AGREEMENT FOR THE EXCHANGE OF STOCK
THIS AGREEMENT FOR THE EXCHANGE OF STOCK ("Agreement") is executed this
3RD day of February 1997 by and between Eurotronics Holdings Incorporated, a
Utah corporation ("EHI"), InterConnect West, Inc., a Utah corporation ("ICW"),
Xxxx Xxxxxx, an individual, Canton Financial Services Corporation, a Nevada
corporation ("CFSC"), and Xxxxx Xxxxxx, an individual.
RECITALS
Whereas, ICW and its sole shareholder, Xxxx Xxxxxx (collectively
hereinafter referred to as "ICW"), desire to exchange and transfer all of ICW's
capital stock to EHI and EHI desires to acquire any and all rights and interests
in and to all of the issued and outstanding capital stock of ICW in exchange for
certain shares of EHI's common stock;
Whereas, the parties desire to make this transaction a tax-free
exchange of stock under the Internal Revenue Code of 1986, as amended (the
"Code").
Whereas, the parties desire to utilize the services of CFSC in
connection with this Agreement.
Whereas, the parties hereto were either parties to, or the
beneficiaries of, a predecessor to this Agreement, executed on July 16, 1996,
and the parties wish to modify certain consideration terms of that previous
agreement.
AGREEMENT
NOW, THEREFORE, based on the foregoing premises, which are incorporated
herein by this reference, and for and in consideration of the mutual covenants
and agreements contained herein, and in reliance on the representations and
warranties set forth in this Agreement, the benefits to be derived herein and
for other valuable consideration, the sufficiency of which is hereby expressly
acknowledged, the Parties agree as follows:
1. Consideration and Exchange of Shares. At the closing, as defined in
Section 7 ("Closing"), ICW agrees to exchange, assign, transfer and convey
exclusively to EHI all of the issued and outstanding shares of capital stock of
ICW ("ICW Shares").
At Closing, EHI will issue to Xxxx Xxxxxx 2.3 million (2,300,000)
shares of common stock, par value $0.0001 ("Common Stock"), which shall be
issued pursuant to Rule 144 ("Rule 144") under the Securities Act of 1933, as
amended (the "Act") (the "Shares"). The Shares shall be issued after EHI
completes a 1-for-2 reverse stock split to be effected by EHI at or before
Closing. EHI warrants that the 1-for-2 reverse split shall constitute the only
stock division to be conducted by EHI for a period of at least one year after
the execution of this Agreement. From and after Closing, ICW will become a
wholly-owned subsidiary of EHI, and the name of EHI will duly be changed, with
the assistance of CFSC, to "Access Market Square, Inc" as soon as is
practicable.
As consideration for services CFSC has performed related to the
negotiation and execution of this Agreement, EHI shall issue to CFSC an
aggregate of 316,620 shares of Common Stock which shall be issued pursuant of a
Form S-8 Registration Statement or other available registration statement under
the Act. The registered shares of Common Stock under this Paragraph shall be
issued to CFSC as follows:
79,155 registered shares shall be issued on or before Closing, but
shall be held in escrow for 90 days by an escrow agent to be
mutually selected by EHI and CFSC.
79,155 registered shares shall be issued on or before 90 days after
Closing..
79,155 registered shares shall be issued on or before 180 days after
Closing.
79,155 registered shares shall be issued on or before 270 days after
Closing.
All shares to be issued to CFSC shall account for a 1-for-2 reverse stock split
to be effected by EHI at or before Closing. If EHI shall fail, without good
cause, to issue any shares according to the schedule set forth above, interest
of eight per cent per annum shall accrue on the fair market value of such
undelivered shares.
In addition to the Common Stock specified above, CFSC shall receive
from EHI $100,000 payable in cash at a date to be mutually agreed upon but which
date shall not be more than 90 days after the execution of this Agreement. Any
amounts which remain unpaid after 90 days shall be paid, at CFSC's option,
through the issuance of registered shares of EHI Common Stock. For purposes of
this Paragraph, such shares shall be valued at one-half the average bid and
asked prices and the day such shares are actually issued.
EHI hereby agrees to issue 15,000 shares of Common Stock, restricted
pursuant to Rule 144, to Xxxxx Xxxxxx, EHI's former president and director, in
exchange for services Xx. Xxxxxx performed in negotiating and executing the
Agreement. The Common Stock to be issued to Xx. Xxxxxx shall be issued
subsequent to the 1-for-2 reverse stock split.
2. Performance by CFSC. CFSC hereby covenants as follows:
a. At Closing, CFSC shall deliver to EHI for cancellation any and right,
title and interest then held by CFSC in 677,149 shares of EHI's Common
Stock currently represented by certificate numbers 5507 and 5510.
b. At Closing, CFSC shall release EHI from EHI's obligation to compensate
CFSC for consulting services CFSC has performed to EHI through
Closing.
