AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Plan") is made this 16th day of March
1999, among Whole Living, Inc., a Nevada corporation (formerly known as Brick
Tower Corporation) ("WLN"); Whole Living, Inc. (dba Brain Garden), a Utah
corporation, any and all of its subsidiaries and fictitious names (hereinafter
collectively referred to as "Whole Living") and its shareholders (hereinafter
"Shareholders").
WLN wishes to acquire one hundred percent (100%) of the issued and
outstanding stock of Whole Living for and in exchange for stock of WLN, in a
statutory merger intending to qualify as a tax-free exchange pursuant to Section
368(a)(1)(A) 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 holders of all the
issued and outstanding stock of Whole Living agree to assign, transfer, and
deliver to WLN, free and clear of all liens, pledges, encumbrances, charges,
restrictions or known claims of any kind, nature or description, all of their
shares of Whole Living stock, and WLN agrees to acquire such shares on the
date thereof, or as soon as practicable thereafter, by issuing and delivering
in exchange therefore solely common shares of WLN's stock, par value $0.001,
in the aggregate of 6,000,000 shares, of the then issued and outstanding
shares of WLN subject to the provisions of this Plan. Subsequent to the date
hereof, the Shareholders shall, upon the surrender of the Whole Living
certificates representing their respective beneficial and record ownership one
hundred percent (100%) of the issued and outstanding shares of Whole Living to
WLN, as soon as practicable hereafter, the Shareholders shall be entitled to
receive a certificate(s) evidencing shares of the exchanged WLN stock as
provided for herein. Upon the consummation of the transaction contemplated
herein, WLN shall merge with Whole Living and become the surviving
corporation.
1.2 Anti-Dilution. For all relevant purposes of this Plan, the number
of WLN 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 WLN 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. The Shareholders shall transfer to WLN at
the closing provided for in Section 2 (the "Closing") the shares of common
stock of Whole Living listed opposite their respective names on Exhibit A
hereto (the "Whole Living shares") in exchange for shares of the common stock
of WLN as outlined above in Section 1.1 hereof (the "WLN Stock"). All of such
shares of WLN stock shall be issued at the closing to the Shareholders, in the
numbers shown opposite their respective names in Exhibit "A." The transfer of
Whole Living shares by the Shareholders shall be effected by the delivery to
WLN at the Closing of certificates representing the transferred shares
endorsed in blank or accompanied by stock powers executed in blank, with all
signatures guaranteed by a national bank and with all necessary transfer taxes
and other revenue stamps affixed and acquired at the Shareholders' expense.
1.4 Further Assurances. Subsequent to the execution hereof, and from
time to time thereafter, the Shareholders shall execute such additional
instruments and take such other action as WLN may request in order to more
effectively sell, transfer and assign clear title and ownership in the Whole
Living shares to WLN.
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 March 31, 1999 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.
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 WLN
WLN represents and warrants to, and covenants with, the Shareholders and
Whole Living as follows:
3.1 Corporate Status. WLN is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. WLN 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 WLN 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 WLN's
Articles of Incorporation or Bylaws. WLN 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 WLN as of the date
hereof consists of 20,000,000 common shares, par value $0.001. The common
shares of WLN 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 WLN's common stock or
with regard to any options, warrants or other contractual rights to acquire
any of WLN's authorized but unissued common shares. As of the Closing, WLN
shall have not more than 10,000,000 shares issued and outstanding.
3.3 Financial Statements.
(a) WLN hereby warrants and covenants to Whole Living that the
audited financial statements dated March 31, 1998, fairly and accurately
represent the financial condition of WLN and that no material change has
occurred in the financial condition of WLN.
(b) WLN 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 WLN as submitted heretofore to
Whole Living for examination and review.
3.4 Conduct of Business. WLN 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 Whole Living, enter
into any material commitments except in the ordinary course of business.
WLN 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 WLN.
(b) Capitalization, etc. WLN 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. WLN has no options, warrants or stock
appreciation rights related to the authorized but unissued WLN common stock.
There are no existing options, warrants, calls, or commitments of any
character relating to the authorized and unissued WLN common stock, except
options, warrants, calls, or commitments, if any, to which WLN is not a party
and by which it is not bound.
