Stock Exchange And Acquisition Agreement

EXHIBIT 10.3
------------


STOCK EXCHANGE AND ACQUISITION AGREEMENT


STOCK EXCHANGE AND ACQUISITION AGREEMENT dated as of April 18, 2000 (the "Agreement"), between and among ELECTRONIC MARKET CENTER, INC., a company organized and existing under the laws of the State of Delaware ("EMC" or the "Company"), located at 1900 Market Street, Suite 701, Philadelphia, Pennsylvania 19103, THE ASHTON TECHNOLOGY GROUP, INC., a company organized and existing under the laws of the State of Delaware ("Ashton"), located at 1900 Market Street, Suite 701, Philadelphia, Pennsylvania 19103, E-TRUSTCO.COM, Inc., a company organized and existing under the laws of the State of Delaware ("E-Trustco"), located at 1 Darling Drive, Suite 600, Avon, Connecticut, 06001, MATTHEW SALTZMAN ("Saltzman"), who resides at 2 Forest Hills Drive, Avon, Connecticut, 06001, and ALLEN WHITEHEAD ("Whitehead"), who resides at 35 East Main Street, PMB 352, Avon, Connecticut, 06001. EMC and E-Trustco together are referred to collectively as the "Parties" and each, a "Party."


WHEREAS, the Parties, Saltzman and Whitehead desire that, upon the terms and subject to the conditions contained herein, Saltzman and Whitehead shall, jointly, sell to the Company, and the Company shall purchase 165 shares of E- Trustco's common stock, no par value per share (the "E-Trustco Common Stock") from Saltzman and Whitehead, which securities represents all of the equity, voting rights, title and interest in E-Trustco, in exchange for 2,000,000 shares of the Company's common stock, par value $.0001 per share (the "EMC Common Stock") as more fully described herein; and


WHEREAS, as a condition of such exchange and acquisition of the E-Trustco Common Stock, EMC and Ashton desire to enter into an employment agreement with Matthew Saltzman, president of E-Trustco, which agreement sets forth the terms and conditions of Saltzman's employment as President and Chief Operating Officer of EMC.


NOW, THEREFORE, the Parties hereto, Ashton, Saltzman and Whitehead agree as follows:


ARTICLE I
Transfer of Shares


Section 1.1 Sale of the E-Trustco Common Stock.
----------------------------------


(a) Saltzman and Whitehead hereby agree to sell, jointly, to the Company and the Company hereby agrees to purchase from Saltzman and Whitehead the E- Trustco Common Stock in exchange for the EMC Common Stock at the Closing (as hereinafter defined). The Company shall issue to Saltzman 1,950,000 shares of the EMC Common Stock and shall issue to Whitehead 50,000 shares of the EMC Common Stock at the Closing.


-1-


(b) After the purchase and sale of the E-Trustco Common Stock, the Company shall own 100% of the authorized, issued and outstanding voting equity of E- Trustco.


(c) After the purchase and sale of the EMC Common Stock, Saltzman shall own 19.5% and Whitehead shall own .5% of the authorized, issued and outstanding voting equity of EMC.


Section 1.2 Closing.
-------


The purchase and sale of the E-Trustco Common Stock shall take place as of 12:00 p.m., Eastern Standard Time, on April 18, 2000 (the "Closing Date") at the offices of EMC first described above, or at such other place as the Parties, Ashton, Saltzman and Whitehead mutually agree upon orally or in writing (which time and place are designated as the "Closing"). At the Closing, the Parties, Ashton, Saltzman and Whitehead shall complete each of the following conditions:


(1) The delivery by Saltzman and Whitehead to the Company of certificates,
executed stock powers and/or register share ownership, as the case may
be, representing the E-Trustco Common Stock;


(2) The delivery by the Company to E-Trustco of certificates representing
the EMC Common Stock;


(3) The execution and delivery by the Company, Ashton and Saltzman of an
employment agreement by and between the Company, Ashton and Saltzman
(the "Employment Agreement"), the form of which is attached hereto as
Exhibit A, and all exhibits, attachments and schedules thereto;


(4) The execution and delivery by the Company, Ashton, Saltzman, and
Whitehead of a Stockholders Agreement, the form of which is attached
hereto as Exhibit B and all exhibits, attachments and schedules
thereto.


