AGREEMENT AND PLAN OF MERGER
BY AND AMONG
BUSINESS ADVANTAGE NO.3, INC.
AND
XXXXXXXXXXXX.XXX, INC.
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER by and between Business Advantage No. 3,
Inc., a Nevada corporation, ("BA3") and Xxxxxxxxxxxx.xxx, Inc., a Cayman Islands
corporation, ("Chineseroots).
WHEREAS, the Boards of Directors of BA3 and Chineseroots deem it
advisable for the mutual benefit of BA3 and Chineseroots and their respective
shareholders that Chineseroots be merged into BA3 (the "Merger"), and have
approved this Agreement and Plan of Merger (the "Agreement"); and
WHEREAS, the Boards of Directors of BA3 and Chineseroots have
unanimously resolved to recommend to their shareholders acceptance of the Merger
contemplated herein.
NOW THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained herein, and for the purpose of setting
forth certain terms and conditions of the Merger, and the mode of carrying the
same into effect, Chineseroots and BA3 hereby agree as follows:
ARTICLE 1
MERGER AND ORGANIZATION
SECTION 1.1 The Merger. As of the Effective Date (as hereinafter
defined), subject to the terms and conditions hereof, Chineseroots shall be
merged with and into BA3 as soon as practicable through BA3's acquisition of
100% of Chineseroots' issued and outstanding shares of common stock in exchange
for shares of common stock of BA3, the surviving entity (the "Surviving
Entity"). Immediately after consummation of the Merger, the Surviving Entity
shall have issued and outstanding 14, 034,000 shares of common stock: 10,034,000
(representing 71.5% of the Surviving Entity) to be held by former Chineseroots
stockholders in proportion to the amount that each of said shareholders
previously held shares of common stock of Chineseroots; and 4,000,000 shares
representing 28.5% of the surviving entity to be held by current BA3
stockholders in the same proportion as currently held shares. BA3 and
Chineseroots are herein sometimes referred to as the "Constituent Corporations."
The Merger is to be done in such a manner as to be tax-free to all parties
involved.
SECTION 1.2. Effect of Merger. The parties agree to the following
provisions with respect to the Merger:
(a) Name of Surviving Corporation. After the Merger and Effective
Date (as defined in Section 1.2(e) hereof), the name of the Surviving Entity
shall become Cybersia Capital Corp.
(b) Articles of Incorporation. The Articles of Incorporation of
BA3 as in effect immediately prior to the Effective Date shall from and after
the Effective Date be and continue to be the Articles of Incorporation of the
Surviving Entity until changed or amended as provided.
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(c) By-Laws. The By-Laws of BA3 as in effect immediately prior to
the Effective Date shall from and after the Effective Date be and continue to be
the By-Laws of the Surviving Entity until changed or amended as provided by law.
(d) Corporate Organization. All of the issued and outstanding
shares of common stock of Chineseroots shall be acquired by BA3. Prior to the
merger 100% of the issued and outstanding common stock of Chineseroots is held
by Cybersia, Inc., a Cayman Islands corporation. The Surviving Entity shall
thenceforth be responsible for all the liabilities and obligations of each of
the Constituent Corporations, with the effect set forth in the appropriate
provisions of Nevada law and the appropriate provisions of Cayman Islands law.
(e) Filing of Articles of Merger and Amendment to Articles of
Association. If this Agreement is duly approved by each of the Constituent
Corporations in accordance with the appropriate provisions of Nevada law and the
appropriate provisions of Cayman Islands law and the respective Articles or
Certificate of Incorporation and By-laws of the Constituent Corporations and not
terminated pursuant to Article 8 hereof, and approved by the shareholders of BA3
as soon as practicable after all other conditions to the Merger set forth in
Article 6 hereof shall have been satisfied or waived, and the closing of this
Agreement (the "Closing") has taken place, the Merger shall be consummated and
Articles of Merger, to which this Agreement shall be appended, shall be filed
with the appropriate Cayman Islands governmental agency and an amendment to
BA3's Articles of Association shall be filed with the Nevada Secretary of State
(the Effective Date). The Closing of this Agreement shall take place at the
offices of Xxxxxxxxx & Xxxxxxxxx, L.L.P., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or at such other time, place or date as the parties may mutually agree.
(f) Further Assurances. If at any time after the Effective Date,
the Surviving Entity shall consider or be advised that any deeds, bills of sale,
assignments or assurances or any other things are necessary, desirable or proper
(a) to vest, perfect or confirm, of record or otherwise, in the Surviving
Entity, its right, title or interest in, to or under any of the rights,
properties or assets of the Constituent Corporations acquired or to be acquired
as a result of the Merger, or (b) otherwise to carry out the purposes of this
Agreement, the Constituent Corporations agree that the Surviving Entity and its
proper officers and directors shall be authorized to execute and deliver, in the
name and on behalf of the Constituent Corporations, all such deeds, bills of
sale, assignments and assurances and do, in the name and on behalf of the
Constituent Corporations, all such other acts and things necessary, desirable or
proper to best, perfect or confirm its right, title or interest in, to or under
any of the rights, properties or assets of the Constituent Corporations acquired
or to be acquired as a result of the Merger and otherwise to carry out the
purposes of this Agreement.
