

ACQUISITION
AGREEMENT
THIS
ACQUISITION AGREEMENT (the "Agreement") is made and entered into this
11th day of March, 2002 by and among The XYZ
Corporation, a ..............
corporation with its principal place of business at ……………… ("XYZ"); YYY ..............,
Inc, a ..............
corporation with its principal place of business at
on Exhibit A attached hereto and made a part hereof (singly and
collectively
referred to herein as the "Shareholders").
PREAMBLE
WHEREAS, YYY has authorized
capital stock consisting of 25,000,000
shares of common stock, $.001 par value per share (the "Common
Stock") and
5,000,000 shares of preferred stock, $.001 par value
per share (the "Preferred
Stock") of which 7,500,00
shares of Common Stock are issued and outstanding and
owned by the Shareholders; and
WHEREAS,
XYZ desires to acquire all of the Common Stock owned by the
Shareholders, making YYY a wholly owned subsidiary of XYZ,
in exchange for
ten million (10,000,000) shares of XYZ's common
stock, $.001 par value per
share, and the Shareholders similarly desire to make such exchange; and
WHEREAS,
the parties desire that the exchange qualify as a tax free
exchange meeting the requirements of Article 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended.
NOW,
THEREFORE, in consideration of the premises, and of the promises,
covenants and conditions contained herein, the parties intending to be legally
bound, hereby agree as follows:
WITNESSETH:
ARTICLE 1
EXCHANGE OF
SHARES
Subject to
the hereinafter described conditions, XYZ hereby agrees to
transfer and deliver ten million (10,000,000) shares of its common stock, $.001
par value (the "XYZ Shares"), to the Shareholders in exchange for
all of the
capital stock of YYY, consisting of
seven million five hundred (7,500,000)
shares of Common Stock owned by the Shareholders (the " YYY
Shares").
ARTICLE 2
CLOSING
The
exchange of the XYZ Shares for the YYY Shares (the "Share
Exchange") shall take place at the offices of .............. & .............., LLP,
…….. Third ..............,
.............., .............., or such other place as the parties
may mutually agree (the "Closing"). The Closing shall take place
as soon as
practicable after the execution of this Agreement, but in all events not later
than five (5) business days from the date hereof, unless mutually extended
by
the parties. The date on which the Closing occurs is referred to herein at
the
Closing Date. At the Closing:
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(a) The
Shareholders shall tender to XYZ certificates representing all of
YYY's authorized, issued and outstanding capital stock,
duly executed and in
proper form for transfer to XYZ, together with such executed consents, powers
of attorney, stock powers and other items as shall be required to convey
such
stock to XYZ, in compliance with all applicable laws; and
(b) XYZ
shall tender to the Shareholders, certificates representing an
aggregate of ten million (10,000,000) XYZ Shares and such other items as shall
be required to convey such stock to the Shareholders in compliance with
all
applicable laws.
ARTICLE 3
EXEMPTION FROM
REGISTRATION
(a) The
Shareholders hereby represent, warrant, covenant and acknowledge
that:
(1)
The XYZ Shares are being issued to them without registration
under the provisions of Article 5 of the Securities Act of
1933, as
amended (the "Act"), pursuant to exemptions
provided pursuant to Article
4(2)
thereof;
(2)
All of the certificates for the XYZ Shares will bear legends
restricting their transfer, sale, conveyance or
hypothecation, unless such
XYZ Shares
are either registered under the provisions of Article 5 of the
Act and
under applicable state securities laws, or an opinion of legal
counsel, in form and substance satisfactory to legal counsel
to XYZ, is
provided certifying that such registration is not required
as a result of
applicable exemptions therefrom;
(3) XYZ's transfer agent shall be instructed not to transfer
any of
the XYZ Shares unless XYZ advises it that such transfer is
in compliance
with all applicable laws;
(4) The Shareholders are acquiring the XYZ
Shares for investment
purposes only, and not with a view to further sale or
distribution; and
(5) YYY, the Shareholders and
their advisors have been given and
had access to all reports filed by XYZ with the Securities
and Exchange
Commission
and have examined all of XYZ's books, records and
financial
statements and fully and completely questioned XYZ's officers and
directors to their satisfaction as to all matters they
deemed pertinent.
(b) XYZ
hereby represents, warrants, covenants and acknowledges that:
(1) The YYY Shares are
being transferred without registration
under the provisions of Article 5 of the Act pursuant to
exemptions
provided pursuant to Article 4(2) thereof;
(2)
The certificates for the
YYY Shares will bear legends
restricting their transfer, sale, conveyance or
hypothecation, unless such
YYY
Shares are either registered under the provisions of Article 5 of
the Act and under applicable state securities laws, or such
registration
is not required as a result of applicable exemptions therefrom;
(3)
XYZ shall not transfer any of the YYY Shares except in
compliance with all applicable laws;
(4)
XYZ is acquiring the
YYY Shares for investment purposes
only and not with a view to further sale or distribution;
and
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(5)
XYZ has been given and had access to all books, records and
financial statements of
YYY and has fully and completely questioned
YYY's officers and directors to its satisfaction as to all
matters it
deemed pertinent.
