EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Plan") is made this 28th day of October,
1999, among XXXXX Enterprises, Inc., a Nevada corporation ("XXXXX"); EduLink,
Inc., a California corporation, ("EduLink") and its shareholders
("Shareholders").
XXXXX wishes to acquire one hundred percent (100%) of the issued and
outstanding stock of EduLink for and in exchange for stock of XXXXX, in a stock
for stock transaction intending to qualify as a tax-free exchange pursuant to
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. The
parties intend for this Plan to represent the terms and conditions of such
tax-free reorganization, which Plan the parties hereby adopt.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, IT IS AGREED:
Section 1
Terms of Exchange
1.1 Number of Shares. Upon the execution hereof, the holders of all the
issued and outstanding stock of EduLink agree to assign, transfer, and deliver
to XXXXX, free and clear of all liens, pledges, encumbrances, charges,
restrictions or known claims of any kind, nature or description, all of their
shares of EduLink stock, and XXXXX agrees to acquire such shares on the date
thereof, or as soon as practicable thereafter, by issuing and delivering in
exchange therefore solely common shares of XXXXX'x stock, par value $.001, in
the aggregate of 7,776,000 common shares, the amount of these shares shall be
adjusted to 388,800,000 common shares to take into account the forward stock
split provided for in Section 2.2 (c). Pursuant to Section 2.2 (c) prior to the
issuance of the 7,776,000 shares XXXXX will effect a forward stock split of its
issued and outstanding shares on a 50 for 1 basis, which will increase XXXXX'x
issued and outstanding stock from 5,180,450 common shares to 259,022,500 common
shares. Therefore, 388,800,000 common shares shall be issued to EduLink which
shall represent approximately sixty percent (60%) of the then issued and
outstanding stock of XXXXX. Subsequent to the date hereof, the Shareholders
shall, upon the surrender to XXXXX of the EduLink certificates representing
their respective beneficial and record ownership of one hundred percent (100%)
of the issued and outstanding shares of EduLink or as soon as practicable
thereafter, and further provided an exemption from the registration provisions
of Section 5 of the Securities Act of 1933 is available for the issuance
thereof, the Shareholders shall be entitled to receive a certificate(s)
evidencing shares of the exchanged XXXXX stock as provided for herein. Upon the
consummation of the transaction contemplated herein, XXXXX shall merge with
EduLink and become the surviving corporation.
1.2 Anti-Dilution. For all relevant purposes of this Plan, the number of
XXXXX shares to be issued and delivered pursuant to this Plan shall be
appropriately adjusted to take into account any stock split, stock dividend,
reverse stock split, recapitalization, or similar change in XXXXX common stock,
which may occur between the date of the execution of this Plan and the date of
the delivery of such shares.
1.3 Delivery of Certificates. The Shareholders shall transfer to XXXXX at
the closing provided for in Section 2 (the "Closing") the shares of common stock
of EduLink listed opposite their respective names on Exhibit A hereto (the
"EduLink shares") in exchange for shares of the common stock of XXXXX as
outlined above in Section 1.1 hereof (the "XXXXX Stock"). All of such shares of
XXXXX stock shall be issued at the closing to the Shareholders, in the numbers
shown opposite their respective names in Exhibit "A." The transfer of EduLink
shares by the Shareholders shall be effected by the delivery to XXXXX at the
Closing of certificates representing the transferred shares endorsed in blank or
accompanied by stock powers executed in blank, with all signatures guaranteed by
a national bank and with all necessary transfer taxes and other revenue stamps
affixed and acquired at the Shareholders' expense.
1.4 Further Assurances. Subsequent to the execution hereof, and from time to
time thereafter, the Shareholders shall execute such additional instruments and
take such other action as XXXXX may request in order to more effectively sell,
transfer and assign clear title and ownership in the EduLink shares to XXXXX.
Section 2
Closing
2.1 Closing. The Closing contemplated by Section 1.3 shall be held on or
before October 3 1, 1 999 or at such other time or place as may be mutually
agreed upon in writing by the parties. The Closing may also be accomplished by
wire, express mail or other courier service, conference telephone communications
or as otherwise agreed by the respective parties or their duly authorized
representatives. In any event, the closing of the transactions contemplated by
this Plan shall be effected as soon as practicable after all of the conditions
contained herein have been satisfied.
2.2 Closing Events. At the Closing, each of the respective parties hereto
shall execute, acknowledge and deliver (or shall cause to be executed,
acknowledged, and delivered) any agreements, resolutions, rulings, or other
instruments required by this Plan to be so delivered at or prior to Closing,
together with such other items as may be reasonably requested by the parties
hereto and their respective legal counsel in order to effectuate or evidence the
transaction contemplated hereby. At the Closing, the following events will take
place:
(a) The Board of Directors and the owners of a majority of the issued and
outstanding stock of XXXXX will adopt a resolution to change the name of XXXXX
to EduLink, Inc.
(b) The Board of Directors and the owners of a majority of the issued and
outstanding stock of XXXXX will adopt a resolution to increase the authorized
capital of XXXXX to 1.5 billion common shares.
(c) The Board of Directors and the owners of a majority of the issued and
outstanding stock of XXXXX will adopt a resolution to forward split issued and
outstanding common stock of
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XXXXX on a 50 for 1 basis which will increase the issued and outstanding stock
of XXXXX from 5,180,450 common shares to 259,022,500.
