EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, dated as of January 20, 2000 (the
"Merger Agreement"), between A.G. Holdings, Inc., a Washington corporation ("AG
Holdings") and Wasatch Interactive Learning Corporation, a Utah corporation
("Wasatch").
WHEREAS, AG Holdings is a corporation duly organized and existing under
the laws of the State of Washington; is required to file reports under Section
13 of the Securities Exchange Act of 1934 (the "Exchange Act") and as of the
date hereof, AG Holdings has authority to issue 100,000,000 shares of Common
Stock, par value $0.0001 per share (the "AG Holdings Common Stock"), of which
3,130,078 shares are issued and outstanding, and 3,894,795 shares will be issued
and outstanding immediately prior to the Merger;
WHEREAS, Wasatch is a corporation duly organized and existing under the
laws of the State of Utah, and as of the date hereof, Wasatch has authority to
issue 20,000,000 shares of Common Stock, no par value per share ("Wasatch Common
Stock"), of which 15,920,816 shares are issued and outstanding;
WHEREAS, the respective Boards of Directors of AG Holdings and Wasatch
have determined that it is advisable and in the best interests of each of such
corporations that Wasatch merge with and into AG Holdings upon the terms and
subject to the conditions set forth herein as authorized by the statutes of the
States of Washington and Utah;
WHEREAS, the respective Boards of Directors of AG Holdings and Wasatch
have by resolutions duly adopted, approved this Merger Agreement; and
WHEREAS, the majority of stockholders of Wasatch have approved this
Merger Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1. Merger. Wasatch shall be merged with and into AG
Holdings (the "Merger), and AG Holdings shall be the surviving corporation
(hereinafter sometimes referred to as the "Surviving Corporation"), the name of
which on and after the Effective Date shall remain unchanged unless and until
amended in the manner provided by law. Notwithstanding the foregoing, the
Surviving Corporation shall qualify to do business under the name Wasatch
Interactive Learning Corporation and, if permitted, without shareholder
approval, shall change its name to Wasatch contemporaneously with the Merger.
The Merger shall become effective upon the date and time of filing Articles of
Merger providing for the Merger (the "Effective Time") with the Secretary of
State of the State of Utah. An appropriate certificate of merger, providing for
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the Merger will be filed within 30 days thereof, with the Secretary of State of
the State of Washington.
Section 2. Governing Documents. The Certificate of
Incorporation of AG Holdings as in effect immediately prior to the Effective
Time, shall be the Certificate of Incorporation of the Surviving Corporation
without change or amendment until thereafter amended in accordance with the
provisions thereof and applicable law. The By-laws of AG Holdings as in effect
immediately prior to the Effective Time, shall be the By-laws of the Surviving
Corporation without change or amendment until thereafter amended in accordance
with the provisions thereof, the Certificate of Incorporation of the Surviving
Corporation and applicable law.
Section 3. Succession. At the Effective Time, the separate
corporate existence of Wasatch shall cease, and AG Holdings shall succeed to all
of the assets and property (whether real, personal or mixed), rights,
privileges, franchises, immunities and powers of Wasatch and AG Holdings shall
assume and be subject to all of the duties, liabilities, obligations and
restrictions of every kind and description of Wasatch including, without
limitation, all outstanding indebtedness of Wasatch. In consideration of the
Merger, AG Holdings shall issue 3,605,205 shares of AG Holdings Common Stock to
the shareholders of Wasatch, representing 48% of the shares outstanding after
such original issuance.
Section 4. Directors. The directors of the Board of Directors
of AG Holdings immediately prior to the Effective Time shall be deemed to have
resigned as directors of AG Holdings at the Effective Time. The board of
directors of the Surviving Corporation and the members thereof, shall consist of
the members of the board of directors of Wasatch immediately prior to the
Merger, to serve thereafter in accordance with the by-laws of the Surviving
Corporation and until their respective successors shall have been duly elected
and qualified in accordance with such by-laws and the laws of the State of
Washington.
Section 5. Officers. The officers of AG Holdings immediately
preceding the Effective Time shall be deemed to have resigned as officers of AG
Holdings at the Effective Time. The officers of the Surviving Corporation shall
be the officers of Wasatch immediately prior to the Merger, such officers to
serve thereafter in accordance with the by-laws of the Surviving Corporation and
until their respective successors shall have been duly elected and qualified in
accordance with such by-laws and the laws of the State of Washington.
