EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger is entered into as of July 23, 2002
between 1st Realty Investments, Inc., a Nevada corporation (herein "Surviving
Entity") and Great Western Land and Recreation, Inc., a Delaware corporation
(herein "Merging Entity") with respect to the following terms, and conditions.
1) Merging Entity shall be merged into Surviving Entity.
2) The effective time of the merger (the "Effective Time") shall be the
later of the time the Articles of Merger (defined below) are filed
with Nevada's Secretary of State or Delaware's Secretary of State.
3) Without any other transfer or documentation, at the Effective Time
of the merger:
(i) the separate existence of the Merging Entity shall cease
and the Merging Entity shall be merged with and into the
Surviving Entity;
(ii) the Surviving Entity shall succeed to all of Merging
Entity's rights and property;
(iii) the Surviving Entity shall be subject to all Merging
Entity's liabilities and obligations;
(iv) the articles of incorporation and bylaws of the Surviving
Entity in effect immediately prior to the Effective Time shall
be the articles of incorporation and bylaws of the Surviving
Entity except as amended pursuant to the Articles of Merger
evidencing the merger contemplated hereby filed with the
Nevada Secretary of State ("Articles of Merger") and unless
and until amended as provided by law;
(v) each share of capital stock in the Merging Entity
outstanding immediately prior to the Effective Time shall be
converted into one share of common stock, par value $.001 per
share, in Surviving Entity.
4) Merging Entity shall from time to time, as and when requested
by Surviving Entity, execute and deliver all such documents and
instruments and take all such action necessary or desirable to
evidence or carry out this merger.
5) The Directors and Officers of the Surviving Entity shall
remain as Directors and Officers for the full unexpired portion of
their term, unless removed pursuant to law.
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6) At any time prior to the Effective Time, this merger may be abandoned
without further obligation or liability by action of either the Board
of Directors of the Merging Entity or the Surviving Entity.
7) The effect of the merger are as prescribed by Nevada law.
8) Merging Entity's obligation to complete the transactions contemplated
herein is subject to fulfillment on or before the Effective Time of
each of the following conditions, unless stated otherwise below or
waived in writing by Merging Entity:
a. Surviving Entity's authorized and issued common stock having
undergone an 8:1 reverse stock split whereby, thereafter, the
number of authorized shares shall be 3,125,000 and the number
of shares of issued shall be concurrently reduced by a factor
of 8 (subject to adjustment for fractional shares, whereby
fractional shares will not be issued; instead any fractions
will be rounded up to the next whole share);
b. An amendment to the articles of incorporation of Surviving
Entity shall have become effective, increasing the number of
authorized shares of common stock from 3,125,000 to
30,000,000.
c. The representations and warranties of Surviving Entity set
forth herein will be true and correct at the Closing as though
made at and as of that date, except as affected by
transactions contemplated hereby.
d. Surviving Entity will have performed all covenants required by
this Agreement to be performed by it on or before the Closing.
e. This Agreement will have been approved by the Board of
Directors and the shareholders of Surviving Entity.
f. Surviving Entity will have delivered to the Merging Entity the
documents set forth below in form and substance reasonably
satisfactory to counsel for the Merging Entity:
(i) A certificate of an officer of Surviving Entity,
certifying that Surviving Entity is a corporation
duly organized, validly existing, and in good
standing;
(ii) A certificate of an officer of Surviving Entity,
certifying that Surviving Entity's authorized and
issued capital stock is as set forth herein;
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(iii) Copies of the resolutions of the board of directors
of Surviving Entity authorizing the execution of this
Agreement and the consummation hereof, certified by
an officer of Surviving Entity; and
(iv) Any further document as may be reasonably requested
by counsel to the Merging Entity in order to
substantiate any of the facts underlying the
representations or warranties of Surviving Entity set
forth herein.
g. There will have occurred no material adverse change in the
business, operations or prospects of Surviving Entity.
h. Xxx X. Xxxxx will be the Chairman, President and CEO of
Surviving Entity and Xxxxxxx X. Xxxxxxxx will be the Senior
Vice President of Surviving Entity. Xxx X'Xxxxxx will be the
Vice-President and CFO.
i. The Board of Directors of Surviving Entity will consist of Xxx
X. Xxxxx, Chairman, Xxxxxxx X. Xxxxxxxx, Xxxxx Xxxxx and
Xxxxxx Xxxxx.
j. Immediately upon the Merger becoming effective, the name of
Surviving Entity will be Great Western Land and Recreation,
Inc., pursuant to an amendment of Surviving Entity's articles
of incorporation, whether filed separately or as a part of the
Articles of Merger effecting the merger contemplated hereby.
k. Holders of not more than 20% of Surviving Entity's common
stock outstanding at the close of business immediately prior
to the Merger, shall have demanded appraisal for such shares
in accordance with Sections 92A.300 to 92A.500, inclusive, of
the Nevada General Corporation Law, as amended.
