EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization is entered into effective as of
this 23rd day of February, 1998, by and among Laraca International, Inc., a
Nevada corporation, (hereinafter "Acquiror") . New Mexico Mortgage Company,
Inc., a New Mexico corporation (hereinafter "Acquiree"); and all of
the shareholders (hereinafter referred to as "Acquiree Stockholders").
RECITAL:
Acquiree Stockholders own all of the issued and outstanding capital stock
of Acquiree. Acquiror desires to acquire all (but not less than 80%) of the
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issued and outstanding common voting stock of Acquiree, making Acquiree a
wholly-owned subsidiary of Acquiror, and Acquiree Stockholders desire to make an
exchange of all of their common voting shares of Acquiree solely for voting
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shares of Acquiror's common stock to be exchanged as set out herein with said
Acquiree Stockholders.
NOW, THEREFORE, for the mutual consideration set out herein, the parties
agree as follows:
AGREEMENT
1. Plan of Reorganization. Acquiree Stockholders are the owners of all
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of the issued and outstanding common voting stock of Acquiree. A list of
Acquiree stockholders and their ownership of Acquiree Shares is attached hereto
as Exhibit "A". It is the intention of the parties hereto that all (but not less
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than 80%)
of the issued and outstanding shares of common voting stock of Acquiree
("Acquiree Shares") shall be acquired by Acquiror in exchange solely for
Acquiror voting common stock. It is the intention of the parties hereto that
this transaction qualify as a tax-free reorganization under Section 368(a)(1)(B)
of the Internal Revenue Code of 1986, as amended, and related sections
thereunder.
2. Exchange of Shares. Acquiror and Acquiree Stockholders agree that all
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(but not less than 80%) of the issued and outstanding Acquiree Shares shall be
exchanged with Acquiror for 2,100,000 shares of voting common stock as described
on Exhibit "A" attached hereto ("Acquiror Shares"). Acquiror Shares will, on the
Closing Date, as hereafter defined, be delivered to Acquiree Stockholders in
exchange for their Acquiree Shares. Acquiree Stockholders agree that they will
hold the Acquiror Shares for investment purposes and not for further public
distribution without registration under applicable securities laws or pursuant
to an available exemption therefrom.
3. Delivery of Shares. On the Closing Date, Acquiree Stockholders will
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deliver certificates representing their Acquiree Shares duly endorsed so as to
make Acquiror the sole owner thereof, free and clear of all claims and
encumbrances; and on such Closing Date, delivery of the Acquiror Shares, which
will
be appropriately restricted as to transfer, will be made to Acquiree
Stockholders as set forth herein.
4. Representations of Acquiree. Acquiree hereby represents and warrants
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that, effective this date and the Closing Date, the representations listed below
are true and correct.
(a) Acquiree Stockholders are the sole record and beneficial owners of
the issued and outstanding shares of common stock of Acquiree;
(b) The Acquiree Shares constitute validly authorized and issued
common voting shares of Acquiree common stock, fully-paid and
nonassessable.
(c) Audited financial statements dated as of December 31, 1996 of
Acquiree together with unaudited financial statements dated as of October
31, 1997 of Acquiree ("Acquiree Financial Statements") as delivered or to
be delivered to Acquiror, are complete, accurate and fairly present the
financial condition of Acquiree as of the date(s) thereof and the results
of its operations for the period(s) covered.
At Closing there shall be no material liabilities, either fixed or
contingent, not reflected in the Acquiree Financial Statements other than
contracts or obligations in the ordinary and usual course of business; and
no such contracts or obligations in the usual course of business
constitute liens or other liabilities which, if disclosed, would materially
alter the financial condition of Acquiree as reflected in such financial
statements unless otherwise disclosed in writing to Acquiror.
(d) Acquiree is not involved in any pending litigation or governmental
investigation or proceeding not reflected in such Acquiree Financial Statements,
or otherwise previously disclosed in writing to Acquiror and, to the best
knowledge of Acquiree, no litigation, claims, assessments, or governmental
investigation or proceeding is threatened against Acquiree.