Section 6. Further Assurances. From time to time, as and when
required by the Surviving Corporation or by its successors or assigns, there
shall be executed and delivered on behalf of Wasatch such deeds and other
instruments, and there shall be taken or caused to be taken by it all such
further and other action, as shall be appropriate, advisable or necessary in
order to vest, perfect or conform, or record or otherwise, in the Surviving
Corporation, the title to and possession of all property, interests, assets,
rights, privileges, immunities, powers, franchises and authority of Wasatch, and
otherwise to carry out the purposes of this Merger Agreement, and the officers
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and directors of the Surviving Corporation are fully authorized, in the name and
on behalf of Wasatch or otherwise, to take any and all such action and to
execute and deliver any and all such deeds and other instruments.
Section 7. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder thereof,
each share of Wasatch Common Stock issued and outstanding in the name of Wasatch
immediately prior to the Effective Time shall be canceled and retired and resume
the status of authorized and unissued shares of Wasatch Common Stock, and no
shares of Wasatch Common Stock or other securities of AG Holdings shall be
issued in respect thereof.
Section 8. Representations and Warranties of AG Holdings. AG
Holdings represents and warrants to Wasatch as follows:
Section 8.1. Organization, Existence, Authority, etc. AG
Holdings is a corporation duly organized and validly existing under the laws of
the State of Washington, has corporate power to own all of its property and
assets, to carry on its business as now conducted and to carry out the terms of
this Merger Agreement. AG Holdings has the corporate power and is duly
authorized by all necessary corporate action to merge with Wasatch pursuant to
this Agreement. The execution and delivery of this Merger Agreement does not,
and the consummation of the Merger will not, violate any provision of AG
Holdings' Certificate of Incorporation or By-Laws, or result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair AG Holdings or any of its rights or
alter the rights or obligations of any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien on any of the properties or assets of AG Holdings
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which AG
Holdings is a party or by which AG Holdings properties are bound or affected,
except in the case of any such conflicts, violations, breaches, defaults or
other occurrences that do not have a Material Adverse Effect. The Board of
Directors of AG Holdings has taken or will take all action required by law, its
Certificate of Incorporation or By-Laws or otherwise to authorize the execution
and delivery of this Merger Agreement and this Merger Agreement is a valid and
binding agreement of the Company in accordance with its terms. The copies of the
Articles of Incorporation and all amendments thereto of AG Holdings and the
By-Laws of AG Holdings delivered to Wasatch are complete and correct.
The Company has all requisite corporate power and authority to
enter into this Merger Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Merger Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Company. The Company's Board of
Directors has unanimously approved, subject to the completion of appropriate due
diligence, this Merger Agreement. This Merger Agreement has been duly executed
and delivered by the Company and constitutes the valid and binding obligation of
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the Company, enforceable in accordance with its terms except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally, and
(b) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
Section 8.2. Capital Stock. The authorized capital stock of AG
Holdings consists of 100,000,000 shares of Common Stock, of which on the date
hereof 3,130,378 shares are issued and outstanding, and 3,894,795 shares will be
issued and outstanding immediately prior to the Merger. All outstanding shares
of AG Holdings at the Effective Time shall be duly authorized, validly issued,
fully paid and non-assessable and not subject to preemptive rights created by
statute, the Certificate of Incorporation or By-laws of AG Holdings or any
agreement to which AG Holdings is a party or by which it is bound. There are no
outstanding obligations to issue or options or rights to acquire any capital
stock of AG Holdings or any outstanding securities or other instruments
convertible into any capital stock of AG Holdings binding upon AG Holdings.
Section 8.3. Accuracy of Information. No representation or
warranty of AG Holdings contained in this Merger Agreement and no statement
contained in any certificate or other instrument delivered pursuant hereto or in
any periodic report, registration statement or other document filed by AG
Holdings with the SEC (collectively, "SEC Reports") or in connection with the
transactions contemplated hereby contains or will contain any untrue statement
of a material fact or omits or will omit to state any material fact necessary to
make the statements contained herein or therein not misleading.
