AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement"), entered into
this 9th day of August 1999, is by, between, and among Xxxxxx XxXxxx National
Retail Inc. a publicly held Delaware corporation (hereinafter the
"Purchaser"),Rascals Enterprises, Inc. a privately-held Delaware corporation
(hereinafter the "Private Company"), and the shareholders of the Private Company
who are listed on the Schedule "A" hereto and have executed Subscriptions
Agreements in the form attached in Schedule "B" hereto (the Shareholders").
RECITALS
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WHEREAS, the Purchaser wishes to acquire, and the Shareholders, by
executing Schedule "B", are willing to sell, all of the outstanding stock of the
Private Company in exchange solely for a part of the voting stock of the
Purchaser whereby the Shareholders would acquire a controlling interest of the
Purchaser; and
WHEREAS, the parties hereto intend to qualify such transaction as a
tax-free exchange Pursuant to Section 368(a)(1)(B) of the Internal Revenue Code
of 1986, as amended;
NOW, THEREFORE, based upon the stated premises, which are incorporated
herein by reference, and for and in consideration of the mutual covenants and
agreements set for herein, the mutual benefits to the parties to be derived
herefrom, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto approve and adopt this
Agreement and Plan of Reorganization and mutually covenant and agree with each
other as follows:
1. Shares to be Transferred and Shares to be Issued
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1.1 On the Closing date the Shareholders shall transfer to the Purchaser
certificates for the number of shares of the common stock of the Private Company
described in Schedule "A", attached hereto and incorporated herein, which in the
aggregate shall represent all of the issued and outstanding shares of the common
stock of the Private Company.
1.2 In exchange for the transfer of the common stock of the Private Company
pursuant to subsection 1.1 hereof, the Purchaser shall on the Closing Date and
contemporaneously with such transfer of the common stock of the Private company
to it by the Shareholders issue and deliver to the Shareholders the number of
shares of common stock of the Purchaser specified on Schedule "A" hereof such
that the Shareholders shall own approximately 70% of the outstanding common
stock of the Purchaser.
2. Representations and Warranties of the Private Company Xxxxxx Xxxxxxxxx
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and the Private Company, severally and not jointly, represent and warrant to the
Purchaser as set forth below. These representations and warranties are made as
an inducement for the Purchaser to enter into this Agreement and, but for the
making of such representations and warranties and their accuracy, the Purchaser
would not be a party hereto.
2.1 Organization and Authority. The Private Company is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Delaware with full power
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and authority to enter into and perform the transactions contemplated by this
Agreement. The Private Company has three subsidiaries, namely Rascals Comedy
Club Stagedoor Grill, Inc., a New Jersey corporation of which the Private
company owns all of the outstanding stock, DEM amusement, Inc., a New Jersey
corporation of which the Private company owns all of the outstanding stock, and
Rascals Xxxxxxx, Inc., a Florida corporation of which the Private Company owns
75% of the outstanding stock (hereinafter the Subsidiaries").
2.2 Capitalization. As of the date of the closing, the Private Company will
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have a total of no more than 7,000,000 shares of common stock issued and
outstanding. All of the shares will have been duly authorized and validly issued
and will be fully paid and nonassessable. There are no options, warrants,
debentures, conversion privileges or other rights, agreements, or commitments
obligating the Private company to issue or to transfer from the treasury any
additional shares of capital stock of any class. Schedule "A" accurately sets
forth all of the shareholders of record of the Private Company and the number of
shares held of record by each shareholder.
2.3 Directors and Officers. The names and titles of all directors and
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officers of the Private company as of the date of this Agreement are as follows:
Xxxx X. Xxxxxxxxx Chairman, COO, Director
Xxxxxx Xxxxxxxxx President, CEO, Director
Xxxxxx Xxxxxxxx Secretary, CFO
2.4 Performance of this Agreement. The execution and performance of this
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Agreement and the transfer of stock contemplated hereby have been authorized by
the board of directors of the Private company.
2.5 Financials. True copies of the financial statements of the Private
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Company and the subsidiaries for the period ended March 31, 1999 and December
31, 1998, (unaudited) have been furnished to the Purchaser. Said financial
statements are true and correct in all material respects and present an accurate
and complete disclosure of the financial condition of the Private Company and
the subsidiaries as of March 31, 1999, and the earnings for the periods covered,
in accordance with generally accepted accounting principles applied on a
consistent basis.