3.6 Title to Property. WLN 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 WLN, and the properties and assets of WLN
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 WLN, threatened by or against or
effecting WLN at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
WLN 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, WLN and its present management will (i) give to the
Shareholders and Whole Living, 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 the Shareholders and
Whole Living, or their duly authorized representatives, may inspect them; and
(ii) furnish such information concerning the properties and affairs of WLN as
the Shareholders and Whole Living, or their duly authorized representatives,
may reasonably request. Any such request to inspect WLN's books shall be
directed to WLN's 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), WLN and its representatives will keep confidential any information
which they obtain from the Shareholders or from Whole Living concerning its
properties, assets and the proposed business operations of Whole Living. 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 March 31, 1999 or otherwise waived
or extended in writing to a date mutually agreeable to the parties hereto, WLN
will return to Whole Living all written matter with regard to Whole Living
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 WLN 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 WLN.
3.11 Corporate Authority. WLN 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 Whole Living, 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. WLN hereby warrants and represents that
the Shareholders of WLN, being the owners of a majority of the issued and
outstanding stock of the Corporation consented in writing to the authorization
to execute this Agreement and Plan of Reorganization as between WLN and Whole
Living pursuant to a stock-for-stock transaction in which WLN would acquire
one hundred percent of the issued and outstanding shares of Whole Living in
exchange for the issuance of a total of 6,000,000 common shares of WLN and
thereby Whole Living shall merge with and into WLN.
3.13 Resignation of Directors. Upon the Closing, the current directors
of WLN shall submit their resignations.
3.14 Special Covenants and Representations Regarding the Exchanged WLN
Stock. The consummation of this Plan and the transactions herein contemplated
include the issuance of the exchanged WLN 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 WLN a Letter(s) of Investment Intent in the form attached
hereto as Exhibit B and incorporated herein by reference.
3.15 Undisclosed or Contingent Liabilities. WLN hereby represents and
warrants that it has no undisclosed or contingent liabilities which have not
been disclosed to Whole Living in writing or in this Agreement or in any
Exhibit attached hereto.
3.16 Information. The information concerning WLN set forth in this
Plan, and the WLN 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 Whole Living in connection with this
Plan.
3.17 Title and Related Matters. WLN 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 WLN balance sheets, free and
clear of any and all liens and encumbrances.
3.18 Contracts or Agreements. WLN is not bound by any material
contracts, agreements or obligations which it has not already disclosed to
Whole Living in writing or in this Agreement or in any Exhibit attached
hereto.
3.19 Governmental Authorizations. WLN 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.
3.20 Compliance with State and Federal Reporting Requirements. WLN is
not nor has it ever been subject to the reporting requirements of section
12(g) of the Securities Exchange Act of 1934 or 15(d) of the Securities Act of
1933 (15 U.S.C. 78m or 78o (d)) and is not an investment company registered
or required to be registered under the Investment Company Act of 1940 (15
U.S.C. 80a-1 et seq.). There is publicly available information concerning WLN
as specified in paragraph (a)(5)(i) to (xiv), inclusive, and paragraph
(a)(5)(xvi) of Rule 15c2-11 under the Securities Exchange Act of 1934.
3.21 Compliance with Laws and Regulations. WLN 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 WLN or except to the extent that noncompliance would
not result in the occurrence of any material liability, not otherwise
disclosed to Whole Living.
3.22 Approval of Plan. The Board of Directors of WLN has authorized the
execution and delivery of this Plan by WLN and have approved the Plan and the
transactions contemplated hereby. WLN has full power, authority, and legal
right to enter into this Plan and to consummate the transactions contemplated
hereby.
3.23 Investment Intent. WLN is acquiring the Whole Living shares to be
transferred to it under this Plan for the purpose of merging with Whole Living
and not with a view to the sale or distribution thereof, and WLN shall cancel
the Whole Living shares upon the completion of the merger.
3.24 Unregistered Shares and Access to Information. WLN understands
that the offer and sale of the Whole Living 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, state securities law administrator has reviewed
or approved any disclosure or other material concerning Whole Living or the
Whole Living shares. WLN has been provided with and reviewed all information
concerning Whole Living, the Whole Living shares as it has considered
necessary or appropriate as a prudent and knowledgeable investor to enable it
to make an informed investment decision concerning the Whole Living shares.
WLN has made an investigation as to the merits and risks of its acquisition of
the Whole Living Shares and has had the opportunity to ask questions of, and
has received satisfactory answers from, the officers and directors of Whole
Living concerning Whole Living, the Whole Living shares and related matters,
and has 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 Whole Living shares.