(e) As of the Closing Date, Acquiree will be in good standing in its state
of incorporation, and will be in good standing and duly qualified to do business
in each state where required to be so qualified except where the failure to so
qualify would not have a material adverse effect on the business of Acquiree.
(f) Acquiree has filed all governmental, tax or related returns and reports
due or required to be filed and has paid or accrued all taxes or assessments
which have become due as of closing or has filed extensions with regard thereto.
(g) Except as disclosed on any Exhibit, Acquiree has not materially
breached any agreement to which it is a party.
(h) Acquiree has no subsidiary corporations other than as previously
disclosed in writing to Acquiror.
(i) The corporate financial records, minute books, and other corporate
documents and records of Acquiree are to be reasonably available to present
management of Acquiror prior to the Closing Date.
(j) The execution of this Agreement will not materially violate or breach
any agreement, contract, or commitment to which Acquiree or Acquiree
Stockholders are a party and has been duly authorized by all appropriate and
necessary action.
(k) The authorized capitalization of Acquiree is as set forth in the
Acquiree Financial Statements. Acquiree has only the capital stock authorized as
set forth in said Acquiree Financial Statements and all outstanding shares have
been duly authorized, validly issued and are fully paid and nonassessable with
no personal liability attaching to the ownership thereof. There are no
outstanding convertible securities, warrants or options which may cause
authorized but unissued shares to be issued to any person.
5. Representations of Acquiree Stockholders.
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(a) Acquiree Stockholders hereby represent and warrant that the
Acquiree Shares are presently (and will be at the Closing) free from
claims, liens, or other encumbrances, and at the Closing Date, Acquiree
Stockholders will have good title and the unqualified right to transfer and
dispose of Acquiree Shares.
(b) Acquiree Stockholders hereby represent that all representations
and warranties made herein by Acquiree are true to the best knowledge and
information of said Acquiree Stockholders.
6. Representations of Acquiror. Acquiror hereby represents and warrants
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as follows:
(a) As of the Closing Date, the Acquiror shares to be delivered to the
Acquiree Stockholders will be duly authorized and will constitute valid and
legally issued shares of common stock of Acquiror, fully-paid and
nonassessable, and the common stock will be legally equivalent in all
respects to the common stock of Acquiror issued and outstanding as of the
date hereof.
(b) The officers of Acquiror are duly authorized to execute this
Agreement and have taken all action required by law, applicable agreements
and governing corporate instruments to properly and legally execute this
Agreement. The execution hereof and performance hereunder will not
violate the provisions of Acquiror's Articles of Incorporation or By-laws
and will not constitute a material breach of any agreement to which
Acquiror is a party.
(c) Acquiror has delivered its audited April 30, 1997 financial
statements, ("Acquiror Financial Statements"), and at closing shall deliver
all of its financial records to persons appointed as new management of
Acquiror. Acquiror Financial Statements, are presently and at closing shall
be, true, correct, complete and accurate; there are not presently and at
closing there shall be no liabilities, either fixed or contingent, not
reflected in such financial statements. Acquiror Financial Statements
fairly and accurately reflect the financial condition of the Acquiror as of
the dates thereof and the results of operations for the periods reflected
therein, except as otherwise disclosed herein. Such statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, except as otherwise stated therein.
(d) Since the date of the Acquiror Financial Statements there shall
not have been, and as of the Closing Date there shall not be, any material
adverse changes in the financial position of Acquiror, except changes
arising in the ordinary course of business, which changes shall in no event
materially and adversely affect the financial
condition of the Acquiror. However, the financial position of Acquiror
shall change to the extent there are costs incurred by Acquiror in
connection with this reorganization and the closing thereof. Acquiror shall
have no liabilities or debts as of the Closing Date.
(e) Acquiror is not involved in any pending litigation, claims, or
governmental investigation or proceeding not reflected in such financial
statements or otherwise disclosed in writing to Acquiree and Acquiree
Stockholders and there are no lawsuits, claims, assessments,
investigations, or similar matters, to the best knowledge of Acquiror,
threatened or contemplated against Acquiror or its assets.
(f) As of the Closing Date and the date hereof Acquiror is duly
organized, validly existing and in good standing under the laws of the
State of Nevada. It has the corporate power to own its property and to
carry on its business as now being conducted and is duly qualified to do
business in any jurisdiction where so required except where the failure to
so qualify would not have a material adverse effect on the business of
Acquiree.