(g) Upon consummation of the Merger, the current officers and
directors of BA3 shall resign, and a minimum of three (3) directors shall be
appointed to the Surviving Entity, which directors shall nominate officers of
the Surviving Entity, subject to shareholder approval. The certificate of
incorporation shall be amended to change the name of Business Advantage No. 3,
Inc. to Cybersia Capital Corp.
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ARTICLE 2
THE MERGER
SECTION 2.1 Conversion of Shares in the Merger.
(a) Issuance of New Shares. On the Effective Date, and upon the
acquisition of 100% of all shares of common stock of Chineseroots, all of which
are currently held by Cybersia, Inc., BA3 shall issue 10,034,000 shares of its
authorized common stock to former Chineseroots shareholders, in the same
proportion said shareholders held shares of common stock of Chineseroots at the
time of the merger. BA3 shareholders shall continue to hold 4,000,000 shares of
BA3 common stock. Thus, after the Effective Date, the Surviving Entity shall
have 14,034,000 shares of common stock issued and outstanding.
SECTION 2.2 Further Transfer of Stock. The shareholders of
Chineseroots may distribute their shares of the Surviving Entity as it
determines in accordance with any and all applicable state and federal
securities laws, and shall provide counsel to BA3 with a list at the time of
closing for delivery to the transfer agent.
SECTION 2.3 Deliberately left blank.
SECTION 2.4 Surrender of Certificates. (a) BA3 has designated Florida
Atlantic Stock Transfer, Inc. as Transfer Agent (the "Transfer Agent")
hereunder. Immediately following the closing, the Transfer Agent shall have
mailed and/or made available to each BA3 shareholder and each former
Chineseroots shareholder notice and letter of transmittal advising such holder
of the effectiveness of the merger and the procedure for surrendering
Chineseroots stock to the Transfer Agent. Chineseroots shall immediately turn in
Chineseroots common stock certificates to the Transfer Agent. Upon the surrender
to the Transfer Agent of such certificates, together with a letter of
transmittal, duly executed and completed in accordance with the instructions
thereon, the Transfer Agent shall promptly convert and issue an aggregate of
10,034,000 shares of BA3 common stock to the former Chineseroots shareholders in
exchange for 100% of the authorized and outstanding shares of Chineseroots.
Until so surrendered and exchanged, each certificate theretofore representing
shares shall represent in the case of Dissenter's Shares, the right to seek
appraisal pursuant to the laws of the state of incorporation of the Constituent
Corporation in which the holder owns stock (if such right has been perfected).
SECTION 2.5 Transfer Agent. Prior to the Offering, BA3 shall have
made such arrangements to insure that an adequate number of its shares of common
stock have been deposited with the Transfer Agent as necessary in sufficient
time to permit prompt distribution against surrender of Chineseroots stock
certificates as provided hereunder.
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ARTICLE 3
ADDITIONAL AGREEMENTS IN CONNECTION WITH THE MERGER
SECTION 3.1 Confidentiality; Inconsistent activities. Unless and
until this Agreement has been terminated in accordance with its terms , neither
Chineseroots nor BA3 will (i) solicit or encourage, directly or indirectly, any
inquiries or proposals to acquire any shares of capital stock of Chineseroots or
BA3 or any significant portion of the total assets of either Constituent
Corporation or any subsidiary or division of either of the Constituent
Corporations (whether by merger, purchase of assets, tender offer or other
similar transaction); (ii) afford any third party which may be considering the
acquisition of any shares of capital stock of Chineseroots or BA3 or any
significant portion of the total assets of either Constituent Corporation,
access to the properties, books or records of either Constituent Corporation
except as required by mandatory provisions of law; or (iii) enter into any
discussions or negotiations for, or enter into any agreement which provides for,
the sale of any shares of capital stock of Chineseroots or BA3 or any
significant portion of the total assets of Chineseroots or BA3 to a person other
than in connection with the transactions contemplated herein, except that,
pursuant to a stock purchase agreement, the majority shareholders of BA3 may
sell a total of 2,600,000 shares of BA3 common stock to third parties.
SECTION 3.2 Reasonable Efforts. Subject to the terms and conditions
hereof, each of the parties hereto agrees to use any and all reasonable efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary to satisfy the other conditions of closing set forth herein.
