EXHIBIT 2
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement") is dated this 13 day of June,
2000, by and between XXXXXXX XXXXXX, a California resident ("Xxxxxx"), and
INTERNET STOCK MARKET RESOURCES, INC., a Delaware corporation ("ISMR").
Background
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Xxxxxx owns beneficially and of record shares of capital in certain
corporations.
Xxxxxx desires to exchange such shares of capital stock in exchange for
twenty-five million (25,000,000) shares of newly issued restricted common stock
of ISMR ("ISMR Stock"), and ISMR is willing to issue such ISMR Stock in exchange
for such shares of capital stock in the other corporations, on and subject to
the terms and conditions set forth herein.
Terms of Agreement
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Now, therefore, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. Exchange of Shares. Pursuant to the terms and conditions of this
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Agreement, ISMR hereby agrees to issue the ISMR Stock to Xxxxxx in exchange for
shares of capital stock in other corporations ("Xxxxxx Exchange Stock"), and
Xxxxxx hereby agrees to sell and transfer to ISMR the Xxxxxx Exchange Stock in
exchange for the ISMR Stock (the "Exchange"). A schedule of the Xxxxxx Exchange
Stock is attached hereto as Exhibit A.
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2. Identification of Exchange Stock and Valuation of ISMR Stock. Prior
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to the closing of the Exchange, Xxxxxx shall provide to ISMR a written list
setting forth the names of the corporations in which he is transferring capital
stock to ISMR pursuant to the Exchange, which list shall set forth the number of
shares of stock in each such corporation and the value of such stock.
3. Representations and Warranties of Xxxxxx. Xxxxxx represents and
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warrants to and covenants with ISMR, that:
(a) Xxxxxx has good, absolute and unencumbered title to all of the
Xxxxxx Exchange Stock, and no person or persons other than ISMR
has or will have any right to purchase or acquire any other
interest whatsoever in the Xxxxxx Exchange Stock.
(b) Xxxxxx has the right, power, legal capacity, and authority to
enter into and perform his obligations under this Agreement;
(c) there are no actions, suits, or proceedings against or affecting
Xxxxxx or the Xxxxxx Exchange Stock, either pending or
threatened, involving the validity or enforceability of this
Agreement or the transaction contemplated thereby, or the legal
right of Xxxxxx to sell any shares of the Xxxxxx Exchange Stock.
Xxxxxx is not in default under any other material agreement or
with respect to any order, writ, injunction, decree
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or demand of any court or any governmental authority which could
aversely affect any of the Xxxxxx Exchange Stock or Brette's
ability to sell the Xxxxxx Exchange Stock; and
(d) the execution and delivery of this Agreement does not violate any
law, rule, or regulation, or any order, writ, judgment,
injunction, bond, mortgage, lease, bank loan, instrument or other
agreement to which Xxxxxx is a party or by which Xxxxxx or any
shares of the Xxxxxx Exchange Stock may be bound or adversely
affected.
(e) Xxxxxx is purchasing the shares ISMR Stock for Brette's own
account and not for the interest of any other person. The shares
of ISMR Stock are being purchased for investment only and not for
the purpose of making a public offering or other distribution.
(f) Xxxxxx understands that ISMR will be under no obligation to
register the ISMR Stock under the Securities Act of 1933, as
amended (the "Act"), or any state securities law. Therefore,
Xxxxxx understands that he will be required to hold the ISMR
Stock and to bear the economic risk of such investment for an
indefinite period of time.
(g) Xxxxxx represents the information contained in Exhibit A is true
and correct as of the date hereof.
(h) Xxxxxx shall deliver to ISMR at the closing those original
certificates in his possession along with duly endorsed stock
powers. Those shares listed on Exhibit A that are not currently
in Brett's possession must be delivered to ISMR along with duly
endorsed stock powers not later than fourteen (14) days from the
date of closing.
The foregoing representations, warranties, and covenants shall be true and
correct and be performed as of the Closing and shall survive the Closing such
that, if subsequent to Closing any representation or warranty was not true as
of the Closing or any covenant was not performed as of the Closing, ISMR may
recover from Xxxxxx any damages sustained by virtue of such representation,
warranty, or covenant not being true or performed as of the Closing.
4. Restricted Securities and Legend. Xxxxxx understands that the shares
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of ISMR Stock being purchased by Xxxxxx are not registered under the Securities
Act of 1993, as amended (the "Act"), Delaware securities laws, or any other
applicable securities law. Therefore, the shares of ISMR Stock are deemed to be
restricted stock as such term is used in the rules and regulations promulgated
under the Act and cannot be sold or otherwise transferred unless such sale or
transfer is effectuated to an effective registration statement under the Act and
all applicable state securities laws or pursuant to an exemption from
registration. The Xxxxxx understands that ISMR will not permit a transfer of the
shares of ISMR Stock unless such transfer is exempt from registration or a
registration statement has become effective pertaining to such transfer. Xxxxxx
agrees and understands that the stock certificates representing the shares of
ISMR Stock shall contain a legend on the reverse side of the certificates in
substantially the following form:
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THE SECURITIES REPRESENTED BY THIS STOCK CERTIFICATE ARE RESTRICTED
SECURITIES AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION. THE COMPANY WILL REFUSE TO PERMIT A TRANSFER OF THIS
STOCK UNLESS THE COMPANY HAS RECEIVED EVIDENCE SATISFACTORY TO
COUNSEL FOR THE COMPANY THAT SUCH TRANSFER IS PURSUANT TO AN
EFFECTIVE REGISTRATION OR EXEMPTION FROM REGISTRATION. THIS STOCK
HAS NOT BEEN REGISTERED UNDER THE FLORIDA SECURITIES AND INVESTOR
PROTECTION ACT OR THE SECURITIES ACT OR 1993, AS AMENDED.