2.6 Liabilities. There are no material liabilities of the Private Company
-----------
or the subsidiaries, whether accrued, absolute, contingent or otherwise, which
arose or relate to any transaction of the Private Company or the Subsidiaries,
their agents or servants occurring prior to March 31, 1999, which are not
disclosed by or reflected in said financial statements. As of the date hereof,
there are no know circumstances, conditions, happenings, events or arrangements,
contractual or otherwise, which may hereafter give rise to liabilities, except
in the normal course of business of the Private Company or the Subsidiaries.
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2.7 Absence of Certain Changes or Events. Except as set forth in this
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Agreement, since March 31, 1999, there has not been (I) any material adverse
change in the business, operations, properties, level of inventory, assets, or
condition of the Private Company or the Subsidiaries, or (ii) any damage,
destruction, or loss to the Private company or the Subsidiaries (whether or not
covered by insurance) materially and adversely affecting the business,
operations, properties, assets or conditions of the Private Company or the
Subsidiaries.
2.8 Litigation. There are no legal, administrative or other proceedings,
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investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions, either threatened, pending or outstanding against
or involving the Private company or the Subsidiaries, or their assets,
properties, or business, nor does the Private company or the Subsidiaries know,
or have reasonable grounds to know, of any basis for any such proceedings,
investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions. In addition, there are no material proceedings
existing, pending or reasonably contemplated to which any officer, director, or
affiliate of the Private company or the Subsidiaries, or as to which any of the
Shareholders is a party adverse to the Private Company or any of the
Subsidiaries or has a material interest adverse to the Private Company or any of
the Subsidiaries, except for a complaint filed against the Private Company in
federal court (Jerry's Famous Deli v. Rascals Xxxxxxx, Inc; File No. 99-1912).
2.9 Taxes. All federal, state, foreign, county and local income, profits,
-----
franchise, occupation, property, sales, use, gross receipts and other taxes
(including any interest or penalties relating thereto) and assessments which are
due and payable have been duly reported, fully paid and discharged as reported
by the Private Company and the subsidiaries, and there are no unpaid taxes which
are, or could become a lien on the property and assets of the Private Company or
the subsidiaries, except as provided for in the financial statements of the
Private Company, or have been incurred in the normal course of business of the
Private Company or the Subsidiaries since that date. All tax returns of any kind
required to be filed have been filed and taxes paid or accrued. There are no
disputes as to taxes of any nature payable by the Private Company or
Subsidiaries.
2.10 Hazardous Materials. No hazardous material has been released, placed,
-------------------
stored, generated, used, manufactured, treated, deposited, spilled, discharged,
released, or disposed of on or under any real property currently or previously
owned or leased by the Private Company or any of the Subsidiaries.
2.11 Accuracy of All Statements Made by the Private Company. No
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representation or warranty by the Private Company in this agreement, nor any
statement, certificate, schedule, or exhibit hereto furnished by or on behalf of
the private Company pursuant to this agreement, nor any document or certificate
delivered to the Purchaser by the Private Company pursuant to this Agreement or
in connection with actions contemplated hereby, contains or shall contain any
untrue statement of material fact or shall omit a material fact necessary to
make the statements contained their in misleading.
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3. Representations and Warranties of the Purchaser. Xxx Xxxxxxx and the
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Purchaser, individually and not jointly, represent and warrant to the Private
Company as set forth below. These representations and warranties are made as an
inducement for the Private Company to enter into this Agreement and, but for the
making of such representations and warranties and their accuracy, the Private
company would not be parties hereto.
3.1 Organization and Good Standing. The Purchaser is a corporation duly
-------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware with full power and authority to enter into and perform the
transactions contemplated by this Agreement. The Purchaser does not have any
subsidiaries or own any interest in any other entity.
3.2 Capitalization. As of the date of the Closing, the Purchaser will have
--------------
a total of no more than 2,980666 shares of common stock issued and outstanding
(excluding the shares to be issued pursuant to this agreement). All shares will
have been duly authorized and validly issued and will be fully paid and
nonassessable except for the Purchaser's obligations hereunder with respect to
the shares to be issue pursuant to subsection 1.2 hereof, there are no options,
warrants, debentures, conversion privileges, or other rights, agreements, or
commitments obligating the Purchaser to issue or to transfer from the treasury
any additional shares of capital stock of any class. As of the Closing, the
Articles of Incorporation, as amended, of the Purchaser (the "Purchaser
Articles") and as currently in effect shall remain unchanged, except as provided
herein.