Section 8.4. Subsidiaries.
AG Holdings does not have and has never had any subsidiaries
or affiliated companies and does not otherwise own and has never otherwise owned
any shares of capital stock or any interest in, or control, directly or
indirectly, any other corporation, partnership, association, joint venture or
other business entity.
Section 8.5 SEC Documents; Seller Financial Statements.
AG Holdings has filed with the SEC all forms, statements,
reports and documents ("SEC Documents including all exhibits, amendments and
supplements thereto) required to be filed by it under each of the Securities Act
of 1933, as amended (the "Act") and the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and the respective rules and regulations
thereunder, all of which complied in all material respects with all applicable
requirements of the appropriate act and rules and regulations thereunder. AG
Holdings has furnished to Wasatch true and correct copies of all SEC Documents
filed by AG Holdings with the SEC. As of their respective filing dates, the SEC
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Documents complied in all material respects with the requirements of the Act and
the Exchange Act, and the applicable rules and regulations of the SEC
thereunder, as the case may be, and none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements made therein, in light
of the circumstances in which they were made, not misleading.
Since October 31, 1999 (the date of the last Form 10-QSB), AG
Holdings has not suffered any material adverse effect with respect to its
business (financial or otherwise), and AG Holdings has conducted its business
only in the ordinary course and there has not been any declaration, setting
aside or payment of any dividend or other distribution with respect to AG
Holdings' Common Stock or any repurchase, redemption or other acquisition by AG
Holdings of any other securities of AG Holdings. The financial statements of AG
Holdings, including the notes thereto, included in the SEC Documents (the "AG
Holdings Financial Statements") comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, were prepared in accordance with GAAP applied
on a basis consistent throughout the periods indicated and consistent with each
other (except as may be indicated in the notes thereto or, in the case of
unaudited statements, as permitted by SEC rules for such form) and present
fairly the consolidated financial position of AG Holdings at the dates thereof
and of its operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal, recurring audit adjustments which will
not be material in amount or significance) and, do not include or omit to state
any fact which renders the AG Holdings Financial Statements hereunder
misleading. There has been no change in AG Holdings accounting policies except
as described in the notes to the AG Holdings Financial Statements.
As soon as practicable, following the date of this Merger
Agreement, AG Holdings shall cause to be delivered to Wasatch, AG Holdings'
unaudited balance sheet as of January 31, 2000 (the "Balance Sheet Date"), and
the related unaudited statements of operations and cash flows for the period
commencing November 1, 1999 and ending on the Balance Sheet Date (collectively,
the "Updated AG Holdings Financials"). At such time as Updated AG Holdings
Financials are delivered, AG Holdings will represent and warrant to Wasatch that
Updated AG Holdings Financials are correct in all material respects and have
been prepared in accordance with GAAP applied on a basis consistent throughout
the periods indicated and consistent with each other. Updated AG Holdings
Financials will present fairly the financial condition and operating results of
AG Holdings as of the dates and during the periods indicated therein.
Section 8.6. Conflicts, Consents, Permits. (a) The execution
and delivery of this Agreement by the Company does not, and the performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby will not, (i) conflict with or violate the
Certificate of Incorporation or By-laws of AG Holdings (ii) conflict with or
violate any federal, foreign, state or provincial law, rule, regulation, order,
judgment or decree (collectively, "Laws") applicable to AG Holdings or any of
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its subsidiaries or by which its or any of their respective properties are bound
or affected, or (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or impair AG Holdings' or any of its subsidiaries' rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien on any of the properties or assets of the Company or any of
its subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or its or any of their respective properties
are bound or affected, except in the case of clauses (ii) and (iii) for any such
conflicts, violations, breaches, defaults or other occurrences that do not have
a Material Adverse Effect, as defined in Section 10.1(C) below.