9) Surviving Entity's obligation to complete the transactions contemplated
herein will be subject to fulfillment on or before the Effective Time
of each of the following conditions, unless waived in writing by
Surviving Entity, as appropriate:
a The representations and warranties of Merging Entity set forth
herein will be true and correct at the Closing as though made
at and as of that date, except as affected by transactions
contemplated hereby.
b. Merging Entity will have performed all covenants required by
this Agreement to be performed by them on or before the
Closing.
c. This Agreement will have been approved by the Board of
Directors and the shareholders of Merging Entity.
d. Merging Entity will have delivered to Surviving Entity the
documents set
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forth below in form and substance reasonably satisfactory to
counsel for Surviving Entity:
(i) A certificate of an officer of Merging Entity,
certifying that Merging Entity is a corporation duly
organized, validly existing, and in good standing;
(ii) Resolutions of the board of directors of Merging
Entity authorizing the execution of this Agreement
and the consummation hereof, certified by an officer
of Merging Entity; and
(iii) Any further document as may be reasonably requested
by counsel to Surviving Entity in order to
substantiate the facts underlying any of the
representations or warranties of the Merging Entity
set forth herein.
e. There will have occurred no material adverse change in the
business, operations or prospects of Merging Entity.
10) Representations and Warranties of Surviving Entity.
Surviving Entity represents, warrants and covenants as follows:
a. Surviving Entity is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Nevada and is licensed or qualified as a foreign corporation
in all states in which the nature of its business or the
character or ownership of its properties makes such licensing
or qualification necessary.
b. As of the date of this Agreement, the authorized capital stock
of Surviving Entity consists of (i) 25,000,000 shares of
common stock, $0.001 par value per share, of which 17,518,525
are issued and outstanding and (ii) 10,000,000 shares of
preferred stock, $.0.001 par value, of which no shares are
issued and outstanding. To the knowledge of Surviving Entity,
all issued and outstanding shares of Surviving Entity's common
and preferred stock are fully paid and non-assessable.
c. Surviving Entity has the wholly owned subsidiaries listed in
Exhibit "A."
d. Execution of this Agreement and performance by Surviving
Entity hereunder has been or will be duly authorized by all
requisite corporate action on the part of Surviving Entity,
and this Agreement constitutes a valid and binding obligation
of Surviving Entity, and Surviving Entity's performance
hereunder will not violate any provision of any charter,
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bylaw, indenture, mortgage, lease, or agreement, or any order,
judgment, decree, or, to Surviving Entity's knowledge any law
or regulation, to which any property of Surviving Entity is
subject or by which Surviving Entity is bound.
e. Surviving Entity has full corporate power and authority to
enter into this Agreement and to carry out its obligations
hereunder, and will deliver at the Closing a certified copy of
resolutions of its board of directors authorizing execution of
this Agreement by its officers and performance hereunder.
f. Except as previously disclosed in writing to Merging Entity,
there is no litigation or proceeding pending, or to Surviving
Entity's knowledge threatened, against or relating to
Surviving Entity, its properties or businesses.
g. Surviving Entity is not a party to any material contract other
than those listed in Surviving Entity's Form 10-QSB periodic
report for the period ending May 31, 2002, as filed with the
Securities Exchange Commission.
h. Surviving Entity has no material assets and no liabilities,
except those included in Surviving Entity's Form 10-QSB
periodic report for the period ending May 31, 2002, as filed
with the Securities Exchange Commission and any liabilities
incurred in the ordinary course of business from May 31, 2002
to the Closing Date.
i. As of the date hereof, Xxx X. Xxxxx serves as Chairman, and
Xxxxxxx X. Xxxxxxxx serves as President of Surviving Entity.