3.3 Performance of This Agreement. The execution and performance of this
------------------------------
Agreement and the issuance of stock contemplated hereby have been authorized by
the board of directors of the Purchaser.
3.4 Financials. True copies of the financial statements of the Purchaser
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Consisting of the balance sheets as of the fiscal years ended December 31, 1998
and 1997 (audited) and the period ended June 30, 1999,(unaudited)and statements
of income, cash flow and changes in stockholder's equity for each of the periods
then ended, have been examined and certified by Xxxxxxxx Xxxxxxxx & Strong,
Certified Public Accountants. Said financial statements are true and correct in
all material respects and present an accurate and complete disclosure of the
financial condition of the Purchaser as of June 30, 1999, and the earnings for
the periods covered, in accordance with the generally accepted accounting
principles applied on a consistent basis.
3.5 Liabilities. There are no material liabilities of the Purchaser,
-----------
whether otherwise, which arose or relate to any transaction of the Purchaser,
its agents or servants which are not reflected in said financial statements. As
of the date hereof, there are no known circumstances, conditions, happenings,
events or arrangements, contractual or otherwise, which may hereafter give rise
to liabilities, except in the normal course of business of the Purchaser.
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3.6 Litigation. There are no legal, administrative or other proceedings,
----------
investigations or inquiries, product liability or claims, judgments, injunctions
or restrictions, either threatened, pending or outstanding against or involving
the Purchaser or its subsidiaries, if any, or their assets, properties, or
business, nor does the Purchaser or its subsidiaries know or have reasonable
grounds to know, of any basis for any such proceedings, investigations or
inquiries, product liability or other claims , judgments, injunctions or
restrictions. In addition, there are no material proceedings existing, pending
or reasonably contemplated to which any officer, director, or affiliate of the
Purchaser or any of its subsidiaries or has a material interest adverse to the
Purchaser or any of its subsidiaries, except Xxxxxx Sender, Trustee, et al V.
Xxxxx X. Xxxxxx, et al (Unites State Bankruptcy Court for the District of
Colorado; Case No. 94-21830 RJB). To the best knowledge and reasonable belief of
the Purchaser, there is no current or pending investigation of the Purchaser by
the Securities and Exchange Commission.
3.7 Taxes. All federal, state, foreign, county and local income, profits,
-----
franchise, occupation, property, sales, use, gross receipts and other taxes
(including any interest or penalties relating hereto) and assessments which are
due and payable have been duly reported, fully paid and discharged as reported
by the Purchaser, and there are no unpaid taxes which are, or could become a
lien on the properties and assets of the Purchaser, except as provided for in
the financial statements of the Purchaser, or have been incurred in the normal
course of business of the Purchaser since that date. All taxes of any kind
required to be filed and the taxes paid or accrued. There are no disputes as to
taxes of any nature payable by the Purchaser.
3.8 Hazardous Materials. No hazardous material has been released, placed,
-------------------
stored, generated, used, manufactured, treated, deposited, spilled, discharged,
released, or disposed of on or under any real property currently or previously
owned or leased by the Purchaser or any of its subsidiaries.
3.9 Legality of Shares to be Issued. The shares of common stock of the
--------------------------------
Purchaser to be issued by the Purchaser pursuant to this Agreement, when so
issued and delivered, will have been duly and validly authorized and issued by
the Purchaser and will be fully paid and nonassessable.
3.10 Accuracy of All Statements Made by the Purchaser. No representations
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or warranty by the Purchaser in this agreement nor any statement, certificate,
schedule, or exhibit hereto furnished by the Purchaser pursuant to this
Agreement, nor any document or certificate delivered to the Private Company
pursuant to this agreement or in connection with actions contemplated hereby,
contains or shall contain any untrue statement of material fact or omits to
state a material fact necessary to make the statements contained therein not
misleading.
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4. Covenants of the Parties
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4.6 Corporate Records.