(d) The current officers and directors of XXXXX shall submit their
resignations and appoint the following officers and directors:
Xxxxxxx Xxxxxxxxx CEO and Director
Xx. Xxxxxx X. Xxxxxxx President, Treasurer and Director
Xxx Xxxxxxx Senior Vice President - Operations
Xxxxxxxxx Xxxxxxx Secretary
Xxxxxxx X. Xxxxxx Director
Xxxxxxxx XxXxxxx Director
Section 3
Representations, Warranties and Covenants of XXXXX
XXXXX represents and warrants to, and covenants with, the Shareholders and
EduLink as follows:
3.1 Corporate Status. XXXXX is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. XXXXX has
full corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets and to carry on its business
on all material respects as it is now being conducted, and there is no
jurisdiction in which the character and location of the assets owned by it, or
the nature of the business transacted by it, requires qualification. Included in
the XXXXX schedules (defined below) are complete and correct copies of its
Articles of Incorporation and Bylaws as in effect on the date hereof. The
execution and delivery of this Plan does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of XXXXX'x
Articles of Incorporation or Bylaws. XXXXX has taken all action required by law,
its Articles of Incorporation, its Bylaws, or otherwise, to authorize the
execution and delivery of this Plan.
3.2 Capitalization. The authorized capital stock of XXXXX as of the date
hereof consists of 50,000,000 common shares, par value $.001. Pursuant to
Section 2.2 (b), at the losing the Board of Directors will adopt an amendment to
increase the authorized capital of XXXXX from 50,000,000 common shares to 1.5
billion common shares. As of the date hereof there are 5,180,450 common shares
of XXXXX issued and outstanding. Upon completion of the forward stock split
provided for in Section 2.2 (c) XXXXX will have 259,022,500 common shares issued
and outstanding. The common shares of XXXXX issued and outstanding are fully
paid, non-assessable shares. There are no outstanding options, warrants,
obligations convertible into shares of stock, or calls or any understanding,
agreements, commitments, contracts or promises with respect to the issuance of
XXXXX'x common stock or with regard to any options, warrants or other
contractual rights to acquire any of XXXXX'x authorized but unissued common
shares.
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3.3 Financial Statements.
(a) XXXXX hereby warrants and covenants to EduLink that the financial
statements fairly and accurately represent the financial condition of XXXXX and
that no material change has occurred in the financial condition of XXXXX.
(b) XXXXX hereby warrants and represents that the financial statements
for the periods set forth in subparagraph (a), supra, fairly and accurately
represent the financial condition of XXXXX as submitted heretofore to EduLink
for examination and review.
3.4 Conduct of Business. XXXXX is a development stage company and has not
been engaged in any operational activities prior to the date hereof.
3.5 Options, Warrants and Rights. XXXXX has no options, warrants or stock
appreciation rights related to the authorized but unissued XXXXX common stock.
There are no existing options, warrants, calls, or commitments of any character
relating to the authorized and unissued XXXXX common stock, except options,
warrants, calls, or commitments, if any, to which XXXXX is not a party and by
which it is not bound.
3.6 Title to Property. XXXXX has good and marketable title to all of its
properties and assets, real and personal, proprietary or otherwise, as will be
reflected in the balance sheets of XXXXX, and the properties and assets of XXXXX
are subject to no mortgage, pledge, lien or encumbrance, unless as otherwise
disclosed in its financial statements.
3.7 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of XXXXX, threatened by or against or
effecting XXXXX at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
XXXXX does not have any knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, warrant, rule, or regulation of any
court, arbitrator, or governmental agency or instrumentality.
3.8 Books and Records. From the date hereof, and for any reasonable period
subsequent thereto, XXXXX and its present management will (i) give to the
Shareholders and EduLink, or their duly authorized representatives, full access,
during normal business hours, to all of its books, records, contracts and other
corporate documents and properties so that the Shareholders and EduLink, or
their duly authorized representatives, may inspect them; and (ii) furnish such
information concerning the properties and affairs of XXXXX as the Shareholders
and EduLink, or their duly authorized representatives, may reasonably request.
Any such request to inspect XXXXX'x books shall be directed to XXXXX'x counsel,
Xxxxxx X. Xxxxxxx, at the address set forth herein under Section 10.4 Notices.
3.9 Confidentiality. Until the Closing (and thereafter if there is no
Closing), XXXXX and its representatives will keep confidential any information
which they obtain from the Shareholders or from EduLink concerning its
properties, assets and the proposed business operations
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of EduLink. If the terms and conditions of this Plan imposed on the parties
hereto are not consummated on or before 5:00 p.m. MST on December 31, 1999 or
otherwise waived or extended in writing to a date mutually agreeable to the
parties hereto, XXXXX will return to EduLink all written matter with regard to
EduLink obtained in connection with the negotiations or consummation of this
Plan.
3.10 Conflict with Other Instruments. The transactions contemplated by this
Plan will not result in the breach of any term or provision of, or constitute a
default under any indenture, mortgage, deed of trust, or other material
agreements or instrument to which UREA was or is a party, or to which any of its
assets or operations are subject, and will not conflict with any provision of
the Articles of Incorporation or Bylaws of XXXXX.
3.11 Corporate Authority. XXXXX has full corporate power and authority to
enter into this Plan and to carry out its obligations hereunder and will deliver
to the Shareholders and EduLink, or their respective representatives, at the
Closing, a certified copy of resolutions of its Board of Directors authorizing
execution of this Plan by its officers and performance thereunder.
3.12 Consent of Shareholders. XXXXX hereby warrants and represents that the
shareholders of XXXXX, being the owners of a majority of the issued and
outstanding stock of the Corporation consented in writing to the authorization
to execute this Agreement and Plan of Merger as between XXXXX and EduLink
pursuant to a stock-for-stock transaction in which XXXXX would acquire one
hundred percent of the issued and outstanding shares of EduLink in exchange for
the issuance of a total of 388,800,000 common shares of XXXXX and thereby
EduLink shall merge with and into XXXXX.