3. Representation and Warranties of ICW. ICW represents and warrants that:
a. Its shareholder, Xxxx Xxxxxx ("Shareholder"), is a citizen of the United
States of America.
b. The Shareholder is acquiring the Shares for his own account and not with
a view to any distribution within the meaning of the Act. The Shareholder
acknowledges that he has been advised and made aware that (i) EHI is
relying upon an exemption under the Act predicated upon his representations
and warranties contained in this Agreement, and (ii) the Shares issued to
the Shareholder pursuant to this Agreement will be "restricted stock"
within the meaning of Rule 144 of the Act. Unless, and until the Shares are
registered under the Act, they will be subject to limitations upon resale
set forth in Rule 144.
c. The Shareholder has received all of the information he considers
necessary and appropriate for determining whether to acquire the Shares
pursuant to this Agreement. The Shareholder is familiar with the business,
affairs, risks and properties of EHI. The Shareholder has had an
opportunity to ask questions of and receive answers from EHI and its
officers, directors and other representatives regarding EHI and the terms
and conditions of the exchange of the Shares. The Shareholder has had the
opportunity to obtain any additional information EHI possesses or could
acquire without unreasonable effort or expense, necessary to verify the
accuracy of the information furnished.
d. The Shareholder has such knowledge and expertise in financial and
business matters that he is capable of evaluating the merits and
substantial risks of an investment in the Shares and is able to bear the
economic risks relevant to the acquisition of the Shares hereunder.
e. The Shareholder is relying solely upon independent consultation with his
professional, legal, tax, accounting and any other advisors as he deems to
be appropriate in purchasing the Shares; the Shareholder has been advised
by, and has consulted with, his professional tax and legal advisors with
respect to any tax consequences of investing in EHI.
f. The Shareholder recognizes that an investment in the securities of EHI
involves substantial risk and understands all of the risk factors related
to the acquisition of the Shares.
g. The Shareholder understands that there may be no market for the Shares.
h. The Shareholder's financial condition is such that he is under no
present or contemplated future need to dispose of any portion of Shares to
satisfy any existing or contemplated undertaking, need or indebtedness.
i. Without in any way limiting the representation set forth above, the
Shareholder further agrees not to make any disposition of all or any
portion of the Shares unless and until:
(1) There is then in effect a registration statement or exemption
under the Act covering such proposed disposition and such
disposition is made in accordance with the requirements of such
registration statement or exemption; or
(2) He shall have notified EHI of the proposed disposition and
shall have furnished EHI with a detailed statement of the
circumstances surrounding the proposed disposition, and if
requested by EHI, the Shareholder shall have furnished EHI with an
opinion of counsel, reasonably satisfactory to EHI and its
counsel, that such disposition is proper under the applicable
rules and regulations promulgated under the Act.
j. It is understood that the certificates evidencing the Shares will bear
substantially the following legend:
"The securities evidenced hereby have not been registered under
the Securities Act of 1933, as amended (the "Act"), nor qualified
under the securities laws of any states, and have been issued in
reliance upon exemptions from such registration and qualification
for non-public offerings. Accordingly, the sale, transfer, pledge,
hypothecation, or other disposition of any such securities or any
interest therein may not be accomplished except pursuant to an
effective registration statement or exemption under the Act and
qualification under applicable State securities laws, or pursuant
to an opinion of counsel, satisfactory in form and substance to
the Issuer to the effect that such registration or exemption and
qualification are not required."
k. ICW confers full authority upon EHI (i) to instruct its transfer agent
not to transfer any of the Shares until it has received written approval
from EHI and (ii) affix the legend in Subparagraph j above to the fact of
the certificate or certificates representing the Shares.
l. The Shareholder understands that EHI is relying upon his representations
and warranties as contained in this Agreement in consummating the sale and
transfer of the Shares without registering them under the Act or any law.
Therefore, the Shareholder agrees to indemnify EHI against, and hold it
harmless from, all losses, liabilities, costs, penalties and expenses
(including attorney's fees) which arise as a result of a sale, exchange or
other transfer of the Shares other than as permitted under this Agreement.
The Shareholder further understands and agrees that EHI will make an
appropriate notation on its transfer records of the restrictions applicable
to these Shares.
m. The Shareholder has fully disclosed his financial condition as required
by law in connection with the Shares to EHI or its agent. At Closing, the
Shareholder and management of ICW will deliver a certificate attesting,
among other things, that there will have been no material changes in the
condition of the business or its finances as reflected in its financial
statements, which shall be audited in accordance with generally accepted
accounting principles; that all corporate authority has been duly taken to
enter into and close this transaction; that there are no material
undisclosed liabilities, claims, or judgments against ICW; and that all
legal and governmental regulations or authorities will have been complied
with, or arrangements made for compliance, including arrangements for any
such outstanding liabilities, claims, or judgments.
