Share Exchange Agreement

SHARE EXCHANGE AGREEMENT


THIS AGREEMENT made the 16th day of January, 1998 by and among DURASWITCH INDUSTRIES, INC., a corporation incorporated pursuant to the laws of the State of Nevada (the "Purchaser"); Anthony G. Shumway, Dian D. Shumway, Dana S. Jones, and Ivan R. Jones and The Anthony Gene Shumway Family Revocable Living Trust (collectively, the "Sellers"); and Aztec Industries, Inc., an Arizona corporation (the "Company").


WHEREAS the Sellers as a group beneficially own and control all the issued and outstanding shares in the capital of the Company, the current shareholdings being The Anthony Gene Shumway Family Revocable Living Trust (the "Trust") owning 6886.35 shares, and Ivan R. Jones owning 2295.45 shares; and


WHEREAS, for convenience sake herein, the Trustee, Anthony G. Shumway, is authorized and will sign individually, however, the shares and the options will be issued in the name of the Trust; and


WHEREAS the Sellers desire to sell and the Purchaser desires to purchase all of the said issued and outstanding shares in the capital of the Company owned by the Sellers, all upon and subject to the terms and conditions hereinafter set forth; and


NOW THEREFORE, in consideration of the premises and the mutual agreements and covenants herein contained (the adequacy of such consideration is hereby mutually admitted by each party), the Parties hereto covenant and agree as follows:


ARTICLE 1


DEFINITIONS AND PRINCIPLES OF INTERPRETATION


1.1 Definitions - Whenever used in this Agreement, unless there is something in the subject matter or context inconsistent therewith, the following words and terms shall have the meanings as follows:


(a) "Agreement" means this Share Exchange Agreement and all
supplemental instruments and amendments;


(b) "Business" means the business presently carried on by the
Company consisting of the manufacture, sale and distribution
of screen printed membrane switch panels and graphic overlays.


(c) "Business Day" means a day other than a Saturday, Sunday or
any day on which the principal Arizona commercial banks are
open for business during normal banking hours;


(d) "Closing" means the completion of the sale to and purchase by
the Purchaser of the Purchased Shares hereunder by the
transfer and delivery of documents of title and the payment of
the purchase price as contemplated herein;


(e) "Closing Date" means January 31, 1998, or such other date as
the Parties may agree as the date upon which the Closing shall
take place;


(f) "Closing Time" means 11:59 p.m. MST, on the Closing Date or
such other time as the Parties may agree as the time at which
the Closing shall take place;


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SHARE EXCHANGE AGREEMENT


(g) "Financial Statements" means the unaudited financial
statements of the Company for the quarter ended December 31,
1997, consisting of a balance sheet and operating statement,
and the year end unaudited financial statements of the Company
dated Jan. 31, 1997, 96, 95, 94, and 93; copies of each of
which are annexed as Schedule "A" hereto;


(h) "Parties" means the Sellers, the Company and the Purchaser
collectively and "Party" means any one of them;


(i) "Person" means any individual, corporation, partnership,
trustee or trust or unincorporated association, and pronouns
have a similarly extended meaning;


(j) "Purchase Price" means the purchase price to be paid by the
Purchaser to the Sellers for the Purchased Shares as provided
in Article 2 hereof;


(k) "Purchased Shares" means all the currently issued and
outstanding common shares in the capital of the Company;


(l) "Sellers' Counsel" means Charles E. Davis, 1201 S. Alma School
Rd., Suite 3400, Mesa, Arizona 85210.


(m) "To Company's knowledge" means that, to the actual knowledge
of the Sellers, such matters are as represented. Unless the
context otherwise requires, such knowledge does not require
investigation of the matters other than as normally conducted
in the ordinary course of business or in reliance on the
advice or information of professionals.


Terms defined in the preamble to this Agreement shall have the same meanings herein as are ascribed thereto in the preamble.


1.2 Gender and Number - Words importing the singular include the plural and vice versa; words importing gender include all genders.


1.3 Entire Agreement - This Agreement, including the Schedules hereto, together with the agreements and other documents to be delivered pursuant hereto, constitute the entire agreement between the Parties pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties and there are no warranties, representations or other agreements between the Parties in connection with the subject matter hereof except as specifically set forth herein and therein.


1.4 Waivers, etc. - No supplement, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the Party to be bound thereby. No waiver of any of the provisions of this Agreement, in whole or in part, shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.