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a. Simultaneous with the execution of this Agreement by the
Private Company, if not previously furnished, such entity shall
deliver to the Purchaser copies of the articles of incorporation, as
mended, and the current bylaws of the Private company, and copies of
the resolutions duly adopted by the board of directors of the Private
Company approving this Agreement and the transactions herein
contemplated.
b. Simultaneous with the execution of this Agreement by the
Purchaser, if not previously furnished, such entity shall deliver to
the Private Company copies of the Purchaser Articles, and the current
bylaws of the Purchaser, and copies of the resolutions duly adopted by
the board of directors of the Purchaser approving this Agreement and
the transactions herein contemplated.
4.2 Access to Information.
---------------------
a. The Purchaser and its authorized representatives shall have
full access during normal business hours to all properties, books,
records, contracts, and documents of the Private Company and the
Private Company shall furnish to the Purchaser and its authorized
representatives all information with respect to is affairs and
business as the Purchaser may reasonably request. The Purchaser shall
hold, and shall cause its representatives to hold confidential, all
such information and documents, other than information that (I) is in
the public domain at the time of its disclosure to the Purchaser; (ii)
becomes part of the public domain after disclosure through no fault of
the Purchaser; (iii) is known to the Purchaser or any of its officers
or directors prior to disclosure; or (iv) is disclosed in accordance
with the written consent of the Private company. In the event this
Agreement is terminated prior to Closing, the Purchaser shall, upon
the written request of the Private company, promptly return all copies
of all documentation and information provided by the Private company
hereunder.
b. The Private Company and its authorized representatives shall
have full access during normal business hours to all properties,
books, records, contracts, and documents of the Purchaser, and the
Purchaser shall furnish or cause to be furnished the Private Company
and its authorized representatives all information with respect to its
affairs and business the Private Company may reasonably request. The
Private Company shall hold, and shall cause its representatives to
hold confidential, all such information and documents, other than
information that (I) is in the public domain at the time of its
disclosure to the Private company; (ii) becomes part of the public
domain after disclosure through no fault of the Private Company; (iii)
is known to the Private Company or any of its officers or directors
prior to disclosure; or (iv) is disclosed in accordance with the
written consent of the Purchaser. In the event this Agreement is
terminated prior to Closing, the Private Company shall, upon the
written request of the Purchaser, promptly return all copies of all
documentation and information provided by the Purchaser hereunder.
46
4.8 Actions Prior to Closing. From and after the date of this Agreement and
------------------------
until the Closing Date.
a. The Purchaser of the Private Company shall each carry on its
business diligently and substantially in the same manner as
heretofore, and neither party shall make or institute any unusual or
novel methods of purchase, sale, management, accounting or operation.
b. Neither the Purchaser nor the Private company shall enter into
any contract or commitment, or engage in any transaction not in the
usual and ordinary course of business and consistent with its business
practices.
c. Neither the Purchaser nor the Private Company shall amend its
articles of incorporation or bylaws or make any changes in authorized
or issued capital stock, except as provide in this Agreement.
d. The Purchaser and the Private Company shall each use its best
efforts (without making any commitments on behalf of the company) to
preserve its business organization intact.
e. Neither the Purchaser nor the Private Company shall do any act
or omit to do any act, or permit any act, which will cause a material
breach of any material contract, commitment, or obligation of such
party.
f. The Purchaser and the Private Company shall each duly comply
with all applicable laws as may be required for the valid and
effective issuance or transfer of stock contemplated by this
Agreement.
g. Neither the Purchaser nor the Private Company shall sell or
dispose of any property or assets, except products sold in the
ordinary course of business.
h. The Purchaser and the Private Company shall each promptly
notify the other of any lawsuits, claims, proceedings, or
investigations that may be threatened, brought, asserted, or commenced
against it, its officers or directors involving in any way the
business, properties, or assets of such party.
4.4 Shareholders' Approval. The Purchaser shall promptly submit this
-----------------------
Agreement and the transactions contemplated hereby for the approval of its
stockholders by majority written consent or at a meeting of stockholders and,
subject to the fiduciary duties of the board of directors of the Purchaser under
applicable law, shall use its best efforts to obtain stockholder approval and
adoption of this Agreement and the transactions contemplated hereby.
4.5 No Covenant as to Tax or Accounting Consequences. It is expressly
----------------------------------------------------
understood and agreed that neither the Purchaser nor its officers or agents has
made any warranty or agreement, expressed or implied, as to the tax or
accounting consequence of the transactions contemplated by this Agreement or the
tax or accounting consequences of any action pursuant to or growing out of this
Agreement.
