EXHIBIT 2.1
PLAN AND AGREEMENT OF REORGANIZATION
BETWEEN
SPECTRUM RESOURCES, INC.
(a Nevada corporation)
AND
FAMOUS FIXINS, INC.
(a New York corporation)
This Plan and Agreement of Reorganization is entered into this 28th day
of May, 1998, by and between Spectrum Resources, Inc., a Nevada corporation,
hereinafter referred to as "SPECTRUM", ( the corporate name which will be
changed by way of an Amendment to its Articles of Incorporation, to Famous
Fixins Inc.) and Famous Fixins, Inc., a New York corporation and its
shareholders, hereinafter referred to as "Famous Fixins".
This Plan or Reorganization is within the meaning of Section 368
(a)(1)(B) of the Internal Revenue Code of 1986, as amended. SPECTRUM will
acquire from the shareholders of Famous Fixins, substantially all of the
issued and outstanding shares of Famous Fixins in return for FIVE MILLION
FOUR HUNDRED AND NINETY FOUR THOUSAND SIX HUNDRED SIXTY TWO (5,494,662)
shares of the authorized but unissued shares of SPECTRUM. SPECTRUM represents
that such shares are and shall, at the closing, represent 90% of all equity
of SPECTRUM, fully diluted, including any and all rights of any kind to any
equity of SPECTRUM. Famous Fixins will then become and operate as a
subsidiary of SPECTRUM.
AGREEMENT
In order to consummate such plan of reorganization, the parties hereto,
in consideration of the mutual agreements and on the basis of the
representations and warranties hereafter set forth, do hereby agree, as
follows:
ARTICLE I
1.01. Transfer of Famous Fixins capital stock and consideration for
transfer: Subject to the terms and conditions of this Agreement,
substantially all of the Famous Fixins shareholders shall have endorsed and
delivered their certificates to Xxxxx Xxxxx, President of Famous Fixins, as
Trustee, prior to the closing date, who shall, at such closing, deliver said
certificates to SPECTRUM in exchange for the stated number of shares of
SPECTRUM as set forth in 1.02 below.
1.02. Consideration for transfer to SPECTRUM: On the closing date,
subject to the terms and conditions of this Agreement, and in full
consideration for the transfer and delivery to SPECTRUM of substantially all
the issued and outstanding shares of Famous Fixins, SPECTRUM shall cause to
be delivered by its transfer agent, 5,494,662 shares of the authorized but
unissued capital stock of SPECTRUM. Said 5,494,662 shares shall be broken
down into individual names and amounts as requested in writing by Xxxxx
Xxxxx, authorized agent for the Famous Fixins shareholders, and when issued,
such shares to be fully paid and nonassessable. Shares shall not be free
trading if they are not at this time registered or covered by any exemption.
Said shares will be restricted in nature and said restriction shall be
reflected on the face of all certificates included in the 5,494,662 shares.
ARTICLE II
2.01. Closing: The time of delivery by Famous Fixins stockholders of
their respective shares as provided in paragraph 1.01 of this Agreement
having already taken place, said shares being held by Xxxxx Xxxxx, as
authorized agent, and the certificate for 5,494,662 shares as authorized by
the Board of Directors of SPECTRUM being in hand for delivery to Xxxxx Xxxxx,
as authorized agent, closing shall be effective with the signing of this
Agreement. For purposes of record, closing shall be effective as of the 28th
day of May, 1998, 5 p.m. New York time, at the offices of Famous Fixins,
Inc., which will become the office of SPECTRUM, located at 000 Xxxx 00xx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000.
ARTICLE III
3.01. Representations and Warranties by Famous Fixins:
(1) Famous Fixins is a corporation duly organized and validly
existing and in good standing under the laws of the State of New York. It
has all requisite corporate power and authority to carry on its business as
now being conducted, to enter into this Agreement and to carry out and
perform the terms and provisions of this Agreement. Famous Fixins is duly
qualified, licensed, or domesticated and in good standing as a foreign
corporation authorized to do business in each jurisdiction wherein the nature
of its activities conducted or the character of its properties make such
qualification, licensing, or domestication necessary.
(2) Famous Fixins is duly and lawfully authorized by its
Articles of Incorporation, to issue the shares of capital stock required by
this Agreement; further, Famous Fixins has no other authorized series or
class of stock. All of the outstanding shares of Famous Fixins's capital
stock have been duly issued.
(3) Famous Fixins has furnished SPECTRUM with an audited Balance
Sheet of Famous Fixins as of December 31, 1997, hereinafter referred to as
the Balance Sheet. Such financial statement presents fairly the financial
condition of Famous Fixins at such date. Specifically, but not by way of
limitation, the Balance Sheet discloses all of the debts, liabilities,
and obligations of any nature (whether absolute, accrued, contingent, or
otherwise, and whether due or to become due) of Famous Fixins at the date
thereof.
