EXHIBIT 10.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (hereinafter
referred to as this "Agreement") is entered into this 17th
day of November, 2000, by and between TRAVEL DYNAMICS, INC.,
a Nevada corporation (hereinafter "TDI"), COLUMBUS
COMPANIES, INC., a Utah corporation (hereinafter
"Columbus"), and I XXXX XXXXXX, an individual resident of
Xxxxx County, Utah, and D. XXXXX XXXXXX, an individual
resident of Salt Lake County, Utah (collectively referred to
herein as the "Shareholders"), based on the following
premises.
Premises
A. The Shareholders are the owners of 100% of the equity
interest in Columbus (the "Columbus Stock").
B. This Agreement provides for the acquisition of TDI of
all the issued and outstanding shares of Columbus Stock
currently held by the Shareholders solely in exchange for
voting shares of the common stock of TDI, par value $0.001
per share (the "TDI Common Stock"), on the terms and
conditions hereinafter provided, all for the purpose of
effecting a "tax free" reorganization pursuant to section
368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended (the "Code").
C. Each of the parties to this Agreement desires to make
certain representations, warranties and agreements in
connection with the acquisition and also to prescribe
certain conditions thereto.
Agreement
NOW, THEREFORE, based on the stated premises, which are
incorporated herein by reference, and for an in
consideration of the mutual covenants and agreements
hereinafter set forth and the mutual benefit to the parties
to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
THE ACQUISTION
Section 1.01 Terms of the Acquisition. The
acquisition of Columbus as a wholly-owned subsidiary of TDI
shall be completed, subject to all of the terms, covenants,
and conditions set forth in this Agreement, by the issuance
of 750,000 shares of TDI Common Stock to the Shareholders in
exchange for all shares of Columbus Stock, which represent
100% of the equity interest in Columbus. The TDI Common
Stock shall be issued in the names and denominations set
forth on Schedule 1.01 attached hereto and incorporated
herein by this reference.
Section 1.02 Closing. The closing (the "Closing")
of the transactions contemplated by this Agreement shall be
held contemporaneously with the execution hereof on November
17, 2000 (the "Closing Date"). Such Closing shall take
place at such time and location as may be mutually
acceptable to the parties hereto and their respective legal
counsel.
Section 1.03 Closing Events. At the Closing:
(a) The Shareholders shall deliver the original
certificates representing all of the issued and outstanding
Columbus Stock, duly executed in blank, for transfer to TDI.
(b) TDI shall deliver the original of the
certificates representing 750,000 shares of common
stock of TDI, registered in the names and denominations
set for on Schedule 1.01.
c The current directors of Columbus shall
resign and nominees of TDI shall be appointed to be the
board of directors of Columbus. Xxxx Xxxxxx and Xxxxx
Xxxxxx, among others, shall be appointed as members of
the board of directors of Columbus. All current
officers of Columbus shall resign and the new board of
directors shall appoint the officers of Columbus. Xxxx
Xxxxxx shall be appointed as the President and Xxxxx
Xxxxxx shall be appointed as Executive Vice President
of Columbus. The appointments of Xxxx Xxxxxx and Xxxxx
Xxxxxx hereunder as officers and directors of Columbus
shall be effective until there removal from office or
until their respective successors are elected and
qualified.
(d) Xxxx Xxxxxx and Xxxxx Xxxxxx shall each enter into an
employment agreement with TDI in form and substance approved
by the new board of directors of Columbus.
(e) Each of the respective parties hereto shall execute,
acknowledge, and deliver (or shall cause to be executed,
acknowledged, and delivered) any and all certificates,
financial statements, schedules, agreements, resolutions, or
other instruments required by this Agreement to be so
delivered at or prior to the 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 transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF COLUMBUS
As an inducement to, and to obtain the reliance of,
TDI, Columbus represents and warrants as follows:
Section 2.01 Organization. Colubus is a
corporation duly organized, validly existing, and in
good standing under the laws of the state of Utah and
has the 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 in all material
respects as it is now being conducted. There is no
jurisdictions in which Columbus is not qualified in
which the character and location of the assets owned by
it or the nature of the business transacted by it
requires qualification, except where failure to do so
would no have a material adverse effect on the business
or properties of Columbus. Included in the Columbus
Schedules or otherwise delivered to TDI in the due
diligence materials are complete and correct copies of
Columbus' articles of incorporation and bylaws as in
effect on the date hereof.
Section 2.02 Authorization. The board of
directors and shareholders of Columbus have authorized
the execution and delivery of this Agreement by
Columbus and have approved the consummation of the
transactions contemplated hereby. Included in the
Columbus Schedules is a signed copy of a consent duly
adopted by the board of directors of Columbus
evidencing such approval. This Agreement is the legal,
valid, and binding agreement of Columbus enforceable
between the parties in accordance with its terms. 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 the Columbus' articles of
incorporation bylaws, or otherwise to authorize the
execution and delivery of this Agreement and the
consummation of the transactions herein contemplated.
No authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or
governmental body or any other person is required in
connection with the execution and delivery by Columbus
of this Agreement and the consummation by Columbus of
the transactions contemplated hereby.
Section 2.03 Capitalization. All issued and
outstanding Columbus Stock is held by the Shareholders
as set forth in Schedule 2.03. There are no options,
rights, convertible securities, calls, or commitments
to which Columbus is a party or to which it is subject
requiring the issuance of the Columbus Stock. All
issued and outstanding shared of Columbus are validly
authorized, legally issued, fully paid, and
nonassessable and not issued in violation of the
preemptive or other right of any person.
Section 2.04 No Subsidiary or Presecessor.
Columbus does not own, beneficially or of record, any
equity securities in any other entity. Since
inception, Columbus has not had any predecessor, as
that term is defined under United States generally
accepted accounting principles ("GAAP").
Section 2.05 Financial Information.
(a) Included in the Columbus Schedules are the audited
balance sheets of Columbus as of December 31, 1999 and 1998,
and the related audited statements of operations and cash
flows for the periods then ended. Also included is the
unaudited balance sheet as of September 30, 2000, and the
related unaudited statement of operations for the nine
months then ended.
(b) Such financial informations has been prepared in
accordance with GAAP, except as disclosed in the Columbus
Schedules. Columbus did not have, as of the date of the
most recent balance sheet, except as and to the extent
reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be
reflected in a balance sheet prepared in accordance with
GAAP. All assets reflected on the most recent balance sheet
present fairly the assets of Columbus, as of the date of
such balance sheet. The statement of operations for the
nine months ended September 30, 2000, presents fairly the
information required to be set forth therein in accordance
with GAAP.
(c) Columbus has filed all tax returns and reports as
required by law. All such returns and reports are accurate
and correct in all material respects. There are no income
taxed currently due to any governmental agency that have not
been paid. Columbus does not have any liabilities with
respect to the payment of any tax (including any
deficiencies, interest, or penalties) accrued for or
applicable to the period ended on the date of the most
recent balance sheet included in the Columbus Schedules and
all such dates and years and periods prior thereto and for
which Columbus may be liable in its own right or as
transferee of the assets of, or as successor to, any other
corporation or other entity, except for taxed accrued but
not yet due and payable. None of the tax returns of
Columbus has been audited or is currently being audited by
any governmental agency. Columbus has not made any tax
election which would have a material adverse effect on
Columbus, its financial condition, its business as presently
conducted or as proposed to be conducted, or any of its
properties or material assets. There are not outstanding
agreements or waivers extending the statutory period of
limitation applicable to any tax return of Columbus.
(d) The books and records, financial and otherwise, of
Columbus are in all material respects complete and correct
and have been made and maintained in accordance with sound
business and bookkeeping practices and, in reasonable
detail, accurately and fairly reflect the transactions
involving the assets of Columbus. Columbus has maintained a
system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions have been and
are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as
necessary to permit the preparation of financial statements
in conformity with GAAP and any other criteria applicable to
such statements and to maintain accountability for assets;
(iii) access to assets have permitted only in accordance
with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals, and appropriate
action is taken with respect to any differences.
(e) Except as set forth in the Columbus Schedules, the
balance sheet included in the Columbus Schedules, or in the
notes thereto, Columbus (i) has good and marketable title to
its accounts receivable, and other debts due or recorded in
the records and books of account of Columbus, free of any
security interests or liens and free of any material
defenses, counterclaims, and set-offs, and all of such
accounts receivable, invoices, and debts are actual and bona
fide amounts due Columbus for the total dollar amount
thereof show on the books of Columbus and resulted from the
regular course of its business; and (ii) the accounts
receivable, invoices, and debts set forth on the Columbus
balance sheets arose in the ordinary course of business and
are, net of any reserves show on the balance sheet,
collectible in full in all material respects on the
continuation of litigation and in any event not later than
ninety (90) days after the date billed.
Section 2.06 Absence of Certain Changes or
Events. Except as set forth in this Agreement or in the
Columbus Schedules, or otherwise disclosed to TDI in
writing in the due diligence materials, since the date
of the balance sheet included in the Columbus Schedules:
(a) There has not been (i) any material adverse change in
the business, operations, assets, or condition of Columbus,
except for changes occurring as a result of transactions in
the normal course of business of Columbus, or (ii) any
damage, destruction, or loss to Columbus (whether or not
covered by insurance) materially and adversely affecting the
business, operations, assets, or condition of Columbus;
(b) Columbus 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 Columbus; (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, employee, or shareholder;
(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
$5,000; 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) Columbus has not (i) granted or agreed any options,
warrants, or other rights to acquire its stocks, bonds, or
other corporate securities; (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 balance sheet
included in the Columbus Schedules 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 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 $10,000 or
assets, properties, or rights disposed of in ordinary course
of business); (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 Columbus; 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) Columbus has not become subject to any law or
regulation which materially and adversely affects, of may in
the future materially and adversely affect, the business,
operations, properties, assets, or condition of Columbus.