4. Representations and Warranties of EHI. EHI represents and warrants that:
a. It is a corporation duly organized, and validly existing under the laws
of the State of Utah, United States of America.
b. Prior to the execution of this Agreement and/or any predecessors of this
Agreeement, EHI had no assets, liabilities or outstanding contracts except
as may be expressly mentioned in this Agreement.
c. It has all necessary corporate power and authority under the laws of
Utah and all other applicable provisions of law to own its properties and
other assets now owned by it, to carry on its business as now being
conducted, and to execute and deliver and carry out the provisions of this
Agreement.
d. All corporate action on its part required for the lawful execution and
delivery of this Agreement and the issuance, execution and delivery of the
Shares have been duly and effectively taken. Upon execution and delivery,
this Agreement will constitute its valid and binding obligation,
enforceable in accordance with its terms, except as the enforceability may
be limited by applicable bankruptcy, insolvency or similar laws and
judicial decisions affecting creditors' rights generally.
5. Survival of Representations, Warranties and Covenants. The representations,
warranties and covenants made respectively by EHI and the Shareholder in this
Agreement shall survive the Closing and the exchange of the respective Shares
called for hereunder.
6. Miscellaneous.
a. In the event any one or more of the provisions contained in this
Agreement are for any reason held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not
effect any other provisions of this Agreement. This Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
b. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective heirs, legal representatives, successors and
permitted assigns. The parties may not transfer or assign all or any part
of their rights or obligations except to the extent expressly permitted by
this Agreement or otherwise agreed to in writing by both parties.
c. This Agreement constitutes the entire agreement and understanding
between the parties, and may not be modified or amended except as in
writing signed by both parties.
d. No term or condition of this Agreement shall be deemed to have been
waived nor shall there be any estoppel to enforce any provision of this
Agreement except by written instrument of the party charged with such
waiver or estoppel.
e. This Agreement shall be interpreted by laws of the State of Utah.
f. The parties hereby agree that, subject to applicable law, any
dispute arising under this Agreement shall be submitted to binding
arbitration. The prevailing party in such arbitration proceeding
shall be entitled to reimbursement of any and all costs directly
or indirectly related to such proceeding from the other party or
parties subject to the proceeding.
g. This Agreement may be executed in one or more counterparts, including
electronic mail or facsimile, each of which may be considered an original
copy hereof.
7. Closing. The Closing hereunder shall take place immediately after the
Agreement is approved by the shareholders of EHI and after EHI successfully
disseminates an information statement pursuant to Regulation 14C of the
Securities Exchange Act of 1934. Closing shall consist of the parties delivering
the securities, monies and other consideration contemplated hereunder, as well
as any documents necessary to effect this Agreement.
8. Tax-free Exchange. Insofar as possible, the parties agree that the exchange
of shares called for hereunder shall be a tax-free exchange under the tax laws
and the Code, and not an acquisition of assets.
9. Conditions to Closing. The Closing called for hereunder shall be subject to,
among other things:
a. The delivery to EHI at Closing of the ICW share certificates and the
accounting information called for herein, pursuant to generally accepted
accounting principles;
b. The conduct of due diligence of ICW by EHI or its agent, satisfactory to
the management of EHI that the books, records, and assets of ICW are in
fact as have been represented;
c. Resolutions by the boards of directors of EHI and ICW ratifying this
transaction;
d. An opinion of counsel satisfactory to EHI that ICW is a validly existing
corporation, in good standing in its place of domicile, and that all
corporate actions called for hereunder have been duly taken, and that, to
such counsel's knowledge, there are no outstanding or threatened adverse
legal actions, claims, or judgments, or the like, other than may have been
duly disclosed in writing by management of ICW, and that all shares issued
and outstanding in ICW are legally being transferred to EHI, free of any
claims or liens of any kind or nature;
e. Duly notarized affidavits from the Shareholder that it has valid right,
title and interest in and to the shares being transferred, free of any and
all claims or liens thereon.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
"EHI" - EUROTRONICS HOLDINGS INCORPORATED "ICW" - INTERCONNECT WEST, INC.
/s/ Xxxxxxx Xxxxxxx /s/ Xxxx Xxxxxx
Xxxxxxx Xxxxxxx, Vice President Xxxx X. Xxxxxx, President
"CFSC" - CANTON FINANCIAL SERVICES XXXX XXXXXX
/s/ Xxxxxxx Xxxxxx /s/ Xxxx Xxxxxx
Xxxxxxx Xxxxxx, President Xxxx Xxxxxx
XXXXX XXXXXX
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