3.25 Obligations. WLN is not aware of any outstanding obligations to
any of its employees or consultants as of the Closing.
3.26 WLN Schedules. WLN has delivered to Whole Living the following
items listed below, hereafter referred to as the "WLN Schedules", which is
hereby incorporated by reference and made a part hereof. A certification
executed by a duly authorized officer of WLN on or about the date within the
Plan is executed to certify that the WLN Schedules are true and correct.
(a) Copy of Articles of Incorporation, as amended, and Bylaws;
(b) Financial statements;
(c) Shareholder list;
(d) Resolution of Directors approving Plan;
(e) Officers' Certificate as required under Section 6.2 of the
Plan;
(f) Opinion of counsel as required under Section 6.4 of the Plan;
(g) Certificate of Good Standing;
(h) Consent of Shareholders approving Plan.
Section 4
Representations, Warranties and Covenants of Whole Living
Whole Living represents and warrants to, and covenants with, the
Shareholders and WLN as follows:
4.1 Corporate Status. Whole Living is a corporation duly organized,
validly existing and in good standing under the laws of the State of Utah
incorporated on April 10, 1997. Whole Living 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 Whole
Living 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 Whole
Living's Articles of Incorporation or Bylaws. Whole Living 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 Whole Living as of
the date hereof consists of 100,000 common shares. As of the date hereof all
common shares of Whole Living 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 Whole
Living's common stock or with regard to any options, warrants or other
contractual rights to acquire any of Whole Living's authorized but unissued
common shares.
4.3 Conduct of Business. Whole Living 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 WLN, enter
into any material commitments except in the ordinary course of business.
Whole Living agrees that Whole Living will conduct itself in the
following manner pending the Closing:
(a) Certificate of Incorporation and Bylaws. No change will be
made in the Certificate of Incorporation or Bylaws of Whole Living.
(b) Capitalization, etc. Whole Living 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. Whole Living 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 Whole Living, and the properties
and assets of Whole Living 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 Whole Living, threatened by or against
or effecting Whole Living at law or in equity, or before any governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of
any kind; Whole Living 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, Whole Living and its present management will (i)
give to WLN, 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 WLN, or their duly authorized
representatives, may inspect them; and (ii) furnish such information
concerning the properties and affairs of Whole Living as the Shareholders and
Whole Living, or their duly authorized representatives, may reasonably
request. Any such request to inspect Whole Living's books shall be directed
to Whole Living'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), Whole Living and its representatives will keep confidential any
information which they obtain from the Shareholders or from Whole Living
concerning its properties, assets and the proposed business operations of
Whole Living. 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 March 31, 1999 or
otherwise waived or extended in writing to a date mutually agreeable to the
parties hereto, Whole Living will return to WLN all written matter with regard
to WLN 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 WLN 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 WLN
on the date 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. Whole Living and the
Shareholders understand that the offer and sale of WLN shares to be exchanged
for the Whole Living 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 WLN or WLN stock. Whole Living and the
Shareholders have been provided with and reviewed all information concerning
WLN and WLN shares, to be exchanged for the Whole Living shares as they have
considered necessary or appropriate as prudent and knowledgeable investors to
enable them to make informed investment decisions concerning the WLN shares,
to be exchanged for the Whole Living shares. Whole Living and the
Shareholders have made an investigation as to the merits and risks of their
acquisition of the WLN shares, to be exchanged for the Whole Living shares and
have had the opportunity to ask questions of, and have received satisfactory
answers from, the officers and directors of WLN concerning WLN shares to be
exchanged for the Whole Living 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 WLN shares to be exchanged for the Whole Living shares.
4.10 Title to Shares. The Shareholders are the beneficial and record
owners, free and clear of any liens and encumbrances, of whatever kind or
nature, of all of the shares of Whole Living of whatever class or series,
which the Shareholders have contracted to exchange.
4.11 Contracts.
(a) Set forth in the Whole Living Schedules are copies or
descriptions of all material contracts which written or oral, all agreements,
franchises, licenses, or other commitments to which Whole Living is a party or
by which Whole Living or its properties are bound.
(b) Except as may be set forth in the Whole Living Schedules, Whole
Living 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 Whole Living.
