AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") dated July 16, 2001 between
Premier Axium ASP, Inc., a Nevada corporation ("Buyer"), and the stockholders
whose names are listed on Schedule A annexed hereto, all of the stockholders
(each individually a "Stockholder" and collectively the "Stockholders") of The
Savvy Employer, Inc. also a California Corporation, and Xxxx X. Xxxx, the
controlling stockholder.
The Stockholders own an aggregate of one hundred thousand (100,000) shares of
voting common stock, $.01 par value, of each Company, constituting all of the
issued and outstanding capital stock of the Company (the "Shares"). The Buyer
desires to acquire all of the Shares for voting common shares, 1 mil per share,
of the Buyer, in an exchange that qualifies under Sections 354 and 368 of the
Internal Revenue Code of 1954, as amended.
This Agreement is being entered into for the purpose of implementing the
foregoing desires, and sets forth the terms and conditions pursuant to which
the Stockholders are selling to the Buyer, and the Buyer is purchasing from the
Stockholders solely in exchange for voting common shares of the Buyer, all of
the issued and outstanding Shares of the Company.
In consideration of the mutual agreement contained herein, the parties agree as
follows:
I. SALE OF THE SHARES
1.01. Shares Being Exchanged. Subject to the terms and conditions of
this Agreement, at the Closing provided for in Section 2.01 hereof (the
"Closing"), being held simultaneously with the execution of this Agreement, each
Stockholder is selling, assigning and delivering to the Buyer the number of
Shares set forth in the column marked "Company Shares Owned" on Schedule A,
opposite the name of such Stockholder.
1.02. Consideration. Subject to the terms and conditions of this
Agreement, the Buyer is delivering at the Closing in full payment for the
aforesaid sale, assignment and delivery of the Shares, an aggregate of one
million (1,000,000) Common Shares of the Buyer, par value 1 mil per share (the
"Buyer's Shares"), each Stockholder receiving the number of Buyer's Shares set
forth opposite the name of such Stockholder in the column marked "Buyer's Shares
Allocated" on Schedule A.
II. CLOSING
2.01. Time and Place. The Closing of the transaction contemplated by
this Agreement is taking place at the offices of the Buyer within 30 days after
the execution of this Agreement.
2.02. Deliveries by the Stockholders. At the Closing, the Stockholders
are delivering to the Buyer (unless previously delivered) the following:
2.02(a). Certificates representing the Shares, duly endorsed or
accompanied by stock powers duly executed in blank and otherwise in form
acceptable for transfer on the books of the Company.
2.02(b). The stock books, stock ledgers, minute books and corporate
seal of the Company (all other books and records of the Company being located in
the Company corporate premises).
2.02(c). Certificate from appropriate authorities as to the good
standing of and payment of taxes by the Company.
2.02(d). The investment letters referred to in Section 8.01 hereof.
2.02(e). All other previously undelivered items required to be
delivered by the Stockholders to the Buyer at or prior to the Closing.
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2.03. Deliveries by the Buyer. At the Closing, the Buyer is delivering
(unless previously delivered) the following:
2.03(a). To the Stockholders, (i) certificates representing one million
(1,000,000) Buyer's Shares, in accordance with Section 1.02 hereof, and (ii) all
other previously undelivered items required to be delivered by the Buyer to the
Stockholders at or prior to Closing.
III. RELATED TRANSACTIONS
3.01. There are no other related transactions.
IV. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
The Stockholders hereby represent and warrant jointly and severally
(except that in the case of Section 4.01 and 4.02 hereof the representations and
warranties contained therein are made severally by the Stockholders) to the
Buyer as follows:
4.01. Title to the Shares. Each Stockholder owns, and is transferring
to the Buyer at the Closing, good, valid, and marketable title to the number of
Shares set forth opposite the name of such Stockholder in Section 1.01 hereof,
free and clear of all liens, claims, options, charges and encumbrances
whatsoever.
4.02. Valid and Binding Agreements. As to each Stockholder, this
Agreement constitutes the valid and binding agreement of such Stockholder,
enforceable in accordance with its terms.
4.03. Organization of the Company.
4.03(a). The Companies are corporations duly organized, validly
existing and in good standing under the laws of the State of California and has
the corporate power and authority to carry on business as presently conducted.
4.03(b). The copies of the Articles of Incorporation, and all
amendments thereto, of the Company, as certified by the Secretary of State of
Nevada and of the By-Laws, as amended to date, of the Company, as certified by
its Secretary, which have heretofore been delivered to the Buyer, are complete
and correct copies of the Articles of Incorporation and By-Laws of the Company
as amended and in effect on the date hereof. All Minutes of the Company are
contained in minute books of the Company heretofore furnished to the Buyer for
examination and being delivered to the Buyer at the Closing, and no minutes have
been included in such minute books since such examination by the Buyer that have
not also been furnished to the Buyer.