(g) Acquiror has filed all federal, state, county and local income,
excise, property and other tax returns, forms, or reports, which are due or
required to be filed by it
prior to the date hereof and has paid or made adequate provision for the
payment of all taxes, fees, or assessments which have or may become due
pursuant to such returns or pursuant to any assessments received.
(h) Acquiror has not breached, nor is there any pending or threatened
claims that Acquiror has breached, any of the terms or conditions of any
agreements, contracts or commitments to which it is a party or is bound and
the execution and performance hereof will not violate any provisions of
applicable law of any agreement to which Acquiror is subject.
(i) As of the Closing Date, the authorized capitalization of Acquiror
shall be as disclosed in Acquiror Financial Statements, except as otherwise
disclosed or provided for herein.
All outstanding shares of Acquiror have been duly authorized, validly
issued, and fully-paid and there are no outstanding or presently authorized
securities, warrants, options or related commitments on behalf of the
Acquiror, of any nature not reflected in Acquiror Financial Statements or
described herein.
(j) Since the date of the Acquiror Financial Statements, Acquiror has
agreed to issue a total of 4,100,000 shares of its common stock to several
investors in
consideration for the aggregate payment of the investors of approximately
$2,000,000 in securities recently received by Acquiror. Upon issuance of
the 4,100,000 shares, Acquiror will then have 4,900,000 shares of its
common stock issued and outstanding (prior to and without giving effect to
the additional 2,100,000 shares to be issued to Acquiree shareholders
pursuant to this Agreement).
(k) Acquiror has no subsidiary corporation.
(l) The shares of restricted Acquiror Shares to be issued to Acquiree
Stockholders at the time of Closing will be validly issued, nonassessable
and fully-paid under Nevada corporation law and will be issued in a
nonpublic or private offering transaction in compliance with all federal
and state securities laws.
(m) At the date of this Agreement, Acquiror has, and at the Closing
Date it will have, disclosed all events, conditions and facts materially
affecting the business of Acquiror. Acquiror has not now and will not have,
at the Closing Date, withheld disclosure of any such events, conditions,
and facts which it has knowledge of, or has reasonable grounds to know, may
materially affect the business of Acquiror.
(n) The corporate financial records, minute books, and other documents
and records of Acquiror are to be available
to Acquiree prior to the closing Date and turned over to newly appointed
Management in their entirety at Closing.
(o) Acquiror is a public company and represents that it has no
existing or threatened liabilities, claims, lawsuits, or, to the best
knowledge of Acquiror, basis for the same, with respect to its original
stock issuance to its founders, its public offering, or any other dealings
with its Stockholders, the public, brokers, the Securities and Exchange
Commission, state agencies or other persons. This includes matters relating
to state or federal securities laws as well as general common law or state
corporation law principles.
(p) This Agreement is enforceable in accordance with its terms.
7. Closing Date. The Closing Date herein referred to shall be upon such
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date as the parties hereto may mutually agree upon but shall be held on or prior
to March 6, 1998 unless mutually agreed to be held at a later date. At the
Closing, Acquiree Stockholders will be deemed to have accepted delivery of the
certificates of Acquiror Shares issued in their respective names, and in
connection therewith will make delivery of their Acquiree Shares to Acquiror.
Certain exhibits, etc. may be delivered subsequent to the Closing Date upon the
mutual agreement of the parties hereto.
8. Conditions Precedent to the Obligations of Acquiree and Acquiree
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Stockholders. All obligations of Acquiree and Acquiree Stockholders under this
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Agreement are subject to the fulfillment, prior to or as of the Closing Date, of
each of the following conditions:
(a) The representations and warranties by or on behalf of Acquiror
contained in this Agreement or in any certificate or document delivered to
Acquiree and Acquiree Stockholders pursuant to the provisions hereof shall
be true in all material respects at and as of the time of Closing as though
such representations and warranties were made at and as of such time.
(b) Acquiror shall have performed and complied with all covenants,
agreements, and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing on the Closing Date.