(4) Famous Fixins will use its best efforts to obtain prompt
written confirmation of the necessary vote under New York law to approve the
transaction contemplated herein.
3.02 SPECTRUM and its officers represent and warrant to Famous Fixins
and its stockholders as follows:
(1) SPECTRUM is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Nevada.
(2) SPECTRUM's authorized capital stock consists of 25,000,000
shares of common stock, par value $.001. At the close of this Agreement
6,105,180 shares of common stock will be validly issued and outstanding and
no preferred stock will have been issued. This figure reflects the 5,494,662
shares beneficially issued to the shareholders of Famous Fixins.
(3) The execution, delivery, and performance of this Agreement
has been duly authorized by all requisite corporate action. This Agreement
constitutes a valid and binding obligation of SPECTRUM in accordance with its
terms. No provision of the Articles of Incorporation and any amendments
thereto, by-laws and any amendments thereto, or of any contract to which
SPECTRUM is a party or otherwise bound, prevents SPECTRUM from delivering
good title to its shares of such capital stock in the manner contemplated
hereunder.
(4) SPECTRUM has furnished Famous Fixins with an audited
statement prepared by Xxxxxx X. Xxxxxxx, CPA showing the financial position
of the company as of April 30, 1996 and a statement or statements of
management, covering the period from the end of the audit to the present
time, that there are no current assets, and SPECTRUM, its officers and its
agents do not have actual or constructive knowledge of any liablities, nor
are they aware of any liabilities, and that the corporation, and its
predecessor have had no activities in which it could have incurred any
liabilities since 1990, including, but not limited to, any fees owed to
SPECTRUM's attorneys, accountants, transfer agent(s) or any taxes, lawsuits
or arbitrations, or facts that may support a claim against SPECTRUM or its
shareholders.
(5) All of the SPECTRUM common shares to be issued to Famous
Fixins shareholders will, when so issued, be validly issued and outstanding,
fully paid and nonassessable.
(6) Since the April 30, 1996 date of the Xxxxxxx financial
statement, there has not been any material or adverse change in, or event or
condition materially and adversely affecting the condition of SPECTRUM.
(7) SPECTRUM is duly and lawfully authorized by its Articles of
Incorporation to issue the shares of capital stock required by this
Agreement; further, SPECTRUM has no other authorized series or class of
stock. All of the outstanding shares of SPECTRUM's capital stock have been
duly issued. There are no outstanding subscriptions, options, warrants,
calls, contracts, demands, commitments, convertible securities, or other
agreements or arrangements of any character or nature whatever under which
SPECTRUM is or may be obligated to issue or purchase shares of its capital
stock.
(8) Spectrum shall furnish an opinion letter from Xxxxxxx
Xxxxxxxxxx, attorney for the corporation, opining as to those shares which
are currently issued and outstanding are free trading shares pursuant to the
applicable securities laws and the Rules and Regulations of the Securities
and Exchange Commission.
ARTICLE IV
4.01 Famous Fixins covenants that all statements made herein and
hereto are true and correct to the best of its knowledge, and may be relied
upon by SPECTRUM.
4.02. Famous Fixins covenants and warrants that, to the best of its
knowledge, all books, records and financial statements employed or used in
connection with this Agreement are true and correct, and that the right to
examine same has been extended to SPECTRUM and its representatives.
4.03. Federal Securities Act - Unregistered Stock:
(1) Each Famous Fixins stockholder acknowledges that the shares
of SPECTRUM common stock to be delivered to him pursuant to this Agreement
have not and are not registered under the 1933 Act, as amended, and that
accordingly such stock is not fully transferable except as permitted under
various exemptions contained in the 1933 Act, and the rules of the Securities
and Exchange Commission interpreting said Act. The provisions contained in
this paragraph are intended to ensure compliance with the 1933 Act, as
amended.
(2) Each Famous Fixins stockholder agrees that, unless such
shares are exempt as described above, the certificates evidencing the shares
he will receive shall contain substantially the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THE SAME ARE
REGISTERED UNDER THE SECURITY ACT OF 1933, OR THE COMPANY RECEIVES AN
OPINION FROM COUNSEL SATISFACTORY TO IT THAT SUCH REGISTRATION IS NOT
REQUIRED FOR SALE OR TRANSFER OR THAT THE SHARES HAVE BEEN LEGALLY SOLD
IN BROKER TRANSACTIONS PURSUANT TO RULE 144 OF THE RULES AND
REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION PROMULGATED UNDER
SECURITY ACT OF 1933."