4.03(c). The Company is not licensed or qualified to do business as a
foreign corporation in any jurisdiction and is not required to be so licensed or
qualified or, if required, the failure to be so licensed or qualified will not
have a material adverse effect on or result in any material liability to the
Company.
4.04. Capitalization of the Company.
4.04(a). The authorized capital stock of the Company's consists solely
of one million (1,000,000) shares of common stock each, $.01 par value, of which
one hundred thousand (100,000) shares are issued and outstanding, in each
company and no shares are held as treasury shares. All issued shares of the
Company are duly authorized, validly issued and outstanding, fully paid, and
nonassessable.
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4.04(b). Except for the Shares, there are no shares of capital stock or
other securities of the Company outstanding; there are no options, warrants or
rights to purchase or acquire any securities of the Company.
4.05. Subsidiaries and Affiliates. Except for the securities identified
on the Balance Sheet (as defined in Section 4.08 hereof), the Company does not
own any capital stock or other securities of any corporation and has no direct
or indirect interest, and since its incorporation has had no such interest, in
any business other than the business presently directly conducted by it.
4.06. No Violation of Agreements. Neither the execution nor delivery of
the Agreement, nor the consummation of the transactions contemplated hereby
violates or will violate, or conflicts with or will conflict with, or
constitutes a default under any or will constitute a default under any documents
relating to the Company.
4.07. Financial Statements.
4.07(a). Prior to the Closing, the Stockholders will deliver to the
Buyer balance sheets ("Balance Sheets") of the Company as of the date of the
Closing and one (1) statement of income of the Company for the period beginning
from the inception of the Company (January, 2000) to the date of the Closing.
All of such statements will be audited.
4.07(b). The Company hereby agrees to furnish to Buyer year-end audited
financial statements of the Company. The Company hereby agrees to use an auditor
selected or approved by the Buyer for such statements. These year-end statements
are due within forty-five (45) days following the end of the fiscal year. The
format of such reports will be specified by the Buyer at the time of closing and
may be subsequently changed by the Buyer, from time to time, by giving the
Company thirty (30) days notice of such change.
4.07(c). The Company hereby agrees to furnish to Buyer quarterly
financial statements of the Company. These quarterly statements are due within
thirty (30) days following the end of a fiscal quarter. No quarterly financial
statement need be provided for the last quarter of the fiscal year. The format
of such reports will be specified by the Buyer at the time of closing and may be
subsequently changed by the Buyer, from time to time, by giving the Company
thirty (30) days notice of such change. The Company further agrees to provide
monthly updates to these financial statements. These monthly updates may be in
written, typed or printed form and will be provided within fifteen (15) days
following the end of the month. No monthly financial update need be provided for
the last month in a fiscal quarter.
4.08. No Undisclosed Liabilities. Except as set forth on the Balance
Sheets, neither the Company or its Stockholders know of any basis for the
assertion of liabilities or against the Company not reflected on the Balance
Sheets.
4.09. Absence of Certain Changes. Subject to the most recent Balance
Sheets, there have been no material adverse changes in the financial condition
of the Company.
4.10. Tax Returns. The Company has duly filed all tax reports and
returns required to be filed by it and has duly paid all taxes and other charges
due or claimed to be due from it by federal, state or local taxing authorities.
4.11. Title to Properties. Except as otherwise reflected on the Balance
Sheet, the Company has good, valid and marketable title to all its properties
and assets, real, personal, and mixed, tangible and intangible, including,
without limitation, the properties and assets reflected in the Balance Sheet.
4.12. Fixed Assets. Schedule 1 lists the fixed assets of the Company.
Furthermore, the Company warrants all such property to be in good condition or
sound working order with no known
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defects. Furthermore, neither the Company nor any Stockholder has received any
notification that there is any violation of any building, zoning, or other law,
ordinance or regulation in respect of such property and to the best of their
knowledge, no such violation exists.
4.13. Leases. Schedule 2 lists any and all leases the Company is a
party thereto. The Company asserts each said lease is valid, binding and
enforceable in accordance with its terms, and is in full force and effect.
4.14. Patents, Trademarks, Trade Names, etc. Schedule 3 lists any and
all patents, trademarks, trade names, etc. owned by, under license to or used by
the Company.