(c) Except as set forth in the Whole Living Schedules, Whole Living
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 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 Whole Living, except
for adequate value and pursuant to contract. Whole Living has not entered
into any material transaction which is not listed in the Whole Living
Schedules or reflected in the Whole Living financial statements.
4.12 Material Contract Defaults. Whole Living 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 Whole Living, 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 Whole Living 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 Whole Living 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 Whole Living.
4.14 Governmental Authorizations. Whole Living is in good standing in
the State of Utah. 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 Whole Living of this Plan and
the consummation by Whole Living of the transactions contemplated hereby.
4.15 Compliance with Laws and Regulations. Whole Living 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 Whole Living or except to the
extent that noncompliance would not result in the occurrence of any material
liability, not otherwise disclosed to WLN.
4.16 Approval of Plan. The Board of Directors of Whole Living have
authorized the execution and delivery of this Plan by Whole Living and have
approved the Plan and the transactions contemplated hereby. Whole Living 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 Whole Living set forth in
this Plan, and the Whole Living 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 WLN in connection
with this Plan.
4.18 Whole Living Schedules. Whole Living has delivered to WLN the
following items listed below, hereafter referred to as the "Whole Living
Schedules", which is hereby incorporated by reference and made a part hereof.
A certification executed by a duly authorized officer of Whole Living on or
about the date within the Plan is executed to certify that the Whole Living
Schedules are true and correct.
(a) Copy of Articles of Incorporation and Bylaws;
(b) Financial Statements;
(c) A schedule setting forth the shareholders, together with the
number of shares owned beneficially or of record by each (also attached as
Exhibit A);
(d) Resolutions of Board of Directors approving Plan;
(e) Consent of Shareholders approving Plan;
(f) 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;
(g) A schedule showing the name and location of each bank or
other institution with which Whole Living has an account and the names of the
authorized persons to draw thereon or having access thereto;
(h) A schedule setting forth all material contracts;
(i) Officers' Certificate as required by Section 7.2 of the
Plan;
(j) Schedule of all debts, mortgages, security interests,
pledges, liens, encumbrances, claims and the like;
(k) Certificate of Good Standing.
Section 5
Special Covenants
5.1 Whole Living Information Incorporated in WLN's Reports. Whole
Living represents and warrants to WLN 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. Whole Living agrees to indemnify and hold WLN 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, 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 WLN Information Incorporated in Whole Living's Reports. WLN
represents and warrants to Whole Living 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 WLN agree to
indemnify and hold Whole Living 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, 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 WLN
Stock. The consummation of this Plan and the transactions herein
contemplated, including the issuance of the WLN shares in exchange for one
hundred percent (100%) of the issued and outstanding shares of Whole Living 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. WLN
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 submission of his Whole Living shares and the
receipt of the WLN shares exchanged therefor, shall execute and deliver to WLN
a letter of investment intent to indicate, among other representations, that
the Shareholder is exchanging the Whole Living shares for WLN shares 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) Whole Living and WLN 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 Whole Living nor WLN will (i) make any change in its
Articles of Incorporation or Bylaws except and unless as contemplated pursuant
to Section 3 of this Plan; (ii) enter into or amend any contract, 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 $10,000.
Section 6
Conditions Precedent to Obligations of
Whole Living and the Shareholders
All obligations of Whole Living 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 WLN 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, WLN shall have performed and complied with all
aspects of this Agreement, unless waived or extended in writing by the parties
hereto. Whole Living shall have been furnished with a certificate, signed by
a duly authorized executive officer of WLN and dated the Closing date, to the
foregoing effect.
6.2 Officers' Certificate. Whole Living and the Shareholders shall have
been furnished with a certificate dated the Closing date and signed by a duly
authorized executive officer of WLN, to the effect that no litigation,
proceeding, investigation, claim, demand or inquiry is pending, or to the best
knowledge of WLN, 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 WLN, 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 WLN, 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
WLN, except as otherwise disclosed to Whole Living.
6.4 Opinion of Counsel of WLN. WLN shall furnish to Whole Living and
the Shareholders an opinion dated as of the Closing date and in form and
substance satisfactory to Whole Living and the Shareholders to the effect
that:
(a) WLN 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 WLN, as presently conducted, including, upon
the consummation hereof, the ownership of all of the issued and outstanding
shares of Whole Living, 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 WLN 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 WLN 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 WLN of any court or before or by any
governmental body which might materially effect the business of WLN or the
financial condition of WLN as a whole and no such claims, suits or legal
proceedings are contemplated by governmental authorities against WLN.
