Exhibit 1
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("Agreement") is entered into
between Circuit Source, Inc.("CSI"), an Arizona corporation and SixthCai, Inc. a
Nevada corporation ("CAI") and the person(s) listed in Exhibit A hereof (the
"Shareholder"), being the owners of record of all of the issued and outstanding
stock of CSI and CAI.
Whereas, CAI wishes to acquire and the Shareholder of CSI wishes to
transfer all of the issued and outstanding securities of CSI in a transaction
intended to qualify as a reorganization within the meaning of 368(a)(1)(B) of
the Internal Revenue Code 1986, as amended. Now, therefore, CAI and the
Shareholder adopt this plan of reorganization and agree as follows:
1. EXCHANGE OF STOCK.
1.1. NUMBER OF SHARES. The Shareholder, as indicated in Exhibit A, agree to
transfer to CAI at the Closing (defined below) all of the shares of the common
stock of CSI, no par value, in exchange for 4,610,000 shares of the common of
stock of CAI which will be 94.1% of the outstanding common stock of CAI.
1.2. EXCHANGE OF CERTIFICATES. Each holder of an outstanding certificate or
certificates theretofore representing shares of CSI common stock shall surrender
such certificates for cancellation to CAI, and shall receive in exchange a
certificate or certificates representing the number of full shares of CAI common
stock into which the shares of CSI common stock represented by the certificate
or certificates so surrendered shall have been converted. The transfer of CSI
shares by the Shareholder shall be effected by the delivery to CAI at the
Closing of certificates representing the transferred shares endorsed in blank or
accompanied by stock powers executed in blank.
1.3. FRACTIONAL SHARES. Fractional shares of CAI common stock shall not be
issued, but in lieu thereof CAI shall round up fractional shares to the next
highest whole number.
1.4. FURTHER ASSURANCES. At the Closing and from time to time thereafter, the
Shareholder and CAI shall execute such additional instruments and take such
other action as the Parties may request in order to effectuate this Agreement.
1.5. AMENDMENTS TO THE ARTICLES OF INCORPORATION. CAI shall amend its Articles
of Incorporation changing its name to Circuit Source International, Inc.
2. RATIO OF EXCHANGE. The securities of CSI owned by the Shareholder, and the
relative securities of CAI for which they will be exchanged, are set out in
Exhibit A.
3. CLOSING.
3.1. TIME AND PLACE. The Closing contemplated herein shall be held as soon as
possible at the offices of SixthCai, Inc., 00000 X. Xxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX unless the parties without requiring the meeting of the parties
hereof agree upon another place or time in writing. All proceedings to be taken
and all documents to be executed at the Closing shall be deemed to have been
taken, delivered and executed simultaneously, and no proceeding shall be deemed
taken nor documents deemed executed or delivered until all have been taken,
delivered and executed. The date of Closing may be accelerated or extended by
agreement of the parties.
3.2. FORM OF DOCUMENTS. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission required by this Agreement or any
signature required thereon may be used in lieu of an original writing or
transmission or signature for any and all purposes for which the original could
be used, provided that such copy, facsimile telecommunication or other
reproduction shall be a complete reproduction of the entire original writing or
transmission or original signature.
4. UN-EXCHANGED CERTIFICATES. Until surrendered, each outstanding certificate
that, prior to the Closing, represented CSI common stock shall be deemed for all
purposes, other than the payment of dividends or other distributions, to
evidence ownership of the number of shares of CAI common stock into which it was
converted. No dividend or other distribution shall be paid to the holders of
certificates of CSI common stock until presented for exchange at which time any
outstanding dividends or other distributions shall be paid.
5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER
The Shareholder represents and warrants as follows:
5.1. TITLE TO SHARES. The Shareholder is the owner, free and clear of any liens
and encumbrances, of the number of CSI shares which are listed in the attached
schedule and which he has contracted to exchange.
5.2. LITIGATION. There is no litigation or proceeding pending or to
Shareholder's knowledge threatened, against or relating to shares, held by the
Shareholder, its properties or business of CSI, except as set forth in a list
certified by the president of CSI and delivered to the Shareholders.
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6. REPRESENTATIONS AND WARRANTIES OF CAI
The officer, director of CAI, represents and warrants as follows:
6.1 CORPORATE STATUS. CAI is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Nevada and is licensed or
qualified as a foreign corporation in all states in which the nature of its
business or the character or ownership of its properties makes such licensing or
qualification necessary.