(c) The present Directors of Acquiror shall cause the appointment of
the following Acquiree Stockholder's nominees to the Board of Directors of
Acquiror: Xxx Xxxx, Xxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxx Xxxxxxxxx, Xxxxxxx
Xxxxxxx, Xxxx Xxxxxx and Xxxxxx Xxxxxxxxx. Acquiror Management,
constituting all officers and directors of Acquiror, shall resign as the
existing officers and directors of Acquiror, as of the Closing.
(d) All instruments and documents delivered to Acquiree Stockholders
pursuant to the provisions hereof shall be reasonably satisfactory to legal
counsel for Acquiree Stockholders.
9. Conditions Precedent to the Obligations of Acquiror. All obligations
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of Acquiror under this Agreement are subject to the fulfillment, prior to or at
the Closing on the Closing Date, of each of the following conditions:
(a) the representations and warranties by Acquiree and Acquiree
Stockholders contained in this Agreement or in any certificate or document
delivered to Acquiror pursuant to the provisions hereof shall be true at
and as of the time of Closing as though such representations and warranties
were made at and as of such time.
(b) Acquiree and Acquiree Stockholders shall have performed and
complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by them prior to or at the
Closing; including the delivery of the stock of Acquiree being acquired
hereunder.
(c) Acquiree Stockholders shall deliver to Acquiror a letter commonly
known as an "investment letter" agreeing that the Acquiror Shares are being
acquired for investment
purposes. The form of said letter is attached hereto as Exhibit "B".
10. Indemnification. Within the period provided in paragraph 11 herein and
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in accordance with the terms of that paragraph, Acquiree (together with Acquiree
shareholders) and Acquiror shall indemnify and hold harmless each other at all
times after the date of this Agreement against and in respect of any liability,
damage or deficiency, all actions, suits, proceedings, demands, assessments,
judgments, costs and expenses including attorney's fees incident to any of the
foregoing, resulting from any misrepresentations, breach of covenant or warranty
or nonfulfillment of any agreement on the part of such party under this
Agreement or from any misrepresentation in or omission from any certificate
furnished or to be furnished to a party hereunder.
11. Nature and Survival of Representations. All representations,
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warranties and covenants made by any party in this Agreement shall survive the
Closing hereunder and the consummation of the transactions contemplated hereby
for two years from the date hereof. All of the parties hereto are executing and
carrying out the provisions of this Agreement in reliance solely on the
representations, warranties and covenants and agreements contained in this
Agreement or at the Closing of the transactions herein provided for and not upon
any
investigation upon which it might have made or any representations, warranty,
agreement, promise or information, written or oral, made by the other party or
any other person other than as specifically set forth herein.
12. Documents at Closing. At the Closing, the following transactions shall
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occur, all of such transactions being deemed to occur simultaneously:
(a) Acquiree Stockholders will deliver, or cause to be delivered, to
Acquiror the following:
(1) stock certificates for the shares of Acquiree Stock being
exchanged hereunder, duly endorsed in blank.
(2) a certificate executed by certain principal Acquiree
Stockholders to the effect that all representations and warranties
made by Acquiree and Acquiree Stockholders under this Agreement are
true and correct as of the Closing, the same as though originally
given to Acquiror on said date;
(3) a certificate from the Secretary of State of its incorporation
dated at or about the date of the Closing to the effect that Acquiree
is in good standing under the laws of said State;
(4) an investment letter from the Acquiree Stockholders;
(5) such other instruments, documents and certificates, if any, as
are required to be delivered pursuant to the provisions of this
Agreement.
(b) Acquiror will deliver or cause to be delivered:
(1) stock certificates representing 2,100,000 shares of Acquiror
Common Stock issued in full consideration of the exchange as described
herein:
(2) a certificate of the President and Secretary of Acquiror to
the effect that all representations and warranties of Acquiror made
under this Agreement are reaffirmed on the Closing Date, the same as
though originally given to Acquiree and Acquiree Stockholders on said
date;
(3) certified copies of resolutions by Acquiror's Board of
Directors, including resignations of the current Acquiror officers and
directors, and resolutions of Stockholders authorizing this
transaction;
(4) a Certificate from the Secretary of State of Acquiror's state
of incorporation dated at or about the date of Closing that Acquiror
is in good standing under the laws of said State;
(5) all corporate records of Acquiror:
(6) such other instruments and documents as are required to be
delivered pursuant to the provisions of this Agreement, including the
turning over of control of corporate assets of Acquiror.