1.5 Other Words and Phrases - In this Agreement, unless otherwise expressly provided (i) the words "hereof," "herein," "hereto" and "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular Article, Section, Subsection, paragraph or other subdivision, and (ii) all references to


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SHARE EXCHANGE AGREEMENT


designated "Articles," "Sections," "Subsections," "paragraphs" or other subdivisions are to the designated Articles, Sections, Subsections, paragraphs and other subdivisions of this Agreement.


1.6 Headings - The Article and Section headings contained herein are included solely for convenience of reference, are not intended to be full or accurate descriptions of the content thereof and shall not be considered part of this Agreement.


1.7 Applicable Law - This Agreement and the rights, obligations and relations of the Parties shall be governed by and construed in accordance with the laws of the State of Arizona and the federal laws of the United States applicable therein, and the courts of Arizona shall have exclusive jurisdiction to entertain any action in connection with this Agreement


1.8 Currency - Unless otherwise specified, all references to currency herein are deemed to mean lawful money of the United States, and all amounts to be paid or calculated pursuant to this Agreement are to be paid or calculated in lawful money of the United States.


1.9 Accounting Terms - All accounting terms shall have the meanings ascribed to them in accordance with accounting principles which are generally accepted in the United States.


1.10 Schedules - The following schedules are attached to and incorporated in this Agreement by reference and deemed to be an integral part hereof:


Schedule "A" - Financial Statements


Schedule "B" - Undisclosed Liabilities


Schedule "C" - Liens, Charges and Encumbrances


Schedule "D" - Non-Vehicular Equipment and Personal Property Leases


Schedule "E" - List of Real Property and Real Property Leases


Schedule "F" - List of Revenue Contracts


Schedule "G" - List of Contracts to Purchase Goods/Services


Schedule "H" - List of Employment-Related Contracts, Collective
Agreements, Pension or Similar Plans, Unfair Labor
Practice Complaints


Schedule "I" - Other Material Contracts/lnsurance Policies


Schedule "J"- Litigation


Schedule "K" - Employees over $40,000 per year and Independent
Contractors


Schedule "L" - Bank Accounts


Schedule "M" - Intellectual Property


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SHARE EXCHANGE AGREEMENT


Schedule "N" - Vehicular Equipment Owned or Leased


Schedule "O" - Environmental Matters


Schedule "P" - Forms of Non-Competition and Employment Agreements


Schedule "Q" - Additional Disclosures


Schedule "R" - Operating Licenses


Schedule "S"- Intentionally Omitted


Schedule "T" - Material Changes


Schedule "U" - Note to Anthony G. Shumway the Company


Schedule "V" - Anthony G. Shumway's Patent


Schedule "W" - Purchaser's Financials


Schedule "X" - Personal Property of Sellers


ARTICLE 2


PURCHASE, SALE AND ASSUMPTION OF OBLIGATIONS


2.1 Purchase Price - At the Closing Time, the Sellers shall endorse and surrender to Purchaser stock certificates representing all of the Purchased Shares, in exchange for which Purchaser will issue 300,000 shares of its voting common stock, $.001 par value, as follows: 225,000 shares to the Trust and 75,000 shares to Mr. Jones (the "Exchange Shares"), subject to any adjustments under this section.


2.2 Actions by Parties at or Prior to the Closing


(a) Delivery of Certificates, etc. - The Sellers shall transfer
and deliver to the Purchaser at the Closing stock certificates
representing all the Purchased Shares duly endorsed in blank
for transfer or accompanied by irrevocable stock transfer
powers of attorney duly executed in blank, in either case by
the holders of record thereof. The Sellers shall take such
steps as shall be necessary to cause the Company to enter the
Purchaser or its nominee upon the books of the Company as the
holder of the Purchased Shares and to issue one or more share
certificates to the Purchaser representing the Purchased
Shares;


(b) Loan to the Company - Prior to the Closing, the Purchaser
shall advance monies toward the payment of liabilities on
behalf of the Company immediately and pursuant to a mutually
agreed upon payoff schedule of payables. This payment shall
continue as a loan on the books of both Purchaser and Company
until after the Closing and then, at Purchaser's option, may
be converted to a capital contribution.


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SHARE EXCHANGE AGREEMENT


2.3 Assumption of Liabilities and Non-Competition Payments - Purchaser shall (1) assume and pay amounts currently due to Mr. Shumway by the Company represented by the promissory note in the form attached hereto as Schedule "U" (the "Shumway Note") which note Purchaser shall assume and (2) enter into employment and non-competition agreements with Mr. Shumway and Mr. Jones in the form attached hereto as Schedule "H" (the "Employment Agreements").