SECTION 3.3 Conduct of Business by Each of the Constituent
Corporations Pending the Merger. Chineseroots and BA3 covenant and agree that,
prior to the Effective Date, unless Chineseroots or BA3, respectively, shall
otherwise agree in writing and except as contemplated by this Agreement:
(a) The business of each of the Constituent Corporations shall be
conducted only in the ordinary and usual course and consistent with its past
practice, and except in the ordinary course of business neither Chineseroots nor
BA3 shall purchase or sell (or enter into any agreement to so purchase or sell)
any properties or assets or make any other changes in the operations of
Chineseroots or BA3, respectively, taken as a whole;
(b) Neither Constituent Corporation shall (i) amend its Articles
of Incorporation or By-Laws, (ii) change the number of authorized or outstanding
shares of its capital stock, except as set forth in Section 2 hereof, or (iii)
declare, set aside or pay any dividend or other distribution or payment in cash,
stock or property, except as designated herein;
(c) Neither Constituent Corporation shall (i) issue, grant, sell
or pledge or agree or propose to issue, grant, sell or pledge any shares of, or
rights of any kind to acquire any shares of, its capital stock (ii) incur any
indebtedness other than in the ordinary course of business, (iii) acquire
directly or indirectly by redemption or otherwise any shares of its capital
stock of any class or (iv) enter into or modify any contact, agreement,
commitment or arrangement with respect to any of the foregoing, except as stated
in Section 2.1 of this Agreement and in Exhibit A attached hereto.
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(d) Each Constituent Corporation shall use its best efforts to
preserve intact its business organizations, to keep available the services of it
and its current officers and key employees, and to preserve the good will of
those having business relationships with it.
(e) Chineseroots and BA3 will not (i) increase the compensation
payable or to become payable by it to any of its officers or directors, (ii)
make any payment or provision with respect to any bonus, profit sharing, stock
option, stock purchase, employee stock ownership, pension, retirement, deferred
compensation, employment or other payment plan, agreement or arrangement for the
benefit of its employees, (iii) grant any stock options or stock appreciation
rights or permit the exercise of any stock appreciation right where the exercise
of such right is subject to its discretion, (iv) make any change in the
compensation to be received by any of its officers, or adopt, or amend to
increase compensation or benefits payable under, any collective bargaining,
bonus, profit sharing, compensation, stock option, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund or arrangement for the benefit of employees, (v) enter into any
agreement with respect to termination or severance pay, or any employment
agreement or other contract or arrangement with any officer or director or
employee of Chineseroots or BA3, respectively, with respect to the performance
of personal services that is not terminable without liability by it on thirty
days' notice or less, (vi) increase benefits payable under its current severance
or termination, pay agreements or policies or (vii) make any loan or advance to,
or enter into any written contract, lease or commitment with, any of its
officers or directors;
(f) Neither Chineseroots nor BA3 shall assume, guarantee, endorse
or otherwise become responsible for the obligations of any other individual,
firm or corporation or make any loans or advances to any individual, firm or
corporation;
(g) Neither Chineseroots nor BA3 shall make any investment of a
capital nature either by purchase of stock or securities, contributions to
capital, property transfers or otherwise, or by the purchase of any property or
assets of any other individual, firm or corporation;
(h) Neither Chineseroots nor BA3 shall reduce its cash or short
term investments or their equivalent, other than to meet cash needs arising in
the ordinary course of business, consistent with past practices, or in
performing its obligations under this Agreement; and
(i) Neither Chineseroots nor BA3 shall enter into an agreement to
do any of the things described in clauses (a), (b), (c), (e), (f), (g) and (h).
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SECTION 3.4 Access and Information.
(a) Chineseroots shall afford to BA3 and its accountants, counsel
and other representatives full access, during normal business hours throughout
the period prior to the Effective Date, to all of the properties, books,
contracts, commitments and records (including but not limited to tax returns) of
Chineseroots and, during such period, Chineseroots shall furnish promptly to BA3
(i) a copy of each report, schedule and other document filed or received by it
pursuant to the requirements of federal or state securities laws, and (ii) all
other information concerning the business, properties and personnel of
Chineseroots that may reasonably be requested. In the event of the termination
of this Agreement, BA3 will, and will cause its representatives to, deliver to
Chineseroots all documents, work papers and other material, and all copies
thereof, obtained by it or on its behalf from Chineseroots as a result of this
Agreement or in connection herewith, whether so obtained before or after the
execution hereof, and will hold in confidence all confidential information, and
will not use any such confidential information, until such time as such
information is otherwise publicly available or as it is advised by counsel that
any such information or document is required by law to be disclosed. If this
Agreement is terminated, BA3 will deliver to Chineseroots all documents so
obtained by it.
(b) BA3 shall afford to Chineseroots and its accountants, counsel
and other representatives full access, during normal business hours throughout
the period prior to the Effective Date, to all of the properties, books,
contracts, commitments and records (including but not limited to tax returns) of
BA3 and, during such period, BA3 shall furnish promptly to Chineseroots (i) a
copy of each report, schedule and other document filed or received by it
pursuant to the requirements of federal or state securities laws, and (ii) all
other information concerning the business, properties and personnel of BA3 that
may reasonably be requested. In the event of the termination of this Agreement,
Chineseroots will, and will cause its representatives to, deliver to BA3 all
documents, work papers and other material, and all copies thereof, obtained by
it or on its behalf from BA3 as a result of this Agreement or in connection
herewith, whether so obtained before or after the execution hereof, and will
hold in confidence all confidential information, and will not use any such
confidential information, until such time as such information is otherwise
publicly available or as it is advised by counsel that any such information or
document is required by law to be disclosed. If this Agreement is terminated,
Chineseroots will deliver to BA3 all documents so obtained by it.
