1
Exhibit 10.1
AGREEMENT AND PLAN OF REORGANIZATION
AND CORPORATE SEPARATION
THIS AGREEMENT AND PLAN OF REOGANIZATION AND CORPORATE SEPARATION (the
"Agreement") is entered into effective the 3rd day of March, 2003, by and
between CORDIA CORPORATION, a Nevada corporation, (hereinafter referred to as
"Cordia"), and WEST LANE GROUP, INC., a New York corporation (hereinafter
referred to as "West Lane"), based on the following:
Premises
Cordia owns various corporations engaged in businesses ranging from
telecommunication to insurance. Cordia is interested in moving its business
focus away from the insurance business. To this end, Cordia wants to transfer
its interest in its insurance business, which is currently operated through
wholly owned subsidiaries named ISG Group, Inc. ("ISG") and US Direct
Insurance Agency, Inc. ("US Direct"). ISG (doing business as Insurance
Solutions Group) owns Universal Recoveries, Inc. (doing business as
Subrogation Partners), U.L.A.E., Inc. (doing business as Claims Partners) and
US Direct (doing Business as Premium Partners). All the subsidiary entities
will be transferred with ISG and US Direct.
Cordia's board of directors has analyzed the best way to transfer ISG and
receive the most value for Cordia and its shareholders. Given ISG's current
losses and the potential for finding a buyer for ISG, Cordia has approached
West Lane, which is controlled by the current management of ISG. West Lane
owns seven hundred thousand shares of Cordia's common stock.
West Lane and ISG have agreed to split off ISG from Cordia by
transferring control of ISG to West Lane in exchange for a purchase price of
seven hundred fifty thousand dollars ($750,000). The purchase price will be
represented by a promissory note from West Lane to Cordia in the amount of
seven hundred fifty thousand dollars ($750,000).
Agreement
Based on the stated premises, which are incorporated herein by reference,
and for and in consideration of the mutual covenants and agreements
hereinafter set forth, the mutual benefits to the parties to be derived here
from, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, it is hereby agreed as follows:
ARTICLE I
Sale of Business/Corporate Separation
1.01 Sale of Business/Corporate Separation. On the terms, and
subject to the conditions, set forth in this Agreement, on the closing date,
Cordia agrees to sell, transfer, convey and deliver to West Lane and West Lane
agrees to accept and purchase ISG and US Direct, along with ISG's and US
Direct's existing business and assets, as a going concern, including, without
limiting the generality of the foregoing, the tangible and intangible personal
property, leasehold interest (subject to the provisions set forth herein),
equipment, and its subsidiaries. The transfer of ISG shall refer to not only
the transfer of ISG but also any and all subsidiaries of ISG including but not
limited to Universal Recoveries, Inc. (doing business as Subrogation
Partners); U.L.A.E., Inc. (doing business as Claims Partners) along with all
the business and assets, tangible and intangible of the subsidiaries. The
transfer of US Direct shall refer to not only the transfer of US Direct but
also any and all subsidiaries of US Direct along with all the business and
assets, tangible and intangible of the subsidiaries. Except as specifically
set forth herein, no other assets of Cordia are to be sold, transfer, conveyed
or delivered to West Lane.
1.02 Consideration for Sale of Business. In consideration of the
conveyance from Cordia to West Lane of one hundred percent ownership interest
in ISG and US Direct, West Lane hereby agrees to deliver to Cordia, at the
Closing, as hereinafter defined, Seven hundred thousand a promissory note in
the principal amount of seven hundred fifty thousand dollars ($750,000) and
bearing interest at 6% as follows: the first interest payment is due March 31,
2003, then payable quarterly until December 31, 2004, with a final interest
payment covering only two months due on February 28, 2005. The promissory
note shall be secured by seven hundred thousand (700,000) shares of Cordia's
common stock held by West Lane. The promissory note shall be in substantially
similar form to the note attached hereto as exhibit "A."
1.03 Further Assurances. At the Closing and from time to time
thereafter, West Lane and Cordia shall execute such additional instruments and
take such other action as the parties may reasonably request, without undue
cost to West Lane or Cordia in order to more effectively sell, transfer, and
assign clear title and ownership to the business and assets.
1.04 Encumbrances. All shares of ISG and US Direct to be transferred
by Cordia shall be done so without any liens, claims and encumbrances of
whatever nature and the recipient of the shares shall have the free and
unqualified right to bargain, sell, transfer, convey, and assign the same
without the prior authorization, consent or approval of any other party,
except as may be limited by restriction under federal or state Securities
laws. The shares of Cordia held by West Lane are deemed "restricted
securities" as that term is defined under the Securities Act of 1933, as
amended, and the parties acknowledges the restriction on transfer placed on
them by such securities laws. Cordia acknowledged that these restrictions
will not prevent the transfer of such shares to Cordia and Cordia will not
rely on this restriction to terminate this Agreement or the provisions under
this Agreement.
1.05 Access to Properties and Records Prior to Closing. Until the
Closing Date, West Lane and Cordia will afford to the other party's officers
and authorized representatives full access to the properties, books, and
records of the other party in order that each party may have full opportunity
to make such reasonable investigation as it shall desire to make of the
affairs of West Lane or Cordia and will furnish the other party with such
additional financial and other information as to the business and properties
of West Lane or Cordia as each party shall from time to time reasonably
request.