2.4 Payments of Mr. Shumway's Personal Note by Purchaser after the Closing Time - Payment of the Shumway Note shall be subject to set-off and reduction to the extent of any and all reasonable costs, damages, or losses incurred by Purchaser due to Sellers' default or breach of any of their obligations, representations, warranties or covenants pursuant to this Agreement or any other documents entered into hereunder. However, any such set-offs shall apply at the end of the Shumway Note term and not interrupt the monthly payment schedule. Any wrongful set-off shall be deemed a breach of this Agreement. A breach of the terms of the Shumway Note shall invalidate the noncompetition clause of Shumway's Employment Agreement under Shumway's Employment Agreement.


2.5 Place of Closing - The Closing shall take place at the Closing Time at the offices of the Purchaser's Legal Counsel in Phoenix, Arizona or at such other place as may be agreed upon by the Sellers and the Purchaser.


2.6 Tender - Any tender of documents or money hereunder may be made upon the Parties or their respective counsel.


2.7 Tax Free Exchange - The parties intend the transactions contemplated herein to be treated as a tax free reorganization under Section 368 and related sections of the Internal Revenue Code of 1986, as amended.


2.8 Norwest Bank Line of Credit- After Closing, prior to any default thereunder, purchaser will pay the balance of that certain $50,000 Norwest Bank of Arizona, N.A. line of credit.


ARTICLE 3


REPRESENTATIONS AND WARRANTIES


3.1 Representations and Warranties of the Sellers - The Sellers and the Company hereby jointly and severally represent and warrant to the Purchaser as follows:


(a) Enforceability of Obligations - This Agreement constitutes a
valid and binding obligation of the Sellers enforceable
against them in accordance with its terms.


(b) Right to Sell - The Sellers:


(i) are the sole beneficial owners of the Purchased
Shares (which shares constitute all the issued and
outstanding shares in the capital of the Company);


(ii) have the exclusive right to dispose of the Purchased
Shares as herein provided and such disposition will
not violate, contravene, breach or offend against or
result in any default under any indenture, mortgage,
lease, agreement, instrument, statute,


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SHARE EXCHANGE AGREEMENT


regulation, order, judgment, decree or law to which
the Sellers are a party or subject or by which the
Sellers are bound or affected; and


(iii) are the holders of record of all the Purchased
Shares, free and clear of any liens, charges,
encumbrances or rights of others (other than the
rights of the Purchaser hereunder) and no Person
(other than the Purchaser hereunder) has any
agreement, option or any rights capable of becoming
an agreement or option for the acquisition of the
Purchased Shares.


(c) Licenses, Registrations and Compliance - The Company is
registered, licensed or otherwise qualified as a corporation
to do business in each jurisdiction in which the nature of
their businesses or the property owned or leased by them makes
such registration, licensing or other qualification necessary,
and such registrations, licenses or qualifications (as the
case may be) are in good standing. To Company's knowledge, the
Company is not in violation of any applicable laws,
regulations, orders, rules, decrees or ordinances. To
Company's knowledge, the licenses and operating authorizations
issued by federal, state or local authorities to the Company,
copies of which are attached hereto as Schedule "R" (the
"Operating Licenses") comprise all the operating authorities
held in respect of the Business. To Company's knowledge, the
Operating Licenses are all of the operating authorities
necessary or reasonably required for the carrying on of the
Business as presently conducted. The Operating Licenses are in
good standing, are in full force and effect and are being held
and operated in accordance with their terms and conditions
and, to Company's knowledge, all applicable laws, ordinances,
rules and regulations. To Company's knowledge, the Operating
Licenses are regularly subject to review or notification. To
Company's knowledge, there is no litigation, arbitration or
other proceeding pending or threatened which would adversely
affect the use of the Operating Licenses by the Business or
which may result in the revocation, cancellation, suspension
or any adverse modification of any of such Operating Licenses.


(d) Organization and Valid Existence; the Company - The Company is
a corporation duly incorporated and organized and validly
exists under the laws of its state of jurisdiction, and has
all necessary corporate power, authority and capacity to own
and lease its property and assets (including, without
limitation, the property and assets shown in the Financial
Statements) and to carry on the Business as presently
conducted.


(e) Capitalization - All issued and outstanding common shares of
the Company have been duly and validly issued and are
outstanding as fully paid and non-assessable shares in the
capital of the Company.


(f) Financial Statements - To Company's knowledge, the Financial
Statements are true and correct and have been prepared in
accordance with generally accepted accounting principles
applied on a basis consistent with that of the preceding
period. To Company's knowledge, the Financial Statements
present a true, accurate and complete statement of the
consolidated financial condition and assets and liabilities of
the Company as at October 31, 1997 and year end statements,
respectively.