4.15. Litigation. The Company knows of no actions, proceedings, or
investigations pending or, to the best knowledge and belief of the Company and
the Stockholders, threatened by or against the Company.
4.16. Insurance. The policies of fire, liability, workmen's
compensation and product liability are in effect with respect to the Company and
its operations. Schedule 4 lists all insurance policies currently in effect,
including amounts, carriers, local agents, etc.
4.17. Bank Accounts. The Company bank account(s) are listed in Schedule
5 including bank, bank branch, account number(s) and current balance(s).
4.18. Contracts and Commitments. Except as specifically identified in
the Balance Sheet, the Company has no contracts, commitments, arrangements or
understandings that are material to its business, operations, financial
condition or prospects, except any lease(s) identified in 4.13 above.
4.19. Customers and Suppliers. At the Closing, the Stockholders are
delivering to the Buyer a list of the names and addresses of the Company's three
largest customers and suppliers that accounted for more than ten percent (10%)
of the Company's sale or purchases, respectively, during the past twelve (12)
month period. The Company has not lost any customer or supplier whose name
appears on such list.
4.20. Compliance with Applicable Law. The Company has duly complied, in
respect of its operations, real property, machinery and equipment, all other
property, practices, and all other aspects of its business, with all applicable
laws (whether statutory or otherwise), rules, regulations, ordinances,
judgments, and decrees of all governmental authorities (federal, state, local or
other laws), including, but not limited to, the Federal Occupational Safety and
Health Act and all Laws relating to environmental protection and conservation.
Neither the Company nor any Stockholder has received any notification of any
asserted present or past failure to comply.
4.21. Disclosure. All facts material to all assets, business,
operations, financial condition, and prospects of the Company are reflected in
the Balance Sheet, or have been disclosed herein, or have been disclosed to the
Buyer in writing. No representation or warranty by the Stockholders contained in
this Agreement and no statement contained in any certificate, schedule, list or
other writing furnished to the Buyer pursuant to the provisions hereof, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein not misleading.
V. REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants as follows:
5.01 Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Nevada and
has the corporate power and authority to carry on its business as presently
conducted and to enter into and perform this Agreement.
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5.02. Authorization. The execution and delivery of this Agreement by
the Buyer and the consummation by the Buyer of the transactions contemplated
hereby have been duly authorized by the Buyer's Board of Directors or Executive
Committee, no approval thereof by the Buyer's stockholders being required by
law, and the Buyer is delivering at the Closing a complete and correct copy,
certified by its Secretary or Assistant Secretary, of the relevant resolutions
adopted at the meeting or meetings at which such authorization took place.
5.03. Valid and Binding Agreement. This Agreement constitutes a valid
and binding agreement of the Buyer, enforceable in accordance with its terms.
5.04. No Violation. Neither the execution and delivery of this
Agreement nor the consummation by the Buyer of the transactions contemplated
hereby violates or conflicts with the certificate of incorporation or by-laws of
the Buyer or any agreement or other restriction of any kind to which the Buyer
is a party or by which it is bound.
5.05. No Preemptive Rights. The stockholders of the Buyer are not by
virtue of their ownership of the Buyer's common shares entitled to any
preemptive rights or subscription privileges with respect to the Buyer's Shares
to be issued hereunder.
5.06. Delivery of Reports. The Buyer has delivered to each Stockholder
its Annual Report for the fiscal year ending 2000.
5.07. Validity of the Buyer's Shares. All of the Buyer's Shares being
delivered hereunder are duly authorized, validly issued, and outstanding, fully
paid and nonassessable, and have been approved (subject to official notice of
issuance) for listing on the NASD OTC Stock Exchange. At the date of signing of
this Agreement, the Buyer's shares were trading at approximately $2.20 per
share.
5.08. Compliance with Rule 144. Upon receipt from time to time of
written notice from any Stockholder that such Stockholder presently intends to
make routine sales of the Buyer's Shares under Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Act"), the Buyer will use its best
efforts to make available the information necessary under Rule 144(c) to enable
such sales to be made. Such obligation will continue until the earlier of the
completion of all sales then intended to be made by the Stockholder or the end
of the three-month period commencing on the date of such notice, provided that a
further notice indicating a continued present intention to make routine sales of
the Buyer's Shares under Rule 144 shall be deemed a new notice for purposes of
this Section 5.08.
VI. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; SET-OFF
6.01. Survival of Representations. All representations, warranties, and
agreements made by any party in this Agreement or pursuant hereto shall survive
the Closing hereunder and any investigation at any time made by or on behalf of
any party hereto.