1.06 Delivery of Certificates by Cordia. The transfer of ISG and US
Direct shares by Cordia shall be effected by the delivery to West Lane at the
Closing of certificates representing the transferred shares endorsed in blank
or accompanied by stock powers executed in blank, with all signatures
medallion guaranteed and with all necessary transfer taxes and other revenue
stamps affixed.
1.07 Closing and Parties. The Closing contemplated hereby shall be
held at a mutually agreed upon time and place (the "Closing Date"). The
Closing may be accomplished by wire, express mail, overnight courier,
conference telephone call or as otherwise agreed to by the respective parties
or their duly authorized representatives.
1.08 Closing Events.
(a) Cordia Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article IV, Cordia shall deliver to West Lane at
Closing all the following:
(i) A certificate of good standing from the secretary of States of
Nevada and New York, issued as of a date within five days prior to the Closing
Date, certifying that Cordia, ISG and US Direct are in good standing as
corporations in the respective States of Nevada and New York;
(ii) Incumbency and specimen signature certificates dated the Closing
Date with respect to the officers of Cordia executing this Agreement and any
other document delivered pursuant hereto on behalf of Cordia;
(iii) Copies of the resolutions of Cordia's board of directors and
shareholder minutes or consents authorizing the execution and performance of
this Agreement and the contemplated transactions, certified by the secretary
or an assistant secretary of Cordia as of the Closing Date;
(iv) The certificate contemplated by Section 4.02, duly executed by
the chief executive officer of Cordia;
(v) The certificate contemplated by Section 4.03, dated the Closing
Date, signed by the chief executive officer of Cordia;
(vi) Certificates for ISG Group, Inc. (10,540,000) shares of ISG's
Common Stock in the name of West Lane, which shares shall represent one
hundred percent (100%) of the issued and outstanding stock of ISG;
(vii) Certificates for US Direct Insurance Agency, Inc. (11,111)
shares of US Direct's Common Stock in the name of West Lane, which shares
shall represent one hundred percent (100%) of the issued and outstanding stock
of US Direct; and
In addition to the above deliveries, Cordia shall take all steps and
actions as West Lane may reasonably request or as may otherwise be reasonably
necessary to consummate the transactions contemplated hereby.
(b) West Lane Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article V, West Lane shall deliver to Cordia at
Closing all the following:
(i) A certificate of good standing from the secretary of state of New
York, issued as of a date within five days prior to the Closing Date
certifying that West Lane is in good standing as a corporation in the State of
New York;
(ii) Incumbency and specimen signature certificates dated the Closing
Date with respect to the officers of West Lane executing this Agreement and
any other document delivered pursuant hereto on behalf of West Lane;
(iii) Copies of resolutions of the board of directors and of the
stockholders of West Lane authorizing the execution and performance of this
Agreement and the contemplated transactions, certified by the secretary or an
assistant secretary of West Lane as of the Closing Date;
(iv) The certificate contemplated by Section 5.02, executed by the
chief executive officer of West Lane;
(v) The certificate contemplated by Section 5.03, dated the Closing
Date, signed by the chief executive officer of West Lane;
(vi) A promissory note in the principal amount of seven hundred fifty
thousand dollars ($750,000) and in substantially similar form and tenor to the
promissory note attached hereto as exhibit "A;" and
(vii) A pledge and security agreement securing the promissory note.
In addition to the above deliveries, West Lane shall take all steps and
actions as West Lane may reasonably request or as may otherwise be reasonably
necessary to consummate the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF WEST LANE
As an inducement to, and to obtain the reliance of Cordia, West Lane
represents and warrants as follows:
2.01 Organization. West Lane is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the State of New York and has the corporate power and is and will be
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 in all material
respects as it is now being conducted, and there are no other jurisdictions in
which it is not so qualified in which the character and location of the assets
owned by it or the nature of the material business transacted by it requires
qualification, except where failure to do so would not have a material adverse
effect on its business, operations, properties, assets or condition. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement in accordance with the terms
hereof will not, violate any provision of West Lane's articles of
incorporation or bylaws, or other agreement to which it is a party or by which
it is bound.
2.02 Approval of Agreement. West Lane has full power, authority, and
legal right and has taken, or will take, all action required by law, its
articles of incorporation, bylaws, and otherwise to execute and deliver this
Agreement and to consummate the transactions herein contemplated, except
Cordia which has been waived. The board of directors of West Lane has
authorized and approved the execution, delivery, and performance of this
Agreement and the transactions contemplated hereby; subject to the approval of
the West Lane shareholders and compliance with state and federal corporate and
securities laws.
2.03 Encumbrances. The shares of Cordia common stock to be
transferred by West Lane hereby are conveyed free and clear of any and all
liens, claims, and encumbrances, and West Lane has the free and unqualified
right to bargain, sell, transfer, convey, and assign the same without the
prior authorization, consent, or approval of any other party.