3.13 Special Covenants and Representations Regarding the Exchanged XXXXX
Stock. The consummation of this Plan and the transactions herein contemplated
include the issuance of the exchanged XXXXX shares to the Shareholders, which
constitutes an offer and sale of securities under the Securities Act of 1933, as
amended, and applicable states' securities laws. Such transaction shall be
consummated in reliance on exemptions from the registration and prospectus
requirements of such statutes which depend interlace on the circumstances under
which the Shareholders acquire such securities. In connection with the reliance
upon exemptions from the registration and prospectus delivery requirements for
such transactions, at the Closing, Shareholders shall cause to be delivered to
XXXXX a Letter(s) of Investment Intent in the form attached hereto as Exhibit B
and incorporated herein by reference.
3.14 Undisclosed or Contingent Liabilities. XXXXX hereby represents and warrants
that it has no undisclosed or contingent liabilities which have not been
disclosed to EduLink in writing or in this Agreement or in any exhibit attached
hereto.
3.15 Information. The information concerning XXXXX set forth in this Plan, and
the XXXXX schedules attached hereto, are complete and accurate in all material
respects and do not contain, or will not contain, when delivered, any untrue
statement or a material fact or omit to state a material fact the omission of
which would be misleading to EduLink in connection with this Plan.
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3.16 Title and Related Matters. XXXXX has good and marketable title to all
of its properties, interests in properties, and assets, real and personal, which
are reflected, or will be reflected, in the XXXXX balance sheets, free and clear
of any and all liens and encumbrances.
3.17 Contracts or Agreements. XXXXX is not bound by any material contracts,
agreements or obligations which it has not already disclosed to EduLink in
writing or in this Agreement or in any Exhibit attached hereto.
3.18 Governmental Authorizations. XXXXX has all licenses, franchises,
permits and other government authorizations that are legally required to enable
it to conduct its business in all material respects as conducted on the date
hereof.
3.19 Compliance with Laws and Regulations. XXXXX has complied with all
applicable statutes and regulations of any federal, state, or other applicable
jurisdiction or agency thereof, except to the extent that noncompliance would
not materially and adversely effect the business, operations, properties,
assets, or condition of XXXXX or except to the extent that noncompliance would
not result in the occurrence of any material liability, not otherwise disclosed
to EduLink.
3.20 Approval of Plan. The Board of Directors of XXXXX has authorized the
execution and delivery of this Plan by XXXXX and have approved the Plan and the
transactions contemplated hereby. XXXXX has full power, authority, and legal
right to enter into this Plan and to consummate the transactions contemplated
hereby.
3.21 Investment Intent. XXXXX is acquiring the EduLink shares to be
transferred to it under this Plan for the purpose of merging with EduLink and
not with a view to the sale or distribution thereof, and XXXXX shall cancel the
EduLink shares upon the completion of the merger.
3.22 Unregistered Shares and Access to Information. XXXXX understands that
the offer and sale of the EduLink shares have not been registered with or
reviewed by the Securities and Exchange Commission under the Securities Act of
1933, as amended, or with or by any state securities law administrator, and no
federal, state securities law administrator has reviewed or approved any
disclosure or other material concerning EduLink or the EduLink shares. XXXXX has
been provided with and reviewed all information concerning EduLink, the EduLink
shares as it has considered necessary or appropriate as a prudent and
knowledgeable investor to enable it to make an informed investment decision
concerning the EduLink shares. XXXXX has made an investigation as to the merits
and risks of its acquisition of the EduLink Shares and has had the opportunity
to ask questions of, and has received satisfactory answers from, the officers
and directors of EduLink concerning EduLink, the EduLink shares and related
matters, and has had an opportunity to obtain additional information necessary
to verify the accuracy of such information and to evaluate the merits and risks
of the proposed acquisition of the EduLink shares.
3.23 Obligations. XXXXX has no outstanding obligations to any of its
employees or consultants.
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3.24 XXXXX Schedules. XXXXX has delivered to EduLink the following items
listed below, hereafter referred to as the "XXXXX Schedules", which are hereby
incorporated by reference and made a part hereof. A certification executed by a
duly authorized officer of XXXXX on or about the date of the Plan will be
executed to certify that the XXXXX Schedules are true and correct.
(a) Copy of Articles of Incorporation, as amended, and Bylaws;
(b) Financial statements;
(c) Shareholder list;
(d) Resolutions of Directors approving Plan;
(e) Consent of Shareholders approving Plan;
(f) Officers' Certificate as required under Section 6.2 of the Plan;
(g) Opinion of counsel as required under Section 6.4 of the Plan;
(h) Certificate of Good Standing;
Section 4
Representations, Warranties and Covenants of EduLink
EduLink represents and warrants to, and covenants with, the Shareholders and
XXXXX as follows:
4.1 Corporate Status. EduLink is a corporation duly organized, validly
existing and in under the laws of California, incorporated on January 25, 1996.
On September 30, 1990, EduLink filed its Statement By Domestic Stock Corporation
in order to receive its Certificate of Good Standing from the State of
California. EduLink has also filed tax returns for the years ended 1997 and 1996
in order to receive its Certificate of Tax Clearance from the Tax Clearance
Unit. The Statement By Domestic Stock Corporation and the tax returns for 1997
and 1996 are attached hereto as Schedule (k) of the EduLink Schedules. EduLink
has full corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry on its
business on all material respects as it is now being conducted, and there is no
jurisdiction in which the character and location of the assets owned by it, or
the nature of the business transacted by it, requires qualification. included in
the EduLink schedules (defined below) are complete and correct copies of its
Articles of Incorporation and Bylaws as in effect on the date hereof. The
execution and delivery of this Plan does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of EduLink's
Articles of Incorporation or Bylaws. EduLink has taken all action required
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by law, its Articles of Incorporation, its Bylaws, or otherwise, to authorize
the execution and delivery of this Plan.