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4.6 Indemnification. The Private company and Xxxxxx Xxxxxxxxx, Individually
---------------
and not jointly, shall indemnify Purchaser for any loss, cost, expense, or other
damage (including without limitation, attorney's fees and expenses) suffered by
Purchaser resulting from, arising out of, or incurred with respect to the
falsity or the breach of any representation, warranty, or covenant made prior to
the Closing Date. Purchaser and Xxx Xxxxxxx, individually and not jointly, shall
indemnify and hold the Private Company harmless from and against any loss, cost,
expense, or other damage (including, without limitation, attorneys' fees and
expenses) resulting from, arising out of, or incurred with respect to, or
alleged to result from, arise out of or have been incurred with respect to,
falsity or breach of any representation, covenant, warranty, or agreement made
by Purchaser herein, and any claims arising from the operations of Purchaser
prior to the Closing Date. The indemnity agreement contained herein shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any party and survive the consummation of the transactions
contemplated by this Agreement.
4.7 Publicity. The parties agree that no publicity, release, or other
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public announcement concerning this Agreement or the transactions contemplated
by this Agreement shall be issued by any party hereto without advance approval
of both the form and substance of the same by the other parties and their
counsel, which approval, in the case of any publicity, release, or other public
announcement required by applicable law, shall not be unreasonably withheld or
delayed.
4.8 Expenses. Except as otherwise the expressly provided herein, each party
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to this Agreement shall bear its own respective expenses incurred in connection
with the negotiation and preparation of this Agreement, in the consummation of
the transactions contemplated hereby, and in connection with all duties and
obligations required to be performed by each of them under this Agreement.
4.9 Further Actions. Each of the parties hereto shall take all such further
---------------
action, and execute and deliver such further documents, as may be necessary to
carry out the transactions contemplated by this Agreement.
4.10 Amendments to Certificate of Incorporation. On or before closing, the
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public company will increase the authorized shares to 50,000,000 shares, and
change the par value to $0.001.
5. Conditions Precedent to the Purchaser's Obligations. Each and every
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obligation of the Purchaser to be performed on the Closing date shall be subject
to the satisfaction prior thereto of the following conditions:
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5.1 Truth of Representations and Warranties. The representations and
------------------------------------------
warranties made by the Private Company in this Agreement or given on its behalf
hereunder shall be substantially accurate in all material respects on and as of
the Closing Date with the same effect as though such representations and
warranties had been made and given on and as of the Closing Date.
5.2 Performance of Obligations and Covenants. The Private Company shall
-----------------------------------------
have performed and complied with all obligations and covenants required by this
Agreement to be performed or complied with by it prior to or at he Closing.
5.3 Officer's Certificate. The Purchaser shall have been furnished with a
----------------------
certificate (dated as of the Closing Date and in form and substance reasonably
satisfactory to the Purchaser), executed by an executive officer of the Private
Company, certifying to the fulfillment of the conditions specified in
subsections 5.1 and 5.2 hereof.
5.4 No litigation or Proceedings. There shall be no litigation of any
-------------------------------
proceeding by or before any governmental agency or instrumentality pending or
threatened against any party hereto that seeks to restrain or enjoin or
otherwise questions the legality or validity of the transactions contemplated by
this Agreement or which seeks substantial damages in respect thereof.
5.5 No Material Adverse Change. As of the Closing Date there shall not have
--------------------------
not have occurred any material adverse change, financially or otherwise, which
materially impairs the ability of the Private company to conduct its business or
the earning power thereof on the same basis as in the past.
5.6 Shareholders' Approval. The holders of not less than a majority of the
-----------------------
outstanding common stock of the Purchaser shall have voted for authorization and
approval of this Agreement and the transactions contemplated hereby.
5.7 Shareholders' Execution of Subscription Agreement. Each of the
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shareholders shall have duly executed and delivered a Subscription agreement in
the form as set forth in Schedule"B" as of the Closing Date.
6. Conditions Precedent to Obligations of the Private Company. Each and
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every obligation of the Private Company to be performed on the Closing Date
shall be subject to the satisfaction prior thereto of the following conditions:
6.1 Truth of representations and Warranties. The representations and
------------------------------------------
warranties made by the Purchaser in this Agreement or given on its behalf
hereunder shall be substantially accurate in all respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made or given on and as of the Closing Date.