6.2 CAPITALIZATION. As of the date hereof, the authorized capital stock of CAI
consists of no shares of preferred stock, and 100,000,000 Shares ($0.0001 par
value) of Common Stock, of which five million forty thousand (5,040,000) shares
of Common Stock are issued and outstanding. Following the completion of the
exchange contemplated hereby, each of the outstanding shares of capital stock of
CAI will be duly authorized, validly issued, fully paid, nonassessable and not
subject to preemptive rights created by statue, CAI charter documents or any
agreement to which CAI is a party or bound.
6.3 SUBSIDIARIES. CAI has no subsidiaries.
6.4 BUSINESS OPERATIONS. CAI, at no time, has ever engaged in any form of
business activity regardless of nature.
6.5 LITIGATION. There is no litigation or proceeding pending, or to the
Company's knowledge threatened, against or relating to CAI, its properties or
business, except as set forth in a list certified by the president of CAI and
delivered to the Shareholders.
6.6 CONTRACTS. CAI is not a party to any material contract.
6.7 NO VIOLATION. Execution of this Agreement and performance by CAI hereunder
has been duly authorized by all requisite corporate action on the part of CAI,
and this Agreement constitutes a valid and binding obligation of CAI and
performance hereunder will not violate any provision of any charter, bylaw,
indenture, mortgage, lease, or agreement, or any order, judgement, decree, law,
or regulation to which any property of CAI is subject or by which CAI is bound.
6.8 TAXES. CAI has filed in correct form all federal, state, and other tax
returns of every nature required to be filed by it and has paid all taxes as
shown on such returns and all assessments, fees and charges received by it to
the extent that such taxes, assessments, fees and charges have become due. CAI
has also paid all taxes which do not require the filing of returns and which are
required to be paid by it. To the extent that tax liabilities have accrued, but
have not become payable, they have been adequately reflected as liabilities on
the books of CAI and are reflected in the financial statements furnished hereto.
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6.9 TITLE TO PROPERTY. CAI has good and marketable title to all properties and
assets, real and personal, reflected in CAI's Financial StatementS, except as
since sold or otherwise disposed of in the ordinary course of business, and
CAI's properties and assets are subject to no mortgage, pledge, lien, or
encumbrance, except for liens shown therein, with respect to which no default
exists.
6.10 TITLE TO STOCK. CAI has good and marketable title to the Common Stock
proposed to be exchanged hereunder and full right, power and authority to
exchange hereunder, free and clear of all encumbrances and upon delivery and
exchange of such Common Stock hereunder, Shareholder will acquire good and
marketable title thereto, free and clear of any and all liens and encumbrances.
6.11 CORPORATE AUTHORITY. CAI has full corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder, and will deliver
at the Closing a certified copy of resolutions of its board of directors
authorizing execution of this Agreement by its officers and performance
thereunder.
6.12 INVESTMENT INTENT. CAI is acquiring the CSI shares to be transferred to it
under this Agreement for investment and not with a view to, or for resale in
connection with, distribution or other disposition thereof, except for such
dispositions that are effected in compliance with the Securities Act of 1933, as
amended, the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
6.13 NO APPROVALS. The execution and delivery of this Agreement by CAI does not,
and the performance of this Agreement will not require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, either domestic or foreign, other than any such
consents, approvals, authorizations or permits that have been obtained or such
filings or notifications that have been made and will be made pursuant to
Securities and Exchange Act of 1934 as amended.
6.14 NO RESTRICTIONS OF SECURITIES. CAI is not a party to any agreement creating
rights in any person or entity with respect to shares of its capital stock or
relating to the voting of shares of its capital stock on any matter,
6.15 OPTIONS, ETC. There are no outstanding options, warrants or other rights
(including registration rights), agreements, arrangements or commitments of any
kind or nature whatsoever to which CAI is a party to purchase, acquire or
convert into any shares of its capital stock or other equity securities, or any
other agreement or right (preemptive, contractual or otherwise) to grant, issue
or sell any such shares of its capital stock of, or any other equity interests
in CAI, by sale, lease, license or otherwise.