4.2 Capitalization. The authorized capital stock of EduLink as of the date
hereof consists of 20,000,000 common shares, par value $.001 and 51 preferred
shares, par value $001. As of the date hereof there are 3,400,000 common shares
of EduLink issued and outstanding. There are no preferred shares issued and
outstanding. The foregoing shares are fully paid, non-assessable shares. As of
the date hereof there are 1,870,000 warrants outstanding. A Warrant Description
is attached hereto as Exhibit C.
4.3 Conduct of Business. EduLink will use its best efforts to maintain and
preserve its business organization, employee relationships and goodwill intact,
and will not, without the prior written consent of XXXXX, enter into any
material commitments from the date of execution of the Plan and through the
closing of the Plan.
EduLink agrees that EduLink will conduct itself in the following manner
pending the Closing:
(a) Certificate of Incorporation and Bylaws. No change will be made in
the Certificate of Incorporation or Bylaws of EduLink.
(b) Capitalization, etc. EduLink will not make any change in its
authorized or issued shares of any class, declare or pay any dividend or other
distribution, or issue, encumber, purchase or otherwise acquire any of its
shares of any class.
4.4 Title to Property. EduLink has good and marketable title to all of its
properties and assets, real and personal, proprietary or otherwise, as will be
reflected in the balance sheets of EduLink, and the properties and assets of
EduLink are subject to no mortgage, pledge, lien or encumbrance, unless as
otherwise disclosed in its financial statements and subject to the Agreement by
and Between EduLink and Saatchi & Saatchi North America Inc. ("Saatchi
Agreement") attached hereto in Schedule (f) of EduLink, Inc.'s Schedules.
4.5 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of EduLink, threatened by or against or
effecting EduLink at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
EduLink does not have any knowledge of any default on its part with respect to
any judgment, order, writ, injunction, decree, warrant, rule, or regulation of
any court, arbitrator, or governmental agency or instrumentality.
4.6 Books and Records. From the date hereof, and for any reasonable period
subsequent thereto, EduLink and its present management will (i) give to XXXXX,
or their duly authorized representatives, full access, during normal business
hours, to all of its books, records, contracts and other corporate documents and
properties so that XXXXX, or their duly authorized representatives, may inspect
them; and (ii) furnish such information concerning the properties and affairs
of EduLink as the Shareholders and EduLink, or their duly authorized
representatives, may
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reasonably request. Any such request to inspect EduLink's books shall be
directed to EduLink's representative, at the address set forth herein under
Section 10.4 Notices.
4.7 Confidentiality. Until the Closing (and thereafter if there is no
Closing), EduLink and its representatives will keep confidential any information
which they obtain from the Shareholders or from EduLink concerning its
properties, assets and the proposed business operations of EduLink. If the terms
and conditions of this Plan imposed on the parties hereto are not consummated on
or before 5:00 p.m. MST on December 31, 1999, or otherwise waived or extended in
writing to a date mutually agreeable to the parties hereto, EduLink will return
to XXXXX all written matter with regard to XXXXX obtained in connection with the
negotiations or consummation of this Plan.
4.8 Investment Intent. The Shareholders represent and covenant that they are
acquiring the unregistered and restricted common shares of XXXXX to be delivered
to them under this Plan for investment purposes and not with a view to the
subsequent sale or distribution thereof, and as agreed, supra, the Shareholders,
their successors and assigns agree to execute and deliver to XXXXX on the date
of Closing or no later than the date on which the restricted shares are issued
and delivered to the Shareholders, their assigns, or designees, an Investment
Letter similar in form to that attached hereto as Exhibit B.
4.9 Unregistered Shares and Access to Information. EduLink and the
Shareholders understand that the offer and sale of XXXXX shares to be exchanged
for the EduLink shares have not been registered with or reviewed by the
securities and Exchange Commission under the Securities Act of 1933, as amended,
or with or by any state securities law administrator, and no federal or state
securities law administrator has reviewed or approved any disclosure or other
material facts concerning XXXXX or XXXXX stock. EduLink and the Shareholders
have been provided with and reviewed all information concerning XXXXX and XXXXX
shares, to be exchanged for the EduLink shares as they have considered necessary
or appropriate as prudent and .knowledgeable investors to enable them to make
informed investment decisions concerning the XXXXX shares, to be exchanged for
the EduLink shares. EduLink and the Shareholders have made an investigation as
to the merits and risks of their acquisition of the XXXXX shares, to be
exchanged for the EduLink shares and have had the opportunity to ask questions
of, and have received satisfactory answers from, the officers and directors of
XXXXX concerning XXXXX shares to be exchanged for the EduLink shares and related
matters, and have had an opportunity to obtain additional information necessary
to verify the accuracy of such information and to evaluate the merits and risks
of the proposed acquisition of the XXXXX shares to be exchanged for the EduLink
shares.
4.10 Title to Shares. The Shareholders are the beneficial and record owners,
free and clear of any liens and encumbrances, of whatever kind or nature, of all
of the shares of EduLink of whatever class or series, which the Shareholders
have contracted to exchange.
