EXHIBIT 2
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement") is dated this ___ day of
June, 2000, by and between MICHAEL BRETTE, a California resident ("Brette"), and
INTERNET STOCK MARKET RESOURCES, INC., a Delaware corporation ("ISMR").
Background
Brette owns beneficially and of record shares of capital stock in
certain corporations.
Brette 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
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
Agreement, ISMR hereby agrees to issue the ISMR Stock to Brette in exchange for
shares of capital stock in other corporations ("Brette Exchange Stock"), and
Brette hereby agrees to sell and transfer to ISMR the Brette Exchange Stock in
exchange for the ISMR Stock (the "Exchange"). A schedule of the Brette Exchange
Stock is attached hereto as Exhibit A.
2. Identification of Exchange Stock and Valuation of ISMR Stock. Prior
to the closing of the Exchange, Brette 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 Brette. Brette represents and
warrants to and covenants with ISMR, that:
(a) Brette has good, absolute and unencumbered title to
all of the Brette 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 Brette Exchange Stock;
(b) Brette 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 Brette or the Brette Exchange Stock,
either pending or threatened, involving the validity
or enforceability of this Agreement or the
transaction contemplated thereby, or the legal right
of Brette to sell any shares of the Brette Exchange
Stock. Brette is not in default under any other
material agreement or with respect to any order,
writ, injunction, decree or demand of any court or
any governmental authority which could
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adversely affect any of the Brette Exchange Stock or
Brette's ability to sell the Brette 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
Brette is a party or by which Brette or any shares of
the Brette Exchange Stock may be bound or adversely
affected.
(e) Brette 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) Brette 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, Brette
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) Brette represents the information contained in
Exhibit A is true and correct as of the date hereof.
(h) Brette 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 Brette'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 Brette 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. Brette understands that the shares
of ISMR Stock being purchased by Brette are not registered under the Securities
Act of 1933, 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 Brette 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. Brette
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:
THE SECURITIES REPRESENTED BY THIS STOCK CERTIFICATE ARE RESTRICTED
SECURITIES AND MAY NOT BE SOLD OR TRANSFERRED
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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 OF 1933, AS AMENDED.
5. Investor Suitability. Brette hereby represents and warrants to ISMR
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 Brette that
ISMR has the full right and authority to enter into and perform its obligations
under this Agreement. ISMR further represents and warrants to Brette that all of
the ISMR Stock issued to Brette 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 Michael
Brette's assets under the Internal Revenue Service
Code Section 351.
(b) ISMR represents and certifies that it has 1,574,777
common shares outstanding at 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 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.
8. Closing. Upon the terms and subject to the conditions set forth
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.
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9. Deliveries at Closing.
(a) Brette Stock Certificates. To effect the Exchange,
Brette shall deliver to ISMR certificates evidencing
all of the Brette 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 Brette certificates evidencing the
authorized but unissued shares of ISMR Stock being
issued to Brette pursuant to this Agreement.
(c) Consents. The parties shall deliver all third party
consents required for the Exchange as contemplated by
this Agreement.
(d) Other Closing Transactions. At the Closing, each of
the parties shall take such other actions required
hereby to be performed by it prior to or on the
Closing.
10. Post-Closing Covenants.
(a) Payment of Indebtedness. Brette shall cause ISMR to
repay the 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 consulting agreements for one year
commencing July 1, 2000, with A.N. Kyriakides at a
fee of $10,000 per month and with C. Keith Byington
at a fee of $6,000 per month.
(c) Change of Name. Promptly following the Closing,
ISMR's corporate name will be changed to VentureNet,
Inc.
(d) Trading Symbol. Promptly following the Closing, the
trading symbol for ISMR will be promptly changed to
"VNDC", or a symbol acceptable to Brette.
(e) Change of Control Issues. The parties acknowledge and
agree that 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, 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
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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. Brette shall pay all of the costs and expenses,
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, Brette will be elected to the
Board 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 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
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 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
binding upon the parties hereto and their respective heirs, legal
representatives, and permitted assigns.
18. Assignment. Neither this Agreement nor any right or obligation
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 ab initio.
19. No Third Party Beneficiary. It is the intent of ISMR and Brette
that this Agreement is solely for the benefit of the parties hereto; therefore,
no person or persons other than ISMR and Brette shall have any rights whatsoever
under this Agreement, either as third party beneficiaries or otherwise.
20. Entire Agreement. This Agreement constitutes the full and complete
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
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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. Brette and ISMR shall, from time to time,
execute 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.
"Brette"
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Michael Brette
"ISMR"
Internet Stock Market Resources, Inc.
By:
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A. N. Kyriakides
AS its: Chairman of the Board
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