2.04 Information. The information concerning West Lane set forth in
this Agreement is complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a material
fact required to make the statements made, in light of the circumstances under
which they were made, not misleading.
2.05 Absence of Certain Changes or Events. Except as set forth in
this Agreement, or as updated by a written schedule:
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or condition of
West Lane or (ii) any damage, destruction, or loss to West Lane (whether or
not covered by insurance) materially and adversely affecting the business,
operations, properties, assets, or conditions of West Lane;
(b) West Lane has not (i) amended its articles of incorporation or
bylaws; (ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any of
its capital stock; (iii) waived any rights of value which in the aggregate are
extraordinary or material considering the business of West Lane; (iv) made any
material change in its method of management, operation, or accounting; (v)
entered into any other material transactions; (vi) made any accrual or
arrangement for or payment of bonuses or special compensation of any kind or
any severance or termination pay to any present or former officer or employee;
(vii) increased the rate of compensation payable or to become payable by it to
any of its officers or directors or any of its employees whose monthly
compensation exceeds $1,000; or (viii) made any increase in any profit-
sharing, bonus, deferred compensation, insurance, pension, retirement, or
other employee benefit plan, payment, or arrangement made to, for, or with its
officers, directors, or employees;
(c) West Lane has not (i) granted or agreed to grant any options,
warrants, or other rights for its stocks, bonds, or other corporate securities
calling for the issuance thereof; (ii) borrowed or agreed to borrow any funds
or incurred, or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary course of
business; (iii) paid any material obligation or liability (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent West Lane balance sheet and current liabilities incurred since that
date in the ordinary course of business; (iv) sold or transferred, or agreed
to sell or transfer, any of its material assets, properties, or rights (except
assets, properties, or rights not used or useful in its business which, in the
aggregate have a value of less than $5,000 or canceled, or agreed to cancel,
any debts or claims (except debts and claims which in the aggregate are of a
value of less than $5,000); (v) made or permitted any amendment or termination
of any contract, agreement, or license to which it is a party if such
amendment or termination is material, considering the business of West Lane;
or (vi) issued, delivered, or agreed to issue or deliver any stock, bonds, or
other corporate securities including debentures (whether authorized and
unissued or held as treasury stock); and
(d) To the best knowledge of West Lane, it has not become subject to
any law or regulation, which materially and adversely affects, or in the
future would be reasonably expected to adversely affect, the business,
operations, properties, assets, or condition of West Lane.
2.06 Litigation and Proceedings. There are no material actions,
suits, or administrative or other proceedings pending or, to the knowledge of
West Lane, threatened by or against West Lane or adversely affecting West Lane
or its properties, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of
any kind. West Lane does not have any knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree, award, rule, or
regulation of any court, arbitrator, or governmental agency or
instrumentality.
2.07 Compliance with Laws and Regulations. West Lane has complied
with all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
(i) could not materially and adversely affect the business, operations,
properties, assets, or condition of West Lane or (ii) could not result in the
occurrence of any material liability for West Lane. To the best knowledge of
West Lane, the consummation of this transaction will comply with all
applicable statutes and regulations, subject to the preparation and filing of
any forms required by state and federal securities laws.
2.08 Material Contract Defaults. West Lane is not in default in any
material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets, or condition of West Lane, and there is no event of
default or other event which, with notice or 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 West Lane has not
taken adequate steps to prevent such a default from occurring.
2.09 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed
of trust, or other material contract, agreement, or instrument to which West
Lane is a party or to which any of its properties or operations are subject.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF CORDIA
As an inducement to, and to obtain the reliance of, West Xxxx, Xxxxxx
represents and warrants as follows:
3.01 Organization. Cordia is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Nevada and has the corporate power and is and will be
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 in all material
respects as it is now being conducted, and there are no other jurisdictions in
which it is not so qualified in which the character and location of the assets
owned by it or the nature of the material business transacted by it requires
qualification, except where failure to do so would not have a material adverse
effect on its business, operations, properties, assets or condition of Cordia.
The execution and delivery of this Agreement does not, and the consummation of
the transactions contemplated by this Agreement in accordance with the terms
hereof will not, violate any provision of Cordia's articles of incorporation
or bylaws, or other material agreement to which it is a party or by which it
is bound.
3.02 Approval of Agreement. Cordia has full power, authority, and
legal right and has taken, or will take, all action required by law, its
articles of incorporation, bylaws, or otherwise to execute and deliver this
Agreement and to consummate the transactions herein contemplated. The board
of directors of Cordia have authorized and approved the execution, delivery,
and performance of this Agreement and the transactions contemplated hereby;
subject to the approval of the Cordia Stockholders, if required, and
compliance with state and federal corporate and securities laws.
3.03 Capitalization. The authorized capitalization of Cordia
consists of 20,000,000 shares of common stock, $0.001 par value, of which as
of the date hereof 5,751,000 shares are issued and outstanding and 5,000,000
shares of Preferred Stock, $0.001 par value, none of which is issued and
outstanding. All issued and outstanding shares of Cordia are legally issued,
fully paid, and nonassessable and not issued in violation of the preemptive or
other right of any person. There are no dividends or other amounts due or
payable with respect to any of the shares of capital stock of Cordia.