4.11 Contracts. All claims in this section are subject to the terms and
conditions in the Saatchi Agreement, attached hereto in Schedule (f) of EduLink,
Inc.'s Schedules. It is further understood that on or before the Closing Date of
this Agreement Xxx Xxxxxxxx, Xxxxxxx Xxxxxxxxx
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and Xxxxxx Xxxxxxxx will execute their respective employment agreements with
EduLink attached hereto as Schedule G.
(a) Except for the Saatchi Agreement, attached hereto in Schedule (f) of
EduLink, Inc.'s Schedules, and the employment agreements EduLink is not a party
to any contracts, written or oral, or any other commitments to which EduLink is
a party or by which EduLink or its properties are bound.
(b) Except for the Saatchi Agreement attached hereto in Schedule (f) of
EduLink, Inc.'s Schedules and the employment agreements EduLink is not a party
to any contract, agreement, corporate restriction, or subject to any judgment,
order, writ, injunction, decree, or award, which materially and adversely effect
the business, operations, properties, assets, or conditions of EduLink.
(c) Except for the employment agreements EduLink is not a party to any
material oral or written (i) contract for employment of any officer which is
not terminable on 30 days (or less) notice; (ii) profit sharing, bonus, deferred
compensation, severance, or any other retirement plan of arrangement covered by
Title IV of the Employee Retirement Income Security Act, as amended, or
otherwise covered; (iii) agreement providing for the sale, assignment or
transfer of any of its rights, assets or properties, whether tangible or
intangible, except sales of its property in the ordinary course of business with
a value of less than $2,000; or (iv) waiver of any right of any value which in
the aggregate is extraordinary or material concerning the assets or properties
scheduled by EduLink, except for adequate value and pursuant to contract.
EduLink has not entered into any material transaction which is not listed in the
EduLink Schedules or reflected in the EduLink financial statements.
4.12 Material Contract Defaults. EduLink is not in default in any material
respect under the terms of any contract, agreement, lease or other commitment
which is material to the business, operations, properties or assets, or
condition of EduLink, and there is no event of default or event which, with
notice of lapse of time or both, would constitute a default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which EduLink has not taken adequate steps to prevent such default
from occurring, or otherwise compromised, reached a satisfaction of, or provided
for extensions of time in which to perform under any one or more contract
obligations, among others with the exception of the Saatchi Agreement, attached
hereto in Schedule (f) of EduLink, Inc.'s Schedules.
4.13 Conflict with Other Instruments. The consummation of the within
transactions will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or other
material agreement or instrument to which EduLink was or is a party, or to which
any of its assets or operations are subject, and will not conflict with any
provision of the Articles of Incorporation or Bylaws of EduLink.
4.14 Governmental Authorizations. EduLink is in good standing in the State
of California. Except for compliance with federal and state securities laws, no
authorization, approval, consent or order of, or registration, declaration, or
filing with, any court or other governmental body
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is required in connection with the execution and delivery by EduLink of this
Plan and the consummation by EduLink of the transactions contemplated hereby.
4.15 Compliance with Laws and Regulations. EduLink has complied with all
applicable statutes and regulations of any federal, state, or other applicable
jurisdiction or agency thereof, except to the extent that noncompliance would
not materially and adversely effect the business, operations, properties,
assets, or condition of EduLink or except to the extent that noncompliance would
not result in the occurrence of any material liability, not otherwise disclosed
to XXXXX.
4.16 Approval of Plan. The Board of Directors of EduLink have authorized the
execution and delivery of this Plan by EduLink and have approved the Plan and
the transactions contemplated hereby. EduLink has full power, authority, and
legal right to enter into this Plan and to consummate the transactions
contemplated hereby.
4.17 Information. The information concerning EduLink set forth in this Plan,
and the EduLink Schedules attached hereto, are complete and accurate in all
material respects and do not contain, or will not contain, when delivered, any
untrue statement or a material fact or omit to state a material fact the
omission of which would be misleading to XXXXX in connection with this Plan.
4.18 EduLink Schedules. EduLink has delivered to XXXXX the following items
listed below, hereafter referred to as the "EduLink Schedules", which is hereby
incorporated by reference and made a part hereof. A certification executed by a
duly authorized officer of EduLink on or about the date within the Plan is
executed to certify that the EduLink Schedules are true and correct.
(a) Copy of Articles of Incorporation and Bylaws;
(b) Financial Statements;
(c) Resolutions of Board of Directors approving Plan;
(d) Consent of Shareholders approving Plan;
(e) Schedule of all debts, mortgages, security interests, pledges, liens,
encumbrances, claims and the like;
(f) Schedule of all material contracts;
(g) A list of key employees, including current compensation, with notation
as to job description and whether or not such employee is subject to written
contract, and if subject to a contract or employment agreement, a copy of the
same;
(h) A schedule showing the name and location of each bank or other
institution with which EduLink has an account;
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(i) A schedule setting forth the shareholders, together with the number of
shares owned beneficially or of record by each (also attached as Exhibit A);
(j) Officers' Certificate as required by Section 7.2 of the Plan;
(k) Copy of state and federal tax returns for the years ended 1997 and 1996
and Statement By Domestic Stock Corporation.
(l) Certificate of Good Standing
Section 5
Special Covenants
5.1 Resignation of Directors. At the Closing, all of XXXXX'x current
officers and directors will resign from their respective positions, in seriatim.
5.2 Name of the Corporation. At the Closing, the Board of Directors of XXXXX
will adopt a resolution to change the name of XXXXX to EduLink, Inc.
5.3 EduLink Information Incorporated in XXXXX'x Reports. EduLink represents
and warrants to XXXXX that all the information furnished under this Plan shall
be true and correct in all material respects and that there is no omission of
any material fact required to make the information stated not misleading.