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6.2 Performance of Obligations and Covenants. The Purchaser shall have
------------------------------------------
performed or complied with all obligations and covenants required by this
Agreement to be performed or complied with by it prior to or at the Closing.
6.3 Officer's Certificate. The Private company shall have been furnished
----------------------
with a certificate (dated as of the Closing Date and in form and substance
reasonably satisfactory to the Private Company), executed by an executive
officer of the Purchaser, certifying to the fulfillment of the conditions
specified in subsections 6.1 and 6.2 hereof.
6.4 No Litigation or Proceedings. There shall be no litigation or any
---------------------------
proceeding by or before any governmental agency or instrumentality pending or
threatened against any party hereto that seeks to restrain or enjoin or
otherwise questions the legality or validity of the transactions contemplated by
this Agreement or which seeks substantial damages in respect thereof.
6.5 No Material Adverse Change. As of the Closing Date there shall not have
--------------------------
occurred any material adverse change, financially or otherwise, which materially
impairs the ability of the Purchaser to conduct its business.
6.6 No liabilities. As of the Closing Date the Purchaser shall have no
---------------
liabilities.
7. Changing of Management. Upon and as a condition of Closing this
------------------------
Agreement:.
7.1 Prior to Closing the Purchaser will present to its shareholders for
approval the election of Xxxxxx Xxxxxxxxx, Xxxx Xxxxxxxxx, and Xxxxxx Xxxxxxxx
as directors of the Purchaser effective immediately following the Closing of
this Agreement. Prior to closing the Private Company will furnish material
information of nominees to be elected by the shareholders of the Purchaser.
Purchaser reserves the right to refuse to cause the nomination of any or all
such persons as directors of Purchaser if, after review of the foregoing
information concerning said persons, it is the opinion of Purchaser that the
election of such persons would not be in the best interests of Purchaser.
7.2 The Private Company reserves the right to terminate this agreement if
nominees selected by it are not elected or appointed as set forth above.
7.3 At the closing the Purchaser shall deliver the resignations of each
officer and director of the Purchaser effective as of the Closing.
8. Closing.
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8.1 Time and Place. The Closing of this transaction ("Closing") shall take
--------------
place at 00 Xxxx 000 Xxxxx, Xxxxx 000 Xxxx Xxxx Xxxx Xxxx, at 2:00 p.m. August
11,1999, or at such other time and place as the parties hereto shall agree upon.
Such date is referred to in this Agreement as the "Closing Date."
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8.2 Documents to Be Delivered by the Private Company. At the Closing the
-------------------------------------------------
Private Company shall deliver to the Purchaser the following documents:
a. Executed copies of Schedule "B" executed by all of the shareholders
of the Private company and the certificates for the number of shares of
common stock of the Private Company in the manner and form required by
subsection 1.1 hereof.
b. A stock certificate in the name of the Purchaser representing all
of the outstanding shares of the Private Company.
c. The certificate required pursuant to subsection 5.3 hereof.
d. A certificate of good standing from the state of Delaware dated not
more than twenty days prior to Closing.
e. A signed consent an/or minutes of the Private Company's directors
and shareholders approving this Agreement and each matter to be approved
under this Agreement.
f. Such other documents to transfer, certificates of authority, and
other documents as the Purchaser may reasonably request.
8.3 Documents To Be Delivered by the Purchaser. At the Closing the
-----------------------------------------------
Purchaser shall deliver to the Private company the following documents:
a. Certificates for the number of shares of common stock of the
Purchaser as determined in subsection 1.2 hereof.
b. The certificates required pursuant to subsection 6.3 hereof.
c. A certificate of good standing from the State of Delaware dated not
more than twenty days prior to Closing.
d. A signed consent and/or minutes of the Purchaser's directors and
shareholders approving this Agreement and each matter to be approved under
this Agreement.
e. Such other documents of transfer, certificates of authority, and
other documents as the Private Company may reasonably request.
9. Termination. This Agreement may be terminated by the Purchaser or the
-----------
Private Company by notice to the other if, (I) at any time prior to the Closing
Date any event shall have occurred or any state of facts shall exist that
renders any of the conditions to its other obligations to consummate the
transactions contemplated by this Agreement incapable of fulfillment, or (ii) on
September 6, 1999, if the closing shall not have occurred. Following termination
of this Agreement no parties shall have liability to another party relating to
such termination, other than any liability resulting from the breach of this
Agreement by a party prior to the date of termination.