3.04 Financial Statements.
(a) Included in Schedule 3.04 are the audited balance sheet of Cordia
as of December 31, 2001 and 2000, and the related statements of operations,
cash flows, and stockholders' equity for the period September 30, 2002,
including the notes thereto, and the accompanying report of Xxxxxxx Xxxxxxx
Xxx & Co., L.L.C., independent certified public accountants. Such financial
statements shall show in significant detail the debts, obligations and
liabilities of ISG and US Direct as separate items so that a reader of such
financial statements will be able to determine the debts, obligations and
liabilities of ISG and US Direct.
(b) The audited financial statements delivered pursuant to Section
3.04(a) have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved. The
financial statements of Cordia present fairly, as of their respective dates,
the financial position of Cordia. Cordia did not have, as of the date of any
such balance sheets, except as and to the extent reflected or reserved against
therein, any liabilities or obligations (absolute or contingent) which should
be reflected in any financial statements or the notes thereto prepared in
accordance with generally accepted accounting principles, and all assets
reflected therein present fairly the assets of Cordia, in accordance with
generally accepted accounting principles. The statements of revenue and
expenses and cash flows present fairly the financial position and result of
operations of Cordia as of their respective dates and for the respective
periods covered thereby.
(c) Cordia has filed or will file as the Closing Date all tax returns
required to be filed by it from inception to the Closing Date. All such
returns and reports are accurate and correct in all material respect. Cordia
has no material liabilities with respect to the payment of any federal, state,
county, local, or other taxes (including any deficiencies, interest, or
penalties) accrued for or applicable to the period ended on the date of the
most recent balance sheet of Cordia, except to the extent reflected on such
balance sheet and all such dates and years and periods prior thereto and for
which Cordia may at said date have been liable in its own right or as
transferee of the assets of, or as successor to, any other corporation or
entity, except for taxes accrued but not yet due and payable, and to the best
knowledge of Cordia, no deficiency assessment or proposed adjustment of any
such tax return is pending, proposed or contemplated. To the best knowledge
of Cordia, none of such income tax returns has been examined or is currently
being examined by the Internal Revenue Service and no deficiency assessment or
proposed adjustment of any such return is pending, proposed or contemplated.
Cordia has not made any election pursuant to the provisions of any applicable
tax laws (other than elections that relate solely to methods of accounting,
depreciation, or amortization) that would have a material adverse affect on
Cordia, its financial condition, its business as presently conducted or
proposed to be conducted, or any of its respective properties or material
assets. There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any tax return of Cordia.
3.05 Outstanding Warrants and Options. Cordia has 136,000 issued
warrants or options, calls, or commitments of any nature relating to the
authorized and unissued Cordia Common Stock. None of these warrants, options,
calls or commitments are for shares of ISG.
3.06 Information. The information concerning Cordia set forth in
this Agreement and in the schedules delivered by Cordia pursuant hereto is
complete and accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact required to make
the statements made, in light of the circumstances under which they were made,
not misleading. Cordia shall cause the schedules delivered by Cordia pursuant
hereto to West Lane hereunder to be updated after the date hereof up to and
including the Closing Date.
3.07 Absence of Certain Changes or Events. Except as set forth in
this Agreement since the date of the most recent Cordia balance sheet
described in Section 3.04 and included in the information referred to in
Section 3.06:
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or condition of
Cordia or (ii) any damage, destruction, or loss to Cordia materially and
adversely affecting the business, operations, properties, assets, or
conditions of Cordia.
(b) Cordia has not (i) amended its articles of incorporation or
bylaws; (ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any of
its capital stock; (iii) waived any rights of value which in the aggregate are
extraordinary and material considering the business of Cordia; (iv) made any
material change in its method of accounting; (v) entered into any other
material transactions other than those contemplated by this Agreement; (vi)
made any material accrual or material arrangement for or payment of bonuses or
special compensation of any kind or any severance or termination pay to any
present or former officer or employee; or (vii) made any material increase in
any profit-sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement made to,
for, or with their officers, directors, or employees;
(c) Cordia has not (i) granted or agreed to grant any options,
warrants, or other rights for its stocks, bonds, or other corporate securities
calling for the issuance thereof; (ii) borrowed or agreed to borrow any funds
or incurred, or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary course of
business; (iii) paid any material obligation or liability (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent Cordia balance sheet and current liabilities incurred since that date
in the ordinary course of business; (iv) sold or transferred, or agreed to
sell or transfer, any of its material assets, properties, or rights, or agreed
to cancel, any material debts or claims; (v) made or permitted any amendment
or termination of any contract, agreement, or license to which it is a party
if such amendment or termination is material, considering the business of
Cordia; or (vi) issued, delivered, or agreed to issue or deliver any stock,
bonds, or other corporate securities including debentures (whether authorized
and unissued or held as treasury stock); and
(d) To the best knowledge of Cordia, it has not become subject to any
law or regulation, which materially and adversely affects, or in the future
would be reasonably expected to adversely affect, the business, operations,
properties, assets, or condition of Cordia.
