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

150 East 58th Street, .............., NY 10022 ("YYY"); and the  YYY shareholders listed

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 ………..YYY 27th Street, .............., from which  YYY intends to operate

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

 

 

                                       40

<PAGE>

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,

 

 

                                       41

<PAGE>

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 United States registered or certified mail,

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.

 

 

                                       42

<PAGE>

                                    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 County of ...............

 

      (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.

 

 

                                       43

<PAGE>

      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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