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6.16 SEC DOCUMENTS. CAI has filed with the Securities and Exchange Commission
("SEC") all reports, forms, schedules and statements and other documents
required to be files by it ("the SEC Documents"). As of the respective filing
dates, the SEC Documents complied in all material respects with the requirements
of the Securities Act, or the Exchange Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents contained any untrue statement of a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
6.17 FINANCIAL STATEMENTS. The financial statements included in the SEC
Documents complied, as of their respective filing dates as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, were prepared in
accordance with generally accepted accounting principals ("GAAP") (except, in
the case of unaudited statements) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present, in all material respects, the consolidated financial position of CAI as
of the date thereof and the results of its operations and cash flows for the
periods then ended.
7. CONDUCT PENDING THE CLOSING
CAI and the Shareholder covenant that between the date of this Agreement, and
the Closing as to each of them:
7.1. No change will be made in the charter documents, by-laws, or other
corporate documents of CAI.
7.2. CAI will use its best efforts to maintain and preserve its business
organization, employee relationships and goodwill intact, and will not enter
into any material commitment except in the ordinary course of business.
7.3. None of the Shareholders will sell, transfer, assign, hypothecate, lien, or
otherwise dispose of or encumber the CSI shares of common stock owned by them.
7.4 None of the Parties hereto shall not take any action, or omit to take any
action, the effect of which would reasonably be expected to cause any of the
representations and warranties contained in this Agreement to be inaccurate as
of the Closing or any time prior thereto, authorize any of the foregoing, or
enter into any Contract to do any of the foregoing.
7.5 Each of the Parties hereto shall provide all reasonable assistance to and
shall cooperate with each other to bring about the consumption of this Plan of
Reorganization in accordance with the terms and conditions of this Agreement.
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8. CONDITIONS PRECEDENT TO OBLIGATION OF THE SHAREHOLDER
The Shareholder's obligation to consummate this exchange shall be subject to
fulfillment on or before the Closing of each of the following conditions, unless
waived in writing by the Shareholder as appropriate:
8.1. CAI OFFICER AND DIRECTOR REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the CAI officer, director set forth herein or
any other document delivered to Shareholder at the Closing in connection with
this Agreement shall be true and correct in all material respects on and as of
the Closing as though made at and as of that date.
8.2. CAI COVENANTS. CAI shall have performed and complied in all material
respects with all covenants, obligations and agreements to be performed or
complied with on or before the Closing as required by this Agreement.
8.3. BOARD OF DIRECTOR APPROVAL. The Board of Directors and Shareholders of CAI
shall have approved this Agreement.
8.4. SUPPORTING DOCUMENTS OF CAI. CAI shall have delivered to the Shareholder
supporting documents in a form and substance reasonably satisfactory to the
Shareholder, to the effect that:
(a) CAI is a corporation duly organized, validly existing, and in good standing;
(b) CAI's authorized capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board of directors of CAI
authorizing the execution of this Agreement and consummation hereof;
(d) Secretary's Certificate of incumbency of the officers and directors of CAI
(e) Any document as may be specified herein or required to satisfy the
conditions, representations and warranties enumerated elsewhere herein.
(f) Opinion of Counsel addressed to Shareholder dated as the Closing in a form
acceptable to all parties.
8.5 NO ORDER. No Governmental Entity or federal or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Order which is in effect and which restricts, prevents or prohibits consummation
of any transaction contemplated in this Agreement.
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8.6 NO CHALLENGE. There shall not be pending or overtly threatened any judicial
or administrative action, proceeding or investigation by any Governmental Entity
challenging or seeking damages in connection with the transaction contemplated
hereby or seeking to restrain or prohibit the consummation of this Plan of
Reorganization.
8.7 GOVERNMENT CONSENTS. All consents, waivers, approvals and authorizations
required to be contained, and all filings or notices required to be made by CAI
prior to consummation of the transaction contemplated in this Agreement shall
have been obtained from and made with all required Governmental Entities, and
all requirements of Law.
8.8 RESIGNATIONS. All Directors of CAI shall have resigned at or prior to the
Closing as directors and members of all committees of the Board of Directors of
CAI in writing effective immediately after the Closing, and CAI shall have
caused Shareholder to be appointed as the sole director of CAI. All officers of
CAI shall have resigned as officers of CAI at or prior to the Closing, in
writing effective immediately after the Closing.
9. CONDITIONS PRECEDENT TO OBLIGATION OF CAI.
CAI's obligation to consummate this merger shall be subject to fulfillment on or
before the Closing of each of the following conditions, unless waived in writing
by CAI
9.1. SHAREHOLDER'S REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Shareholder set forth herein shall be true and correct at the
Closing as though made at and as of that date, except as affected by
transactions contemplated hereby.