3.08 Title and Related Matters. Except as provided herein or
disclosed in the most recent Cordia balance sheet and the notes thereto,
Cordia has good and marketable title to all of its properties, inventory,
interests in properties, technology, whether patented or un-patented, and
assets, which are reflected in the most recent Cordia balance sheet or
acquired after that date (except properties, interests in properties, and
assets sold or otherwise disposed of since such date in the ordinary course of
business), free and clear of all mortgages, liens, pledges, charges, or
encumbrances, except (i) statutory liens or claims not yet delinquent; and
(ii) such imperfections of title and easements as do not, and will not,
materially detract from, or interfere with, the present or proposed use of the
properties subject thereto or affected thereby or otherwise materially impair
present business operations on such properties. To the best knowledge of
Cordia, its technology does not infringe on the copyright, patent, trade
secret, know-how, or other proprietary right of any other person or entity and
comprises all such rights necessary to permit the operation of the business of
Cordia as now being conducted or as contemplated.
3.09 Litigation and Proceedings. Except as otherwise disclosed, there
are no material actions, suits, or proceedings pending or, to the knowledge of
Cordia, threatened by or against Cordia or adversely affecting Cordia, at law
or in equity, before any court or other governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind.
Cordia does not have any knowledge of any default on its part with respect to
any judgment, order, writ, injunction, decree, award, rule, or regulation of
any court, arbitrator, or governmental agency or instrumentality.
3.10 Material Contract Defaults. Cordia is not in default in any
material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets, or condition of Cordia, and there is no event of default
or other event which, with notice or 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 Cordia has not taken adequate steps to
prevent such a default from occurring.
3.11 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed
of trust, or other material contract, agreement, or instrument to which Cordia
is a party or to which any of its properties or operations are subject.
3.12 Governmental Authorizations. Cordia has all licenses,
franchises, permits, and other governmental authorizations that are legally
required to enable it to conduct its business in all material respects as
conducted on the date of this Agreement. Except for compliance with federal
and state securities and corporation laws, as hereinafter provided, no
authorization, approval, consent, or order of, or registration, declaration,
or filing with, any court or other governmental body is required in connection
with the execution and delivery by Cordia of this Agreement and the
consummation by Cordia of the transactions contemplated hereby.
3.13 Compliance With Laws and Regulations. Cordia has complied with
all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations,
properties, assets, or condition of Cordia or except to the extent that
noncompliance would not result in the occurrence of any material liability for
Cordia. To the best knowledge of Cordia, the consummation of this transaction
will comply with all applicable statutes and regulations, subject to the
preparation and filing of any forms required by state and federal security
laws.
3.14 Subsidiary. Cordia owns all the issued and outstanding stock of
the following subsidiaries Cordia Communications Corp., ISG Group, Inc. (doing
business as Insurance Solutions Group) which in turn owns Universal
Recoveries, Inc. (doing business as Subrogation Partners); U.L.A.E., Inc.
(doing business as Claims Partners); and US Direct Insurance Agency, Inc.
(doing business as Premium Partners).
3.15 Encumbrances. The shares of ISG and US Direct common stock to
be transferred by Cordia hereby are conveyed free and clear of any and all
liens, claims, and encumbrances, and Cordia has the free and unqualified right
to bargain, sell, transfer, convey, and assign the same without the prior
authorization, consent, or approval of any other party. All shares of ISG and
US Direct common stock to be transferred by Cordia when transferred will be
legally issued, fully paid, and nonassessable and not issued in violation of
the preemptive or other right of any person.
3.16 US Direct Liabilities. At the time of Closing, US Direct
shall have no debts, liabilities, obligations or contingencies. Any debts,
liabilities, obligations or contingencies of US Direct shall be settled prior
to closing by Cordia which will indemnify and hold harmless West Lane and US
Direct for any debts, liabilities, obligations or contingencies of US Direct
prior to the Closing.
3.17 Cordia Schedules. Cordia has delivered to West Lane the
following schedules, which are collectively referred to as the "Cordia
Schedules" and which consist of the following separate schedules dated as of
the date of execution of this Agreement, and instruments and West Lane as of
such date, all certified by the chief executive officer of Cordia as complete,
true, and accurate:
(a) A schedule including copies of the articles of incorporation and
bylaws of Cordia and all amendments thereto in effect as of the date of this
Agreement;
(b) A schedule containing copies of resolutions adopted by the board
of directors of Cordia approving this Agreement and the transactions herein
contemplated as referred to in Section 3.02;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or condition
of Cordia since the most recent Cordia balance sheet, required to be provided
pursuant to Section 3.04 hereof;
(d) A schedule setting forth the financial statements required
pursuant to Section 3.04 (a) hereof; and
(e) A schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the Cordia Schedules
by Sections 3.01 through 3.16.
Cordia shall cause the Cordia Schedules and the instruments delivered to West
Lane hereunder to be updated after the date hereof up to and including a
specified date not more than three business days prior to the Closing Date.
Such updated Cordia Schedules, certified in the same manner as the original
Cordia Schedules, shall be delivered prior to and as a condition precedent to
the obligation of West Lane to close.