EduLink agrees to indemnify and hold XXXXX harmless, including each of its
Directors and Officers, and each person, if any, who controls such party, under
any applicable law from and against any and all losses, claims, damages,
expenses or liabilities to which any of them may become subject under applicable
law, or reimburse them for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such actions, whether or
not resulting in liability, insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of or are based on any untrue statement, or
omission of a material fact contained in such information delivered hereunder.
5.4 XXXXX Information Incorporated in EduLink's Reports. XXXXX represents
and warrants to EduLink that all the information furnished under this Plan shall
be true and correct in all material respects and that there is no omission of
any material fact required to make the information stated not misleading. XXXXX
and the current officers and directors of XXXXX agree to indemnify and hold
EduLink Harmless, including each of its Directors and Officer, and each person,
if any, who controls such party, under any applicable law from and against any
and all losses claims, damages, expenses or liabilities to which any of them any
become subject under applicable law, or reimburse them for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such actions, whether or not resulting in liability, insofar as
such losses, claims, damages, expenses, liabilities or actions arise out of or
are based on any untrue statement, or omission of a material fact contained in
such information delivered hereunder.
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5.5 Special Covenants and Representations Regarding the Exchanged XXXXX
Stock. The consummation of this Plan and the transactions herein contemplated,
including the issuance of the XXXXX shares in exchange for one hundred percent
(100%) of the issued and outstanding shares of EduLink to the Shareholders
constitutes of offer and sale of securities under the Securities Act and the
applicable state statutes, which depend, inter alia, on the circumstances under
which the Shareholders acquired such securities. XXXXX intends to rely on the
exemption of the registration provision of Section 5 of the Securities Act as
provided for under Section 4.2 of the Securities Act of 1933, which states
"transactions not involving a public offering", among others. Each Shareholder
upon submission of his EduLink shares and the receipt of the XXXXX shares
exchanged therefor, shall execute and deliver to XXXXX a litter of investment
intent to indicate, among other representations, that the Shareholder is
exchanging the EduLink shares for XXXXX shares for investment purposes and not
with a view to the subsequent distribution thereof. A proposed Investment Letter
is attached hereto as Exhibit B and incorporated herein by reference for the
general use by the Shareholders, as they may determine.
5.6 Action Prior to Closing. Upon the execution hereof until the Closing
date,
(a) EduLink and XXXXX will (i) perform all of their obligations under
material contracts, leases, insurance policies and/or documents relating to
their assets and business; (ii) use their best efforts to maintain and preserve
their business organization intact, to retain their key employees, and to
maintain its relationship with existing potential customers and client; and
(iii) fully comply with the perform in all material respects all duties and
obligations imposed on them by all federal and state laws and all rules,
regulations, and orders imposed by all federal or state governmental
authorities.
(b) Neither EduLink nor XXXXX will (i) make any change in their Articles of
Incorporation or Bylaws except and unless as contemplated pursuant to Section 3
and Section 5 of this Plan; (ii) enter into or amend any contract, agreement, or
other instrument of the types described in the parties' schedules, except that a
party may enter into or amend any contract or other instrument in the ordinary
course of business involving the sale of goods or services, provided that such
contract does not involve obligations in except of $10,000.
Section 6
Conditions Precedent to Obligations of
EduLink and the Shareholders
All obligations of EduLink and the Shareholders under this Plan are subject
to the satisfaction, on or before the Closing date, except as otherwise provided
for herein, or waived or extended in writing by the parties hereto, of the
following conditions:
6.1 Accuracy of Representations. The representations and warranties made by
XXXXX in this Plan were true when made and shall be true as of the Closing date
(except for exchanges therein permitted by this Plan) with the same force and
effect as if such representations and warranties were made at and as of the
Closing date; and, XXXXX shall have performed and complied
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with all aspects of this Agreement, unless waived or extended in writing by the
parties hereto. EduLink shall have been furnished with a certificate, signed by
a duly authorized executive officer of XXXXX and dated the Closing date, to the
foregoing effect.
6.2 Officers' Certificate. EduLink and the Shareholders shall have been
furnished with a certificate dated the Closing date and signed by a duly
authorized executive officer of XXXXX, to the effect that no litigation,
proceeding, investigation, claim, demand or inquiry is pending, or to the best
knowledge of XXXXX, threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Plan, or which
might result in any material adverse change in the assets, properties, business,
or operations of XXXXX, and that this Agreement has been complied with in all
material respects.
6.3 No Material Adverse Change. Prior to the Closing date, there shall have
not occurred any material adverse change in the financial condition, business or
operations of XXXXX, nor shall any event have occurred which, with lapse of time
or the giving of notice or both, may cause or create any material adverse change
in the financial condition, business or operations of XXXXX, except as otherwise
disclosed to EduLink.
6.4 Opinion of Counsel of XXXXX. XXXXX shall furnished to EduLink and the
Shareholders an opinion dated as of the Closing date and in form and substance
satisfactory to EduLink and the Shareholders to the effect that:
(a) XXXXX is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Nevada, and with all requisite corporate
power to perform its obligations under this Plan.
(b) The business of XXXXX, as presently conducted, including, upon the
consummation hereof, the ownership of all of the issued and outstanding shares
of EduLink, does not require it to register it to do business as a foreign
corporation on any jurisdiction other than under the jurisdiction of its
Articles of Incorporation or Bylaws and XXXXX has complied to the best of its
knowledge in all material respects with all the laws, regulations, licensing
requirements and orders applicable to its business activities and has filed with
the proper authorities, including the Department of Commerce, Division of
Corporations, and Secretary of State for the State of Nevada, all statements and
reports required to be filed.