SECTION 3.5 Notice of Actions and Proceedings. Chineseroots shall
promptly notify BA3, and BA3 shall promptly notify Chineseroots of any claims,
actions, proceedings or investigations commenced or, to the best of its
knowledge, threatened, involving or affecting Chineseroots or BA3 or any of
their property or assets, or, to the best of its knowledge, against any
employee, consultant, director, officer or shareholder, in his, her or its
capacity as such, of Chineseroots or BA3 which, if pending on the date hereof,
would have been required to have been disclosed in writing pursuant to Section
4.4 hereof or which relates to the consummation of the Merger or the
transactions contemplated hereby.
SECTION 3.6 Notification of Other Certain Matters. Chineseroots shall
give prompt notice to BA3, and BA3 shall give prompt notice to Chineseroots
of:
(a) any notice of, or other communication relating to, a
default or event which, with notice or lapse of time or both, would become a
default, received by Chineseroots or BA3 subsequent to the date of this
Agreement and prior to the Effective Date, under any agreement, indenture or
instrument material to the financial condition, properties, business or results
of operations of Chineseroots or BA3 taken as a whole to which Chineseroots or
BA3 is a party or is subject;
(b) any notice or other communication from any third party
alleging that the consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement; and
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(c) any material adverse change in the financial condition,
properties, businesses or results or operations of Chineseroots or BA3, or the
occurrence of an event which, so far as reasonably can be foreseen at the time
of its occurrence, would result in any such change.
SECTION 3.7 Stockholder Meeting of Chineseroots. Chineseroots shall, at a
meeting of its stockholders duly called by the Board of Directors of
Chineseroots to be held as soon as practicable following execution of this
Agreement, or by written consent by the majority stockholders' if so permissible
pursuant to Cayman Islands law, present the following proposals for the
authorization and approval of the stockholders of Chineseroots and recommend
their adoption by the stockholders:
(a) ratification of this Agreement and authorization of the
consummation of the Merger contemplated herein.
SECTION 3.8 BA3 Stockholder Consent. BA3 shall obtain written consent of
two-thirds of its shareholders to take the following actions:
(a) ratification of this Agreement and authorization of the
consummation of the Merger contemplated herein;
(b) issuance of 10,034,000 shares of BA3 common stock to former
Chineseroots shareholders;
(c) the tender of resignations of the directors of BA3, whose
resignations are contingent on the consummation of this merger, and which shall
occur on the Effective Date.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF BA3
BA3 represents and warrants to, and agrees with Chineseroots as follows:
SECTION 4.1 Organization and Good Standing. BA3 is a duly incorporated
and validly existing corporation in good standing under the laws of the state of
its incorporation, with all requisite power and authority (corporate and other)
to own its properties and conduct its business, and is duly qualified and in
good standing as a foreign corporation authorized to do business.
SECTION 4.2 Authorization; Binding Agreement. BA3 has the corporate power
and authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by BA3, and subject to any requisite approval
of the Merger by the shareholders of BA3, constitutes a valid and binding
agreement of BA3 in accordance with its terms.
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SECTION 4.3 Capitalization. The authorized capital stock of BA3 consists
of 25,000,000 shares of common stock, par value $.001 per share. On October 21,
1997, BA3 issued 1,000,000 shares of common stock to 27 people. On March 7,
2002, BA3 instituted a 4 for 1 (4:1) forward stock split, after which there were
4,000,000 shares of common stock outstanding. On March 7, 2002, ten shareholders
transferred a total of 2,600,000 shares to 15 persons. As of the date hereof,
4,000,000 shares of common stock are outstanding. All of the outstanding shares
of capital stock of BA3 have been duly authorized and validly issued and are
fully paid and nonassessable. BA3 is not aware of any voting trusts, voting
agreements or similar understandings applicable to the shares. BA3 does not have
any outstanding options, subscriptions or other rights, agreements or
commitments, which either; (a) obligates BA3 to issue, sell or transfer any
shares of the capital stock of BA3 or (b) restricts the transfer of or otherwise
relates to the shares of its common stock except for 10,034,000 shares to be
issued pursuant to this merger agreement.
SECTION 4.4 Litigation. Except as may be disclosed to Chineseroots in
writing on or prior to the date hereof, as of the date hereof there are no
claims, actions, proceedings, or investigations pending or, to the best
knowledge of BA3, threatened against BA3 or to the best of BA3's knowledge,
pending or threatened against BA3 or any BA3 employee, consultant, director,
officer or shareholder, in his, her or its capacity as such, before any court or
governmental or regulatory authority or body which, if decided adversely, could
materially and adversely affect the financial condition, business, prospects or
operations of BA3. As of the date hereof, neither BA3 nor any of its property is
subject to any order, judgment, injunction or decree, which materially and
adversely affects the financial condition, business, prospects or operations of
BA3.