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF CORDIA
The obligations of Cordia under this Agreement are subject to the
satisfaction of Cordia, at or before the Closing Date, of the following
conditions:
4.01. Shareholder Approval. West Lane, if required by New York
statutes, shall call and hold a meeting of its shareholders, or obtain through
a majority written consent of its shareholders, whereby the shareholders of
West Lane authorize and approve this Agreement and the transactions
contemplated hereby.
4.02 Accuracy of Representations. The representations and warranties
made by West Lane in this Agreement were true when made and shall be true at
the Closing Date with the same force and affect as if such representations and
warranties were made at and as of the Closing Date (except for changes therein
permitted by this Agreement), and West Lane shall have performed or complied
with all covenants and conditions required by this Agreement to be performed
or complied with by West Lane prior to or at the Closing. Cordia shall be
furnished with certificates, signed by duly authorized officers of West Lane
and dated the Closing Date, to the foregoing effect.
4.03 Officer's Certificates. Cordia shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
executive officer of West Lane to the effect that to such officers best
knowledge no litigation, proceeding, investigation, or inquiry is pending or,
to the best knowledge of West Lane threatened, which might result in an action
to enjoin or prevent the consummation of the transactions contemplated by this
Agreement. Furthermore, based on certificates of good standing,
representations of government agencies, and West Lane's own documents and
information, the certificate shall represent, to the best knowledge of the
officer, that:
(a) This Agreement has been duly approved by West Lane's board of
directors and shareholders and has been duly executed and delivered in the
name and on behalf of West Lane by its duly authorized officers pursuant to,
and in compliance with, authority granted by the board of directors of West
Lane pursuant to a unanimous consent;
(b) There have been no material adverse changes in West Lane up to
and including the date of the certificate;
(c) All conditions required by this Agreement have been met,
satisfied, or performed by West Lane;
(d) All authorizations, consents, approvals, registrations, and/or
filings with any governmental body, agency, or court required in connection
with the execution and delivery of the documents by West Lane have been
obtained and are in full force and effect or, if not required to have been
obtained, will be in full force and effect by such time as may be required;
and
(e) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body pending or
threatened against West Lane, wherein an unfavorable decision, ruling, or
finding could have an adverse effect on the financial condition of West Lane,
the operation of West Lane, or the acquisition and reorganization contemplated
herein, or any agreement or instrument by which West Lane is bound or in any
way contests the existence of West Lane.
4.04 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial
condition, business, or operations of West Lane, nor shall any event have
occurred which, with the lapse of time or the giving of notice, may cause or
create any material adverse change in the financial condition, business, or
operations of West Lane.
4.05 Good Standings. Cordia shall have received a certificate of
good standing from the secretary of state of New York, dated as of the date
within five days prior to the Closing Date, certifying that West Lane is in
good standing as a corporation in the State of New York.
4.06 Other Items. Cordia shall have received such further documents,
certificates, or instruments relating to the transactions contemplated hereby
as Cordia may reasonably request.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF WEST LANE
The obligations of West Lane under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
5.01 Cordia Shareholders. If required by Nevada statutes, Cordia
Shareholders have approved this Agreement and the proposed transaction.
5.02 Accuracy of Representations. The representations and warranties
made by Cordia in this Agreement were true when made and shall be true at the
Closing Date with the same force and affect as if such representations and
warranties were made at and as of the Closing Date (except for changes therein
permitted by this Agreement), and Cordia shall have performed or complied with
all covenants and conditions required by this Agreement to be performed or
complied with by Cordia prior to or at the Closing. West Lane shall be
furnished with a certificate, signed by a duly authorized officer of Cordia
and dated the Closing Date, to the foregoing effect.
5.03 Officer's Certificates. West Lane shall have been furnished
with certificates dated the Closing Date and signed by the duly authorized
chief operating officer of Cordia to the effect that no litigation,
proceeding, investigation, or inquiry is pending or, to the best knowledge of
Cordia, threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement. Furthermore,
based on certificates of good standing, representations of government
agencies, and Cordia's own documents, the certificate shall represent, to the
best knowledge of the officer, that:
(a) This Agreement has been duly approved by Cordia's board of
directors and shareholders and has been duly executed and delivered in the
name and on behalf of Cordia by its duly authorized officers pursuant to, and
in compliance with, authority granted by the board of directors of Cordia
pursuant to a unanimous consent of its board of directors and a majority vote
of its stockholders;
(b) Except as provided or permitted herein, there have been no
material adverse changes in Cordia up to and including the date of the
certificate;
(c) All authorizations, consents, approvals, registrations, and/or
filing with any governmental body, agency, or court required in connection
with the execution and delivery of the documents by Cordia have been obtained
and are in full force and effect or, if not required to have been obtained
will be in full force and effect by such time as may be required; and
(d) Except as otherwise disclosed in Schedule 3.09, there is no
material action, suit, proceeding, inquiry, or investigation at law or in
equity by any public board or body pending or threatened against Cordia,
wherein an unfavorable decision, ruling, or finding would have an adverse
affect on the financial condition of Cordia, the operation of Cordia, or the
acquisition and reorganization contemplated herein, or any material agreement
or instrument by which Cordia is bound or would in any way contest the
existence of Cordia.