ARTICLE V
Conditions Precedent:
(1) The aggregate number of shares of the corporation's capital
stock tendered by the Famous Fixins stockholders at the closing shall
constitute substantially all of the issued and outstanding Capital Stock of
Famous Fixins, and, in any event, in excess of ninety five percent (95%) of
such Capital Stock.
(2) SPECTRUM shall make available to Famous Fixins or its
authorized agent(s) such books and records of SPECTRUM as it desires in
furtherance of its due diligence review of SPECTRUM, which shall include, but
not be limited to, all stock ledgers, Board minutes and resolutions,
shareholders minutes and resolutions, contracts, leases, SEC and state
filings, officer's certificates, opinions of counsel, accountant reports,
court filings if any, UCC filings if any and employment agreements.
(3) Prior to the closing date, on a mutually agreeable date,
time and place, the parties shall deliver a list of documents which they
require to be produced at the closing.
ARTICLE VI
6.01 Paragraph and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.02. This Agreement shall be construed under and in accordance with
the laws of the State of New York. Any proceedings, claims or actions of any
kind hereunder, if instituted by or on behalf of SPECTRUM, its successors or
assigns, shall be brought in the courts of the County, City and State of New
York.
6.03. This Agreement shall be binding on and inure to the benefit of
and be enforceable by the Famous Fixins shareholders and SPECTRUM, their
respective heirs, executors, administrators, legal representatives,
successors, and assigns except as otherwise expressly provided herein.
6.04. Should there be any litigation arising from this transaction, the
prevailing party shall be entitled to recover reasonable attorney's fees from
the other party, which fees may be set by the court in the trial of such
action or may be enforced in a separate action brought for that purpose.
These fees shall be in addition to any other relief which may be awarded.
ARTICLE VII
7.01. Resignations: Immediately upon the Closing, Spectrum Resources,
Inc. shall hold a Special Meeting of its Board of Directors, at which time
Xxxxxxx Xxxxxx and Xxxxx Xxxxxxx who are the current officers and all of the
directors of Spectrum Resources, Inc. shall submit their respective
resignations, and at which time Xxxxx Xxxxx, and his slate of officers and
directors shall be appointed in their places.
7.02. Amendment to Articles of Incorporation. Prior to Closing,
Spectrum Resources, Inc. shall have submitted to the Secretary of State of
the State of Nevada, and received a confirmation from said Secretary of State
that the Amendment to the Articles have been approved changing the name of
the corporation from Spectrum Resources, Inc., to Famous Fixins Inc.
IN WITNESS WHEREOF, the parties hereto have executed this Plan and
Agreement of Reorganization on the date first set forth, at New York, New
York.
SPECTRUM RESOURCES, INC.
by: /s/ Xxxxxxx Xxxxxx
-------------------------------
Xxxxxxx Xxxxxx, President
by: /s/ Xxxxx Xxxxxxx
-------------------------------
Xxxxx Xxxxxxx, Secretary
FAMOUS FIXINS, INC.
by: /s/ Xxxxx Xxxxx
-------------------------------
Xxxxx Xxxxx, President
by: /s/ Xxxxx Xxxxx
-------------------------------
Secretary
/s/ Xxxxx Xxxxx
-------------------------------
Xxxxx Xxxxx, as Trustee
for all Shareholders of
Famous Fixins, Inc.
XXXXXXX X. XXXXXXXXXX
ATTORNEY AT LAW
00 XXXXXXXX XXXXXXX
XXXXXXX, XX 00000
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
June 5, 1998
SPECTRUM RESOURCES, INC.
0000 XXXXXXXXX
XXXXXXXXX, XX 00000
Re: Status of Issuance of Shares of Common Stock
Dear Madam or Sir:
I have been requested to provide a letter stating my opinion of the
validity of issuance of the shares of common stock of SPECTRUM RESOURCES,
INC. ("SPECTRUM") issued and outstanding as of May 28, 1998.