The execution and delivery of this Merger Agreement by AG Holdings does
not, and the performance of this Merger Agreement by the Company will not
require any consent, approval, authorization or permit of, or filing with
notification to, any domestic or foreign governmental or regulatory authority
except (i) for the applicable requirements, if any, of the Exchange Act state
securities laws ("Blue Sky Laws"), the pre-merger notification requirements of
the Xxxx-Xxxxx- Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the legal requirements of any foreign jurisdiction requiring notification
in connection with this Merger Agreement and the transactions contemplated
hereby and the filing and recordation of appropriate documents as required by
Washington Law and the Laws of the State of Nevada, and (ii) where the failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, either (A) would not prevent or materially delay
consummation of this Merger Agreement or otherwise prevent or materially delay
the Company from performing its obligations under this Merger Agreement, or (B)
do not have a Material Adverse Effect.
Section 8.7 Court Orders and Decrees. The officers of the AG
Holdings have not received written or oral notice that there is outstanding,
pending, or threatened any order, writ, injunction or decree of any court,
governmental agency or arbitration tribunal against or affecting AG Holdings.
The Updated AG Holdings Financial Statements shall be subject
to review by the Company and its accountants and consultants. AG Holdings shall
be responsible for the fees and expenses of the auditors for their services in
connection with the Updated AG Holdings Financial Statements.
Section 8.8 Approvals and Authorizations. AG Holdings has
obtained all necessary consents, approvals or authorizations in connection with
the transactions contemplated hereby that are required by law or otherwise in
order to make this Merger Agreement binding upon AG Holdings.
Section 8.9 Legal Proceedings; Claims. AG Holdings is not a
party to any pending litigation, arbitration or administrative proceeding or
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investigation and to AG Holdings' best knowledge and belief, no litigation,
arbitration or administrative proceeding or investigation that would have a
material adverse effect on the Assets or the Business is threatened.
Section 8.10 Brokers. AG Holdings has not entered into and
will not enter into any agreement, arrangement or understanding with any person
or firm which will result in an obligation of Wasatch to pay any finder's fee,
brokerage commission, or similar payment in connection with the transactions
contemplated by this Merger Agreement.
Section 8.11 Absence of Undisclosed Liabilities and
Conditions. Except as disclosed in the AG Holdings Financial Statements, AG
Holdings shall have no debts, liabilities or obligations (whether due or to
become due, absolute, accrued, contingent or otherwise) of any nature
whatsoever. The AG Holdings Financial Statements do not include any assets or
liabilities of any entity other than AG Holdings nor any expense of any entity
other than AG Holdings. AG Holdings has no knowledge of any currently existing
facts that materially adversely affect or are likely in the future to materially
adversely affect its assets.
Section 8.12 Taxes. As of the Effective Time, all taxes,
including, without limitation, income, property, sales, use, franchise, added
value, employees' income withholding and social security taxes, imposed by any
governmental entity whatsoever, which are due or payable by AG Holdings and all
interest and penalties thereon, have been paid in full, all tax returns required
to be filed in connection therewith have been timely filed and all deposits
required by law to be made by AG Holdings with respect to employee's withholding
taxes have been duly made. AG Holdings has not been delinquent in the payment of
any tax, assessment or governmental charge or deposit and has no tax deficiency
or claim outstanding, proposed or assessed against it. Except for amounts
accrued, but not payable as of the Effective Time, (i) AG Holdings is not liable
for the payment of any taxes relating to its assets or the operation of its
business, and (ii) Wasatch shall have no liability for any taxes related to the
ownership or operation of AG Holdings' assets or AG Holdings' business prior to
the Effective Time or in connection with the sale of AG Holdings' assets in this
transaction.
Section 9. Representations and Warranties of Wasatch. Wasatch
represents and warrants to AG Holdings as follows:
Section 9.1 Organization, Existence, Authority, etc. Wasatch
is a corporation, duly organized and validly existing under the laws of the
State of Utah. Wasatch has the corporate power to execute and deliver and to
carry out the terms of this Merger Agreement, and Wasatch has taken all action
required by law, its Certificate of Incorporation and By-Laws or otherwise to
authorize such execution and delivery and the carrying out of this Merger
Agreement. The execution and delivery of this Merger Agreement do not, and the
consummation of the Merger will not, violate any provision of Wasatch's
Certificate of Incorporation or ByLaws, or any provision of any material
mortgage, lien, lease, agreement, instrument, order, arbitration award, judgment
or decree to which Wasatch is a party or by which it is bound. By its execution
and delivery of this Merger Agreement, Wasatch represents and warrants that the
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holders of in excess of a majority of the outstanding capital stock of Wasatch
has consented to and approved this Merger Agreement in accordance with the
provisions of the Utah Business Corporation Act. The Board of Directors has
taken all action required by law, the Certificate of Incorporation and By-Laws
of Wasatch or otherwise to authorize the execution and delivery of this Merger
Agreement, and this Merger Agreement is a valid and binding agreement of Wasatch
in accordance with its terms.