5.04 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial
condition, business or operations of Cordia, nor shall any event have occurred
which, with the lapse of time or the giving of notice, may cause of create any
material adverse change in the financial condition, business, or operations of
Cordia.
5.05 Good Standing. West Lane shall have received a certificate of
good standing from the appropriate authority, dated as of a date with five
days prior to the Closing Date, certifying that the Cordia is in good standing
as a corporation in the State of Nevada.
5.06 Other Items. West Lane shall have received such further
documents, certificates, or instruments relating to the transactions
contemplated hereby as West Lane may reasonably request.
ARTICLE VI
SPECIAL COVENANTS
6.01 Activities of West Lane and Cordia
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the respective schedules to be delivered by West
Lane and Cordia pursuant hereto or as permitted or contemplated by this
Agreement, West Lane and Cordia will each:
(i) Carry on its business in substantially the same manner as it has
heretofore;
(ii) Maintain in full force and effect insurance comparable in amount
and in scope of coverage to that now maintained by it;
(iii) Perform in all material respects all of its obligations under
material contracts, leases, and instruments relating to or affecting its
assets, properties, and business;
(iv) Use its best efforts to maintain and preserve it business
organization intact, to retain its key employees, and to maintain its
relationships with its material suppliers and customers;
(v) Duly and timely file for all taxable periods ending on or prior
to the Closing Date all federal, state, county, and local tax returns required
to be filed by or on behalf of such entity or for which such entity may be
held responsible and shall pay, or cause to pay, all taxes required to be
shown as due and payable on such returns, as well as all installments of tax
due and payable during the period commencing on the date of this Agreement and
ending on the Closing Date; and
Fully comply with and perform in all material respects all obligations and
duties
imposed on it by all federal and state laws and all rules, regulations,
and orders imposed by federal
or state governmental authorities.
Fully cooperate for the purpose of completing and filing any and all reports
required by the Securities Exchange Commission, including but not limited
to the 8K, 10K and/or
10Q, and any and all state and/or federally required financial, tax
and/or regulatory reports.
(b) From and after the date of this Agreement and except as provided
herein until the Closing Date, West Lane and Cordia will not:
(i) Make any change in its articles of incorporation or bylaws;
(ii) Enter into or amend any material contract, agreement, or other
instrument of any of the types described in such party's schedules, except
that a party may enter into or amend any contract, agreement, or other
instrument in the ordinary course of business; and
(iii) Enter into any agreement for the sale of Cordia or West Lane
securities without the prior approval of the other party.
6.02 Access to Properties and Records. Until the Closing Date,
Cordia and West Lane will afford to the other party's officers and authorized
representatives full access to the properties, books, and records of the other
party in order that each party may have full opportunity to make such
reasonable investigation as it shall desire to make of the affairs of Cordia
or West Lane and will furnish the other party with such additional financial
and other information as to the business and properties of Cordia or West Lane
as each party shall from time to time reasonably request.
6.03 The Acquisition of Common Stock. West Lane and Cordia
understand and agree that the consummation of this Agreement including the
issuance of the ISG and US Direct Common Stock as contemplated hereby,
constitutes the offer and sale of securities under the Securities Act and
applicable state statutes. West Lane and Cordia agree that such transactions
shall be consummated in reliance on exemptions from the registration and
prospectus delivery requirements of such statutes, which depend, among other
items, on the circumstances under which such securities are acquired.
(a) In connection with the transaction contemplated by this
Agreement, West Lane and Cordia shall each file, with the assistance of the
other and their respective legal counsel, such notices, applications, reports,
or other instruments as may be deemed by them to be necessary or appropriate
in an effort to document reliance on such exemptions, and the appropriate
regulatory authority in the states where the shareholders of Cordia reside
unless an exemption requiring no filing is available in such jurisdictions,
all to the extent and in the manner as may be deemed by such parties to be
appropriate.
(b) In order to more fully document reliance on the exemptions as
provided herein, Cordia, the Cordia Stockholders, and West Lane shall execute
and deliver to the other, at or prior to the Closing, such further letters of
representation, acknowledgment, suitability, or the like as West Lane or
Cordia and their respective counsel may reasonably request in connection with
reliance on exemptions from registration under such securities laws.
(c) The Cordia Stockholders acknowledge that the basis for
relying on exemptions from registration or qualifications are factual,
depending on the conduct of the various parties, and that no legal opinion or
other assurance will be required or given to the effect that the transactions
contemplated hereby are in fact exempt from registration or qualification.
6.04 Indemnification by Cordia. Cordia will indemnify and hold
harmless West Lane and its directors and officers, and each person, if any,
who controls West Lane within the meaning of the Securities Act, from and
against any and all losses, claims, damages, expenses, liabilities, or actions
to which any of them may become subject under applicable law (including the
Securities Act and the Securities Exchange Act) and will reimburse them for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any claims or actions, whether or not resulting in
liability, insofar as such losses, claims, damages, expenses, liabilities, or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of material fact contained in any application or statement filed
with a governmental body or arising out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein, or necessary in order to make the statements therein not misleading,
but only insofar as any such statement or omission was made in reliance upon
and in conformity with information furnished in writing by Cordia expressly
for use therein. The indemnity agreement contained in this Section 6.04 shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of West Lane and shall survive the consummation of the
transactions contemplated by this Agreement for a period of one year.