SECTION 4.5 Financial Statements. BA3 has provided Chineseroots with true
and complete copies of BA3's most recent audit, and unaudited interim financial
statements. The financial statements of BA3 were prepared by an independent
certified public accountant in BA3cordance with generally accepted accounting
principles applied on a consistent basis (except as otherwise noted in such
statements) and present fairly the financial position, results of operations and
changes in financial position of BA3 as of the dates and for the periods
indicated subject, in the case of unaudited interim financial statements, to
normal year-end adjustments and any other adjustments described therein.
SECTION 4.6 Absence of Certain Changes or Events. Except as disclosed to
Chineseroots in writing, (a) there has not been any change or any development
involving a prospective change, which has affected or may affect materially and
adversely the business, assets or prospects or the financial position or the
results of operations of and its subsidiaries taken as whole; and (b) BA3 has
not incurred any indebtedness for money borrowed, or purchased or sold any
material amount of assets, other than in the ordinary course of business, or
entered into any other transaction other than in the ordinary course of
business.
SECTION 4.7 Absence of Breach. Except as may be disclosed to Chineseroots
in writing on or prior to the date hereof, the execution, delivery and
performance by BA3 of this Agreement, and the performance by BA3 of its
obligations hereunder, will not
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(a) subject to the appropriate approval by BA3's shareholders,
conflict with or result in a breach of any of the provisions of its Articles of
Incorporation or By-Laws;
(b) subject to obtaining the governmental and other consents
referred to in Section 4.8 hereof, contravene any law, rule or regulation of any
state or of the United States or any political subdivision thereof or therein,
or any order, writ, judgment, injunction, decree, determination or award
currently in effect, which, singly or in the aggregate, would have a material
adverse effect on BA3;
(c) conflict in any respect with or result in a breach of or
default under any indenture, loan or credit agreement relating to money borrowed
or (iv) conflict in any respect with or result in a breach of or default under
any other indenture, mortgage, lien, lease, agreement, contract or instrument to
which BA3 is a party or by which it or any of its properties may be affected or
bound, which, singly or in the aggregate, would have a material adverse effect
on BA3.
SECTION 4.8 Governmental and Other Consents, etc. Subject to the
requisite shareholder approval, no consent, waiver, approval, license or
authorization of or designation, declaration or filing with any governmental
agency or authority or other public persons or entities in the United States on
the part of BA3 is required in connection with the execution or delivery by BA3
of his Agreement or the consummation by the Company of the transactions
contemplated hereby other than (i) filings in the State of Nevada in accordance
with state law thereof, (ii) filings under state securities "Blue Sky" or
anti-takeover laws and (iii) filings with the SEC and any applicable national
securities exchange.
SECTION 4.9 Benefits Plans. Except as disclosed in writing to
Chineseroots before the date hereof, BA3 does not have any employment agreement
with any executive officer of BA3 or any incentive compensation, deferred
compensation, profit sharing, stock option, stock bonus, stock purchase,
savings, consultant, retirement, pension or other "fringe benefit" plan or
arrangement with or for the benefit of any officer, employee, former employee or
consultant.
SECTION 4.10 Certain Contracts. Except as disclosed in writing to
Chineseroots on or prior to the date hereof, BA3 is not a party to any
collective bargaining agreement or any other agreement with employees of BA3 or
any of the subsidiaries as a group.
SECTION 4.11 ERISA. BA3 has no employee benefit plans, as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA").
SECTION 4.12 Transactions With Management. Except as disclosed in writing
on or before the date hereof Chineseroots, BA3 is not now a party to any
material contract, lease, loan or commitment with or to any officer or director,
or person owning more than 5% of the outstanding common stock of BA3 or any
subsidiary of BA3 or any affiliate or associate of such officer, director or
person.
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ARTICLE 5
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF CHINESEROOTS
Chineseroots, represents and warrants to, and agrees with BA3 as follows:
SECTION 5.1 Organization and Good Standing. Chineseroots is a duly
incorporated and validly existing corporation in good standing under the laws of
Cayman Islands, with all requisite power and authority (corporate and other) to
own its properties and conduct its businesses.
SECTION 5.2 Authorization; Binding Agreement. Chineseroots has the
requisite corporate power and authority to execute and deliver this Agreement.
This Agreement has been duly and validly authorized, executed and delivered by
Chineseroots and constitutes a valid and binding agreement of Chineseroots in
accordance with its terms.