Section 9.2 Capital Stock. The authorized Capital Stock of
Wasatch consists of 20,000,000 shares of Common Stock, of which on the date
hereof 15,920,816 shares are issued and outstanding, all of which have executed
this agreement and which are being transferred by the Agreement to AG Holdings.
There are no outstanding obligations to issue or options or rights to acquire
any Capital Stock of Wasatch or any outstanding securities or other investments
convertible into Capital Stock of Wasatch binding upon Wasatch which will
survive the Merger. Notwithstanding the foregoing, following the Merger the
Surviving Corporation shall (i) issue one Class A Common Stock Purchase Warrant
for every five shares of Common Stock issued and outstanding, and (ii) adopt an
employee stock option plan and authorize up to 1,000,000 shares of Common Stock
to be issued upon exercise of options available for grant under such plan.
Section 9.3 Legal Proceedings; Claims. Wasatch is not a party
to any pending litigation, arbitration or administrative proceeding or
investigation and to Wasatch's best knowledge and belief, no litigation,
arbitration or administrative proceeding or investigation that would have a
material adverse effect on the Assets or the Business is threatened.
Section 9.4 Brokers. Wasatch has not entered into and will not
enter into any agreement, arrangement or understanding with any person or firm
which will result in an obligation of AG Holdings to pay any finder's fee,
brokerage commission, or similar payment in connection with the transactions
contemplated by this Merger Agreement.
Section 9.5 Absence of Undisclosed Liabilities and Conditions.
Except as disclosed in the Wasatch Financial Statements, Wasatch shall have no
debts, liabilities or obligations (whether due or to become due, absolute,
accrued, contingent or otherwise) of any nature whatsoever, including, without
limitation. The Wasatch Financial Statements do not include any assets or
liabilities of any entity other than Wasatch nor any expense of any entity other
than Wasatch. Wasatch has no knowledge of any currently existing facts that
materially adversely affect or are likely in the future to materially adversely
affect its assets.
Section 9.6 Financial Statements. The financial statements
provided to AG Holdings by Wasatch ("Wasatch Financial Statements") fairly
present the financial position and results of operations of Wasatch. The Wasatch
Financial Statements, including the notes thereto, shall be prepared in
accordance with GAAP applied on a basis consistent throughout the periods
indicated and consistent with each other (except as may be indicated in the
notes thereto or, in the case of unaudited statements, as permitted by SEC rules
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for such form) and present fairly the consolidated financial position of Wasatch
at the dates thereof and of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal, recurring audit
adjustments which will not be material in amount or significance) and, do not
include or omit to state any fact which renders the Wasatch Financial Statements
hereunder misleading. There has been no change in Wasatch accounting policies
except as described in the notes to the Wasatch Financial Statements. Wasatch
represents and warrants that as of December 31, 1999, Wasatch had approximately
$1,050,000 in assets, $2,661,000 in liabilities, $1,585,000 in annual gross
sales, $1,605,000 deficit shareholders' equity and $63,000 in net after tax
profit.
Section 9.7 Title of Assets. Wasatch has good and marketable
title to all of its assets and properties carried on its balance sheet, free and
clear of all liens or encumbrances, except those reflected on its financial
statements.
Section 9.8 Default. Wasatch is not in material default, or
alleged to be in material default, under any contract or obligation.
Section 9.9 Transactions with Affiliates, Directors and
Shareholders. There are no contracts or agreements between Wasatch, its
shareholders, affiliates and/or directors that have an adverse material effect
on Wasatch.
Section 9.10 Accuracy of Information. No representation or
warranty of Wasatch contained in this Merger Agreement and no statement
contained in any certificate or other instrument delivered pursuant hereto or in
connection with the transactions contemplated hereby contains or will contain
any untrue statement of a material fact or omits or will omit to state any
material fact necessary to make the statements contained herein or therein not
misleading.
