STOCK EXCHANGE AGREEMENT
STOCK EXCHANGE AGREEMENT (the "Agreement") dated as of May 12, 2000 by and
between PriceNetUA.com, a Nevada corporation ("PUSA" or the "Company"), MNS
Eagle Equity Group II, Inc. ("MNS") and those shareholders of MNS who have
executed a counterpart of this Agreement (the "MNS Holders").
WITNESSETH:
WHEREAS, PUSA wishes to acquire all of the issued and outstanding stock of
MNS in exchange for total consideration of 50,000 shares of common stock of PUSA
and $100,000 in cash; and
WHEREAS, PUSA and the MNS Holders are entering into this Agreement to
provide for the acquisition by PUSA of the 682,500 shares of MNS held by the MNS
Holders (the "MNS Shares"), which today do and as of the closing of the
transactions herein contemplated shall constitute 100.0% of the issued and
outstanding capital shares of MNS, in exchange for payment to them of their
prorata share of the total consideration; and
WHEREAS, it is the intention of the parties that (i) MNS be operated as a
wholly owned subsidiary with its own board of directors but including
representatives of PUSA; and that (ii) the transaction be tax free under either
Section 368 or Section 351 of the Internal Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the sufficiency of which is acknowledged, the parties
hereto hereby agree that:
1. Purchase and Sale of Securities.
1.1 Purchase and Sale of MNS Shares. On the terms and subject to the
conditions set forth in this Agreement, PUSA hereby purchases all of the 682,500
MNS Shares from the MNS Holders, and the MNS Holders hereby sell the MNS Shares
to PUSA (the "Exchange").
1.2 Purchase Price. In payment for all the MNS Shares, PUSA hereby
agrees to ratably pay and deliver to the MNS Holders at Closing a total of
US$100,000.00 in cash and 50,000 shares of the common stock of PUSA (the "PUSA
Shares") in the proportions set forth on SCHEDULE 1.2; and the MNS Holders
hereby agree to convey and deliver all of the MNS Shares to PUSA at closing. All
of the MNS Shares and the PUSA Shares must at closing be duly authorized, fully
paid and validly issued, free of all liens, claims and encumbrances. The MNS
Shares, and the cash and PUSA Shares payable to the MNS Holders, shall be
delivered to Brasher & Company, Attorneys at Law, 90 Madison Street, Suite 707,
Denver, Colorado 80206, as Closing agent for delivery to the proper parties, and
delivery to such firm shall constitute delivery to the parties. The "Closing"
shall be the date the MNS Shares, cash and PUSA Shares are delivered to such
firm. The Closing agent shall deliver a written report to PUSA and MNS
reflecting the fact and manner of closing. Closing must occur on or before May
31, 2000.
2. Company's Representations and Warranties. The Company represents and
warrants to MNS and the MNS Holders that:
2.1 Due Organization. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation, and has all requisite corporate power and authority to own,
operate, and lease its respective properties and assets and to conduct its
respective businesses as now conducted, and is qualified to do business in the
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state or other jurisdiction where the nature of its properties, assets, or
businesses as now conducted, and is qualified to do business in the state or
other jurisdiction where the nature of its properties, assets, or businesses
requires such qualification other than where the failure to be so qualified
would not, individually or in the aggregate, have a material adverse effect on
the condition, financial or otherwise, of the business, operations, affairs,
properties, or assets. This shall be referred to as the "Condition of the
Company."
2.2 Compliance with Law. The Company has obtained and maintains in
full force and effect all permits, licenses, consents, approvals, registrations,
memberships, authorizations, and qualifications under all federal, state, local,
and foreign laws and regulations, and with all federal, state, local, and
foreign governmental or regulatory authorities ("Authority") required for the
conduct by it of its businesses and the ownership or possession by it of its
properties and assets other than where the failure to obtain or maintain such
permits, licenses, consents, approvals, registrations, memberships,
authorizations, or qualifications could not, individually or in the aggregate,
have a material adverse effect on the Condition of the Company. The Company is
in compliance with all laws, regulations, ordinances, orders, and decrees
(including, without limitation, all environmental and occupational, health, and
safety laws) of any Authority applicable to the conduct by the Company of its
business and to its ownership and possession of its properties and assets other
than where the failure so to comply would not, individually or in the aggregate,
have a material adverse effect on the Condition of the Company.