SECTION 5.3 Absence of Breach. The execution, delivery and performance by
Chineseroots of this Agreement, and the performance by Chineseroots of its
obligations hereunder, do not (i) conflict with or result in a breach of any of
the provisions of its articles of incorporation or by-laws, (ii) subject to
obtaining the governmental and other consents referred to in Section 5.4 hereof,
contravene any law, rule or regulation of any state or of the United States or
any political subdivision thereof or therein, or any order, writ, judgment,
injunction, decree, determination or award currently in effect, which, singly or
in the aggregate, would have a material adverse effect on Chineseroots, (iii)
conflict in any respect with or result in a breach of or default under any
indenture, loan or credit agreement (appropriate waivers having been obtained)
or any other agreement or instrument to which Chineseroots is a party or by
which Chineseroots properties may be affected or bound, which, singly or in the
aggregate, would have a material adverse effect on Chineseroots.
SECTION 5.4 Governmental and Other Consents, etc. Subject to the
requisite Board of Directors approval, no material consent, approval or
authorization of or designation, declaration or filing with any governmental
agency or authority or other public persons or entities in the United States on
the part of Chineseroots is required in connection with the execution or
delivery by Chineseroots of this Agreement or the consummation by Chineseroots
of the transaction contemplated hereby other than (i) filings in the state of
Nevada in accordance with the laws of that state and in Cayman Islands in
accordance with the laws of that nation, thereof, (ii) filings under state
securities "Blue Sky" or anti-takeover laws.
SECTION 5.5. Financial Statements. Chineseroots shall provide BA3 with
certified consolidated financial statements for the past two fiscal years
(including the notes thereto) and interim financial statements which have been
prepared by an independent certified public accountant in accordance with
generally accepted accounting principles (as in effect from time to time)
applied on a consistent basis and which present fairly the consolidated
financial position, results of operations and changes in financial position of
Chineseroots.
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SECTION 5.6. Capitalization. At closing, Chineseroots will have two
(2) shares of common stock outstanding, with a par value of $.001 each.
SECTION 5.7 Litigation. Except as may be disclosed to BA3 in writing
on or prior to the date hereof, as of the date hereof there are no claims,
actions, proceedings, or investigations pending or, to the best knowledge of
Chineseroots, threatened against Chineseroots or to the best of Chineseroots'
knowledge, pending or threatened against any employee, consultant, director,
officer or shareholder, in his, her or its capacity as such, before any court or
governmental or regulatory authority or body which, if decided adversely, could
materially and adversely affect the financial condition, business, prospects or
operations of Chineseroots. As of the date hereof, neither BA3 nor any of its
property is subject to any order, judgment, injunction or decree, which
materially and adversely affects the financial condition, business, prospects or
operations of Chineseroots.
SECTION 5.8 Absence of Certain Changes or Events. Except as disclosed
to BA3 in writing, (a) there has not been any change or any development
involving a prospective change, which has affected or may affect materially and
adversely the business, assets or prospects or the financial position or the
results of operations of BA3 and its subsidiaries taken as whole; and (b)
Chineseroots has not incurred any indebtedness for money borrowed, or purchased
or sold any material amount of assets, other than in the ordinary course of
business, or entered into any other transaction other than in the ordinary
course of business.
ARTICLE 6
CONDITIONS
SECTION 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Date of the following
conditions:
(a) this Agreement and the transactions contemplated hereby
having been approved and adopted at or prior to the Effective Date by the
requisite vote of the shareholders of each company as required by applicable
law;
(b) no preliminary or permanent injunction or other order
issued by any federal or state court of competent jurisdiction in the United
States or any foreign jurisdiction preventing the consummation of the Merger
shall be in effect;
SECTION 6.2 Conditions to Obligation of Chineseroots to Effect the
Merger. The obligation of Chineseroots to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Date of the following conditions
any one or more of which may be waived by BA3:
(a) Chineseroots shall have performed in all material respects
its agreements contained in this Agreement required to be performed on or prior
to the Effective Date including those specified in Section 5.5 herein;
(b) Chineseroots shall have performed in all material respects
its agreements contained in this Agreement required to be performed on or prior
to the Effective Date, including the surrender of 100% of its issued and
outstanding common stock to BA3 upon BA3's issuance of an aggregate of
10,034,000 shares of its common stock to Chineseroots.
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(c) the representations and warranties of Chineseroots set
forth in this Agreement shall be true and correct in all material respects on
and as of the Effective Date as if made on and as of such date, except as
contemplated or permitted by this Agreement.
(d) Chineseroots shall have delivered a certificate of its
President or its Chairman of the Board to the effect set forth in paragraphs
(a), (b) and (c) of this Section 6.2;
(e) Chineseroots shall have delivered to BA3 copies of
resolutions duly adopted by its Board of Directors approving the execution and
delivery of this Agreement, such resolutions being certified by the Secretary or
other officer of Chineseroots;
(f) No action or preceding before any court or governmental or
regulatory authority or body, United States, federal or state or foreign, shall
have been instituted (and be pending) or threatened by any government or
governmental authority, which seeks to prevent or delay the consummation of the
Merger or which challenges any of the terms or provisions of this Agreement;
(g) No order issued by any United States federal or state or
foreign governmental or regulatory authority or body of by any court of
competent jurisdiction nor any statute, rule, regulation or executive order
promulgated or enacted by any United States federal or state or foreign
governmental authority which prevents the consummation of the Merger shall be in
effect;
(h) Opinion of Counsel to Chineseroots. BA3 shall have received
an opinion dated the effective date of this Merger by counsel to Chineseroots,
satisfactory to BA3, in substantially the following form:
i) Chineseroots is a corporation duly incorporated, validly
existing and in good standing under the laws Cayman Islands and has the
corporate power to own all of its properties and assets and carry on its
business in all material respects as it is now being conducted, and is qualified
to do business as a foreign corporation in the states in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification.