ARTICLE 4
REPRESENTATIONS AND
WARRANTIES
OF YYY AND THE SHAREHOLDERS
YYY and
the Shareholders hereby represent and warrant to XYZ as
follows:
(a) YYY is a corporation duly organized, validly
existing, and in good
standing under the laws of the State of .............., and has the legal
capacity and
all necessary corporate authority to enter into and perform this Agreement
and
to consummate the transactions contemplated hereby;
(b) At the
Closing, YYY
shall have good and marketable title to all of
its assets free and clear of all liens, claims, charges, and any other
encumbrances. These assets will include (i)
a license agreement with Heir
Holding Co. Inc granting YYY the right to use the
"Scores" name in ..............
City for up to three adult
.............. clubs; and (ii) a lease for a facility
at ………..
an adult .............. club utilizing the "Scores" name.
(c) At the
Closing, YYY
shall have no liabilities other than those
liabilities listed in Exhibit B hereof.
(d) The YYY Shares
represent all of YYY's
issued and outstanding
capital stock. At the Closing, YYY shall have no outstanding
subscriptions,
options, warrants, or other convertible securities that could result in an
obligation to issue additional capital stock of
YYY;
(e) This
Agreement has been duly authorized, executed and delivered by
YYY and the Shareholders and constitutes a legal,
valid and binding obligation
of
YYY and the Shareholders,
enforceable against YYY and the
Shareholders in accordance with its terms;
(f) The
execution and delivery of this Agreement and the performance of
the obligations imposed hereunder will not conflict with, or result in a
breach
by
YYY of, any of the terms or
provisions of, or constitute a default under
the certificate of incorporation or bylaws of YYY, or any material agreement
or instrument to which YYY is a party,
or by which it or any of its
properties or assets are bound, or result in a violation of any order, decree,
or judgment of any court or governmental agency having jurisdiction
over YYY
or YYY's properties,
will not conflict with, constitute a default under, or
result in the breach of, any contract, agreement, or other instrument to which
YYY is a party
or is otherwise bound and no consent, authorization or order
of, or filing or registration with, any court, governmental, or regulatory
authority is required in connection with the execution and delivery of this
Agreement and any related agreements or the
performance by YYY
of its
obligations hereunder;
(g) There
is no litigation or proceeding pending or, to the best knowledge
of
YYY and the Shareholders,
threatened, against YYY, the property of
YYY, or any of the Shareholders which would have any
effect on the validity or
performance of this Agreement;
(h) YYY and the Shareholders are aware that the
XYZ Shares have not
been registered under the Act and may not be transferred or otherwise
disposed
of unless they are subsequently registered under the Act or an exemption
from
such registration is available. Additionally, each of the Shareholders has
such
knowledge and experience in financial and business matters that such Shareholder
is capable of evaluating the merits and risks of the purchase of the XYZ
Shares
and making an informed investment
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decision with respect thereto, has evaluated the merits and risks of the
purchase of the XYZ Shares, and is able to bear the economic risk of purchasing
the XYZ Shares;
(i) Each of the Shareholders is purchasing the XYZ Shares
for its own
account for investment purposes and not with a view to "distribute"
the XYZ
Shares as that term is defined in the Act;
(j) YYY and each of the Shareholders have been
provided with any and
all written information and materials concerning XYZ, and its business
which it
has requested and has had the opportunity to conduct and has conducted its
own
due diligence in connection with the purchase set forth herein;
(k)
Neither XYZ, nor any person acting on behalf of XYZ, has offered,
offered to sell, offered for sale or sold the XYZ Shares to the Shareholders by
means of any form of general public solicitation or advertising;
(l) YYY has filed with the appropriate
governmental agencies all tax
returns and tax reports required to be filed; all Federal, state and local
income, franchise, sales, use, occupation or other taxes due have been fully
paid or adequately reserved for; and
YYY is not a party to any action or
proceeding by any governmental authority for assessment or collection of taxes,
nor has any claim for assessments been asserted against YYY;
(m) There
are presently no contingent liabilities, factual circumstances,
threatened or pending litigation, contractually assumed obligations or
unasserted possible claims which are known to
YYY, which might result in a
material adverse change in the future financial condition or operations of
YYY;
(n) No
transactions have been entered into either by or on behalf of
YYY, other than in the ordinary course of business nor
have any acts been
performed (including within the definition of the term performed the failure to
perform any required acts) which would adversely affect the good will of
YYY, nor will any such transactions be entered into
prior to the Closing;
(o) YYY does not have any subsidiaries;
(p) The
Shareholders own the
YYY Shares free and clear of all liens,
claims, charges, preemptive rights, and any other
encumbrances and shall deliver
the
YYY Shares to XYZ at Closing
free and clear of all liens, claims,
charges, preemptive rights, and any other
encumbrances;
(q) YYY shall comply, at YYY's
expense, with all Federal, state
and local stock transfer tax requirements; and
(r) YYY has acquired the right to use the
"Scores" name in ..............