ARTICLE II
Representations and Warranties of E-Trustco


E-Trustco, and for purposes of Sections 2.6, 2.8 and 2.9, Saltzman and Whitehead, hereby represent and warrant to the Company and Ashton that the following are true and correct as of the Closing Date:


Section 2.1 Corporate Existence and Power. E-Trustco is a
----------------------------- corporation duly organized, validly existing and in good standing in the state of its incorporation, and E-Trustco has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. E-Trustco is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the character of the property owned or leased by it or the nature of its activities makes such qualification


-2-


necessary, except for those jurisdictions where failure to be so qualified could not reasonably be expected, individually or in the aggregate, to have a material adverse effect on the condition (financial or otherwise), business, assets, properties, results of operations or prospects (hereinafter, a "Material Adverse Effect") of E-Trustco and its subsidiaries, taken as a whole.


Section 2.2 Corporate Authorization. E-Trustco has full power and
----------------------- authority (including full corporate power and authority) to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The transactions contemplated hereby have been duly authorized and require no other action or proceeding on the part of E- Trustco. The undersigned executing this Agreement on behalf of E-Trustco has all right, power and authority to execute and deliver this Agreement on behalf of E-Trustco. This Agreement has been duly executed and delivered by E-Trustco and constitutes the valid and legally binding obligation of E-Trustco, enforceable against E-Trustco in accordance with its terms and conditions.


Section 2.3 Capitalization. The entire authorized capital stock of
-------------- E-Trustco consists of: one thousand five hundred (1,500) shares of common stock, no par value per share, of which one hundred sixty five (165) shares are issued and outstanding. All of the shares of E-Trustco Common Stock to be issued pursuant to this Agreement have been duly authorized and, upon consummation of this transaction, will be validly issued, fully paid and nonassessable.


Section 2.4 Noncontravention. Neither the execution and the
---------------- delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which E-Trustco is subject or any provision of the charter or bylaws of E-Trustco, or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, mortgage, indenture, lease, license, instrument or other arrangement, permit, concession or franchise to which E-Trustco is a party or by which it is bound or to which any of its assets is subject. E-Trustco does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.


Section 2.5 Broker's Fees. None of E-Trustco and its subsidiaries
------------- has any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which EMC or Ashton could become liable or obligated.


Section 2.6 Disclosure. E-Trustco, Saltzman and Whitehead have fully
---------- provided the Company and Ashton with all the information the Company and Ashton have requested for deciding whether to consummate this transaction. Neither this Agreement, the Employment Agreement, nor any other statements or certificates made or delivered by E-Trustco in connection herewith contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made herein or therein, in the light of the circumstances under which they were made, not misleading.


-3-


Section 2.7 No Undisclosed Liabilities or Events. E-Trustco has no
------------------------------------ liabilities or obligations (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for taxes, other than those incurred in the ordinary course of E- Trustco's business which, individually or in the aggregate, do not or would not have a Material Adverse Effect on E-Trustco. No event or circumstance has occurred or exists which is likely to have a Material Adverse Effect on E- Trustco.


Section 2.8 Litigation. There is no action, proceeding or
---------- investigation pending, or to E-Trustco's knowledge threatened, against E-Trustco that questions the validity of this Agreement, or the right of E-Trustco to enter into this Agreement, or to consummate the transactions contemplated hereby, or that might have a Material Adverse Effect on E-Trustco, or result in a change in the current equity ownership of E-Trustco, nor is E-Trustco aware that there is any basis for the foregoing. E-Trustco is not under the jurisdiction of a court in a proceeding under Title 11 of the United States Bankruptcy Code or similar proceeding. There is no action, proceeding or investigation pending, or to Saltzman's or Whitehead's knowledge threatened, against Saltzman or Whitehead that threatens the validity of this Agreement, or the right of Saltzman or Whitehead to enter into this Agreement, or to consummate the transactions contemplated hereby, nor are Saltzman or Whitehead aware that there is any basis for the foregoing.


Section 2.9 Title to Assets. E-Trustco has good and marketable title
--------------- to all properties and material assets owned by it, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest other than such as are not material to the business of E-Trustco. With respect to the property and assets it leases, E-Trustco is in compliance with such leases and, to the best of its knowledge, holds a valid leasehold interest free of any liens, claims or encumbrances. Saltzman and Whitehead have good title to the E- Trustco Common Stock, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest.


Section 2.10 Required Governmental Permits. E-Trustco and its
----------------------------- subsidiaries are in possession of and operating in compliance with all authorizations, licenses, certificates, consents, orders and permits from state, federal and other regulatory authorities which are material to the conduct of its business, all of which are valid and in full force an ...