6.02. Statements as Representations. All statements contained in any
certificate, schedule, list, document, or other writing delivered pursuant
hereto or in connection with the transactions contemplated hereby shall be
deemed representations and warranties within the meaning of Section 6.01 hereof.
VII. PROVISIONS REGARDING BUYER'S SHARES
7.01. Representations by the Stockholders. Each Stockholder represents
and warrants to the Buyer that it is his present intention to acquire the
Buyer's Shares for investment and not with a view to the distribution or resale
thereof, and is confirming such intention to the Buyer by letter simultaneously
with the execution hereof.
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7.02 Agreements by the Stockholders. Each Stockholder agrees that he
will not offer, sell, transfer, assign, mortgage, pledge or otherwise dispose of
or encumber any of the Buyer's Shares delivered to him pursuant to this
Agreement (a) if such action would prevent the Buyer from accounting for the
acquisition of the Shares as a "pooling of interests" and (b) unless (i) in the
opinion of counsel to the Buyer or in the opinion of the Division of Corporate
Finance (the "Division") of the Securities and Exchange Commission (the
"Commission") expressed in a "no-action" letter (which letter and the request
therefor shall be in form and substance satisfactory to counsel for the Buyer)
in registration of such shares under the Act, and the rules and regulations of
the Commission thereunder, as then in effect, is not required in connection with
such transaction; (ii) sale of the Buyer's Shares is permissible under Rule 144
of the Commission under the Act, in which event the Stockholder shall furnish
the Buyer with an opinion of counsel (which counsel shall be reasonably
satisfactory to counsel for the Buyer and which opinion shall be in form and
substance reasonably satisfactory to the Buyer) the effect that the sale of the
Buyer's Shares proposed to be sold is permissible under Rule 144, provided that
the Buyer agrees to make such representations as may be reasonably requested by
such counsel and that the Buyer can then accurately make concerning the Buyer's
qualifications under Rule 144(c); or (iii) a registration statement under the
Act is then in effect with respect to such shares and the purchaser or
transferee has been furnished with a prospectus meeting the requirements of
Section 10 of the Act.
7.03 Legend, etc. Each Stockholder agrees that the Buyer may endorse on
any certificate for the Buyer's Shares to be delivered to or on behalf of the
Stockholder pursuant to this Agreement an appropriate legend referring to the
provisions of Sections 8.01 and 8.02 hereof, and that the Buyer may instruct its
transfer agents not to transfer any such shares unless advised by the Buyer that
such provisions have been complied with.
VIII. MISCELLANEOUS
8.01 Further Assurances. From time to time, at the Buyer's request and
without further consideration, each Stockholder will execute and deliver to the
Buyer such documents and take such action as the Buyer may reasonably request in
order to consummate more effectively the transactions contemplated hereby and to
vest in the Buyer good, valid and marketable title to the Shares.
8.02 Parties in Interest. Except as otherwise expressly provided
herein, all the terms and provisions of this agreement shall be binding upon,
shall inure to the benefit of, and shall be enforceable by the respective heirs,
beneficiaries, personal and legal representatives, successors, and assigns of
the parties hereto.
8.03 Entire Agreement. This Agreement, including the exhibits,
schedules, lists and other documents and writings referred to herein or
delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to this subject matter.
8.04 Headings, etc. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretations of this Agreement.
8.05 Notice. All notice, request, demands and other communications
hereunder ("Notices") shall be in writing and shall be deemed to have been duly
given if delivered or mailed (registered or certified mail, postage prepaid,
return receipt requested) as follows:
If to the stockholders of The Savvy Employer Inc.:
000 Xxxxx Xxx.
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Xxxx, XX 00000
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If to the buyer:
0000 Xxxxxxxx Xxxx.
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Suite 400
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Xxxxxxx Xxxxx, XX 00000
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or such other address(es) as any party may have furnished to the others in
writing in accordance herewith, except that Notices of change of address(es)
shall only be effective upon receipt. All Notices shall be deemed received on
the date of delivery or, if mailed, on the date appearing on the return receipt
therefore.
8.06 Counterparts. This agreement may be executed simultaneously in several
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8.07 This Agreement shall be governed by and construed pursuant to the laws
of the State of Nevada.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
Stockholders of the Company and by a duly authorized officer of the Buyer on the
date first written.
For the Buyer For the Company
By: /s/ Xxxxxxxxx XxXxxxxxx By: /s/ Xxxx Xxxx
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Xxxxxxxxx XxXxxxxxx, Chief Xxxx Xxxx, President
Operating Officer
The Stockholders of the Company
/s/ Xxxx Xxxx
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Xxxx Xxxx
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