City for up to three adult
.............. clubs pursuant to a license agreement
between
YYY and Heir Holding Co., Inc.,
the owner of the Scores trademark.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF XYZ
XYZ hereby
represents and warrants to
YYY and the Shareholders as
follows:
(a) XYZ is
a corporation duly organized, validly existing, and in good
standing under the laws of the State of .............. and has the legal
capacity and all
necessary corporate authority to carry on its business,
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to own its properties and assets, and to enter into and perform this
Agreement
and to consummate the transactions contemplated hereby;
(b) This
Agreement has been duly authorized, executed and delivered by
XYZ and constitutes a legal, valid and binding
obligation of XYZ, enforceable
against XYZ in accordance with its terms;
(c) The
execution and delivery of this Agreement and the performance of
the obligations imposed hereunder will not conflict with, or result in a
breach
by XYZ of, any of the terms or provisions of, or constitute a default
under the
certificate of incorporation or bylaws of XYZ, or any material agreement or
instrument to which XYZ is a party, or by which it or any of its properties or
assets are bound, or result in a violation of any order, decree, or judgment
of
any court or governmental agency having jurisdiction over XYZ or XYZ's
properties, will not conflict with, constitute a default under, or result in the
breach of, any contract, agreement, or other instrument to which XYZ is a
party
or is otherwise bound and no consent, authorization or order of, or filing
or
registration with, any court, governmental, or regulatory
authority is required
in connection with the execution and delivery of this Agreement and any
related
agreements or the performance by XYZ of its obligations hereunder;
(d) There
is no litigation or proceeding pending or, to the best knowledge
of XYZ, threatened, against XYZ which would have any material effect on
the
validity or performance of this Agreement; and
(e) The
XYZ Shares will, when issued, be duly authorized, validly issued,
fully paid, and non-assessable.
ARTICLE 6
NOTICE
All
notices, demands or other communications given hereunder shall be in
writing and shall be deemed to have been duly given when received if sent by fax
or overnight courier, and if mailed shall be deemed to have been given on
the
first business day after mailing by
return receipt requested, postage prepaid, addressed as follows:
To
XYZ: The Internet Advisory
Corporation
Telephone:
Facsimile:
With a
copy to:
.............. ttbetter
& .............., LLP
Telephone:
Facsimile:
To YYY: YYY .............., Inc.
Telephone:
Facsimile:
To the
Shareholders: At the address provided for YYY above.
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ARTICLE 7
MISCELLANEOUS
(a) Each
of XYZ, YYY and
the Shareholders agrees to take such actions
as are reasonably necessary to carry out the intentions of the parties
under
this Agreement, including but not limited to the prompt execution and
delivery
of any documents reasonably necessary to carry out and perform the terms
or
intention of this Agreement.
(b) All
costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring
such
costs or expenses, unless otherwise agreed.
(c) This
Agreement shall be governed by and construed in accordance with
the laws of the State of .............., without regard to conflicts of
laws of
principles and each party hereby agrees that all performances due and
transactions undertaken pursuant to this Agreement shall be deemed
to be due or
have occurred in .............., and the exclusive venue and place of
jurisdiction for
any litigation arising from or related to this Agreement shall be the state
or
federal courts located in the State and
(d) The
headings used in this Agreement are for convenience only, do not
form a part of this Agreement, and shall not affect in any way the meaning
or
interpretation of this Agreement.
(e) This
Agreement may be executed in one or more counterparts which when
taken together shall constitute one agreement.
(f) This
Agreement is intended for the benefit of the parties hereto and
is not for the benefit of, nor may any provisions hereof be enforced by
any
other person, firm or entity.
(g) This
Agreement may be amended, modified and supplemented in writing
only by the mutual consent of the parties hereto.
(h) This
Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors
and permitted assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, and any
attempts
to do so without the consent of the other parties shall be void and of no
effect.
(i) In the event any party breaches the terms of this
Agreement, the
non-breaching parties shall be entitled to the recovery of their
attorney's fees
and other professional costs and fees incurred in enforcing their rights
hereunder.
(j) This
writing constitutes the entire agreement and understanding
between the parties hereto with respect to the subject matter contained herein.
Neither party is relying on any representation or
statement not contained in
this writing. This Agreement supercedes and
cancels any prior agreements
relating to the subject matter contained herein.
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IN WITNESS
WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written
above.
THE INTERNET ADVISORY CORPORATION
By: /s/
--------------------------------
Name:
Title: Vice President and Secretary
By: /s/
--------------------------------
Name:
Title: Treasurer
YYY
.............., INC.
By: /s/
--------------------------------
Name:
Title: President
THE SHAREHOLDERS:
/s/
-----------------------------------
Name:
/s/
-----------------------------------
Name:
/s/
-----------------------------------
Name:
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EXHIBIT A
LIST OF
SHAREHOLDERS
NUMBER OF
YYY SHARES
NAME
OWNED
…………………..
………………….
…………………..
EXHIBIT B
LIST OF YYY LIABILITIES AT CLOSING
Accounts Payable - $................
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