13 Authority. The Board of Directors of The Shelby Companies have authorized the execution of this Agreement and the consummation of the transactions contemplated herein, and Shelby has full power and authority to execute, deliver and perform this Agreement, and this Agreement is a legal, valid and binding obligation of The Shelby Companies and is enforceable in accordance with its terms and conditions. By execution of Exhibit 1.2, the Shelby Security Holder has agreed to and have approved the terms of this Agreement.


2.14 Ability to Carry Out Obligations. The execution and delivery of this Agreement by The Shelby Companies and the performance by The Shelby Companies of its obligations hereunder in the time and manner contemplated will not cause, constitute or conflict with or result in (a) any breach or violation of any of the provisions of or constitute a default under any license, indenture, mortgage, instrument, article of incorporation, bylaw, or other agreement or instrument to which The Shelby Companies is a party, or by which it may be bound, nor will any consents or authorizations of any party other than those hereto be required, (b) an event that would permit any party to any agreement or instrument to terminate it or to accelerate the maturity of any indebtedness or other obligation of The Shelby Companies, or (c) an event that would result in the creation or imposition of any lien, charge or encumbrance on any asset of The Shelby Companies.


2.15 Full Disclosure. None of the representations and warranties made by The Shelby Companies herein or in any exhibit, certificate or memorandum furnished or to be furnished by The Shelby Companies, or on its behalf, contains or will contain any untrue statement of material fact or omit any material fact the omission of which would be misleading.


2.16 Assets. The Shelby Companies' assets are fully included in Exhibit 2.5 and are not subject to any claims or encumbrances except as indicated in Exhibit 2.5.


2.17 Material Contracts. The Shelby Companies does not have any material contracts, except as set forth in Exhibit 5.8.


2.18 Indemnification. The Shelby Companies agrees to indemnify, defend and hold Ginseng harmless against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including interest, penalties and reasonable attorney fees, that it shall incur or suffer, which arise out of, or result from (i) any breach by


4


The Shelby Companies in performing any of its covenants or agreements under this Agreement or in any schedule, certificate, exhibit or other instrument furnished or to be furnished by The Shelby Companies under this Agreement or (ii) any untrue statement made by The Shelby Companies in this Agreement.


2.19 Criminal or Civil Acts. For the period of five years prior to the execution of this Agreement, no executive officer, director or principal stockholder of The Shelby Companies has be ...