9.2. SHAREHOLDER'S COVENANTS. The Shareholder shall have performed all covenants
required by this Agreement to be performed by them on or before the Closing.
10. TERMINATION. This Agreement may be terminated (1) by mutual consent in
writing; (2) by either the Shareholders or CAI if there has been material
misrepresentation or material breach of any warranty or covenant by any other
party; or (3) by either Shareholders or CAI if the Closing shall not have taken
place within 15 days following execution of this Agreement, unless adjourned to
a later date by mutual consent in writing.
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11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representation and
warranties of the Shareholders and CAI set out herein shall survive the Closing.
12. GENERAL PROVISIONS
12.1 FURTHER ASSURANCES. From time to time, each party will execute such
additional instruments and take such actions as may be reasonably required to
carry out the intent and purposes of this agreement.
12.2 WAIVER. Any failure on the part of either party hereto to comply with any
of its obligation, agreements, or conditions hereunder may be waived in writing
by the party to whom such compliance is owed.
12.3 BROKERS. Each party agrees to indemnify and hold harmless the other party
against any fee, loss, or expense arising out of claims by brokers or finders
employed or alleged to have been employed by the indemnifying party.
12.4 NOTICES. All notices and other communications hereunder shall be in writing
and shall be deemed to have been given if delivered in person or sent by prepaid
first-class certified mail, return receipt requested or recognized commercial
courier service as follows:
If to CSI and Shareholder, to:
Circuit Source, Inc.
0000 X. Xxxxx Xx., Xxxxx 00
Xxxxx, XX 00000
If to SixthCai, Inc.,
SixthCai, Inc
00000 X. Xxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
12.5. GOVERNING LAW. This agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Arizona.
12.6. ASSIGNMENT. This agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their successors and assigns; provided, however,
that any assignment by either party of its rights under this agreement without
the written consent of the other party shall be void.
12.7. COUNTERPARTS. This agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an, original, but all of which
together shall constitute one and the same instrument. Signatures sent by
facsimile transmission shall be deemed to be evidence of the original execution
thereof.
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12.8. CLOSING DATE. The Closing shall take place upon the fulfillment by each
party of all the conditions of Closing required herein, but not later than 15
days following execution of this agreement unless extended by mutual consent of
the parties.
12.9. REVIEW OF THE AGREEMENT. Each party acknowledges that it has had time to
review this agreement and, as desired, consult with counsel. In the
interpretation of this agreement, no adverse presumption shall be made against
any party on the basis that it has prepared, or participated in the preparation
of, this agreement.
12.10. SCHEDULES. Each party shall acknowledge and date all schedules attached
hereto, if any, by signature or initials thereon.
12.11. EFFECTIVE DATE. The effective date of this agreement shall be upon its
execution.
13. MUTUAL INDEMNIFICATION. The officer, director and shareholders of CAI shall
indemnify and hold harmless Shareholder and Shareholder shall indemnify and hold
harmless the officer, director and shareholders of CAI from and against any
losses, claims, obligations, liabilities, diminution's in value, expenses
(including, without limitation, fees and disbursements of counsel) or other
damages caused by or arising out of the failure in whole or in part of either
Party to satisfy its obligations pursuant to this Agreement, or any breach by
either Party of any representations or warranty contained in this Agreement
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IN WITNESS WHEREOF, the parties have executed this agreement this 27th day of
February 2001.
Circuit Source, Inc.
By: /s/ Xxxxx Xxxxxx Xx.
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Xxxxx Xxxxxx, Xx., President & Director
SixthCai, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, President & Director
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EXHIBIT A
THE SHAREHOLDERS OF SIXTHCAI, INC..
Corporate Architects, Inc.
By /s/ Xxxxxx X. Xxxxxxxx February 27, 2001
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Xxxxxx X. Xxxxxxxx, President & Director
By /s/ Xxxxxxx X. Xxx February 27, 2001
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Xxxxxxx X. Xxx, Individually
By /s/ Xxxx X. Xxxxx February 27, 2001
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Xxxx X. Xxxxx, Individually
THE SHAREHOLDER OF CIRCUIT SOURCE, INC.
By /s/ Xxxxx Xxxxxx, Xx February 27,2001
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Xxxxx Xxxxxx, Xx., Individually
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