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10. Miscellaneous.
------------
10.1 Notices. All communications provided for herein shall be in writing
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and shall be deemed to be given or made when served personally or when deposited
in the United States mail, certified return receipt requested, addresses as
follows, or at such other address as shall be designated by any party hereto in
written notice to the other party hereto delivered pursuant to this subsection:
Purchaser: Xxx Xxxxxxx, President
Xxxxxx XxXxxx National Retail Inc.
0000 Xxxxx 000 Xxxx
Xxxx Xxxx Xxxx, XX 00000
With Copy to: Xxxxxx X. Xxxxx, P.C.
Attorney at Law
00 Xxxx 000 xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Private Company Xxxxxx Xxxxxxxxx, President
Rascals Enterprises, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx 0X
Xxxxxxxxxxx, X.X. 00000
With Copy to: Xxxx Xxxxx
Attorney at Law
00000 Xxxxx Xxxx 0
Xxxx Xxxxx, XX 00000
10.2 Default. Should any party to this Agreement default in any of the
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covenants, conditions, or promises contained herein, the defaulting party shall
pay all costs and expenses, including a reasonable attorney's fee, which may
arise or accrue from enforcing this Agreement, or in pursuing and remedy
provided hereunder or by the statutes of the State of Utah.
10.3 Assignments. This Agreement may not be assigned in whole or in apart
-----------
by the parties hereto without the prior written consent of the other party or
parties, which consent shall not be reasonably withheld.
10.4 Successors and Assigns. This Agreement shall be binding upon and shall
----------------------
inure to the benefit of the parties hereto, executors, administrators,
successors and assigns.
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10.5 Partial Invalidity. If any term, covenant, condition, or provision of
------------------
this Agreement or the application thereof to any person or circumstance shall to
any extent be invalid or unenforceable, the remainder of this Agreement or
application of such term or provision to persons or circumstances other than
those as to which it is held to be invalid or unenforceable shall not be
affected thereby and each term, covenant or provision of this Agreement shall be
valid and shall be enforceable to the fullest extent permitted by law.
10.6 Entire Agreement. This Agreement constitutes the entire understanding
----------------
between the parties hereto with respect to the subject matter hereof and
supercedes all negotiations, representations, prior discussions, letters of
intent, and preliminary agreements between the parties hereto relating to the
subject matter of this Agreement.
10.7 Interpretation of Agreement. This agreement shall be interpreted and
---------------------------
construed as if equally drafted by all parties hereto.
10.8 Survival of Covenants, Etc. All covenants, representations, and
warranties made herein to any party, or in any statement or document delivered
to any party hereto, shall survive the making of this Agreement and shall remain
in full force and effect until the obligations of such party hereunder have been
fully satisfied.
10.9 Further Action. The parties hereto agree to execute and deliver such
---------------
additional documents and to take such other further action as may be required to
carry out fully the transactions contemplated herein.
10.10 Amendment. This Agreement or any provision hereof may not be changed,
---------
waived, terminated, or discharged except by means of a written, supplemental
instrument signed by the party or parties against whom enforcement of the
change, waiver, termination, or discharge is sought.
10.11 Full Knowledge. By their signatures, the parties acknowledged that
--------------
they have carefully read and fully understand the terms and conditions of this
agreement, that each party has agreed to be bound by the terms and conditions of
this Agreement.
10.12 Headings. The descriptive headings of the various sections or parts
--------
of this Agreement are for the convenience only and shall not affect the meaning
or construction of any of the provisions hereof.
10.13 Counterparts. This Agreement may be executed in two or more partially
------------
or fully executed counterparts, each of which shall be deemed an original and
shall bind the signatory but all of which together shall constitute but one and
the same instrument.
53
IN WITNESS WHEREOF, the parties hereto executed the foregoing Agreement
and Plan of Reorganization as of the day and year first above written.
PURCHASER Xxxxxx XxXxxx National Retail Inc.
By________________________________
Xxx Xxxxxxx, President
PRIVATE COMPANY Rascals Enterprises, Inc
By________________________________
Xxxxxx Xxxxxxxxx, President
_________________________________
Xxxxxx Xxxxxxxxx,
Individually as to
Section 2 and Subsection
4.6 of the Agreement.