5. Investor Suitability. Xxxxxx hereby represents and warrants to ISMR
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that (i) he has adequate means for providing for his or her current needs and
personal contingencies and has no need for liquidity in this investment, and
(ii) he has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of investing in ISMR.
6. Representation of ISMR. ISMR represents and warrants to Xxxxxx that
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ISMR has the full right and authority to enter into and perform its obligations
under this Agreement. ISMR further represents and warrants to Xxxxxx that all of
the ISMR Stock issued to Xxxxxx pursuant to this Agreement shall be fully paid
and nonassessable upon issuance. The foregoing representations shall be true and
correct and be performed as of the Closing and shall survive the Closing.
(a) ISMR represents that the purpose of this agreement is to qualify
as a tax-free reorganization of Xxxxxxx Xxxxxx'x assets under the
Internal Revenue Service Code Section 351.
(b) ISMR represents and certifies that it has 1,574,777 common shares
outstanding at the time of signing of this agreement.
(c) ISMR represents that as of the time of signing, that there is no
pending litigation.
(d) ISMR represents that as of the time of signing, that there is no
pending SEC, NASD actions.
(e) ISMR represents that taxes, payroll, income, corporate are all
current
(f) ISMR represents that there are not any material undisclosed
liabilities Post 10Q dated February 29, 2000.
7. Sale of Assets. At, or within sixty days from the Closing, ISMR shall
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sell the assets of its investor relations business to Internet Stock Market,
Corp. a FLorida corporation (including the company name, url, web site, customer
contracts, customer list, etc.) for a mutually agreed upon price.
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8. Closing. Upon the terms and subject to the conditions set forth
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herein, the closing of the transactions contemplated herein (the "Closing")
shall be held at such time and on such date as may be mutually agreed to by the
parties hereto.
9. Deliveries at Closing.
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(a) Xxxxxx Stock Certificates. To effect the Exchange, Xxxxxx shall
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deliver to ISMR certificates evidencing all of the Xxxxxx
Exchange Stock, free and clear of any encumbrances of any nature
whatsoever, duly endorsed in blank for transfer or accompanied by
stock powers duly executed in blank, together with evidence of
the payment of any applicable stock transfer taxes.
(b) Payment of Purchase Price. At the Closing, ISMR shall issue to
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Xxxxxx certificates evidencing the authorized but unissued
shares of ISMR Stock being issued to Xxxxxx pursuant to this
Agreement.
(c) Consents. The parties shall deliver all third party consents
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required for the Exchange as contemplated by this Agreement.
(d) Other Closing Transactions. At the Closing, each of the parties
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shall take such other actions required hereby to be performed by
it prior to or on the Closing.
10. Post-Closing Covenants.
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(a) Payment of Indebtedness. Xxxxxx shall cause ISMR to repay the
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outstanding loan payable of $564,965 to A. N. Kyriakides within
sixty (60) days after Closing, with a thirty (30)-day extension
if sufficient funds are not available. Interest at the rate of 6%
per annum will accrue on this loan payable from the date of
Closing until paid in full. If the loan is not paid within the
time limit set forth above, then a default rate of interest of
9% per annum will apply from the default date until the loan has
been paid in full. The loan will be evidenced by a promissory
note.
(b) Consulting Agreements. At the Closing, ISMR will enter into
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consulting agreements for one year commencing July 1, 2000, with
A. N. Kyriakides at a fee of $10,000 per month and with C. Xxxxx
Xxxxxxxx at a fee of $6,000 per month.
(c) Change of Name. Promptly following the Closing, ISMR's corporate
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name will be changed to VentureNet, Inc.
(d) Trading Symbol. Promptly following the Closing, the trading
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symbol for ISMR will be promptly changed to "VNDC", or a symbol
acceptable to Xxxxxx.
(e) Change of Control Issues. The parties acknowledge and agree that
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the Exchange is likely to result in a "change of control" of ISMR
as defined under the Securities Exchange Act of 1934, as amended.
Accordingly,
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promptly following the Closing, the parties shall cooperate to
ensure that all appropriate documents are filed with the
Securities and Exchange Commission, the NASD, and any applicable
state securities commissions or departments as may be required by
and within the time limits set forth in, applicable federal and
state securities laws or the applicable rules or all applicable
regulatory agencies, including, without limitation, a Notice of
Change of Control on Form 8-K, Schedule 13D and Form's 3 and 4,
and a new application for trading to be submitted to the OTCBB,
to reflect change of control issues.