2.3 Authorization, Execution, and Delivery of Agreement. (a) The
execution and delivery of this Agreement, the issuance and sale of the PUSA
Shares to MNS, and the consummation of the transactions contemplated hereby (i)
are within the corporate power and authority of the Company, (ii) do not require
the approval or consent of any stockholders of the Company, and (iii) have been
duly authorized by all necessary corporate power on the part of the Company.
This Agreement has been duly authorized by all necessary corporate power on the
part of the Company. This Agreement has been duly executed and delivered by the
company, and this Agreement constitutes the legal, valid, binding, and
enforceable obligation of the Company, subject to applicable bankruptcy,
insolvency, and similar laws affecting creditors' rights generally, and subject
as to enforceability under general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(b) The PUSA Shares have been duly authorized by all necessary
corporate action on the part of the Company and when issued will be validly
issued, fully paid, and nonassessable, and the MNS Holders will acquire valid
title to such shares, free and clear of any preemptive rights and any
encumbrances and claims of third persons.
2.4 Financial Statements. The Company's audited financial statements
for the periods ending December 31, 1998 and 1999 are true, correct and
complete, and have been prepared in accordance with generally accepted
accounting principles and standards and all applicable SEC rules.
2.5 No Misrepresentation. This Agreement and the Company's Form 8-K
report previously furnished contain no untrue statement of a material fact, nor
omit to state a material fact about the Company necessary to make the statements
contained herein and therein not misleading.
2.6 Capitalization. The Company has authorized 50,000,000 shares of
common stock of which 12,147,234 are issued and outstanding and 25,000,000
shares of Preferred Stock of which none are issued and outstanding. The Board of
Directors has the right to issue preferred stock in series with the relative
rights, designations and preferences determined by the Board of Directors from
time to time.
3. Representations and Warranties of MNS and the MNS HOLDERS. MNS and the
MNS Holders severally represent and warrant to the Company that:
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3.1 Capitalization of MNS. MNS has authorized 50,000,000 shares of
common stock of which 682,500 are issued and outstanding and 5,000,000 shares of
Preferred Stock of which none are issued and outstanding. There are no options,
warrants or other rights pursuant to which any person has the right to purchase
or acquire capital shares of MNS, nor any instrument convertible into or
exchangeable for capital shares of MNS.
3.2 Execution and Delivery of Agreement. This Agreement has been duly
executed and delivered by and constitutes a legal, valid, binding, and
enforceable obligation of MNS and each of the MNS Holders, subject to applicable
bankruptcy, insolvency, and similar laws affecting creditors' rights generally,
and subject as to enforceability under general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law).
3.3 Purchase Entirely for Own Account. The MNS Holders each confirm
that they are acquiring the PUSA Shares for their respective own accounts and
not as a nominee or agent for any person, and each is acquiring the PUSA Shares
for investment and not with a view to the resale or distribution of any part
thereof, other than as permitted by applicable federal and state securities
laws, and no MNS Holder is a party to any contract, undertaking, agreement, or
arrangement with any person to sell, transfer, or grant participation to such
person or to any third person with respect to any of the PUSA Shares.
3.4 Representations and Warranties Correct. To the best knowledge of
each of the MNS Holders, the representations and warranties of MNS herein are
true and correct, and MNS has full power and authority to enter into this
Agreement.
3.5 Receipt of Documents. The MNS Holders each acknowledge that his,
her or its investment is based solely on the description of the Company given by
the agents of the Company without any written disclosures, but also by inviting
the MNS Holders to discuss the Company with the Company's officers or its
professional advisors.