None of these officers are currently receiving any
compensation from Surviving Entity for such service.
j. As of the date hereof, no current officer, director, affiliate
or person is known to Surviving Entity to be the record or
beneficial owner of in excess of 5% of Surviving Entity's
common stock, other than Xxx X. Xxxxx, Chairman, Xxxxxxx X
Xxxxxxxx, President and Xxxxx Xxxxxxx an individual, and no
person known by Surviving Entity to be an associate of any of
the foregoing is a party adverse to Surviving Entity or has a
material interest adverse to Surviving Entity in any material
pending legal proceeding.
k. To its knowledge, Surviving Entity has filed in materially
correct form all federal, state, and other tax returns of
every nature required to be filed by it and has paid all taxes
as shown on such returns and all assessments, fees and charges
received by it to the extent that such taxes, assessments,
fees
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and charges have become due. Surviving Entity has also paid
all material taxes which do not require the filing of returns
and which are required to be paid by it. To the extent that
tax liabilities have accrued, but have not become payable,
they have been adequately reflected as liabilities on the
books of Surviving Entity.
l. Surviving Entity is a publicly reporting company pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Act") and is in compliance with all reporting
requirements of the Act, except as follows: The last annual
report on Form 10-K was for the year ended August 31, 1991,
and the last quarterly report on Form 10-Q for the quarter
ended November 30, 1991 were filed on or about December 13,
1991 and January 21, 1992 respectively. Surviving Entity has
not filed annual reports for the years ended August 31, 1992
through 2000, or quarterly reports for the quarters ended
February 28, 1992 through May 31, 2000. On or about June 25,
2002 quarterly reports for the quarters ended November 30,
2000 through February 28, 2002 and an annual report on Form
10KSB for the fiscal year ended August 31, 2001 were filed
with the SEC. On July 12, 2002, a quarterly report for the
quarter ended May 31, 2002 was filed with the SEC. Due to
changes in personnel and the lack of availability of records
kept by such personnel prior to 2000, Surviving Entity has
determined that certain of its records for the fiscal years
1992 through 2000 are not available and are, therefore, not
able to be audited and the cost of recreating and auditing
such records, should such recreation be possible, would not be
justified in light of the age of the information and its
relevancy to current operations. There is therefore, no
intention of preparing or filing annual or quarterly reports
for the periods set forth above through the year ended August
31, 2000. Surviving Entity's Form 10-KSB for the period ending
August 31, 2001, its Form 10-QSB for the periods ending
November 30, 2000, February 28, 2001, May 31, 2001, November
30, 2001, February 28, 2002 and May 31, 2002 and any other
periodic filings made by Surviving Entity as filed with the
SEC, including all exhibits, documents and attachments
thereto, are true and correct in all material respects and do
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make any statement therein not materially
misleading.
m. Holders of a majority of the shares of Surviving Entity's
common stock outstanding have consented to the transaction
contemplated by this Agreement.
n. Surviving Entity has had the opportunity to perform all due
diligence investigations of Merging Entity as it has deemed
necessary or appropriate and to ask questions of Merging
Entity's officers and directors and has
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received satisfactory answers to all of its
questions. Surviving Entity has had access to all
documents and information about Merging Entity and
have reviewed sufficient information to allow it to
evaluate the merits and risks of the acquisition of
Merging Entity.
11) Representations and Warranties of Merging Entity.
Merging Entity represents and warrants as follows:
a. Merging Entity is a corporation duly organized,
validly existing, and in good standing under the laws
of the state of Delaware and is licensed or qualified
as a foreign corporation in all places in which the
nature of its business or the character or ownership
of its properties makes such licensing or
qualification necessary.
b. There are no agreements purporting to restrict the
transfer of the Merging Entity shares, nor any voting
agreements, voting trusts or other arrangements
restricting or affecting the voting of the Merging
Entity Shares. There are no subscription rights,
options (except for an Employee Stock Option Plan,
the details of which have been previously provided to
Surviving Entity), warrants, convertible securities,
or other rights (contingent or otherwise) presently
outstanding, for the purchase, acquisition, or sale
of the capital stock of Merging Entity, or any
securities convertible into or exchangeable for
capital stock of Merging Entity or other securities
of Merging Entity, from or by Merging Entity.
c. Except as previously disclosed in writing to
Surviving Entity, there is no litigation or
proceeding pending, or to Merging Entity's knowledge,
threatened against or relating to Merging Entity.
d. Merging Entity has filed in materially correct form
all tax returns of every nature required to be filed
by it and has paid all taxes as shown on such returns
and all assessments, fees and charges received by it
to the extent that such taxes, assessments, fees and
charges have become due. Merging Entity has also paid
all material taxes which do not require the filing of
returns and which are required to be paid by it. To
the extent that tax liabilities have accrued, but
have not become payable, they have been adequately
reflected as liabilities on the books of Merging
Entity.
e. Merging Entity has had the opportunity to perform all
due diligence investigations of Surviving Entity as
it has deemed necessary or appropriate and to ask
questions of Surviving Entity's officers and
directors and has received satisfactory answers to
all of its questions. Merging Entity has had access
to all documents and information about
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Surviving Entity and have reviewed sufficient
information to allow it to evaluate the merits and
risks of the transaction contemplated hereby.
