AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Plan") is made this 31st day
of October, 2000, among Corvallis, Inc., a Nevada corporation ("Corvallis");
XXXXxxXxxx.Xxx, Inc., a Texas corporation, (USAOneStar) and the Shareholders
in USAOneStar (hereinafter "Shareholders").
Corvallis wishes to acquire one hundred percent (100%) of the issued and
outstanding stock of USAOneStar for and in exchange for stock of Corvallis, in
a stock for stock transaction intending to qualify as a tax-free exchange
pursuant to Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended. The parties intend for this Plan to represent the terms and
conditions of such tax-free reorganization, which Plan the parties hereby
adopt.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, IT IS AGREED:
Section 1
Terms of Exchange
1.1 Number of Shares. Upon the execution hereof, the Shareholders agree
to, and to cause USAOneStar to assign, transfer, and deliver to Corvallis,
free and clear of all liens, pledges, encumbrances, charges, restrictions or
known claims of any kind, nature or description, all of their shares of
USAOneStar, and Corvallis agrees to acquire said shares on the date thereof,
or as soon as practicable thereafter, by issuing and delivering in exchange
therefore solely common shares of Corvallis's stock, par value $0.001, in the
aggregate of 13,500,000 shares, of the then issued and outstanding shares of
Corvallis subject to the provisions of this Plan. Such shares will represent
approximately 90% of the issued and outstanding shares of Corvallis. Upon the
consummation of the transaction contemplated herein, USAOneStar shall merge
with Corvallis and become the surviving corporation.
1.2 Anti-Dilution. For all relevant purposes of this Plan, the number
of Corvallis shares to be issued and delivered pursuant to this Plan shall be
appropriately adjusted to take into account any stock split, stock dividend,
reverse stock split, recapitalization, or similar change in Corvallis common
stock, which may occur between the date of the execution of this Plan and the
date of the delivery of such shares.
1.3 Delivery of Certificates. USAOneStar shall transfer to Corvallis at
the closing provided for in Section 2 (the "Closing") the shares of common
stock of USAOneStar listed opposite their respective names on Exhibit A hereto
(the "USAOneStar Shares") in exchange for shares of the common stock of
Corvallis as outlined above in Section 1.1 hereof (the "Corvallis Stock").
All of such shares of Corvallis stock shall be issued at the closing to the
Shareholders, in the numbers shown opposite their respective names in Exhibit
A. The transfer of USAOneStar Shares by the Shareholders shall be effected by
the delivery to Corvallis at the Closing of such documents as counsel for
Corvallis deems reasonably necessary and appropriate.
1.4 Further Assurances. Subsequent to the execution hereof, and from
time to time thereafter, the parties hereto shall execute such additional
instruments and take such other action as any of the parties may request in
order to more effectively effect the transactions described herein.
Section 2
Closing
2.1 Closing. The Closing contemplated by Section 1.3 shall be held at
the law offices of Xxxxxx X. Xxxxxxx, Esq. on or before October 31, 2000 or at
such other time or place as may be mutually agreed upon in writing by the
parties. The Closing may also be accomplished by wire, express mail or other
courier service, conference telephone communications or as otherwise agreed by
the respective parties or their duly authorized representatives. In any
event, the closing of the transactions contemplated by this Plan shall be
effected as soon as practicable after all of the conditions contained herein
have been satisfied.
2.2 Closing Events. At the Closing, each of the respective parties
hereto shall execute, acknowledge and deliver (or shall cause to be executed,
acknowledged, and delivered) any agreements, resolutions, rulings, or other
instruments required by this Plan to be so delivered at or prior to Closing,
together with such other items as may be reasonably requested by the parties
hereto and their respective legal counsel in order to effectuate or evidence
the transaction contemplated hereby. At the Closing, the following events
will take place:
(a) The Board of Directors and the owners of a majority of the
issued and outstanding stock of Corvallis will adopt a resolution to change
the name of Corvallis to XXXXxxXxxx.Xxx, Inc.
(b) The currently elected members of the Board of Directors of
Corvallis and XXXXxxXxxx.Xxx, Inc. shall be merged and shall make up the Board
of Directors of the surviving Corporation.
(c) Upon closing of the reorganization the current officers of
Corvallis shall submit their resignations and the Board will appoint the
following officers:
Xxxxxx X. Xxxx President
Xxxxxxx X. Xxxxxx Vice-President
Xxxxxx Xxxxxx Chief Operating Officer
Xxxxx Xxxxxx Secretary/Treasurer
Additionally, upon the signing of the merger agreement, the current
members of the board, Xx. Xxxxxxx Xxxxx and Xx. Xxxx Xxxxxxxxxxx shall resign
from the Board and the remaining Board members of the merged companies shall
constitute the entire Board of Directors and Board of Directors shall be three
in number as authorized by the Board of Directors by resolution.
2
2.3 Mediation Arbitration. If a dispute arises out of or relates to
this Plan, or the breach thereof, and if said dispute cannot be settled
through direct discussions, the parties agree to first endeavor to settle the
dispute in an amicable manner by mediation under the Commercial Mediation
Rules of the American Arbitration Association, before resorting to
arbitration. Thereafter, any unresolved controversy or claim arising out of
or relating this Plan, or breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the Award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
Section 3
Representations, Warranties and Covenants of Corvallis
Corvallis represents and warrants to, and covenants with, the
Shareholders and USAOneStar as follows:
3.1 Corporate Status. Corvallis is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada.
Corvallis has full corporate power and is duly authorized, qualified,
franchised, and licensed under all applicable laws, regulations, ordinances,
and orders of public authorities to own all of its properties and assets and
to carry on its business on all material respects as it is now being
conducted, and there is no jurisdiction in which the character and location of
the assets owned by it, or the nature of the business transacted by it,
requires qualification. Included in the Corvallis schedules (defined below)
are complete and correct copies of its Articles of Incorporation and Bylaws as
in effect on the date hereof. The execution and delivery of this Plan does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of Corvallis' Articles of Incorporation or Bylaws.
Corvallis has taken all action required by law, its Articles of Incorporation,
its Bylaws, or otherwise, to authorize the execution and delivery of this
Plan.
3.2 Capitalization. The authorized capital stock of Corvallis as of the
date hereof consists of 200,000,000 common shares, par value $0.001 and
10,000,000 preferred shares, par value $.001. The common shares of Corvallis
issued and outstanding are fully paid, non-assessable shares. There are no
outstanding options, warrants, obligations convertible into shares of stock,
or calls or any understanding, agreements, commitments, contracts or promises
with respect to the issuance of Corvallis' common stock or with regard to any
options, warrants or other contractual rights to acquire any of Corvallis'
authorized but unissued common shares. As of the date hereof there are
1,505,000 common shares of Corvallis and outstanding. There are 13,500,000
shares held in escrow in contemplation of the merger.
3.3 Financial Statements.
(a) Corvallis hereby warrants and covenants to USAOneStar that the
audited financial statements for the year ended June 30, 2000, fairly and
accurately represent the financial condition of Corvallis and that no material
change has occurred in the financial condition of Corvallis.
3
(b) Corvallis hereby warrants and represents that the audited
financial statements for the periods set forth in subparagraph (a), supra,
fairly and accurately represent the financial condition of Corvallis as
submitted heretofore to USAOneStar for examination and review.
3.4 Conduct of Business. Corvallis is a development stage company and
has not engaged in any operational activities prior to the date hereof.
Corvallis will use its best efforts to maintain and preserve its business
organization, employee relationships and goodwill intact, and will not,
without the prior written consent of USAOneStar, enter into any material
commitments except in the ordinary course of business.
Corvallis will conduct itself in the following manner pending the
Closing:
(a) Certificate of Incorporation and Bylaws. No change will be
made in the Articles of Incorporation or Bylaws of Corvallis.
(b) Capitalization, etc. Corvallis will not make any change in its
authorized or issued shares of any class, declare or pay any dividend or other
distribution, or issue, encumber, purchase or otherwise acquire any of its
shares of any class.
3.5 Options, Warrants and Rights. Corvallis has no options, warrants or
stock appreciation rights related to the authorized but unissued Corvallis
common stock. There are no existing options, warrants, calls, or commitments
of any character relating to the authorized and unissued Corvallis common
stock, except options, warrants, calls, or commitments, if any, to which
Corvallis is not a party and by which it is not bound.
3.6 Title to Property. Corvallis has good and marketable title to all
of its properties and assets, real and personal, proprietary or otherwise, as
will be reflected in the balance sheets of Corvallis, and the properties and
assets of Corvallis are subject to no mortgage, pledge, lien or encumbrance,
unless as otherwise disclosed in its financial statements.
3.7 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of Corvallis, threatened by or against or
effecting Corvallis at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
Corvallis does not have any knowledge of any default on its part with respect
to any judgment, order, writ, injunction, decree, warrant, rule, or regulation
of any court, arbitrator, or governmental agency or instrumentality.
3.8 Books and Records. From the date hereof, and for any reasonable
period subsequent thereto, Corvallis and its present management will (i) give
to the Shareholders and USAOneStar, or their duly authorized representatives,
full access, during normal business hours, to all of
4
its books, records, contracts and other corporate documents and properties so
that the Shareholders and USAOneStar, or their duly authorized
representatives, may inspect them; and (ii) furnish such information
concerning the properties and affairs of Corvallis as the Shareholders and
USAOneStar, or their duly authorized representatives, may reasonably request.
Any such request to inspect Corvallis' books shall be directed to Corvallis'
counsel, Xxxxxx X. Xxxxxxx, at the address set forth herein under Section 10.4
Notices.
3.9 Confidentiality. Until the Closing (and thereafter if there is no
Closing), Corvallis and its representatives will keep confidential any
information which they obtain from the Shareholders or from USAOneStar
concerning its properties, assets and the proposed business operations of
USAOneStar. If the terms and conditions of this Plan imposed on the parties
hereto are not consummated on or before 5:00 p.m. MST on October 31, 2000 or
otherwise waived or extended in writing to a date mutually agreeable to the
parties hereto, Corvallis will return to USAOneStar all written matter with
regard to USAOneStar obtained in connection with the negotiations or
consummation of this Plan.
3.10 Conflict with Other Instruments. The transactions contemplated by
this Plan will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or other
material agreements or instrument to which Corvallis was or is a party, or to
which any of its assets or operations are subject, and will not conflict with
any provision of the Articles of Incorporation or Bylaws of Corvallis.
3.11 Corporate Authority. Corvallis has full corporate power and
authority to enter into this Plan and to carry out its obligations hereunder
and will deliver to the Shareholders and USAOneStar, or their respective
representatives, at the Closing, a certified copy of resolutions of its Board
of Directors authorizing execution of this Plan by its officers and
performance thereunder.
3.12 Consent of Shareholders. Corvallis hereby warrants and represents
that the Shareholders of Corvallis, being the owners of a majority of the
issued and outstanding stock of the Corporation consented in writing to the
authorization to execute an Agreement and Plan of Reorganization as between
Corvallis and USAOneStar pursuant to a stock-for-stock transaction in which
Corvallis would acquire one hundred percent of the issued and outstanding
shares of USAOneStar in exchange for the issuance of a total of 13,500,000
common shares of Corvallis and thereby USAOneStar shall merge with Corvallis.
3.13 Special Covenants and Representations Regarding the Exchanged
Corvallis Stock. The consummation of this Plan and the transactions herein
contemplated include the issuance of the exchanged Corvallis shares to the
Shareholders, which constitutes an offer and sale of securities under the
Securities Act of 1933, as amended, and applicable states' securities laws.
Such transaction shall be consummated in reliance on exemptions from the
registration and prospectus requirements of such statutes which depend
interlace on the circumstances under which the Shareholders acquire such
securities. In connection with the reliance upon exemptions from the
registration and prospectus delivery requirements for such transactions, at
the Closing, Shareholders shall cause to be delivered to Corvallis
5
Letter(s) of Investment Intent in the form attached hereto as Exhibit B and
incorporated herein by reference.
3.14 Undisclosed or Contingent Liabilities. Corvallis hereby represents
and warrants that it has no undisclosed or contingent liabilities which have
not been disclosed to USAOneStar in writing or in this Agreement or in any
Exhibit attached hereto.
3.15 Information. The information concerning Corvallis set forth in
this Plan, and the Corvallis schedules attached hereto, are complete and
accurate in all material respects and do not contain, or will not contain,
when delivered, any untrue statement or a material fact or omit to state a
material fact the omission of which would be misleading to USAOneStar in
connection with this Plan.
3.16 Title and Related Matters. Corvallis has good and marketable title
to all of its properties, interests in properties, and assets, real and
personal, which are reflected, or will be reflected, in the Corvallis balance
sheets, free and clear of any and all liens and encumbrances.
3.17 Contracts or Agreements. Corvallis is not bound by any material
contracts, agreements or obligations which it has not already disclosed to
USAOneStar in writing or in this Agreement or in any Exhibit attached hereto.
3.18 Governmental Authorizations. Corvallis has all licenses,
franchises, permits and other government authorizations that are legally
required to enable it to conduct its business in all material respects as
conducted on the date hereof.
3.19 Compliance with Laws and Regulations. Corvallis has complied with
all applicable statutes and regulations of any federal, state, or other
applicable jurisdiction or agency thereof, except to the extent that
noncompliance would not materially and adversely effect the business,
operations, properties, assets, or condition of Corvallis or except to the
extent that noncompliance would not result in the occurrence of any material
liability, not otherwise disclosed to USAOneStar.
3.20 Approval of Plan. The Board of Directors of Corvallis has
authorized the execution and delivery of this Plan by Corvallis and have
approved the Plan and the transactions contemplated hereby. Corvallis has
full power, authority, and legal right to enter into this Plan and to
consummate the transactions contemplated hereby.
3.21 Obligations. Corvallis is not aware of any outstanding obligations
to any of its employees or consultants as of the Closing.
3.22 Corvallis Schedules. Corvallis has delivered to USAOneStar the
following items listed below, hereafter referred to as the "Corvallis
Schedules", which is hereby incorporated by reference and made a part hereof.
A certification executed by a duly authorized officer of Corvallis on or about
the date within the Plan is executed to certify that the Corvallis Schedules
are true and correct.
(a) Copy of Articles of Incorporation, including any amendments,
and Bylaws;
6
(b) Financial statements;
(c) Shareholder list;
(d) Resolution of Directors approving Plan;
(e) Consent of Shareholders approving Plan.
(f) Officers' Certificate as required under Section 6.2 of the
Plan;
(g) Opinion of counsel as required under Section 6.4 of the Plan;
(h) Certificate of Good Standing;
Section 4
Representations, Warranties and Covenants of USAOneStar
USAOneStar represents and warrants to, and covenants with Corvallis as
follows:
4.1 Corporate Status. USAOneStar is a corporation duly organized,
validly existing under the laws of the State of Texas, incorporated on July
21, 2000. USAOneStar has full corporate power and is duly authorized,
qualified, franchised, and licensed under all applicable laws, regulations,
ordinances, and orders of public authorities to own all of its properties and
assets and to carry on its business on all material respects as it is now
being conducted, and there is no jurisdiction in which the character and
location of the assets owned by it, or the nature of the business transacted
by it, requires qualification. Included in the USAOneStar schedules (defined
below) are complete and correct copies of its Articles of Incorporation and
Bylaws as in effect on the date hereof. The execution and delivery of this
Plan does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of USAOneStar's Articles of Incorporation or
Bylaws. USAOneStar has taken all action required by law, its Articles of
Incorporation, its Bylaws, or otherwise, to authorize the execution and
delivery of this Plan.
4.2 Capitalization. The authorized capital stock of USAOneStar as of the
date hereof consists of 1,000,000 common shares, par value $.001. As of the
date hereof there are 1,000,000 common shares of USAOneStar issued and
outstanding. There are no preferred shares issued and outstanding. The
foregoing shares are fully paid, non-assessable shares.
4.3 Conduct of Business. USAOneStar will use its best efforts to
maintain and preserve its business organization, employee relationships and
goodwill intact, and will not, without the prior written consent of Corvallis,
enter into any material commitments except in the ordinary course of business.
7
USAOneStar agrees that USAOneStar will conduct itself in the following
manner pending the Closing:
(a) Articles of Incorporation and Bylaws. No change will be made
in the Articles of Incorporation or Bylaws of USAOneStar.
(b) Capitalization, etc. USAOneStar will not make any change in
its authorized or issued shares of any class, declare or pay any dividend or
other distribution, or issue, encumber, purchase or otherwise acquire any of
its shares of any class.
4.4 Title to Property. USAOneStar has good and marketable title to all
of its properties and assets, real and personal, proprietary or otherwise, as
will be reflected in the balance sheets of USAOneStar, and the properties and
assets of USAOneStar are subject to no mortgage, pledge, lien or encumbrance,
unless as otherwise disclosed in its financial statements.
4.5 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of USAOneStar, threatened by or against or
effecting USAOneStar at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
USAOneStar does not have any knowledge of any default on its part with respect
to any judgment, order, writ, injunction, decree, warrant, rule, or regulation
of any court, arbitrator, or governmental agency or instrumentality.
4.6 Books and Records. From the date hereof, and for any reasonable
period subsequent thereto, USAOneStar and its present management will (i) give
to Corvallis, or their duly authorized representatives, full access, during
normal business hours, to all of its books, records, contracts and other
corporate documents and properties so that Corvallis, or their duly authorized
representatives, may inspect them; and (ii) furnish such information
concerning the properties and affairs of USAOneStar or their duly authorized
representatives, may reasonably request. Any such request to inspect
USAOneStar's books shall be directed to USAOneStar's representative, at the
address set forth herein under Section 10.4 Notices.
4.7 Confidentiality. Until the Closing (and thereafter if there is no
Closing), USAOneStar and its representatives will keep confidential any
information which they obtain from the Shareholders or from USAOneStar
concerning its properties, assets and the proposed business operations of
USAOneStar. If the terms and conditions of this Plan imposed on the parties
hereto are not consummated on or before 5:00 p.m. MST on October 31, 2000 or
otherwise waived or extended in writing to a date mutually agreeable to the
parties hereto, USAOneStar will return to Corvallis all written matter with
regard to Corvallis obtained in connection with the negotiations or
consummation of this Plan.
4.8 Investment Intent. The Shareholders represent and covenant that
they are acquiring the unregistered and restricted common shares of Corvallis
to be delivered to them under this Plan for investment purposes and not with a
view to the subsequent sale or distribution thereof, and as agreed, supra, the
Shareholders, their successors and assigns agree to execute and deliver to
Corvallis on the date
8
of Closing or no later than the date on which the restricted shares are issued
and delivered to the Shareholders, their assigns, or designees, an Investment
Letter similar in form to that attached hereto as Exhibit B.
4.9 Unregistered Shares and Access to Information. USAOneStar and the
Shareholders understand that the offer and sale of Corvallis shares to be
exchanged for the USAOneStar Shares have not been registered with or reviewed
by the securities and Exchange Commission under the Securities Act of 1933, as
amended, or with or by any state securities law administrator, and no federal
or state securities law administrator has reviewed or approved any disclosure
or other material facts concerning Corvallis or Corvallis Stock. USAOneStar
and the Shareholders have been provided with and reviewed all information
concerning Corvallis and Corvallis Stock, to be exchanged for the USAOneStar
Shares as they have considered necessary or appropriate as prudent and
knowledgeable investors to enable them to make informed investment decisions
concerning the Corvallis Stock, to be exchanged for the USAOneStar Shares.
USAOneStar and the Shareholders have made an investigation as to the merits
and risks of their acquisition of the Corvallis Stock, to be exchanged for the
USAOneStar Shares and have had the opportunity to ask questions of, and have
received satisfactory answers from, the officers and directors of Corvallis
concerning the Corvallis Stock to be exchanged for the USAOneStar Shares and
related matters, and have had an opportunity to obtain additional information
necessary to verify the accuracy of such information and to evaluate the
merits and risks of the proposed acquisition of the Corvallis Stock to be
exchanged for the USAOneStar Shares.
4.10 Ownership of Shares. The Shareholders are the beneficial and
record owners, free and clear of any liens and encumbrances, of whatever kind
or nature, of all the shares of USAOneStar of whatever class or series, which
the Shareholders have contracted to exchange.
4.11 Contracts or Agreements.
(a) Set forth in the USAOneStar Schedules are descriptions of all
material contracts which written or oral, all agreements, franchises,
licenses, or other commitments to which USAOneStar is a party or by which
USAOneStar or its properties are bound.
(b) Except as may be set forth in the USAOneStar Schedules,
USAOneStar is not a party to any contract, agreement, corporate restriction,
or subject to any judgment, order, writ, injunction, decree, or award, which
materially and adversely effect the business, operations, properties, assets,
or conditions of USAOneStar.
(c) Except as set forth in the USAOneStar Schedules, USAOneStar is
not a party to any material oral or written (i) contract for employment of any
officer which is not terminable on 30 days (or less) notice; (ii) profit
sharing, bonus, deferred compensation, stock option, severance, or any other
retirement plan of arrangement covered by Title IV of the Employee Retirement
Income Security Act, as amended, or otherwise covered; (iii) agreement
providing for the sale, assignment or transfer of any of its rights, assets or
properties, whether tangible or intangible, except sales of its property in
the
9
ordinary course of business with a value of less than $2,000; or (iv) waiver
of any right of any value which in the aggregate is extraordinary or material
concerning the assets or properties scheduled by USAOneStar, except for
adequate value and pursuant to contract. USAOneStar has not entered into any
material transaction which is not listed in the USAOneStar Schedules or
reflected in the USAOneStar financial statements.
4.12 Material Contract Defaults. USAOneStar is not in default in any
material respect under the terms of any contract, agreement, lease or other
commitment which is material to the business, operations, properties or
assets, or condition of USAOneStar, and there is no event of default or event
which, with notice of lapse of time or both, would constitute a default in any
material respect under any such contract, agreement, lease, or other
commitment in respect of which USAOneStar has not taken adequate steps to
prevent such default from occurring, or otherwise compromised, reached a
satisfaction of, or provided for extensions of time in which to perform under
any one or more contract obligations, among others.
4.13 Conflict with Other Instruments. The consummation of the within
transactions will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or other
material agreement or instrument to which USAOneStar was or is a party, or to
which any of its assets or operations are subject, and will not conflict with
any provision of the Articles of Incorporation or Bylaws of USAOneStar.
4.14 Governmental Authorizations. USAOneStar is in good standing in the
State of Nevada. Except for compliance with federal and state securities
laws, no authorization, approval, consent or order of, or registration,
declaration, or filing with, any court or other governmental body is required
in connection with the execution and delivery by USAOneStar of this Plan and
the consummation by USAOneStar of the transactions contemplated hereby.
4.15 Compliance with Laws and Regulations. USAOneStar has complied with
all applicable statutes and regulations of any federal, state, or other
applicable jurisdiction or agency thereof, except to the extent that
noncompliance would not materially and adversely effect the business,
operations, properties, assets, or condition of USAOneStar or except to the
extent that noncompliance would not result in the occurrence of any material
liability, not otherwise disclosed to Corvallis.
4.16 Approval of Plan. The Board of Directors and Shareholders of
USAOneStar have authorized the execution and delivery of this Plan by
USAOneStar and have approved the Plan and the transactions contemplated
hereby. USAOneStar has full power, authority, and legal right to enter into
this Plan and to consummate the transactions contemplated hereby.
4.17 Information. The information concerning USAOneStar set forth in
this Plan, and the USAOneStar Schedules attached hereto, are complete and
accurate in all material respects and do not contain, or will not contain,
when delivered, any untrue statement or a material fact or omit to state a
material fact the omission of which would be misleading to Corvallis in
connection with this Plan.
10
4.18 USAOneStar Schedules. USAOneStar has delivered to Corvallis the
following items listed below, hereafter referred to as the "USAOneStar
Schedules", which is hereby incorporated by reference and made a part hereof.
A certification executed by a duly authorized officer of USAOneStar on or
about the date within the Plan is executed to certify that the USAOneStar
Schedules are true and correct.
(a) Copy of Articles of Incorporation and Bylaws;
(b) Financial statements;
(c) A schedule setting forth the shareholder, together with the
number of shares owned beneficially or of record by each (also attached as
Exhibit A);
(d) Resolutions of Directors approving Plan;
(e) Consent of Shareholders approving Plan;
(f) Officers' Certificate as required by Section 7.2 of the
Plan;
(g) A list of key employees, including current compensation,
with notation as to job description and whether or not such employee is
subject to written contract, and if subject to a contract or employment
agreement, a copy of the same;
(h) A schedule showing the name and location of each bank or
other institution with which USAOneStar has an account and the names of the
authorized persons to draw thereon or having access thereto;
(i) A schedule setting forth all material contracts.
(j) Certificate of Good Standing.
Section 5
Special Covenants
5.1 USAOneStar Information Incorporated in Corvallis' Reports.
USAOneStar represents and warrants to Corvallis that all the information
furnished under this Plan shall be true and correct in all material respects
and that there is no omission of any material fact required to make the
information stated not misleading. USAOneStar agrees to indemnify and hold
Corvallis harmless, including each of its Directors and Officers, and each
person, if any, who controls such party, under any applicable law from and
against any and all losses, claims, damages, expenses or liabilities to which
any of them may become subject under applicable law, or reimburse them for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such actions, whether or not resulting in
liability,
11
insofar as such losses, claims, damages, expenses, liabilities or actions
arise out of or are based on any untrue statement, alleged untrue statement,
or omission of a material fact contained in such information delivered
hereunder.
5.2 Corvallis Information Incorporated in USAOneStar's Reports.
Corvallis represents and warrants to USAOneStar that all the information
furnished under this Plan shall be true and correct in all material respects
and that there is no omission of any material fact required to make the
information stated not misleading. The current officers and directors of
Corvallis agree to indemnify and hold USAOneStar harmless, including each of
its Shareholders, and each person, if any, who controls such party, under any
applicable law from and against any and all losses, claims, damages, expenses
or liabilities to which any of them may become subject under applicable law,
or reimburse them for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such actions, whether or not
resulting in liability, insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of or are based on any untrue statement,
alleged untrue statement, or omission of a material fact contained in such
information delivered hereunder.
5.3 Special Covenants and Representations Regarding the Exchanged
Corvallis Stock. The consummation of this Plan and the transactions herein
contemplated, including the issuance of the Corvallis Stock in exchange for
all the issued and outstanding stock of USAOneStar and the subsequent transfer
of 13,500,000 shares Corvallis Common Stock to the Shareholders, constitutes
the offer and sale of securities under the Securities Act and the applicable
state statutes, which depend, inter alia, on the circumstances under which the
Shareholders acquire such securities. Corvallis intends to rely on the
exemption of the registration provision of Section 5 of the Securities Act as
provided for under Section 4.2 of the Securities Act of 1933, which states
"transactions not involving a public offering", among others. Each
Shareholder upon receipt of the Shares exchanged for USAOneStar's Shares shall
execute and deliver to Corvallis a letter of investment intent to indicate,
among other representations, that the Shareholder is receiving the shares for
the USAOneStar Stock, for investment purposes and not with a view to the
subsequent distribution thereof. A proposed Investment Letter is attached
hereto as Exhibit B and incorporated herein by reference for the general use
by the Shareholders, as they may determine.
5.4 Action Prior to Closing. Upon the execution hereof until the
Closing date, and the completion of the consolidated audited financials,
(a) USAOneStar and Corvallis will (i) perform all of its
obligations under material contracts, leases, insurance policies and/or
documents relating to its assets and business; (ii) use its best efforts to
maintain and preserve its business organization intact, to retain its key
employees, and to maintain its relationship with existing potential customers
and clients; and (iii) fully comply with and perform in all material respects
all duties and obligations imposed on it by all federal and state laws and all
rules, regulations, and orders imposed by all federal or state governmental
authorities.
(b) Neither USAOneStar nor Corvallis will (i) make any change in
its Articles of Incorporation/Organization or Bylaws/Operating Agreement; (ii)
enter into or amend any contract,
12
agreement, or other instrument of the types described in the parties'
schedules, except that a party may enter into or amend any contract or other
instrument in the ordinary course of business involving the sale of goods or
services, provided that such contract does not involve obligations in excess
of $2,000.
Section 6
Conditions Precedent to Obligations of
USAOneStar and the Shareholders
All obligations of USAOneStar and the Shareholders under this Plan are
subject to the satisfaction, on or before the Closing date, except as
otherwise provided for herein, or waived or extended in writing by the parties
hereto, of the following conditions:
6.1 Accuracy of Representations. The representations and warranties
made by Corvallis in this Plan were true when made and shall be true as of the
Closing date (except for changes therein permitted by this Plan) with the same
force and effect as if such representations and warranties were made at and as
of the Closing date; and, Corvallis shall have performed and complied with all
aspects of this Agreement, unless waived or extended in writing by the parties
hereto. USAOneStar shall have been furnished with a certificate, signed by a
duly authorized executive officer of Corvallis and dated the Closing date, to
the foregoing effect.
6.2 Officers' Certificate. USAOneStar and the Shareholders shall have
been furnished with a certificate dated the Closing date and signed by a duly
authorized executive officer of Corvallis, to the effect that no litigation,
proceeding, investigation, claim, demand or inquiry is pending, or to the best
knowledge of Corvallis, threatened, which might result in an action to enjoin
or prevent the consummation of the transactions contemplated by this Plan, or
which might result in any material adverse change in the assets, properties,
business, or operations of Corvallis, and that this Agreement has been
complied with in all material respects.
6.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the financial condition,
business or operations of Corvallis, nor shall any event have occurred which,
with lapse of time or the giving of notice or both, may cause or create any
material adverse change in the financial condition, business or operations of
Corvallis, except as otherwise disclosed to USAOneStar.
6.4 Opinion of Counsel of Corvallis. Corvallis shall furnish to
USAOneStar and the Shareholders an opinion dated as of the Closing date and in
form and substance satisfactory to USAOneStar and the Shareholders to the
effect that:
13
(a) Corvallis is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Nevada, and with all
requisite corporate power to perform its obligations under this Plan.
(b) The business of Corvallis, as presently conducted, including,
upon the consummation hereof, the ownership of all of the issued and
outstanding shares of USAOneStar, does not require it to register it to do
business as a foreign corporation on any jurisdiction other than under the
jurisdiction of its Articles of Incorporation or Bylaws and Corvallis has
complied to the best of its knowledge in all material respects with all the
laws, regulations, licensing requirements and orders applicable to its
business activities and has filed with the proper authorities, including the
Department of Commerce, Division of Corporations, and Secretary of State for
the State of Nevada, all statements and reports required to be filed.
(c) The authorized and outstanding capital stock of Corvallis as
set forth in Section 3.2 above, and all issued and outstanding shares have
been duly and validly authorized and issued and are fully paid and
non-assessable.
(d) There are no material claims, suits or other legal proceedings
pending or threatened against Corvallis of any court or before or by any
governmental body which might materially effect the business of Corvallis or
the financial condition of Corvallis as a whole and no such claims, suits or
legal proceedings are contemplated by governmental authorities against
Corvallis.
(e) To the best knowledge of such counsel, the consummation of the
transactions contemplated by this Plan will not violate or contravene the
provisions of the Certificate of Incorporation or Bylaws of Corvallis, or any
contract, agreement, indenture, mortgage, or order by which Corvallis is
bound.
(f) This Plan constitutes a legal, valid and binding obligation of
Corvallis enforceable in accordance with its terms, subject to the effect of
any bankruptcy, insolvency, reorganization, moratorium, or similar law
effecting creditors' rights generally and general principles of equity
(regardless of whether such principles are considered in a proceeding in
equity or law).
(g) The execution and delivery of this Plan and the consummation of
the transactions contemplated hereby have been ratified by a majority of the
Shareholders of Corvallis and have been duly authorized by its Board of
Directors.
(h) Corvallis has not, nor will it undertake any action, the
result of which would endanger the tax-free nature of the Plan.
6.5 Good Standing. USAOneStar shall have received a Certificate of Good
Standing from the State of Nevada, dated within sixty (60) days prior to
Closing, but in no event later than ten days subsequent to the execution
hereof certifying that Corvallis is in good standing as a corporation in the
State of Nevada.
14
6.6 Other Items. USAOneStar and the Shareholders shall have received
such further documents, certifications or instruments relating to the
transactions contemplated hereby as USAOneStar and the Shareholders may
reasonably request.
Section 7
Conditions Precedent to Obligations of Corvallis
All obligations of Corvallis under this Plan are subject, at its option,
to the fulfillment, before the Closing, of each of the following conditions:
7.1 Accuracy of Representations. The representations and warranties
made by USAOneStar and the Shareholders under this Plan were true when made
and shall be true as of the Closing date (except for changes therein permitted
by this Plan) with the same force and effect as if such representations and
warranties were made at and as of the Closing date; and, Corvallis shall have
performed and complied with all aspects of this Agreement, unless waived or
extended in writing by the parties hereto. Corvallis shall have been
furnished with a certificate, signed by a duly authorized Officer of
USAOneStar and dated the Closing date, to the foregoing effect.
7.2 Officers' Certificate. Corvallis shall have been furnished with a
certificate dated the Closing date and signed by the duly authorized Officer
USAOneStar, to the effect that no litigation, proceeding, investigation,
claim, deed, or inquiry is pending, or to the best knowledge of USAOneStar,
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Plan, or which might
result in any material adverse change in the assets, properties, business, or
operations of USAOneStar, and that this Agreement has been complied with in
all material respects.
7.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the financial condition,
business or operations of Corvallis, nor shall any event have occurred which,
with lapse of time or the giving of notice or both, may cause or create any
material adverse change in the financial condition, business or operations of
USAOneStar, except as otherwise disclosed to Corvallis.
7.4 Good Standing. Corvallis shall have received a Certificate of Good
Standing from the State of Texas, dated within sixty (60) days prior to
Closing, but in no event later than ten days subsequent to the execution
hereof certifying that USAOneStar is in good standing as a corporation in the
State of Texas.
7.5 Other Items. Corvallis shall have received such further documents,
certifications or instruments relating to the transactions contemplated hereby
as Corvallis may reasonably request.
7.6 Execution of Investment Letter. The Shareholders shall have
executed and delivered copies of Exhibit B to Corvallis.
15
Section 8
Termination
8.1 Termination by USAOneStar or the Shareholders. This Plan may be
terminated at any time prior to the Closing date by action of USAOneStar or
the Shareholders, if Corvallis shall fail to comply in any material respect
with any of the covenants or agreements contained in this Plan, or if any of
its representations and warranties contained herein shall be inaccurate in any
material respect.
8.2 Termination by Corvallis. This Plan may be terminated at any time
prior to the Closing date by action of Corvallis if USAOneStar shall fail to
comply in any material respect with any of the covenants or agreements
contained in this Plan, or if any of its representations or warranties
contained herein shall be inaccurate in any material respect.
8.3 Termination by Mutual Consent.
(a) This Plan may be terminated at any time prior to the Closing
date by mutual consent of Corvallis, expressed by action of its Board of
Directors, USAOneStar or the Shareholders.
(b) If this Plan is terminated pursuant to Section 8, this Plan
shall be of no further force and effect and no obligation, right or liability
shall arise hereunder. Each party shall bare its own costs in connection
herewith.
Section 9
Shareholders' Representative
The Shareholders hereby irrevocably designate and appoint Xxxxxx X. Xxxx,
as their agent and attorney in fact (the "Shareholders' Representative") with
full power and authority until the Closing to execute, deliver and receive on
their behalf all notices, requests and other communications hereunder; to fix
and alter on their behalf the date, time and place of the Closing; to waive,
amend or modify any provisions of this Plan and to take such other action on
their behalf in connection with this Plan, the Closing and the transactions
contemplated hereby as such agent deems appropriate; provided, however, that
no such waiver, amendment or modification may be made if it would decrease the
number of shares to be issued to the Shareholders under Section 1 hereof or
increase the extent of their obligation to Corvallis hereunder, unless agreed
in writing by the Shareholders.
Section 10
General Provisions
10.1 Further Assurances. At any time, and from time to time, after the
Closing date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of the Plan.
16
10.2 Payments of Costs and Fees. Corvallis and USAOneStar shall each
bear their own costs and expenses, including any legal and accounting fees in
connection with the negotiation, execution and consummation of the Plan.
10.3 Press Release and Shareholders' Communications. On the date of
Closing, or as soon thereafter as practicable, USAOneStar and the Shareholders
shall cause to have promptly prepared and disseminated a news release
concerning the execution and consummation of the Plan, such press release and
communication to be released promptly and within the time required by the
laws, rules and regulations as promulgated by the United States Securities and
Exchange Commission, and concomitant therewith to cause to be prepared a full
and complete letter to Corvallis' shareholders which shall contain information
required by Regulation 240.14f-1 as promulgated under Section 14(f) as
mandated under the Securities and Exchange Act of 1934, as amended.
10.4 Notices. All notices and other communications required or
permitted hereunder shall be sufficiently given if personally delivered, sent
by registered mail, or certified mail, return receipt requested, postage
prepaid, or by facsimile transmission addressed to the following parties
hereto or at such other addresses as follows:
If to Corvallis: Corvallis, Inc.
0000 Xxxxx 0000 Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
With a copy to: Xxxxxx X. Xxxxxxx, Esq.
000 Xxxxx 000 Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
If to USAOneStar: XXXXxxXxxx.Xxx, Inc.
0 Xxxxxxxxx Xxxx., Xxxxx XX0
Xxxxxxxxx, XX 00000
With a copy to: Xxxxxx X. Xxxx
0 Xxxxxxxxx Xxxx., Xxxxx XX0
Xxxxxxxxx, XX 00000
or at such other addresses as shall be furnished in writing by any party in
the manner for giving notices hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered, mailed, sent
by facsimile transmission, or telegraphed.
10.5 Entire Agreement. This Plan represents the entire agreement
between the parties relating to the subject matter hereof, including any
previous letters of intent, understandings, or agreements between Corvallis,
USAOneStar and the Shareholders with respect to the subject matter hereof, all
of which are hereby merged into this Plan, which alone fully and completely
expresses the agreement of the parties relating to the subject matter hereof.
Excepting the foregoing agreement, there
17
are no other courses of dealing, understandings, agreements, representations,
or warranties, written or oral, except as set forth herein.
10.6 Governing Law. This Plan shall be governed by and construed and
enforced in accordance with the laws of the State of Nevada, except to the
extent preempted by federal law, in which event (and to that extent only)
federal law shall govern.
10.7 Tax Treatment. The transaction contemplated by this Plan is
intended to qualify as a "tax-free" reorganization under the provisions of
Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as amended.
USAOneStar and Corvallis acknowledge, however, that each are being represented
by their own tax advisors in connection with this transaction, and neither has
made any representations or warranties to the other with respect to treatment
of such transaction or any part or effect thereof under applicable tax laws,
regulations or interpretations; and no attorney's opinion or tax revenue
ruling has been obtained with respect to the tax consequences of the
transactions contemplated by the within Plan.
10.8 Attorney Fees. In the event that any party prevails in any action
or suit to enforce this Plan, or secure relief from any default hereunder or
breach hereof, the nonprevailing party or parties shall reimburse the
prevailing party or parties for all costs, including reasonable attorney fees,
incurred in connection therewith.
10.9 Amendment of Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law or in equity, and may be enforced concurrently or separately, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, therefore, or
thereafter occurring or existing. Any time prior to the expiration of thirty
(30) days from the date hereof, this Plan may be amended by a writing signed
by all parties hereto, with respect to any of the terms contained herein, and
any term or condition of this Plan may be waived or the time for performance
thereof may be extended by a writing signed by the party or parties for whose
benefit the provision is intended.
10.10 Counterparts. This Plan may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be
an original, and all of which together shall constitute one and the same
instruments.
18
10.11 Headings. The section and subsection headings in this Plan are
inserted for convenience only and shall not effect in any way the meaning or
interpretation of the Plan.
10.12 Parties in Interest. Except as may be otherwise expressly
provided herein, all terms and provisions of this Plan shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
beneficiaries, personal and legal representatives, and assigns.
IN WITNESS WHEREOF, the parties have executed this Plan and Agreement of
Reorganization effective the day and year first set forth above.
CORVALLIS, INC.
/s/ Xxxxxxx X. Xxxxx
By: ____________________________
Its President
XXXXXXXXXX.XXX, INC.
/s/ Xxxxxx X. Xxxx
By: _____________________________
Its President
SHAREHOLDERS:
/s/ Xxxxxx X. Xxxx
_____________________________
Xxxxxx X. Xxxx
/s/ Xxxxx Xxxxxx
_____________________________
Xxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
_____________________________
Xxxxxxx Xxxxxx