(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 WLN, or any
contract, agreement, indenture, mortgage, or order by which WLN is bound.
(f) This Plan constitutes a legal, valid and binding obligation of
WLN 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 WLN and have been duly authorized by its Board of Directors.
(h) WLN 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. Whole Living 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 WLN is in good standing as a corporation in the State
of Nevada.
6.6 Other Items. Whole Living and the Shareholders shall have received
such further documents, certifications or instruments relating to the
transactions contemplated hereby as Whole Living and the Shareholders may
reasonably request.
Section 7
Conditions Precedent to Obligations of WLN
All obligations of WLN 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 Whole Living 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, WLN shall have
performed and complied with all aspects of this Agreement, unless waived or
extended in writing by the parties hereto. WLN shall have been furnished with
a certificate, signed by a duly authorized executive officer of Whole Living
and dated the Closing date, to the foregoing effect.
7.2 Officers' Certificate. WLN shall have been furnished with a
certificate dated the Closing date and signed by a duly authorized executive
officer of Whole Living, to the effect that no litigation, proceeding,
investigation, claim, deed, or inquiry is pending, or to the best knowledge of
Whole Living, 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 Whole Living, 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 WLN, 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
Whole Living, except as otherwise disclosed to WLN.
7.4 Good Standing. WLN shall have received a Certificate of Good
Standing from the State of Utah, dated within sixty (60) days prior to
Closing, but in no event later than ten days subsequent to the execution
hereof certifying that Whole Living is in good standing as a corporation in
the State of Utah.
7.5 Dissenters' Rights Waived. Shareholders representing at one hundred
percent (100%) of the issued and outstanding shares of Whole Living, and each
of them, have agreed and hereby waive any dissenters' rights, if any, under
the laws of the State of Utah in regards to any objection to this Plan as
outlined herein and otherwise consent to and agree and authorize the execution
and consummation of the within Plan in accordance to the terms and conditions
of this Plan by the management of Whole Living.
7.6 Other Items. WLN shall have received such further documents,
certifications or instruments relating to the transactions contemplated hereby
as WLN may reasonably request.
7.7 Execution of Investment Letter. The Shareholders shall have
executed and delivered copies of Exhibit B to WLN.
Section 8
Termination
8.1 Termination by Whole Living or the Shareholders. This Plan may be
terminated at any time prior to the Closing date by action of Whole Living or
the Shareholders, if WLN 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 WLN. This Plan may be terminated at any time prior
to the Closing date by action of WLN if Whole Living 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 WLN, expressed by action of its Board of Directors,
Whole Living 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 Xxxxxxx 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 WLN 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.
10.2 Payments of Costs and Fees. WLN and Whole Living 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, Whole Living and the
Shareholders shall cause to have promptly prepared and disseminated a Whole
Living 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 WLN's 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 Whole Living, Inc. of Nevada: Whole Living, Inc.
000 Xxxxx 000 Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
With a copy to: Xxxxxx X. Xxxxxxx
000 Xxxxx 000 Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
If to Whole Living: Whole Living, Inc.
000 Xxxxx XX 000
Xxxxx, Xxxx 00000
With a copy to: Xxxxxxx Xxxx
0000 Xxxxx Xxxxxxxxxx Xxx.
Xxxxx, Xxxx
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 WLN, Whole
Living 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 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)(A) of the Internal Revenue Code of 1986, as amended. Whole
Living and WLN 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.
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.
WHOLE LIVING, INC., a Nevada corporation
Attest:
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxxxxx
------------------ --------------------
Its President
WHOLE LIVING, INC., a Utah corporation
Attest:
/s/ Xxxx Xxxxxxxx By: /s/ Xxx Xxxxxxxx
----------------- ----------------
Its President
SHAREHOLDERS:
Attest:
/s/ Xxx Xxxxxxxx By: /s/ Xxxx Xxxxxxxx
---------------- -----------------
Xxxx Xxxxxxxx
Attest:
/s/ Xxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxxx III
----------------- ---------------------
Xxxxx Xxxxxx III
Attest:
/s/ Xxxx Xxxxxxxx By: /s/ Xxx Xxxxxxxx
----------------- ----------------
Xxx Xxxxxxxx