f. Execution of this Agreement and performance by
Merging Entity hereunder has been duly authorized by
all requisite corporate action on the part of Merging
Entity, and this Agreement constitutes a valid and
binding obligation of Merging Entity, and Merging
Entity's performance hereunder will not violate any
provision of any charter, bylaw, indenture, mortgage,
lease, or agreement, or any order, judgment, decree,
or, to Merging Entity's knowledge, any law or
regulation, to which any property of Merging Entity
is subject or by which Merging Entity is bound.
g. Merging Entity is not a party to any material
contract other than those previously disclosed in
writing to Surviving Entity.
h. Merging Entity has no material assets and no
liabilities, except as previously disclosed in
writing to Surviving Entity.
12) Conduct Prior to the Effective Time.
a. Surviving Entity agrees that between the date of this
Agreement and the Effective Time it will take the
following actions at its sole expense, which expense
shall be paid or satisfied prior to Closing:
(i) Effect a reverse split of its issued and
outstanding common stock of 1 share for
every 8 shares currently issued and
outstanding, reducing the amount of
Surviving Entity common stock currently
issued and outstanding from 17,518,525 to
2,187,359 shares.
(ii) Increase its authorized common stock to
30,000,000 shares.
(iii) Complete all necessary actions to change the
name of the Company from 1st Realty
Investments, Inc. to GREAT WESTERN LAND
AND RECREATION, INC., such name change to be
effective upon or immediately after the
effectiveness of the Merger.
b. Surviving Entity and Merging Entity covenant that
between the date of this Agreement and the Closing as
to each of them:
(i) Surviving Entity and Merging Entity will
cooperate with each other in the preparation
and filing of an information statement
prepared pursuant to Sections 14(c) & (f) of
the Securities Exchange Act of 1934 to be
sent to the shareholders of Surviving Entity
and filed with the SEC describing the terms
and conditions of the merger, the change in
control of Surviving Entity and the changes
in capitalization of Surviving Entity and
the name change contemplated by Sections
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8(a), (b) and (k) above, and agree to use
their best efforts to cause such statement
to be prepared and filed in preliminary form
within ten (10) days of the date of
execution of this Agreement by all parties.
Merging Entity agrees to bear all expenses
for the filing of the information statement
prepared pursuant to Sections 14(c) & (f) of
the Securities Exchange Act of 1934 as well
as any amendments to same and the
distribution of the information statement to
the shareholders of Surviving Entity.
Surviving Entity agrees to bear all costs
and expenses relating to the preparation and
filing of the annual report required on Form
10-KSB for the fiscal year 2002 and all
costs of auditing its financial statements
reported therein prior to Closing.
(ii) Neither of Surviving Entity or Merging
Entity will make any change in its charter
documents, by-laws, or other corporate
documents except as provided herein.
(iii) Surviving Entity and Merging Entity will
each use its best efforts to maintain and
preserve its business organization, employee
relationships, and goodwill intact, and
Surviving Entity will not enter into any
material commitment except in the ordinary
course of business.
13) Additional Covenants.
a. Between the date of this Agreement and the Effective
Time, Merging Entity, with respect to itself, and
Surviving Entity, with respect to itself, will, and
will cause their respective representatives to (i)
afford the other party and its representatives access
to their personnel, properties, contracts, books and
records, and other documents and data, as reasonably
requested by the other party; (ii) furnish the other
party and its representatives with copies of all such
contracts, books and records, and other existing
documents and data as the other may reasonably
request in connection with the transaction
contemplated by this Agreement; and (iii) furnish the
other party and its representatives with such
additional financial, operating, and other data and
information as the other may reasonably request.
Merging Entity and Surviving Entity will provide each
other with, complete copies of all material contracts
and other relevant information on a timely basis in
order to keep the other party fully informed of the
status of their respective business and operations.
b. Surviving Entity and Merging Entity will cooperate
with each other in the preparation of a Form 8-K if
required to be filed with the SEC describing the
transaction contemplated by this Agreement and such
other items as
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are required by the SEC rules and regulations.
c. Merging Entity will deliver Merging Entity's
corporate books and records, including all records
relating to Merging Entity's audited financial
statements, to Surviving Entity at the Effective
Time.
d. The parties agree that they will not make any public
announcements relating to this Agreement or the
transactions contemplated herein without the prior
written consent of the other party, except as may be
required upon the written advice of counsel to comply
with applicable laws or regulatory requirements after
consulting with the other party hereto and seeking
their consent to such announcement.
14) Termination.