As the basis for the opinion expressed below, I have reviewed, among
others, the following documents provided to me by SPECTRUM; as deemed
appropriate, I have discussed various matters related to the opinion with
present and prior management of SPECTRUM:
1. Articles of Incorporation of TINDERBLOCK, INC. in the State of
Utah dated 2-09-84;
2. Bylaws of the Company;
3. Opinion letter dated 11-04-85 rendered by O.Xxxxxx Xxxxxxxx, Esq.;
4. Articles of Incorporation of SPECTRUM, RESOURCES, INC. in the
State of Nevada, dated 07-27-95;
5. Articles of Merger of TINDERBLOCK, INC. into SPECTRUM, dated
07-31-95;
6. Opinion Letter dated 8-15-95 rendered by Xxxx X.Xxxxxxx, Esq.;
7. Minutes of the meeting of the board of directors of SPECTRUM,
dated 10-20-95;
8. Minutes of the meeting of the board of directors of SPECTRUM,
dated 01-09-96;
9. Shareholders List for SPECTRUM, dated May 28, 1998
DISCUSSION
TINDERBLOCK, INC. was incorporated in Utah on February 9, 1984 as Straw
Dog, Inc. The Articles of Incorporation authorized the issuance of a total
of 50,000,000 shares of Common Stock ($0.001 par value). Pursuant to a
registration with the Utah Securities Division effective September 26, 1984,
1,000,000 shares of common stock were sold to the public at a price of $.02
per share. After a name change to TINDERBLOCK, INC. ("TINDERBLOCK") in 0000,
XXXXXXXXXXX was merged into SPECTRUM RESOURCES, INC., a Nevada corporation,
in July 1995, at which time there were 7,666,666 shares of TINDERBLOCK common
stock issued and outstanding. By terms of the Merger Agreement every three
(3) shares of TINDERBLOCK stock were converted into one (1) share of SPECTRUM
stock. On October 20, 1995, the SPECTRUM board of directors approved a one (1)
for ten (10) reverse split of stock, after which there were 255,588
shares of common stock issued and outstanding.
On January 12, 1996, pursuant to a resolution of the board of
directors, SPECTRUM issued 354,930 shares of common stock to Phoenix Pacific
Property Trust as consideration for performance of certain services and
payment of certain costs on behalf of the Company.
On May 28, 1998, as provided in a Reorganization Agreement between
SPECTRUM and Famous Fixins, Inc., a New York corporation and pursuant to a
resolution of the board of directors, SPECTRUM issued 5,494,662 shares of
common stock (the "Famous Fixins Shares") to Xxxxx Xxxxx, Trustee for
Shareholders of Famous Fixins, Inc. Upon consideration of the Reorganization
Agreement, those shares are to be distributed, pro rata, to said shareholders
as consideration for the acquisition by SPECTRUM of all issued and
outstanding shares of Famous Fixins, Inc. common stock.
CONCLUSION
Based on the information reviewed and the applicable statutes and
regulations, it is my opinion that the 610,518 shares of SPECTRUM common
stock which were issued on or before January 12, 1996, were validly issued
and are fully paid and non-assessable. Further, it is my opinion that upon
consummation of the Reorganization Agreement between SPECTRUM and Famous
Fixins and distribution of the 5,494,662 SPECTRUM shares issued in trust on
May 28, 1998, those shares will also be validly issued, fully paid, and non-
assessable.
This letter and the opinions expressed herein are intended for the
information and use of the Company. No other use of this letter may be made
without my prior written consent.
Very truly yours,
/s/ Xxxxxxx Xxxxxxxxxxxx
------------------------
Xxxxxxx X Xxxxxxxxxxxx
CERTIFICATION BY OFFICER
OF
SPECTRUM RESOURCES, INC.
I, Xxxxxxx Xxxxxx, President of Spectrum Resources, Inc., a Nevada
corporation, hereby state:
1. I have been the President of Spectrum Resources, Inc. since January
of 1997.
2. Attached hereto and made a part of this Certificate is an audited
financial statement prepared by Xxxxxx X. Xxxxxxx, C.P.A., the accountant for
the corporation showing that as of April of 1996, the corporation has no
assets nor any liabilities.
3. Since I took over the position of President of Spectrum Resources,
Inc., the sole activity of the corporation has been to find a candidate for
merging into this corporation. Any and all expenses which have been incurred
in this endeavor have not been charged to the corporation and have been
personal expenses which have been advanced by shareholders of the corporation
who would most benefit by the successful completion of such an acquisition.
4. To the best of my knowledge and information, the company has had no
activity, either as Spectrum Resources, Inc. or as its predecessor
Tinderblock, Inc., since 1990.
Executed at Dallas, Texas this 15th day of May, 1998.
/s/ Xxxxxxx Xxxxxx
---------------------------
Xxxxxxx Xxxxxx,President
CERTIFICATION BY OFFICER
OF
SPECTRUM RESOURCES, INC.
I, Xxxx Xxxxxxxx, hereby certify:
(1) I served as President and Director of the corporation from its
incorporation, until Xxxxxxx Xxxxxx took over in January of 1997.
(2) I have reviewed the financial statement prepared by Xxxxxx X.
Xxxxxxx dated as of April 1996, and can certify that the financial statement
relects the position of the company as of that date. In addition, from the
date of the financial statement until Xxxxxxx Xxxxxx took over the position of
President of the corporation, I can attest that the corporation did not
purchase any assets, nor did it incurr any liabilities which would
substantially alter the position of the company as set forth in the financial
statement.
Executed at Sausalito, California, this 26th day of May, 1998.
/s/ Xxxx Xxxxxxxx
---------------------------
Xxxx Xxxxxxxx