(g) Absence of Undisclosed Liabilities - Except to the extent
reflected or reserved against in the Financial Statements
(including the notes thereto) or incurred subsequent to the
date thereof


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SHARE EXCHANGE AGREEMENT


and disclosed in Schedule "B" and except as incurred in the
ordinary and usual course of the Business of the Company, the
Company, to the Company's knowledge, has neither outstanding
indebtedness nor any material liabilities or obligations
(whether accrued, absolute, contingent, known, unknown, or
otherwise) of a nature customarily reflected or reserved
against in a balance sheet (including the notes thereto)
prepared in accordance with generally accepted accounting
principles.


(h) Stockholder Equity - The total stockholder equity of the
Company at the date of Closing calculated in accordance with
generally accepted accounting principles (applied on a basis
consistent with those applied in connection with the Financial
Statements) is not less than the total stockholder equity of
the Company as at the date of, and as set forth in the
Financial Statements, except for adjustments due to items
disclosed herein or through information furnished in writing
to Purchaser.


(i) Revenue Contracts - The revenue contracts of the Company
representing accounts for greater than 5% of net revenue
annually are set out at Schedule "F."


(j) Tax Matters. - To Company's knowledge, the Company has duly
and timely filed all federal, state and local income,
franchise, capital, sales or use, excise, fuel, property or
other tax returns or reports required by any law or regulation
to be filed by it and has duly paid all taxes, assessments and
reassessments and all other taxes, duties, governmental
charges, penalties, interest and fines due and payable by it
on or before the date hereof.


The last three fiscal years' federal and state income tax
returns of the Company, provided to Purchaser hereunder, to
Company's knowledge, are accurate in all respects including,
without limitation, the tax depreciation values of all capital
properties.


The Company has not received from any authority any
assessment, reassessment or notice of underpayment of any
taxes or other penalty or charges and no such notice is
reasonably to be expected.


There is no misrepresentation that is attributable to neglect,
carelessness, willful default or fraud in tax returns of the
Company previously filed or, to Company's knowledge, neglect
or carelessness in the Company's tax returns previously filed.


No consents extending or waiving the time limited for
reassessment of any taxes, duties, governmental charges,
penalties, interest or fines, or any statutes of limitations
related thereto have been filed with respect to the Company
for any fiscal year.


The Company has withheld from each payment made to any of its
officers, directors, former directors, and employees and
former employees the amount of all taxes and other deductions
(including without limitation, income taxes, unemployment,
disability, and other required taxes and contributions)
required to be withheld and has paid the same together with
the employer's share of same, if any (to the extent required
to be paid so no such amount is past due), to the proper tax
or other receiving officers within the prescribed times and
has filed, in complete and accurate form, all information and
other returns required pursuant to any applicable legislation
within the prescribed time.


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SHARE EXCHANGE AGREEMENT


The provisions made for current and deferred taxes included in
the Financial Statements are sufficient for the payment of all
accrued and unpaid federal, state and local income, franchise,
capital, sales or use, excise, fuel, property or other taxes,
assessments and reassessments, duties, governmental charges,
penalties, interest and fines of, and payable by, the Company
whether or not disputed, for the period ended the date thereof
and for all periods prior thereto. The reserve for taxes on
the financial statements does not take into account the affect
that the acquisition and post-acquisition activities may have
on taxes for the Company.


The Sellers represent that their Social Security or Federal I.D. Numbers are as follows:
Aztec Industries, Inc. 86-0264077
Anthony G. Shumway 529-58-3271 Dian D. Shumway: 526-62-1313
Ivan R. Jones 526-98-8485 Dana S. Jones: 601-01-2895


The Purchaser represents that its federal employer identification number is set out below:


DuraSwitch Industries, Inc.: 88-0308867


(k) Absence of Changes - Other than as disclosed on Schedule "T"
hereto since the date of the Financial Statements there has
not been:


(i) any material decrease in the condition or operations
of the Business, assets or financial condition of the
Company other than changes in the ordinary and normal
course of business, none of which has been materially
adverse; or


(ii) any damage, destruction or loss, labor trouble or
other event, development or condition of any
character (whether or not covered by insurance)
materially and adversely affecting the Business,
assets, properties or future prospects of the
Company.


(l) Absence of Unusual Transactions - Except as otherwise
disclosed on Schedule "T" attached hereto, since the date of
the Financial Statements the Company has not:


(i) transferred, assigned, sold or otherwise disposed of
any of the assets shown in the Financial Statements
or cancelled any debts or claims except in each case
in the ordinary and usual course of business;


(ii) incurred or assumed any obligation or liability
(fixed or contingent), except those listed in
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