6.05. Indemnification by West Lane. West Lane will indemnify and
hold harmless Cordia, the Cordia Stockholders, Cordia's directors and
officers, and each person, if any, who controls Cordia within the meaning of
the Securities Act, from and against any and all losses, claims, damages,
expenses, liabilities, or actions to which any of them may become subject
under applicable law (including the Securities Act and the Securities Exchange
Act) and will reimburse them for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any claims or
actions, whether or not resulting in liability, insofar as such losses,
claims, damages, expenses, liabilities, or actions arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in any application or statement filed with a governmental body or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary in order
to make the statements therein not misleading, but only insofar as any such
statement or omission was made in reliance upon and in conformity with
information furnished in writing by West Lane expressly for use therein. The
indemnity agreement contained in this Section 6.05 shall remain operative and
in full force and effect, regardless of any investigation made by or on behalf
of Cordia and shall survive the consummation of the transactions contemplated
by this Agreement for a period of one year.
ARTICLE VII
MISCELLANEOUS
7.01 Brokers. West Lane and Cordia agree that there were no finders
or brokers involved in bringing the parties together or who were instrumental
in the negotiation, execution, or consummation of this Agreement. Further,
West Lane and Cordia each agree to indemnify the other against any claim by
any third person for any commission, brokerage, or finder's fee or other
payment with respect to this Agreement or the transactions contemplated hereby
based on any alleged agreement or understanding between such party and such
third person, whether express or implied, from the actions of such party.
The covenants set forth in this section shall survive the Closing Date
and the consummation of the transactions herein contemplated.
7.02 No Representation Regarding Tax Treatment. No representation
or warranty is being made by any party to any other regarding the treatment of
this transaction for federal or state income taxation. Each party has relied
exclusively on its own legal, accounting, and other tax adviser regarding the
treatment of this transaction for federal and state income taxes and on no
representation, warranty, or assurance from any other party or such other
party's legal, accounting, or other adviser.
7.03 Governing Law. This Agreement shall be governed by, enforced
and construed under and in accordance with the laws of the State of New York.
7.04 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered, if
sent by facsimile or telecopy transmission or other electronic communication
confirmed by registered or certified mail, postage prepaid, or if sent by
prepaid overnight
courier addressed as follows:
If to West Lane, to: Xxxxx Xxxxxx If to Cordia, to: Xxxxxxx Xxxxxxx
000 Xxxx Xxxx Xxxx 00 Xxxxxxx Xxxx, #000
Xxxxxxxx, Xxxxxxxxxxx 00000 Ridgefield,
Fax: (000) 000-0000 Xxxxxxxxxxx 00000
Fax: (000) 000-0000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices, hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered or sent by
facsimile or telecopy transmission or other electronic communication, or one
day after the date so sent by overnight courier.
7.05 Attorney's Fees. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
7.06 Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. All
previous agreements between the parties, whether written or oral, have been
merged into this Agreement. This Agreement alone fully and completely
expresses the agreement of the parties relating to the subject matter hereof.
There are no other courses of dealing, understandings, agreements,
representations, or warranties, written or oral, except as set forth herein.
7.07 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
7.08 Third Party Beneficiaries. This Agreement is solely between
West Lane and Cordia and no director, officer, stockholder, employee, agent
independent contractor, or any other person or entity shall be deemed to be a
third party beneficiary of this Agreement.
7.09 Amendment or 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 such remedies may be enforced concurrently,
and no waiver by any party of the performance of any obligation by the other
shall be construed as a waiver of the same or any other default then,
theretofore, or thereafter occurring or existing. At any time prior to the
Closing Date, this Agreement 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 Agreement may be waived or the time for performance thereof
may be extended by a writing signed by the
party or parties for whose benefit the provision is intended.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly
authorized, as of the date first above written.
CORDIA: CORDIA CORPORATION
By: /s/
-----------------------
Xxxxxxx Xxxxxxx, President
WEST LANE: WEST LANE GROUP, INC.
By: /s/
-------------------------
Xxxxx Xxxxxxx, President
STATE OF __________ )
ss.
COUNTY OF __________ )
On this 4th day of March, 2003, personally appeared before me Xxxxxxx
Xxxxxxx, whose identity is personally known to me and who by me duly sworn,
did say that he is the President of Cordia Corporation and that said document
was signed by him of behalf of said corporation by authority of its bylaws,
and said Xxxxxxx Xxxxxxx acknowledged to me that said corporation executed the
same.
/s/
_________________________
NOTARY PUBLIC
STATE OF _________ )
ss.
COUNTY OF __________ )
On this 4th day of March, 2003, personally appeared before me Xxxxx
Xxxxxxx, whose identity is personally known to me and who by me duly sworn,
did say that he is the President of West Lane Group, Inc. and that said
document was signed by him of behalf of said corporation by authority of its
bylaws, and said Xxxxx Xxxxxxx acknowledged to me that said corporation
executed the same.
/s/
___________________________
NOTARY PUBLIC