_________________________________
Xxx Xxxxxxx, Individually
as to Section 3 and
Subsection 4.6 of the
Agreement.
54
SCHEDULE "A"
TO THE
AGREEMENT AND PLAN OF REORGANIZATION
NAME OF NO. OF SHARES OF NO. OF SHARES OF
SHAREHOLDERS THE PRIVATE COMPANY THE PURCHASER
------------
TO BE TRANSFERRED TO BE ISSUED
----------------- ------------
Xxxxxx Xxxxxxxxx 3,087,500 3,087,500
Xxxx Xxxxxxxxx 3,087,500 3,087,500
Xxxxxx Xxxxx 50,000 50,000
Xxxxxxx Xxxxx Xx. 350,000 350,000
Xxxx Xxxxx 125,000 125,000
Xxxxxx X'Xxxxxx 100,000 100,000
Xxxx Xxxxxxxxx 50,000 50,000
Xxxxxx Xxxxxxxx 100,000 100,000
Xxxxxxx Xxxxx 50,000 50,000
--------- ---------
TOTAL 7,000,000 7,000,000
========= =========
55
XXXXXX XXXXXX NATIONAL RETAIL INC.
(A Delaware Corporation)
Certificate of Officer
----------------------
The undersigned, constituting the current and duly elected or appointed
president of Xxxxxx XxXxxx National Retail Inc., a Delaware corporation (the
"Company"), in accordance with the requirements of subsection 6.3 of the
Agreement and Plan of Reorganization dated August 9, 1999, by and among the
Company, Rascals Enterprises, Inc., and the shareholders of such corporation
(the "Reorganization Agreement"), hereby certify that all of the representations
and warranties of the Company made under the Reorganization Agreement are true
and correct as of the Closing (as defined therein), the same as though
originally given on the date of the Reorganization Agreement and that the
Company has performed and complied with all obligations and covenants required
by the Reorganization Agreement.
IN WITNESS WHEREOF, the undersigned has executed this document to be
effective as of the Closing of the Reorganization Agreement to be held on August
10,1999, or as soon thereafter as practicable, but in not event later than
September 6, 1999.
------------------------
Xxx Xxxxxxx, President
56
UNANIMOUS CONSENT IN LIEU OF SPECIAL MEETING
OF THE
BOARD OF DIRECTORS
OF
XXXXXX XXXXXX NATIONAL RETAIL INC.
The undersigned, constituting the sole director of Xxxxxx XxXxxx National
Retail Inc., a Delaware corporation (the "Company"), hereby consent to and does
adopt the following resolutions::
Correction to Prior Issuance of Stock
-------------------------------------
RESOLVED, that the prior issuance of 1,000,000 shares of common stock to
Xxxxxxx Holdings, Inc. asset forth in the board consent dated July 23,1999, be
and hereby is corrected to state that the amount of money advanced by such
entity on behalf of the Company was $13,711 rather than $50,000.
FURTHER RESOLVED, that as additional consideration for such shares, Xxxxxxx
Holdings Inc. has agreed to pay all legal fees and costs of the proposed reverse
acquisition with Rascals Enterprises, Inc.; and
FURTHER RESOLVED, that the foregoing resolutions shall be effective as of
the date of the original board consent dated July 23, 1999.
Engagement Letter
-----------------
Resolved that the engagement letter with counsel for the company dated July
23, 1999, be and hereby is approved and that the President be and hereby is
authorized and directed to execute and deliver such agreement.
Filing of Consent
-----------------
RESOLVED, that the consent shall be placed into the minute book of the
Company with the proceedings of the board of directors and that this consent
shall have the same force and effect as if a meeting of the directors were held.
IN WITNESS WHEREOF, the undersigned has executed this consent this 12th day
of August 1999.
--------------------------
Xxx Xxxxxxx, Sole Director
57
RESIGNATION
Pursuant to the terms of the Agreement and Plan of Reorganization dated
August 9, 1999, by, between, and among Xxxxxx XxXxxx National Inc., a Delaware
corporation (the "Company"), Rascals Enterprises, Inc., a Delaware corporation,
and the shareholders of such company (the Reorganization Agreement"),the
undersigned hereby resigns as a director and an officer of the Company effective
as of the Closing of the Reorganization Agreement as set forth therein.
Date: August 9, 1999.
---------------------------
Xxx Xxxxxxx
58