Section 2.07 Inventories. The inventories of
Columbus (including raw materials, supplies, work-in-
process, finished goods and other materials), a
description of which shall be included in the Columbus
Schedules, are in good, merchantable and usable
condition.
Section 2.08 Real Property Interests. Columbus
owns no fee interest in any real property, options to
acquire any such interest, or easements, rights of way,
or similar rights with respect to real property used in
or relating to the operation of its business. A
complete and accurate list of each lease or similar
agreement under which Columbus is lessee of, or holds or
operates, any real property owned by any third person
and used in or relating to Columbus' business shall be
included in the Columbus Schedules or has been otherwise
delivered to TDI in writing in the due diligence
materials. The real property and improvements owned or
leased by Columbus are in good operating condition and
repair and are suitable for the purposes for which they
are being used. All leases in which Columbus holds an
interest are in full force and effect, have an
unexperienced term as set forth in the lease agreements,
and there is no outstanding default or event that, with
the passage of time or notice, would constitute a
default on behalf of Columbus or any other party to the
lease agreements.
Section 2.09 Personal Property. Included in the
Columbus Schedules is a completed and accurate list (in
the form of a depreciation schedule) of all tangible and
intangible property owned or leased by Columbus with a
value in excess of $1,000 (except that included within
the definition of Intellectual Property as set forth in
section 2.11) and used in or relating to the operation
of Columbus' business. The tangible property owned or
leased by Columbus is in good operating condition and
repair and is suitable for the purposes for which it is
being used. All leases for tangible property are in
full force and effect, have an unexpired term as set
forth in the lease agreements, and there is no
outstanding default or event that with the passage of
time or notice would constitute a default, on behalf of
Columbus or any other party to the lease agreements.
Section 2.10 Title to Property. Columbus has
good and marketable title to all if its properties,
inventory, know-how, interests in properties, and assets
which are reflected in the most recent balance sheet
included in the Columbus Schedules, or are used in
Columbus' business, or acquired after the date, free and
clear of all liens, pledges, charges, mortgages,
security interests, royalties, or encumbrances, except
as describe in the Columbus Schedules.
Section 2.11 Intellectual Property. Included in
the Columbus Schedules is a complete and accurate list
of all of the trade secrets, technology, know-how,
tradenames, trademarks, servicemarks, and other
proprietary information owned by or used in connection
with the business of Columbus, including all domain
names, source and object codes, copyrights, patents,
paten applications, registrations, and applications with
respect thereto (collectively the "Intellectual
Property"). Except as set forth in the Columbus
Schedules, Columbus owns the entire right, title, and
interest in and to such Intellectual Property, and such
Intellectual Property is not subject to the payment of
royalties or any other obligation to any other person or
entity. Except as set forth in the Columbus Schedules,
none of the employees or former employees for Columbus
owns, directly or indirectly, any right, title, or
interest in or to the Intellectual Property. To the
best knowledge of Columbus, none of the Intellectual
Property is subject to any order, decree, judgment,
stipulation, settlement, encumbrance, or attachment.
There are no pending or threatened proceedings,
litigation, or other adverse claims of which Columbus is
aware affecting or with respect to the Intellectual
Property. The Intellectual Property 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 business of Columbus as now being
conducted.
Section 2.12 Litigation and Proceedings. Except
as set forth in the Columbus Schedules (which reflect
the manner in which each item is treated for financial
reporting purposes), there are no actions, suits, or
proceedings pending or, to the knowledge of Columbus,
threatened by or against, or affecting Columbus 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;
Columbus 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.
Section 2.13 Contracts.