11. Costs and Expenses. Xxxxxx shall pay all of the costs and expenses,
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including attorneys' fees, incurred in the negotiation, preparation,
execution, and delivery of this Agreement and any other documents related to the
transaction contemplated hereby, and the Closing, not exceed $5,000.
12. Election to Board. At the Closing Xxxxxx will be elected to the Board
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of Directors of ISMR and as Chairman and President. A. N Kyriakides and other
existing directors will resign.
13. Press Releases. No press releases or other public announcements of the
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transactions contemplated by this Agreement shall be made with out the mutual
agreement of the parties, until such time as the Assett Purchase of the investor
relations business, referenced in paragraph 8 above has been completed.
15. Governing Law. This Agreement shall be construed and enforced in
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accordance with the laws of the State of Delaware without regard to its
principles of conflict of laws. Any action brought to enforce or interpret this
Agreement shall be brought only in the federal or state court having competent
jurisdiction and sitting in Pinellas County, Florida.
16. Attorneys' Fees. In the event of a dispute under this Agreement, the
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non-prevailing party shall pay all of the prevailing party's reasonable
attorneys' fees and costs incurred in connection with any such action, including
any appellate proceedings and post-judgment collection proceedings.
17. Binding Effect. This Agreement shall inure to the benefit of and be
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binding upon the parties hereto and their respective heirs, legal
representatives, and permitted assigns.
18. Assignment. Neither this Agreement nor any right or obligation
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hereunder is assignable or transferable in whole or in part, by either party,
without the prior written consent of the other party, and any such purported
assignment without such consent shall be void abinitio.
19. No Third Party Beneficiary. It is the intent of ISMR and Xxxxxx that
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this Agreement is solely for the benefit of the parties hereto; therefore, no
person or persons other than ISMR and Xxxxxx shall have any rights whatsoever
under this Agreement, either as third party beneficiaries or otherwise.
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20. Entire Agreement. This Agreement constitutes the full and complete
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understanding of the parties and supersede all prior agreements and
understandings, oral or written, between the parties with respect to the subject
matter hereof. This Agreement may not be amended or modified except by a writing
signed by the party to be charged by such modification. This provision itself
may not be changed or altered orally, but only in a writing signed by the
parties to this Agreement.
21. Further Assurances. Xxxxxx and ISMR shall, from time to time, execute
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and deliver to each other such additional documents as reasonably may be deemed
to be required or advisable to carry and effect the intent and purpose of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"Xxxxxx"
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
"ISMR"
Internet Stock Market Resources, Inc.
By: /s/ A. N. Kyriakides
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A.N. Kyriakides
AS its: Chairman of the Board
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Exhibit "A"
To the Exchange Agreement Between Xxxxxxx Xxxxxx and ISMR
Dated June 13, 2000
Shares Cost Fair Market Fair Market
Company Symbol of Stock Basis(1) Price (2) Valuation (3)
------- ------ -------- -------- ----------- -------------
ATI Networks, Inc. ATIW (4) 120,000 $ 12,000 $ 2.50 $ 300,000
The Hydrogiene Corp. HICS (5) 2,000,000 $ 750,000 $ 0.84 1,680,000
Solutions Media, Inc. 700,000 $ 200,000 $ 22.00 15,400,000
Stylelogic, Inc. 50,000 $ 100,000 $ 4.00 200,000
Gramerica Food Company, Inc. 500,000 $ 380,000 $ 7.00 3,500,000
Smartech Technologies, Inc. 15,000 $ 125,000 $ 3.00 45,000
Sensonetics, Inc. 300,000 $ 115,000 $ 3.00 900,000
Australian Importers, Ltd. 80,000 $ 135,000 $ 1.00 80,000
Shark Attack 10,000 $ 75,000 $ 10.00 100,000
TV Ears, Inc. 24,000 $ 21,000 $ 1.00 24,000
XxxxxXxxxxxx.xxx(6) 1,000,000 $ 100,000 $ 12.00 12,000,000
Choice Sport CHSP (7) 2,000,000 $ 150,000 $ 2.50 5,000,000
Human Services Technologies, Inc. 510,000 $ 250,000 $ 8.00 4,080,000
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Totals $2,413,000 $ 43,309,000
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(1) Subject to review and verification
(2) Based upon Company information provided as of 6-13-2000.
(3) Based upon Company information provided as of 6-13-2000.
(4) Reflects the closing bid price of the Company as of 6-13-2000
(5) Reflects the closing bid price of the Company as of 6-13-2000
(6) To be added pending issue of certificate, post closing.
(7) Reflects the closing bid price of the Company as of 6-13-2000
/s/ Xxxxxxx Xxxxxx
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Initialed: Xxxxxxx Xxxxxx
/s/ A. N. Kyriakides
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Initialed: A. N. Kyriakides, as Chairman of ISMR