3.6 Access to Information about PUSA. The MNS Holders each have had
the opportunity to discuss the Company's business and affairs with such officers
or other officials of the Company and/or agents as they have deemed necessary or
appropriate, and each believes that he, she or it has received all the
information considered necessary or appropriate for deciding whether to purchase
the PUSA Shares. Notwithstanding the foregoing, MNS and the MNS Holders
represent and warrant that MNS has no assets or liabilities, no contracts or
agreements respecting MNS or the MNS Shares, MNS has engaged in no business of
any kind since its inception, there are no preemptive rights as to the MNS
Shares, and no options or other rights exist whereby any person is entitled to
buy or acquire the MNS Controll Shares or any other shares of MNS.
3.7 Restricted Securities. Each MNS Holders understands and
acknowledges that the PUSA Shares he or she is purchasing are characterized as
restricted securities under the U.S. federal securities laws because they were
acquired from the Company in a transaction not involving a public offering, and
that under such laws and applicable regulations the securities may be resold or
otherwise transferred without registration under the Securities Act of 1933 and
other applicable laws only in certain limited circumstances.
3.8 Legend. The MNS Holders each understand and acknowledge that all
certificates evidencing the PUSA Shares shall, unless and until removed in
accordance with law, bear a legend in substantially the following form:
"These securities have not been registered under the Securities Act of
1933. They may not be sold, offered for sale, pledged, or hypothecated in the
absence of a registration statement in effect with respect to the securities
under such Act or an opinion of counsel satisfactory to Company that such
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registration is not required or unless sold under Rule 144 of the Securities
Act."
3.9 Ownership of MNS Shares; Etc. Each MNS Holder owns good and
merchantable title to the MNS Shares, free and clear of all liens, claims and
encumbrances of third persons, and each owns the number of shares set forth next
to his, her or its respective name.
4. Additional Covenants.
4.1 Covenants of MNS. MNS hereby covenants and agrees to perform or do
after Closing the following: (i) nominate and elect a board of directors
consisting of persons designated by PUSA; and (ii) l cooperate with the Company
in any respect required to carry out the purposes of this Agreement, including
the execution and delivery of any additional documents deemed by counsel to the
Company to be required.
4.2 Piggyback Registration Rights. If PUSA should register any of its
Common Stock or other securities under the Act, either for its own account or
for the account of a security holder or holders other than the MNS Holders,
other than (i) a registration relating solely to employee benefit plans, or (ii)
a registration relating solely to a transaction of the type described in Rule
145(a) of the Securities and Exchange Commission ("SEC") under the Act, PUSA
shall, at such time, promptly give each MNS Holder written notice of the
proposed registration. Upon the written request of a Holder given within 20 days
after mailing of such notice by PUSA, then PUSA shall cause to be registered
under the Act all of the PUSA Shares that such Holder has requested to be
registered. Whenever required under this Section to effect the registration of
any PUSA Shares, PUSA shall, as expeditiously as is practicable:
(a) Prepare and file with the SEC a registration statement including
the requested PUSA Shares and use its best efforts to cause such registration
statement to become effective, and keep such registration statement effective
for a period of up to 120 days or until the distribution contemplated in such
Registration Statement has been completed; provided, however, that such 120-day
period shall be extended as to an MNS Holder for a period of time equal to the
period the MNS Holder refrains from selling any securities included in such
registration at the request of PUSA or of an underwriter of securities of PUSA.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the MNS Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of PUSA Shares owned by them.
(d) Register or qualify the PUSA Shares covered by such registration
statement under the securities or "blue sky" laws of such jurisdictions as the
MNS Holders reasonably request.
(e) Notify each MNS Holder at any time when a prospectus relating
thereto is required to be delivered under the Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
5. General Provisions.
5.1 Survival of Representations, Warranties and Agreement.
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Notwithstanding any investigation conducted or notice or knowledge obtained by
or on behalf of any party hereto, the representation and warranty in this
Agreement shall survive the sale and delivery of the PUSA Shares and MNS Shares
under the terms of this Agreement.
5.2 Expenses. Each party hereto shall pay its, his or her own expenses
incidental to the preparation of this Agreement, the carrying out of the
provisions hereof, and the consummation of the transaction contemplated hereby.
5.3 Laws. This Agreement shall be governed and interpreted in
accordance with the laws of the State of California, United States of America.
5.4. Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties, and supersedes and integrates
all prior oral or written agreements, if any, and may only be modified by
written amendment signed by an authorized representative of each party.