Section 9.11 Court Orders and Decrees. The officers of Wasatch
have not received written or oral notice that there is outstanding, pending, or
threatened any order, writ, injunction or decree of any court, governmental
agency or arbitration tribunal against or affecting Wasatch.
Section 9.12 Approvals and Authorizations. Wasatch has
obtained all necessary consents, approvals or authorizations in connection with
the transactions contemplated hereby that are required by law or otherwise in
order to make this Merger Agreement binding upon Wasatch.
CONDITIONS TO THE MERGER
Section 10.1. Conditions to Obligations of AG Holdings. The
obligations of AG Holdings to consummate the Merger are subject to satisfaction
on or prior to the Effective Time of the following conditions:
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(a) Performance. Each of the acts and undertakings of
Wasatch to be performed on or before the Effective Time pursuant to the terms
hereof shall have been duly performed;
(b) Board of Directors and Shareholder Resolutions.
Wasatch shall have furnished AG Holdings with:
(i) a certified copy of the resolutions duly
adopted by the Board of Directors of Wasatch approving this Merger Agreement,
directing the submission thereof to a vote of the shareholders of Wasatch and
declaring this Merger Agreement and the proposed Merger to be advisable; and
(ii) a certified copy of a resolution or
resolutions approving this Merger Agreement and the Merger duly adopted by the
holders of at least a majority of the outstanding shares of Wasatch's Common
Stock entitled to vote thereon.
(c) Representations and Warranties True. Except as
affected by transactions contemplated by this Agreement, the representations and
warranties of Wasatch contained in this Merger Agreement shall be true in all
material respects on and as of the Effective Time with the same effect as though
such representations and warranties had been made on and as of such date, except
for such breaches, inaccuracies or omissions of such representations and
warranties which have neither had, nor reasonably would be expected to have, a
Material Adverse Effect on Wasatch, and AG Holdings shall have received at the
closing a certificate to that effect dated the Effective Time and executed on
behalf of Wasatch by its President. "Material Adverse Effect" on a party shall
mean an event, change or occurrence which, individually or together with any
other event, change or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of such party and its
subsidiaries, taken as a whole, or (ii) the ability of such party to perform its
obligations under this Agreement or the other transactions contemplated by this
Agreement, provided that "Material Adverse Effect" shall not be deemed to
include the impact of (1) changes in laws of general applicability or
interpretations thereof by courts or governmental authorities, (2) changes in
GAAP, (3) actions and omissions of a party (or any of its subsidiaries) taken
with the prior written consent of the other party in contemplation of the
transactions contemplated hereby, and (4) the direct effects of compliance with
this Agreement on the operating performance of the parties, including expenses
incurred by the parties in consummating the transactions contemplated by this
Agreement; and
(d) No Violation of Orders, Decrees, etc. The Merger
shall not violate any order, decree, or judgment of any court or governmental
body having competent jurisdiction and AG Holdings shall not have reasonably
determined that the Merger has become inadvisable or impractical by reason of
any event or any order, decree or judgment of any court or governmental body
materially restraining or prohibiting, or the effect of which is to materially
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restrain or prohibit the effective operation by AG Holdings of the business of
Wasatch after the Effective Time.
(e) Securities and Exchange Commission Filing. The
Surviving Corporation shall file a Form 8-K within 15 days of this Agreement
with the U.S. Securities and Exchange Commission ("SEC"), and within 60 days
will file financial statements of Wasatch, audited by an independent public
accountant prepared under U.S. GAAP.
