SHARE EXCHANGE AGREEMENT
by and among
a California corporation
the shareholders of
on the one hand;
a Nevada corporation,
the Majority Shareholder of Ventures-United, Inc.,
on the other hand
February 9, 2007
SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement, dated as of February 9, 2007 (this “Agreement”), is made and entered into by and among the shareholders of Avasoft, Inc., a California corporation (“ASFT”), listed on Schedule I attached (each, an “ASFT Shareholder,” collectively, the “ASFT Shareholders”), on the one hand; and Ventures-United, Inc., a publicly traded Nevada corporation (OTCBB: VNUN.OB) (“VNUN”), and Tryant, LLC, a limited liability company (“VNUN Shareholder”) on the other hand.
WHEREAS, the Board of Directors of VNUN has adopted resolutions approving VNUN’s acquisition of shares of ASFT (the “Acquisition”) upon the terms and conditions hereinafter set forth in this Agreement;
WHEREAS, each ASFT Shareholder owns the number of shares of common stock of ASFT, par value $.001 per share, set forth opposite such ASFT Shareholder’s name in Column I on Schedule I attached hereto (“ASFT Shares”);
WHEREAS, ASFT Shareholders own, collectively, an amount of shares of common stock of ASFT, constituting all of the issued and outstanding capital stock of ASFT, and ASFT Shareholders desire to sell their respective portion of ASFT Shares pursuant to the terms and conditions of this Agreement;
WHEREAS, VNUN Shareholder holds an amount of shares of VNUN common stock, par value $.001 per share, (“VNUN Shares”) which represents an overwhelming majority of the issued and outstanding capital stock of VNUN;
WHEREAS, VNUN Shareholder will enter into this Agreement for the purpose of making certain representations, warranties, covenants, indemnifications and agreements; and
WHEREAS, it is intended that the terms and conditions of this Agreement comply in all respects with Section 368(a)(1)(B) of the Code and the regulations corresponding thereto, so that the Acquisition shall qualify as a tax free reorganization under the Code.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
The Acquisition. Upon the terms and subject to the conditions hereof, at the Closing (as hereinafter defined) ASFT Shareholders will sell, convey, assign, transfer and deliver to VNUN one or more stock certificates representing all outstanding ASFT Shares, and as consideration for the acquisition of ASFT Shares, VNUN will issue to each ASFT Shareholder, in exchange for such ASFT Shareholder’s pro rata portion of ASFT Shares, one or more stock certificates representing the number of shares of common stock set forth opposite such ASFT Shareholder’s name in Column II on Schedule 1.1(a) attached hereto (collectively, the “VNUN Shares”). In addition, at Closing, ASFT shall pay to VNUN Shareholder an amount equal to $510,000, a portion of which shall be used to directly pay liabilities of VNUN in the amounts owed to each person as set forth in Schedule 1.1(b) (“Cash Payment”). The parties acknowledge that $200,000 of the Cash Payment has already been paid to VNUN Shareholder. The remaining portion of the Cash Payment will be delivered via wire transfer to VNUN Shareholder to the VNUN Shareholder’s wire transfer account. VNUN Shareholder agrees that $250,000 of this Cash Payment may be disbursed to VNUN Shareholder upon satisfaction of the closing conditions set forth in Section 7.1 below. The remaining $60,000 of the Cash Payment shall be held in escrow with VNUN’s legal counsel until the VNUN Form 10-KSB for the year ended December 31, 2006 has been filed with the Securities and Exchange Commission.
Closing. The closing of the Acquisition (the “Closing”) shall take place on or before February 12, 2007, or on such other date as may be mutually agreed upon by the parties. Such date is referred to herein as the “Closing Date.”
Derivative Securities. All options and warrants to purchase ASFT common stock shall be exchanged into options and warrants to purchase that number of VNUN common stock set forth in Schedule 1.3 and at the exercise price set forth in Schedule 1.3. All ASFT debt that may be converted into ASFT common stock shall be exchanged for VNUN debt that may be converted into shares of VNUN common stock in the manner set forth in Schedule 1.3. The conversion price at which VNUN debt may be converted into VNUN common stock shall be based on the conversion price of ASFT debt and also proportional to the rate at which ASFT common stock may be exchanged for VNUN common stock. VNUN shall reserve for issuance 3,745,000 shares of its common stock upon exercise of such options and warrants or conversion of such convertible notes.
Ownership. The parties intend that at the Closing, holders of ASFT common stock, ASFT options, ASFT warrants and ASFT convertible debt shall hold 93% of the outstanding VNUN common stock on a fully-diluted basis, subject to certain exceptions set forth below. In furtherance of this intent, VNUN shall issue 13,702,534 shares. It shall issue warrants to purchase 3,745,000 VNUN shares of common stock in exchange for outstanding warrants to purchase 3,745,000 shares of ASFT common stock. This fully-diluted basis shall exclude: