STOCK PURCHASE AGREEMENT AND PLAN OF REORGANIZATION
STOCK PURCHASE AGREEMENT AND PLAN OF REORGANIZATION, dated April 19, 2000,
between Telnet World Communications, Inc. ("Telnet") a Utah corporation and
Triple S Parts, Inc. a Nevada corporation, hereinafter for convenience ("Triple
S").
PLAN OF REORGANIZATION
The reorganization will comprise in general the acquisition by Telnet of Triple
S pursuant to an I.R.S. qualified tax free exchange. The acquisition shall be
accomplished by the payment of cash and stock as provided for herein making
Triple S a wholly owned subsidiary of Telnet upon completion of the acquisition
via the issuance by Telnet of shares of Telnet Common capital stock to the below
signed and listed shareholders of Triple S in consideration of the conveyance of
100% of the issued and outstanding shares of Triple S to Telnet, all subject to
the terms and conditions of the agreement hereinafter set forth. For purposes of
this Agreement the terms stock, shares and common capital stock shall be
interchangeable.
AGREEMENT
In order to consummate the foregoing Plan of Reorganization, and in
consideration of the premises and of the representations and undertakings herein
set forth, the parties agree as follows:
1.Transfer of shares. Upon and subject to the terms and conditions herein
stated, Telnet shall acquire from Triple S and Triple S shareholders shall
transfer, assign, and convey to Telnet all of the issued and outstanding shares
of Common stock of Triple S to Telnet in exchange for Telnet newly issued
restricted shares totaling Three Thirty-Five Thousand Shares. By virtue of the
transaction Telnet shall acquire Triple S as a going concern, including all of
the properties and assets of Triple S of every kind, nature, and description,
tangible and intangible, wherever situated, including, without limiting the
generality of the foregoing, its business as a going concern, its goodwill, and
the corporate name (subject to changes referred to or permitted herein or
occurring in the ordinary course of business prior to the time of closing
provided herein).
2. Issuance and delivery of stock. In consideration of and in exchange for the
foregoing transfer, assignment, and conveyance, and subject to compliance by
Telnet and Triple S with their warranties and undertakings contained herein,
Telnet shall issue and deliver to Triple S one or more stock certificates
registered in the name of the shareholders of Triple S, on a pro-rata basis
totaling 1,152,000 resulting from a 4:1 forward split of 288,000 together with
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payment for such shares as set forth in a Promissory Note between Triple S
Parts, Inc. and FMS Group and attached hereto as Exhibit "A", in exchange for
100% of the issued and outstanding shares of Triple S Common stock which, upon
such issuance and delivery, shall be fully paid and nonassessable.
3. Investment intent.
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3.1 The Board of Directors and Officers of Triple S Parts, Inc.(
"Subscriber") understand and acknowledge that the Telnet Stock being
acquired hereunder have not been registered under the Securities Act of
1933 (the "Act") or applicable state securities laws; (ii) the Subscriber
cannot sell such Stock unless such securities are registered under the Act
and any applicable state securities laws or unless exemptions from such
registration requirements are available (iii) the Company has no obligation
to register the securities or assist the Subscriber in obtaining an
exemption from the various registration requirements except as set forth
herein or therein. Subscriber agrees not to resell the shares of Stock
without compliance with the terms of this Subscription Agreement, the Act
and any applicable state securities laws.
3.2 Such Subscriber(i) is acquiring the Shares solely for the Subscriber's
own account for investment purposes only and not with a view toward resale
or distribution, either in whole or in part; (ii) has no contract,
undertaking, agreement or other arrangement, in existence or contemplated,
to sell, pledge, assign or otherwise transfer the Shares to any other
person; (iii) agrees not to sell or otherwise transfer the Subscriber's
Shares unless and until such securities are subsequently registered under
the Act and any applicable state securities laws or unless an exemption
from any such registration is available; and (iv) agrees, in any event, not
to sell or otherwise transfer the Subscriber's securities for up to 90 days
after the effective date of the Company's registration statement under the
Act relating to the offer, sale and original issuance of its capital stock
in a public offering provided such registration statement includes the
Subscriber's securities.
3.3 Such Subscriber understands that an investment in the Shares involves
substantial risks and Subscriber recognizes and understands the risks
relating to this transaction and acquisition of the Telnet shares.
3.4 Such Subscriber has, either alone or together with the Subscriber's
Purchaser Representative (as that term is defined in Regulation D under the
Act), such knowledge and experience in financial and business matters that
the Subscriber is capable of evaluating the merits and risks of the
acquisition by Telnet.
4. Dissenting shares: There shall be no dissenting shares as a result of the
acquisition
5. Place of closing. The closing of this agreement and all deliveries hereunder
shall take place at the offices of Triple S Parts, Inc.
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6. Time of closing. The closing shall be 3:00 PM, Eastern Standard time April
19, 2000, unless extended by mutual agreement of the parties. The last date
fixed by mutual agreement of the parties or otherwise becoming effective under
this paragraph shall constitute the closing date.
7. Representations and warranties of Triple S. Triple S and its shareholders
represent and warrant to Telnet that: (a) Corporate status. Triple S is a
corporation duly organized and existing under the laws of the State of Nevada,
with an authorized capital stock consisting of 50,000,000 Common shares, of
which 338,805 are currently issued and outstanding; and no Preferred shares
authorized or outstanding. Triple S has no .
(b) Disposition of assets. Since January 1, 2000, there has been no material
adverse change in the assets or liabilities or in the condition, financial or
other, of Triple S, except changes occurring in the ordinary course of business
and changes referred to or permitted herein.
(c) Lawsuits and claims. Triple S is not a party to or threatened by any
litigation, proceeding, or controversy before any court or administrative agency
which might result in any change in the business or properties of Triple S or
which change would be substantially adverse taking into account the entire
business and properties of Triple S; Triple S is not in default with respect to
any judgment, order, writ, injunction, decree, rule, or regulation of any court
or administrative agency.
(d) Taxes. Triple S has filed with the appropriate governmental agencies all tax
returns required by such agencies to be filed by it and is not in default with
respect to any such filing. Triple S has paid all taxes claimed to be due by
state and local taxing authorities and has not been examined by representatives
of the United States Internal Revenue Service for federal taxes since inception.
(e) Triple S and its shareholders have or will have disclosed all material facts
relating to the business and its products to Telnet and shall not have omitted
to disclose any material fact, which, if known by Telnet, would affect its
decision to enter into this transaction.
8. Representations and warranties of Telnet. Telnet represents and warrants to
Triple S that:
(a) Corporate status. Telnet is a corporation duly organized and existing under
the laws of the State of Utah, with an authorized capital stock consisting of
Fifty Million shares of Common stock, of which 338,805 are issued and
outstanding and are fully paid and nonassessable; and no shares of Preferred
stock. Telnet has no .
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(b) Corporate authority. Telnet has the corporate right and authority to acquire
and operate the properties and business now owned and operated by it and to
issue and deliver the number of shares of its Common stock required to be issued
hereunder to Triple S.
(c) Disposition of assets. Since December 31, 1999, there has been no material
adverse change in the assets or liabilities or in the condition, financial or
other, of Telnet except changes occurring in the ordinary course of business and
changes referred to or permitted herein.
(d) Lawsuits and claims. Telnet is not a party to or threatened by any
litigation, proceeding, or controversy before any court or administrative agency
which might result in any change in the business or properties of Telnet or
which change would be substantially adverse, taking into account the entire
business and properties of Telnet.
(e) Taxes. Telnet has filed with the appropriate governmental agencies all tax
returns required by such agencies to be filed by it and is not in default with
respect to any such filing. Telenet has paid all taxes claimed to be due by
state and local taxing authorities and has not been examined by representatives
of the United States Internal Revenue Service for federal taxes during the past
three fiscal years.
9. Interim conduct of business by Triple S. Until the time of closing, Triple S
will conduct its business in the ordinary and usual course, and prior to the
time of closing it will not, without the written consent of Telnet, borrow any
money, incur any liability other than in the ordinary and usual course of
business or in connection with the performance or consummation of this
agreement, encumber or permit to be encumbered any of its properties and assets,
dispose or contract to dispose of any property except in the regular and
ordinary course of business, enter into any lease or contract for the purchase
of real estate, form or cause to be formed any , pay any bonus or special
remuneration to any officer or employee, declare or pay any dividends, make any
other distributions to its shareholders, or issue, sell, or purchase any stock,
notes, or other securities.
10. Access to information. From the date hereof each party shall allow the other
free access to its files and audits, including any and all information relating
to taxes, commitments, and contracts, real estate and personal property titles,
and financial condition. From the date hereof each party agrees to cause its
auditors to cooperate with the other in making available all financial
information requested, including the right to examine all working papers
pertaining to audits made by such auditors.
11. Conditions and obligations of Triple S. Unless, at the time of closing, the
following conditions are satisfied, Triple S shall not be obligated to make the
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transfer, assignment, and conveyance provided in paragraph 1. to be made by it
and otherwise to effectuate its part of the reorganization herein provided:
(a) The representations and warranties of Telnet set forth herein, are, on the
date hereof and as of the time of closing, substantially correct.
(b) The directors of Telnet have approved the consummation of this agreement and
the matters herein provided.
(c) No litigation or proceeding is threatened or pending for the purpose of with
the probably effect of enjoining or preventing the consummation of this
agreement or which would materially affect Telnet operation or its assets.
(d) Telnet has complied with its agreements herein to be performed by it prior
to the time of closing.
12. Conditions of obligations of Telnet. Unless at the time of closing the
following conditions are satisfied, Telnet shall not be obligated to issue and
deliver the shares of its Common stock as provided in paragraph 1. and otherwise
to effectuate its part of the reorganization herein provided:
(a) The representations and warranties of Triple S set forth in paragraph 9.
are, on the date hereof and as of the time of closing, substantially correct
subject to any change made because of any action approved by Telnet.
(b) The directors of Triple S have approved and the holders of all outstanding
shares of Telnet have voted in favor of the consummation of this agreement and
the matters herein provided.
(c) No litigation or proceeding is threatened or pending for the purpose or with
the probable effect of enjoining or preventing the consummation of this
agreement or which would materially affect Triple S operation of the properties
and business to be acquired by it hereunder.
(d) Triple S has complied with its agreements herein to be performed by it prior
to the time of closing.
13. Abandonment of agreement. If by reason of the provisions of paragraphs 11.
or 12. above either party is not obligated to effectuate the reorganization,
then either party which is not so obligated may terminate and abandon this
agreement by delivering to the other party written notice of termination prior
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to the time of closing, and thereupon this agreement shall be terminated without
further obligation or liability upon either party in favor of the other.
14. Authorization by shareholders. Telnet and Triple S shall promptly take such
action as may be legally necessary to call special meetings of their respective
shareholders to authorize the consummation of this agreement and the matters
herein provided, and each will recommend to its shareholders that this agreement
and the matters herein provided, and all other matters necessary or incident
thereto, be approved, authorized, and consummated.
15. Listing of Telnet stock issued to Triple S. Telnet shall not be required to
prepare and file a registration statement under the Securities Act of 1933
covering the shares of Common stock to be delivered hereunder.
16. Brokers' fees. Neither party has incurred nor will incur any liability for
brokerage fees or agents' commissions in connection with the transactions
contemplated hereby.
17. Execution of documents. At any time and from time to time after the time of
closing, Triple S will execute and deliver to Telnet such further conveyances,
assignments, and other written assurances as Telnet shall reasonably request in
order to vest and confirm Telnet title to the shares, assets and properties to
be and intended to be transferred, assigned, and conveyed hereunder.
18. Parties in interest. Nothing herein expressed or implied is intended or
shall be construed to confer upon or to give any person, firm, or corporation
other than the parties hereto any rights or remedies under or by reason hereof.
19. Completeness of agreement. This agreement contains the entire understanding
between
the parties hereto with respect to the transactions contemplated hereby.
20. Survival of Representations and Warranties. Each of the parties hereto
hereby agrees that all representations and warranties made by or on behalf of
him or it in this Agreement or in any document or instrument delivered pursuant
hereto shall survive for a period of three (3) years following the Closing Date
and the consummation of the transactions contemplated hereby, except with
respect to the representation and warranties set forth in Section 4 which shall
survive applicable statute of limitations period.
IN WITNESS HEREOF, the Parties hereto have hereunder set their hands and seals,
effective on the date above stated, as witnessed below:
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TELNET WORLD COMMUNICATIONS, INC.
A Utah corporation
By:/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx, President
TRIPLE S PARTS, INC.
A Nevada Corporation
By:/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxx, President
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