ii) The execution and delivery by Chineseroots of this
Agreement and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not conflict with or result
in a breach of any term or provision of Chineseroots' certificate of
incorporation or by-laws or constitute a default or give rise to a right of
termination, cancellation or acceleration under any material mortgage,
indenture, deed of trust, license agreement, or other obligation or violate any
court order, writ, injunction or decree applicable to Chineseroots, or its
properties or assets;
iii) This Agreement has been duly and validly authorized,
executed and delivered and constitutes the legal and binding obligation of
Chineseroots, except as limited by bankruptcy and insolvency laws and by others
laws affecting the rights of creditors generally; and
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iv) There are no actions, suits or proceedings pending, or
to the best knowledge of such counsel, threatened by or against Chineseroots or
affecting Chineseroots or its properties, at law or in equity, before any court
or any other governmental agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind.
SECTION 6.3 Conditions to the Obligation of BA3 to Effect the Merger. The
obligation of BA3 to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Date of the following conditions, any one or more of
which may be waived by Chineseroots:
(a )BA3 shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior to
the Effective Date;
(b) BA3 shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior to
the Effective Date, including the issuance by BA3 of an aggregate of 10,034,000
shares of its common stock to Chineseroots.
(c) The representations and warranties of BA3 set forth in this
Agreement shall be true and correct in all material respects on and as of the
Effective Date as if made on and as of such date, except as contemplated or
permitted by this Agreement;
(d) Except to the extent such consents are not required at the
Effective Date, BA3 shall have received the consents or exemptions, or made the
filings, as the case may be, which were referred to in Section 5.4;
(e) BA3 shall have delivered a certificate of its President to
the effect set forth in paragraph (a) of this Section 6.3;
(f) BA3 shall have delivered to Chineseroots copies of
resolutions duly adopted by the Board of Directors of BA3 approving the
execution and delivery of this Agreement, such resolutions being certified by
the Secretary of BA3;
(g) No action or proceeding before any court or governmental or
regulatory authority or body, United States federal or state or foreign, shall
have been instituted (and be pending or threatened) by any government or
governmental authority, which seeks to prevent or delay the consummation of the
Merger or which challenges any of the terms or provisions of this Agreement; and
(h) No order issued by any United States federal or state or
foreign governmental or regulatory authority or body, or by any court of
competent jurisdiction nor any statute, rule, regulation, or executive order
promulgated or enacted by any United States, federal, or state or foreign
government or governmental authority, which prevented the consummation of the
Merger or materially and adversely affects the business, financial condition, or
operations of BA3 shall be in effect.
(i) Shareholder Approval. The shareholders of BA3 upon the
Effective Date of this Merger will have duly approved the Merger, and the
issuance of 10,034,000 additional shares of BA3 common stock.
(j) Opinion of Counsel to BA3. Chineseroots shall have received
an opinion dated the effective date of this Merger by Xxxxxxxxx & Xxxxxxxxx, 00
Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, counsel to BA3, satisfactory
to Chineseroots, in substantially the following form:
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i) BA3 is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Nevada and has the corporate
power to own all of its properties and assets and carry on its business in all
material respects as it is now being conducted, and is qualified to do business
as a foreign corporation in the states in which the character and location of
the assets owned by it or the nature of the business transacted by it requires
qualification.
ii) The execution and delivery by BA3 of this Agreement and
the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not conflict with or result in a breach of
any term or provision of BA3's certificate of incorporation or by-laws or
constitute a default or give rise to a right of termination, cancellation or
acceleration under any material mortgage, indenture, deed of trust, license
agreement, or other obligation or violate any court order, writ, injunction or
decree applicable to BA3, or its properties or assets;
iii) The authorized capitalization of BA3 consists of
25,000,000 shares of common stock, par value $.001 per share. As of the date of
this Agreement, there are 4,000,000 shares of common stock issued and
outstanding. As of the Effective Date, after the issuance of 10,034,000 to
Chineseroots there will be 14,034,000 shares of BA3 outstanding;
iv) This Agreement has been duly and validly authorized,
executed and delivered and constitutes the legal and binding obligation of BA3,
except as limited by bankruptcy and insolvency laws and by others laws affecting
the rights of creditors generally; and
v) There are no actions, suits or proceedings pending, or to
the best knowledge of such counsel, threatened by or against BA3 or affecting
BA3 or its properties, at law or in equity, before any court or any other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind.