13. Miscellaneous.
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(a) Further Assurances. At any time, and from time to time, after the
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effective 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 this Agreement.
(b) Waiver. Any failure on the part of any party hereto to comply with
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any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
(c) Brokers. Neither party has employed any brokers or finders with
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regard to this Agreement unless otherwise described in writing to all
parties hereto.
(d) Notices. All notices and other communications hereunder shall be
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in writing and shall be deemed to have been given if delivered in person or
sent by prepaid first class registered or certified mail, return receipt
requested.
(e) Headings. The section and subsection headings in this Agreement
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are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in two
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or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(g) Binding Effect. This Agreement shall be binding upon the parties
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hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
(h) Entire Aqreement. This Agreement is the entire agreement of the
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parties covering everything agreed upon or understood in the transaction.
There are no oral promises, conditions, representations, understandings,
interpretations or terms of any kind as conditions or inducements to the
execution hereof.
(i) Time. Time is of the essence.
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(j) Severability. If any part of this Agreement is deemed to be
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unenforceable the balance of the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Agreement
the day and year first above written.
LARACA INTERNATIONAL, INC.
By /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx, President
NEW MEXICO MORTGAGE COMPANY, INC.
By
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Xxx Xxxx, President
STOCKHOLDERS OF NEW MEXICO MORTGAGE
COMPANY, INC.
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Xxx Xxxx
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Xxxxx X. Xxxx
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
LARACA INTERNATIONAL, INC.
By
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Xxxxx Xxxxxxx, President
NEW MEXICO MORTGAGE COMPANY, INC.
By /s/ Xxx Xxxx
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Xxx Xxxx, President
STOCKHOLDERS OF NEW MEXICO MORTGAGE
COMPANY, INC.
/s/ Xxx Xxxx
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Xxx Xxxx
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
EXHIBIT "A"
LIST OF ACQUIREE SHAREHOLDERS
Shares of
Shares of Acquiror
Acquiree To Be
Name and Address Owned Issued
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Xxx Xxxx 1,000 2,097,902 Common
0000 Xxxxxxx XX, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Xxxxx X. Xxxx 1 2,098 Common
0000 Xxxxxxx XX, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Total: 2,100,000
Exhibit "B"
INVESTMENT LETTER
TO THE BOARD OF DIRECTORS OF LARACA INTERNATIONAL, INC.
The undersigned hereby represents to the Laraca International, Inc. (the
"Company"), that (1) the shares of the Company's common stock (the "securities")
which are being acquired by the undersigned are being acquired for his own
account and for investment and not with a view to the public resale or
distribution thereof: (2) the undersigned will not sell, transfer or otherwise
dispose of the securities except in compliance with the Securities Act of 1933,
as amended (the "Act"); and (3) he is aware that the Securities are "restricted
securities" as that term is defined in Rule 144 or the General Rules and
Regulations under the Act.
The undersigned acknowledges that he has been furnished with disclosure
documents which, among other things, include the Company's Broker/Dealer
Information Statement pursuant to Rule 15c-2-11 (and all other exhibits thereto)
and audited financial statements of the Company as of April 30, 1997.
The undersigned further acknowledges that he has had an opportunity to ask
questions of and receive answers from duly designated representatives of the
Company concerning the terms and conditions pursuant to which the Securities are
being offered.
The undersigned acknowledges that he has been afforded an opportunity to
examine such documents and other information which he has requested for the
purpose of verifying the information set forth in the documents referred to
above.
The undersigned acknowledges and understands that the Securities are
unregistered and must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
The undersigned further acknowledges that he is fully aware of the
applicable limitations on the resale of the Securities. These restrictions for
the most part are set forth in Rule 144. The Rule permits sales of "restricted
securities" upon compliance with the requirements of such Rule. If the Rule is
available to the undersigned, the undersigned may make only routine sales of
securities, in limited amounts, in accordance with the terms and conditions of
that Rule.