(c) The authorized and outstanding capital stock of XXXXX as set forth in
Section 3.2 above, and all issued and outstanding shares have been duly and
validly authorized and issued and are fully paid and non-assessable.
(d) There are no material claims, suits or other legal proceedings pending
or threatened against XXXXX or any court or before or by any governmental body
which might materially effect the business of XXXXX or the financial condition
of XXXXX as a whole and no such claims, suits or legal proceedings are
contemplated by governmental authorities against XXXXX.
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(e) To the best knowledge of such counsel, the consummation of the
transactions contemplated by this Plan will not violate or contravene the
provisions of the Certificate of Incorporation or Bylaws of XXXXX, or any
contract, agreement, indenture, mortgage, or other by which XXXXX is bound.
(f) This Plan constitutes a legal, valid and binding obligation of XXXXX
enforceable in accordance with its terms, subject to the effect of any
bankruptcy, insolvency, reorganization, moratorium, or similar law effecting
creditors' rights generally and general principles of equity (regardless of
whether such principles or considered in a proceeding in equity of law).
(g) The execution and delivery of this Plan and the consummation of the
transactions contemplated hereby have been ratified by a majority of the
Shareholders of XXXXX and have been duly authorized by its Board of Directors.
(h) XXXXX has not, nor will it undertake any action, the result of which
would endanger the tax-free mature of the Plan.
6.5 Good Standing. EduLink shall have received a Certificate of Good
Standing for the State of Nevada, dated within ninety (90) days prior to
Closing, but in no event later than ten days subsequent to the execution hereof
certifying that XXXXX is in good standing as a corporation in the State of
Nevada.
6.6 Other Items. EduLink and the Shareholders shall have received such
further documents, certifications or instruments relating to the transactions
contemplated hereby as EduLink and the Shareholders may reasonably request.
Section 7
Conditions Precedent to Obligations of XXXXX
All obligations of XXXXX under this Plan are subject, at its option, to the
fulfillment, before the Closing, of each of the following conditions:
7.1 Accuracy of Representations. The representations and warranties made by
EduLink and the Shareholders under this Plan were true when made and shall be
true as of the Closing date (except for changes therein permitted by this Plan)
with the same force and effect as if such representations and warranties were
made at and as of the Closing date; and, XXXXX shall have performed and
complied with all aspects of this Agreement, unless waived or extended in
writing by the parties hereto. XXXXX shall have been furnished with a
certificate, signed by a duly authorized executive officer of EduLink and dated
the Closing date, to the foregoing effect.
7.2 Officers' Certificate. XXXXX shall have been furnished with a
certificate dated the Closing date and signed by a duly authorized executive
officer of EduLink, to the effect that no litigation, proceeding, investigation,
claim, deed, or inquiry is pending, or to the best knowledge of EduLink,
threatened, which might result in an action to enjoin or prevent the
consummation of the
-15-
transactions contemplated by this Plan, or which might result in any material
adverse change in the assets, properties, business, or operations of EduLink,
and that this Agreement has been complied with in all material respects. All of
the representations made in this paragraph 7.2 would be subject to the Saatchi
Agreement, attached hereto in Schedule (f) of EduLink, Inc.'s Schedules.
7.3 No Material Adverse Change. Prior to the Closing date, there shall have
not occurred any material adverse change in the financial condition, business or
operations of XXXXX, nor shall any event have occurred which, with lapse of time
or the giving of notice or both, may cause or create any material adverse change
in the financial condition, business or operations of EduLink, except as
otherwise disclosed to XXXXX.
7.4 Dissenter's Rights Waived. Shareholders representing one hundred percent
(100%) of the issued and outstanding shares of EduLink, and each of them, have
agreed and hereby waive any dissenters' rights, if any, under the laws of the
State of Nevada in regards to any objection to this Plan as outlined herein and
otherwise consent to and agree and authorize the execution and consummation of
the within Plan in accordance to the terms and conditions to this Plan by
EduLink.
7.5 Other Items. XXXXX shall have received such further documents,
certifications or instruments relating to the transactions contemplated hereby
as XXXXX may reasonably request.
7.6 Execution of Investment Letter. The Shareholders shall have executed and
delivered copies of Exhibit B to XXXXX.
Section 8
Termination
8.1 Termination by EduLink or the Shareholders. This Plan may be terminated
any time prior to the Closing date by action of EduLink or the Shareholders, if
XXXXX shall fail to comply in any material respect with any of the covenants or
agreements contained in this Plan, or if any of its representations and
warranties contained herein shall be inaccurate in any material respect.
8.2 Termination by XXXXX. This Plan may be terminated at any time prior to
the Closing date by action of XXXXX if EduLink shall fail to comply in any
material respect with any of the covenants or agreements contained in this Plan,
or if any of its representations or warranties contained herein shall be
inaccurate in any material respect.
8.3 Termination by Mutual Consent
(a) This Plan may be terminated at any time prior to the Closing date by
mutual consent of XXXXX, expressed by action of its Board of Directors, EduLink
or the Shareholders.
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(b) If this Plan is terminated pursuant to Section 8, this Plan shall be of
no further force and effect and no obligation, right or liability shall arise
hereunder. Each party shall are its own costs in connection herewith.
Section 9
Shareholders' Representative
The Shareholders hereby irrevocably designate and appoint Xxxxxxx Xxxxxxxxx,
as their agent and attorney in fact (the "Shareholders' Representative") with
full power and authority until the Closing to executive, deliver and receive on
their behalf all notices, requests and other communications hereunder; to fix
and alter on their behalf the date, time and place of the Closing; to waive,
amend or modify any provisions of this Plan and to take such other action on
their behalf in connection with this Plan, the Closing and the transactions
contemplated hereby as such agent deems appropriate; provided, however, that no
such waiver, amendment or modification may be made if it would decrease the
number of shares to be issued to the Shareholders under Section 1 hereof or
increase the extent of their obligation to XXXXX hereunder, unless agreed in
writing by the Shareholders.