This Agreement may be terminated (1) by mutual consent in writing or
(2) by either Merging Entity or Surviving Entity if there has been a
material misrepresentation or material breach of any warranty or
covenant by the non-terminating party that is not cured by the
Effective Time.
15) Expenses.
Except as expressly set forth herein, whether or not the transaction
contemplated hereby is consummated, each of the parties will pay at or
before the Effective Time all of his, her, or its own legal and
accounting fees and other expenses incurred in the preparation of this
Agreement and the performance of the terms and provisions of this
Agreement.
16) Survival of Representations and Warranties.
The representations and warranties of Merging Entity and Surviving
Entity set out in this Agreement will survive the Closing for a period
of thirty days, except for the representations and warranties set forth
in Sections 10(k) and 11(d) regarding tax liabilities with shall
survive for seven years from the date of this Agreement.
17) Waiver.
Any failure on the part of either party hereto to comply with any of
its obligations, agreements, or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
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18) Brokers.
There are no Brokers involved in this transaction.
19) Notices.
All notices and other communications under this Agreement must be in
writing and will be deemed to have been given if delivered in person or
sent by prepaid first-class certified mail, return receipt requested,
or recognized commercial courier service, as follows:
If to 1st Realty, to:
1st Realty Investments, Inc.
0000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
If to Great Western Land and Recreation, Inc. to :
Great Western Land and Recreation, Inc
0000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
20) General Provisions.
a. This Agreement will be governed by and under the laws of the
State of Nevada, USA without giving effect to conflicts of law
principals. If any provision hereof is found invalid or
unenforceable, that part will be amended to achieve as nearly
as possible the same effect as the original provision and the
remainder of this Agreement will remain in full force and
effect.
b. Any dispute arising under or in any way related to this
Agreement will be submitted to binding arbitration before a
panel of three arbitrators of the American Arbitration
Association. The arbitrators will be selected and the
arbitration will conducted in accordance with the
Association's commercial rules then in effect. The arbitration
will be conducted in the State of Arizona. The decision of the
arbitrators will set forth in reasonable detail the basis for
the decision and will be binding on the parties. The
arbitration award may be confirmed by any court of competent
jurisdiction.
c. In any adverse action, the parties will restrict themselves to
claims for compensatory damages and/or securities issued or to
be issued and no claims will be made by any party or affiliate
for lost profits, punitive or multiple damages.
d. This Agreement, together with any exhibits hereto, constitutes
the entire agreement and final understanding of the parties
with respect to the subject matter
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hereof and supersedes and terminates all prior and/or
contemporaneous understandings and/or discussions between the
parties, whether written or verbal, express or implied,
relating in any way to the subject matter hereof. This
agreement may not be altered, amended, modified or otherwise
changed in any way except by a written agreement, signed by
both parties.
e. This Agreement will inure to the benefit of, and be binding
upon, the parties hereto and their successors and assigns;
provided, however, that any assignment by either party of
Merging Entity rights under this Agreement without the written
consent of the other party will be void.
f. The parties agree to take any further actions and to execute
any further documents which may from time to time be necessary
or appropriate to carry out the purposes of this Agreement.
g. The headings of the Sections, paragraphs and subparagraphs of
this Agreement are solely for convenience of reference and
will not limit or otherwise affect the meaning of any of the
terms or provisions of this Agreement. The references in this
Agreement to Sections, unless otherwise indicated, are
references to sections of this Agreement.
h. This Agreement may be executed in counterparts, each one of
which will constitute an original and all of which taken
together will constitute one document. This Agreement may be
executed by delivery of a signed signature page by fax to the
other parties hereto and such fax execution and delivery will
be valid in all respects.
Signed, sealed and delivered as the act of each party hereto on the date first
above written.
1ST REALTY INVESTMENTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
_____________________________
Xxxxxxx X. Xxxxxxxx, President
GREAT WESTERN LAND AND RECREATION, INC.
By: /s/ Xxx X. Xxxxx
____________________________________
Xxx X. Xxxxx, President and CEO
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EXHIBIT A
1ST REALTY INVESTMENTS, INC.
LIST OF SUBSIDIARIES
Firebird Financial, L.L.C., an Arizona limited liability corporation
First National Realty, L.L.C., an Arizona limited liability corporation
F Troops L.L.C., an Arizona limited liability corporation
Bosque del San Antonio, L.L.C., an Arizona limited liability corporation
Aquarius Mountain Water & Mineral, L.L.C., an Arizona limited liability
corporation
Willow Springs Water L.L.C., a New Mexico limited liability corporation
Houston Damage Control L.L.C., a Texas limited liability corporation
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