10.2 Conditions to Obligations of Wasatch. The obligation of
Wasatch to consummate the Merger is subject to the satisfaction on or prior to
the Effective Time, of the following conditions:
(a) Performance. Each of the acts and undertakings of
AG Holdings to be performed on or before the Effective Time pursuant to the
terms hereof shall have been duly performed;
(b) Board of Directors Resolutions. AG Holdings shall
have furnished Wasatch with a certified copy of the resolutions duly adopted by
the Board of Directors of AG Holdings approving this Merger Agreement and
authorizing the Merger and all matters necessary advisable to effect each of
these transactions;
(c) Representations and Warranties True. Except as
affected by transactions contemplated by this Agreement, the representations and
warranties of AG Holdings contained in this Merger Agreement shall be true in
all material respects on and as of the Effective Time with the same effect as
though such representations and warranties had been made on and as of such date
except for such breaches, inaccuracies or omissions of such representations and
warranties which have neither had, nor reasonably would be expected to have, a
Material Adverse Effect on AG Holdings, and Wasatch shall have received at the
closing a certificate of AG Holdings to that effect dated the Effective Time and
executed on behalf of AG Holdings by its President. "Material Adverse Effect" on
a party shall mean an event, change or occurrence which, individually or
together with any other event, change or occurrence, has a material adverse
impact on (i) the financial position, business, or results of operations of such
party and its subsidiaries, taken as a whole, or (ii) the ability of such party
to perform its obligations under this Agreement or the other transactions
contemplated by this Agreement, provided that "Material Adverse Effect" shall
not be deemed to include the impact of (1) changes in laws of general
applicability or interpretations thereof by courts or governmental authorities,
(2) changes in GAAP, (3) actions and omissions of a party (or any of its
subsidiaries) taken with the prior written consent of the other party in
contemplation of the transactions contemplated hereby, and (4) the direct
effects of compliance with this Agreement on the operating performance of the
parties, including expenses incurred by the parties in consummating the
transactions contemplated by this Agreement;
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(d) No Violation of Orders, Decrees, etc. The Merger
shall not violate any order, decree or judgment of any court or governmental
body having competent jurisdiction and Wasatch shall not have reasonably
determined that the Merger has become inadvisable or impractical by reason of
any event or any order, decree or judgment of any court or governmental body
which adversely affects the rights of the holders of Wasatch Common Stock.
(e) Securities and Exchange Commission Filing. AG
Holdings shall deliver a copy of its Form S-8 Registration Statement (No.
333-40747) concerning an aggregate of 4,000,000 shares of Common Stock including
those sold to investors referred to AG Holdings by Wasatch.
(f) Conduct of Business of AG Holdings Pending the
Merger.
Except as otherwise contemplated by this Merger Agreement, after the
date hereof and prior to the Merger or earlier termination of this Merger
Agreement, unless Wasatch shall otherwise agree in writing or if provided in
this Merger Agreement, AG Holdings shall:
(i) conduct its business in the ordinary and
usual course of business and consistent with past practice;
(ii) not (i) amend or propose to amend its
Certificate of Incorporation or By-laws, (ii) split, combine or reclassify its
outstanding capital stock or declare, set aside or pay any dividend or
distribution payable in cash, stock, property or otherwise, (iii) spin-off any
assets or businesses, (iv) engage in any transaction for the purpose of
effecting a recapitalization of the Company, or (v) engage in any transaction or
series of related transactions which has a similar effect to any of the
foregoing;
(iii) not issue, sell, pledge or dispose of,
or agree to issue, sell, pledge or dispose of, any additional shares of, or any
options, warrants or rights of any kind to acquire any shares of AG Holdings'
capital stock of any class or any debt or equity securities convertible into or
exchangeable for such capital stock or amend or modify the terms and conditions
of any of the foregoing;
(iv) not (i) incur or become contingently
liable with respect to any indebtedness for borrowed money, except in the
ordinary course of business, (ii) redeem, purchase, acquire or offer to purchase
or acquire any shares of its capital stock, other than as required by the
governing terms of such securities, (iii) take or fail to take any action which
action or failure to take action would cause AG Holdings or its stockholders
(except to the extent that any stockholders receive cash in lieu of fractional
shares) to recognize gain or loss for federal income tax purposes as a result of
the consummation of this Agreement, (iv) make any acquisition of any assets
(except in the ordinary course of business) or businesses, except such strategic
acquisitions that are approved by AG Holdings' Board of Directors, (v) sell any
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assets (except in the ordinary course of business) or businesses, or (vi) enter
into any contract, agreement, commitment or arrangement with respect to any of
the foregoing;
(g) Legal Opinion. Wasatch shall have received a
legal opinion from Jehu Hand, legal counsel to AG Holdings as soon as possible
following the Merger, but not later than two weeks thereafter.