SECTION 6.4 Waiver of Condition; Right to Proceed. Unless stated
otherwise herein, if any of the conditions to the obligations of Chineseroots
and BA3 specified in Sections 6.2 and 6.3 hereof has not been satisfied,
Chineseroots or BA3, as the case may be, in addition to any other rights which
may be available to them or it, shall have the right to waive such conditions
and to proceed with the Merger (subject to satisfaction of the other conditions
contained herein, unless also waived).
ARTICLE 7
Deliberately left blank
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ARTICLE 8
TERMINATION
SECTION 8.1 Board Action. This Agreement may be terminated at any time by
mutual consent of the Boards of Directors of BA3 and Chineseroots.
SECTION 8.2 Certain Dates. In the event that BA3 shall not have received
certified financial statements from Chineseroots and/or this Agreement is not
executed by both parties by April 1, 2002, this Agreement may be terminated by
either party upon written notice, whether before or after approval of the Merger
thereof by the holders of the requisite number of shares of BA3. This Agreement
shall terminate automatically if the Merger has not been consummated by April
15, 2002.
SECTION 8.3 Deliberately left blank
SECTION 8.4 Effect of Termination. In the event of the termination of
this Agreement, this Agreement shall thereafter become void and have no effect
and no party hereto shall have any liability to any other party hereto or its
shareholders or directors or officers in respect thereof, except for the
obligations of the parties hereto in Section 9.2 hereof.
ARTICLE 9
GENERAL AGREEMENTS
SECTION 9.1 Cooperation. Each of the parties hereto shall cooperate with
the other in every reasonable way in carrying out the transactions contemplated
herein, and in delivering all documents and instruments deemed reasonably
necessary or useful by counsel for any party hereto.
SECTION 9.2 Funds. Each party shall incur all its own costs and expenses
in connection with this Agreement and the transactions contemplated hereby.
After the consummation of the Merger, all expenses will be incurred by the
Surviving Entity.
SECTION 9.3 Survival of Representations and Warranties. All
representations and warranties in this Agreement or in any instrument or
certificate delivered pursuant to this Agreement delivered on or prior to the
Effective Date shall survive the consummation of the Merger.
SECTION 9.4 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered by
messenger, transmitted by telex or telegram or mailed by registered or certified
mail, postage prepaid, as follows:
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(a) If to BA3, to:
Xxxx Vespa
0000 Xxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx
X0X0X0
With a copy to:
Xxxx Xxxxxxxxx, Esq.
Xxxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx & Xxxxxxxxx, L.L.P.
00 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
(b) If to Chineseroots, to:
Xxx Xxxxx
Commercial Director
Xxxxxxxxxxxx.xxx, Inc.
00 Xxxxx Xxxx
Xxxxxxxxxxxxx Xxxxx #00-00
Xxxxxxxxx 000000
Fax: 000-00-000-0000
With a copy to:
Xxxxx Xxxxxxx
Xxxxxxxxxxxx.xxx, Inc.
00 Xxxxx Xxxx
Xxxxxxxxxxxxx Xxxxx #00-00
Xxxxxxxxx 000000
Fax: 000-00-000-0000
The date of any such notice shall be the date hand delivered or otherwise
transmitted or mailed.
SECTION 9.5 Amendment. This Agreement (including the documents and
instruments referred to herein or therein) (a) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof, (b) is not
intended to confer upon any other person any rights or remedies hereunder, and
(c) shall not be assigned by operation of law or otherwise. This Agreement may
be amended or modified in whole or in part to the extent permitted by New York
law at any time, by an agreement in writing executed in the same manner as this
Agreement after authorization to do so by the Board of Directors of Chineseroots
and BA3.
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SECTION 9.6 Waiver. At any time prior to the Effective Date, the parties
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representation and warranties contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid is set forth in an instrument in writing
signed on behalf of such party.
SECTION 9.7 Brokers. Chineseroots and BA3 represent and warrant that no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the Merger, except as stated herein
or elsewhere in writing.
SECTION 9.8 Publicity. So long as this Agreement is in effect, the
parties hereto shall not issue or cause the publication of any press release or
other announcement with respect to the Merger or this Agreement without the
consent of the other party, which consent shall not be unreasonably withheld or
delayed where such release or announcement is required by applicable law.
SECTION 9.9 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.10 Successors and Assigns. This Agreement shall be binding upon
and insure to the benefit of and enforceable by the respective successors and
assigns of the parties hereto.
SECTION 9.11 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
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COUNTERPART SIGNATURE PAGE TO
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
BUSINESS ADVANTAGE NO.3, INC.
AND
XXXXXXXXXXXX.XXX, INC.
IN WITNESS WHEREOF the parties have executed this Agreement by their duly
authorized officers as of the ____ day of __________, 2002
BUSINESS ADVANTAGE NO.3, INC.
By:
---------------------------
President
XXXXXXXXXXXX.XXX, INC.
By:
---------------------------
President
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