Section 10
General Provisions
10.1 Further Assurances. At any time, and from time to time, after the
Closing date, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the intent
and purposes of the Plan.
10.2 Consolidated Financial Statements. As soon as practicable after the
closing EduLink and the Shareholders shall cause to have consolidated financial
statements prepared.
10.3 Payments of Costs and Fees. XXXXX and EduLink shall each bear their own
costs and expenses, including any legal and accounting fees in connection with
the negotiation, execution and consummation of the Plan.
10.4 Press Release and Shareholders' Communications. On the date of Closing,
or as soon thereafter as practicable, EduLink and the Shareholders shall cause
to have promptly prepared and disseminated a news release concerning the
execution and consummation of the Plan, such press release and communication to
be released promptly and within the time required by the laws, rules and
regulations as promulgated by the United States Securities and Exchange
Commission, and concomitant therewith to cause to be prepared a full and
complete letter to XXXXX'x shareholders which shall contain information required
by Regulation 240.14f-a as promulgated under Section 14(f) as mandated under
the Securities and Exchange Act of !934, as amended.
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10.5 Notices. All notices and other communications required or permitted
hereunder shall be sufficiently given if personally delivered, sent by
registered mail, or certified mail, return receipt requested, postage prepaid,
or by facsimile transmission addressed to the following parties hereto or as
such other addresses as follows:
If to XXXXX: XXXXX Enterprises, Inc.
000 Xxxxx
Xxxx Xxxxxxx, Xxxxxxx 00000
With a copy to: Xxxxxx X. Xxxxxxx, Esq.
000 Xxxxx 000 Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
If to EduLink: EduLink, Inc.
000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
If to the Shareholders: Xxxxxxx Xxxxxxxxx
000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
or at such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice of communication shall
be deemed to have been given as of the date so delivered, mailed, sent by
facsimile transmission, or telegraphed.
10.6 Entire Agreement. This Plan represents the entire agreement between the
parties relating to the subject matter hereof, including any previous letters of
intent, understandings, or agreements between XXXXX, EduLink and the
Shareholders with respect to the subject matter hereof, all of which are hereby
merged into this Plan, which alone fully and completely expresses the agreement
of the parties relating to the subject matter hereof. Excepting the foregoing
agreement, there are no other courses of dealing, understandings, agreements,
representations, or warranties, written or oral, except as set forth herein.
10.7 Governing Law. This Plan shall be governed by and construed and
enforced in accordance with the laws of the State of Nevada, except to the
extent preempted by federal law, in which even (and to that extent only) federal
law shall govern.
10.8 Tax Treatment. The transaction contemplated by this Plan is intended to
qualify as a "tax-free" reorganization under the provisions of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. EduLink and XXXXX
acknowledge, however, that each are being represented by their own tax advisors
in connection with this transaction, and neither has made any representations or
warranties to the other with respect to treatment of such transaction or nay
part of effect thereof under applicable tax laws, regulations or
interpretations; and no attorney's opinion or tax revenue ruling has been
obtained with respect to the tax consequences of the transactions contemplated
by the within Plan.
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10.10 Amendment of Waiver. Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred herein, at law
or in equity, and may be enforced concurrently or separately, and no waiver by
any party of the performance of any obligation by the other shall be encurred
ass a waiver of the same or any other default than, therefore, or thereafter
occurring or existing. Any time prior to the expiration of thirty (30) days from
the date hereof, this Plan may be amended by a writing signed by all parties
hereto, with respect to any of the terms contained herein, and any term or
condition of this Plan may be waived or time for performance thereof may be
extended by a writing signed by the party or parties for whose benefit the
provision is intended.
10.11 Counterparts. This Plan may be executed in any number of counterparts,
each of which when executed and delivered shall be deemed to be an original, and
all of which together shall constitute one and the same instruments.
10.12 Headings. The section and subsection headings in this Plan are
inserted for convenience only and shall not effect in any way the meaning or
interpretation of the Plan.
10.13 Parties in Interest. Except as may be otherwise expressly provided
herein, all terms and provisions of this Plan shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, beneficiaries,
personal and legal representatives, and assigns.
IN WITNESS WHEREOF, the parties have executed this Plan and Agreement of
Merger effective the day and year first set forth above.
Attest: XXXXX ENTERPRISES, INC.
/s/ Xxxxx Xxxxxx By /s/ Xxxxxx Xxxxxxxxxx
---------------- ------------------------
Its President
Attest: EDULINK, INC.
/s/ By /s/ Xxxxxx X. Xxxxxxxx
---------------- ------------------------
It President
Attest: SHAREHOLDERS
/s/ By /s/ Xxxxxxx Xxxxxxxxx
---------------- ------------------------
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Attest:
/s/ /s/ Xxxxxx X. Xxxxxxxx
---------------- ------------------------
Xxxxxx X. Xxxxxxxx
Attest: AM-TWO, LLC
/s/ By: /s/ Xxxx Xxxxxx
---------------- ------------------------
Xxxx Xxxxx
Its: Manager
Attest: AM-THREE, LLC
/s/ By: /s/ Xxxx Xxxxxx
---------------- ------------------------
Xxxx Xxxxx
Its: Manager
Attest: AM-FOUR, LLC
/s/ By: /s/ Xxxx Xxxxxxxxx
---------------- ------------------------
Xxxx Xxxxxxxxx
Its: Manager