Section 11. Amendment; Assurances. The parties hereto, by
mutual consent of their respective boards of directors, may amend, modify or
supplement this Merger Agreement prior to the Effective Time; provided, however,
that no amendment, modification or supplement may be made after the adoption of
this Merger Agreement by the Shareholders of Wasatch which changes this Merger
Agreement in a way which, in the judgment of the Board of Directors of Wasatch,
would have a material adverse effect on the Shareholders of Wasatch, unless such
amendment, modification or supplement is approved by such Shareholders.
If at any time the Surviving Corporation shall deem or be
advised that any further grants, assignments, confirmations, or assurances are
necessary or desirable to vest, perfect, or confirm title in the Surviving
Corporation, of record or otherwise, to any property of Wasatch acquired or to
be acquired by, or as a result of, the Merger, the officers and directors of
Wasatch or any of them shall be, and they hereby are, severally and fully
authorized to execute and deliver any and all such deeds, assignments,
confirmations, and assurances and to do all things necessary or proper so as to
best prove, confirm, and ratify title to such property in the Surviving
Corporation and otherwise carry out the purposes of the Merger and the terms of
this Plan.
Section 12. Stock Split. AG Holdings and Wasatch hereby agree
and covenant that from the date hereof prior to the Effective Time, neither
party will implement one or more stock splits in its issued and outstanding
common stock without the consent of the other party.
Section 13. Termination. This Merger Agreement may be
terminated, and the Merger and the other transactions provided for herein may be
abandoned, at any time prior to the Effective Time, whether before or after
approval of this Merger Agreement by the Shareholders of Wasatch, by action of
the Board of Directors of Wasatch if the Board of Directors of Wasatch
determines for any reason, in its sole judgment and discretion, that the
consummation of the Merger would be inadvisable or not in the best interests of
Wasatch and its Shareholders.
Section 14. Counterparts. This Merger Agreement may be
executed in one or more counterparts, and each such counterpart hereof shall be
deemed to be an original instrument, but all such counterparts together shall
constitute but one agreement.
Section 15. Descriptive Headings. The descriptive headings
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Merger Agreement.
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Section 16. Governing Law. This Merger Agreement shall be
governed by and construed in accordance with the laws of the State of
Washington.
IN WITNESS WHEREOF, A.G. Holdings and Wasatch have caused this Merger
Agreement to be executed and delivered as of the date first above written.
A.G. HOLDINGS, INC.
A Washington corporation
ATTEST:
By: /s/ Xxxxxxx Xxxx
--------------------
/s/ Xxxxx Xxxxx Xxxxxxx Xxxx
---------------------- Chairman of the Board
Xxxxx Xxxxx, Secretary,
WASATCH INTERACTIVE LEARNING CORP.
A Utah corporation
ATTEST:
By: /s/ Xxxxxxx Xxxxxx
-----------------------
/s/ Xxxxx Xxxxxx Xxxxxxx Xxxxxx
----------------------- President
Xxxxx Xxxxxx, Secretary
STATE OF WASHINGTON )
) :ss
COUNTY OF RIVERSIDE )
I, Xxxxxxxxx Xxxxxxxx, a notary public, hereby certify that on the 20th
day of January, 2000, personally appeared before me the Chairman of the Board of
AG Holdings Inc., a Washington corporation ("AG Holdings"), and the Secretary of
AG Holdings, who being by me first duly sworn, declared that they are the
persons who signed the foregoing document as the Chairman of the Board and
Secretary, respectively, and that the statements therein contained are true.
/s/ Xxxxxxxxx Xxxxxxxx
----------------------
NOTARY PUBLIC
Residing in Xxxxxxxxx Xxxxxx, XX
00
XXXXX XX XXXX )
) :ss
COUNTY OF SALT LAKE )
I, Xxxxx X. Xxxxx, a notary public, hereby certify that on the 20st day
of January, 2000, personally appeared before me the President of Wasatch
Interactive Learning Corporation, a Utah corporation ("Wasatch"), and the
Secretary of Wasatch, who being by me first duly sworn, declared that they are
the persons who signed the foregoing document as the President and Secretary,
respectively, of Wasatch and that the statements therein contained are true.
/s/ Xxxxx X. Xxxxx
-------------------
NOTARY PUBLIC
Residing in Salt Lake City, UT
15