5.5. No Conflicting Agreements. Each party states that there is no
agreement between itself and any other person, firm, or corporation which would
cause this Agreement not to have full force and effect.
5.6 Notices. Any notice required or permitted to be given to a party
may be given by U.S. mail, by messenger or courier service or by facsimile
transmission, to the addresses below or any other addresses subsequently
provided in wriitng; if to MNS or an MNS Holder to:
MNS Eagle Equity Group II, Inc.
90 Madison Street, Suite 707
Denver, Colorado 80206
Facsimile: 303-35503063
If to PUSA: PriceNetUSA.com
2575 McCabe Way
Irvine, California 92614
Facsimile: 949-475-1358
IN WITNESS WHEREOF, the parties have duly executed this Agreement,
all as of the date first written above.
PriceNetUSA.com MNS Eagle Eguity Group II, Inc. ("MNS")
("Company")
By /s/ Donald J. Rackemann By /s/ Stephen M. Siedow
-------------------------- ------------------------
Authorized Officer Stephen M. Siedow, Pres., CEO
SIGNATURES of the MNS HOLDERS:
Stephen M. Siedow (280,689) John D. Brasher Jr. (263,189)
By /s/ Stephen M. Siedow By /s/ John D. Brasher Jr
------------------------ -------------------------
Signature Signature
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Linda M. Siedow (12,500) Nicole A. Siedow (5,000)
X................................. X...................................
Signature Signature
Linda M. Siedow CF Linda M. Siedow CF
Stephen J. Siedow (5,000) Michael R. Siedow (5,000)
X................................. X...................................
Signature Signature
Lisa K. Brasher (10,000) Lisa K. Brasher Children's Trust (5,000)
By /s/ Lisa K. Brasher By /s/ Lisa K. Brasher
---------------------- ----------------------
Signature Signature
MNS Eagle Equity Group, Inc.(34,916) YAKIMA CORP. (20,000)
By /s/ Stephen M. Siedow By /s/ John Brasher
------------------------ -------------------
Stephen M. Siedow, Pres. John Brasher, Vice Pres.
Richard Evans (1,000) Johnny D. Brasher (10,000)
X By /s/ Johnny D. Brasher
---------------------------------- ------------------------
Signature Signature
Myron D. Spanier (2,000) Alpine Trust & Asset Management FBO
Saccomanno Higher Education Foundation
X................................. By..................................
Signature Authorized Sgnature
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Marion F. Siedow (1,500) Geraldine F. Siedow (1,500)
X................................. X...................................
Signature Signature
A.V. Gallagher (500) Robert W. Hershey (23,706)
X................................. X....................................
Signature Signature
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SCHEDULE 1.2
DELIVERIES TO THE MNS HOLDERS
MNS Shares Cash PUSA Shares
Stephen M. Siedow 280,689 $41,126.59 20,563
John D. Brasher Jr 263,189 $38,562.50 19,281
Linda M. Siedow 12,500 $ 1,831.50 916
Nicole A. Siedow 5,000 $ 732.60 366
Linda M. Siedow
CF Stephen J. Siedow 5,000 $ 732.60 366
Linda M. Siedow
CF Michael R. Siedow 5,000 $ 732.60 366
Lisa K. Brasher 10,000 $ 1,465.20 733
Lisa K. Brasher Children's Trust 5,000 $ 732.60 366
MNS Eagle Equity Group, Inc. 34,916 $ 5,115.90 2,558
YAKIMA CORP 20,000 $ 2,930.40 1,465
Richard Evans 1,000 $ 146.52 73
Johnny D. Brasher 10,000 $ 1,465.20 733
Myron D. Spanier 2,000 $ 293.04 147
Marion F. Siedow 1,500 $ 219.78 110
Geraldine H. Siedow 1,500 $ 219.78 110
A.V. Gallagher 500 $ 73.26 37
Robert W. Hershey 23,706 $ 3,473.41 1,737
Alpine Trust & Asset Management FBO
Saccomanno Higher Education Foundation 1,000 $ 146.52 73
------- ----------- -------
TOTALS 682,500 $100.000.00 50,000
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