(a) Included in the Columbus Schedules or otherwise
delivered to TDI in writing in the due diligence materials
is a description of every contract, agreement,
distributorship, franchise, license, or other agreement,
arrangement, or commitment to which Columbus is a party or
by which its assets or properties are bound, which calls for
the payment by Columbus of more than $1,000 a month, or
$12,000 in the aggregate;
(b) Except as described in the Agreement or in the Columbus
Schedules, Columbus is not a party to or bound by, and the
properties of Columbus are not subject to, any contract,
agreement, or other commitment or instrument or any charter
or other corporate restriction or any judgment, order, writ,
injunction, decree, or award which material and adversely
affects, or in the future may (as far as Columbus can now
reasonable foresee) materially and adversely affect, the
business operations, properties, assets, or financial
condition of Columbus; and
(c) Except as included or described in the Columbus
Schedules, otherwise disclosed to TDI in writing in the due
diligence materials or reflected in the accompanying
Columbus balance sheet, Columbus is not a party to any oral
or written (i) contract for the employment of any officer,
director, or employee, whose compensation is greater than
$5,000 per month, which is not terminable on thirty (30)
days (or less) notice; (ii) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension benefit
or retirement plan; (iii) agreement, contract, or indenture
relating to the borrowing of money in amounts greater that
$10,000 in the aggregate; (iv) guarantee of any obligation
for the borrowing of money or otherwise, excluding
endorsements made for collection and other guarantees of
obligations, which, in the aggregate do not exceed $10,000;
(v) consulting or other similar contract with an unexpired
term of more than one year or providing for payments in
excess of $10,000 in the aggregate; (vi) collective
bargaining agreement; (vii) agreement with any present of
former officer or director of Columbus whose compensation
was or is greater than $5,000 per month; (viii) other
contract, agreement, or other commitment, except normal
ongoing monthly operating expenses, involving payments by it
in the future of more than $10,000 in the aggregate per
contract.
Section 2.14 Material Contract Defaults. Except
as set forth in the Columbus Schedules, Columbus is not
in default in any respect under the terms of nay
outstanding contract, agreement, lease, or other
commitment which is material to the business,
operations, properties, assets, or condition of
Columbus, and there is not 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 Columbus has not taken adequate steps
to prevent such a default from occurring.
Section 2.15 Third-Party Consents. Included in
the Columbus Schedules is a description of each
contract, agreement, lease, or other commitment, written
or oral, to which Columbus is a party or to which any of
its properties or assets are subject to pursuant to
which the consent of the other party is required in
order to consummate the transactions herein
contemplated, except where the failure to obtain such
consent would not have a material adverse effect on the
assets transferred hereto. Columbus shall utilize its
best efforts to obtain from all third parties any
consents that may be required in order to consummate the
transactions contemplated by this Agreement.
Section 2.16 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 any event of default under, any material
indenture, mortgage, deed of trust, or other material
contract, agreement, or instrument to which Columbus is
a party or to which any of its properties or operations
are subject.
Section 2.17 Governmental Authorizations.
Columbus has 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 hereof or as presently
contemplated. Columbus has all required approvals
necessary to permit it to conduct its business and
provide its proposed services as presently conducted.
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 Columbus of this Agreement
and the consummation by Columbus of the transactions
contemplated hereby.
Section 2.18 Compliance With Laws and
Regulations. Columbus 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 Columbus or except to the extent
that noncompliance would not result in the incurrence of
any material liability for Columbus.
Section 2.19 Hazardous Substances. Except as set
forth in the Columbus Schedules, (a) during the period
of Columbus' ownership, use, or other occupancy of its
properties, Columbus has not used, gereated,
manufactured, stored, treated, disposed of, or released
andy hazardous waste or substance on, under, or about
any of the properties, except in compliance with
environmental laws; and (b) Columbus has no knowledge of
, or reason to believe that there has been (i) any use,
generation, manufacture, storage, treatment, disposal,
release, or threatened release of any hazardous waste or
substance by any prior owners or occupants of any of the
properties, except in compliance with environmental
laws, or (ii) any actual or threatened litigation of
claims of any kind against the Company of any other
person for whose conduct it is or may be liable by any
person relating to such matters. The terms "hazardous
waste," "hazardous substance," "disposal," "release,"
and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, the Superfund
Amendments and Reauthorization Act of 1986, the
Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act, the Federal Clean Water
Act, the Occupational Safety and Health Act, or other
applicable state of federal laws, rules, ordinances,
bylaws, or regulations relating to or addresses the
environment, health or safety.
Section 2.20 Insurance. Included in the Columbus
Schedules is a completed list of all business liability,
casualty, automobile, extended coverage, and other
insurance policies which Columbus maintains respecting
its products, services, business, properties, and
employees, showing for each type of coverage the policy
limits, principal exclusions, deductibles, insurer, and
other relevant information. Such policies are full
force and effect and are free from any right of
termination by the insurance carriers. All of the
insurable properties of Columbus are insured for its
benefit in the amount of their full replacement value
(subject to reasonable deductibles) against losses due
to fire and other casualty, with extended coverage, and
other risks customarily insured against by persons
operating similar properties in the localities where
such properties are located and under valid and
enforceable policies issued by insurers of recognized
responsibility.
Section 2.21 Insurance Claims. Except as set
forth in the Columbus Schedules, during the last three
years Columbus has not received, or informed its
insurance carriers of, any claims for damages, whether
or not covered by insurance, for amounts greater than
$10,000. Columbus is not currently aware of any pending
or unasserted claims.
Section 2.22 Transactions With Affiliates. Set
forth in the Columbus Schedules is a descriptions of
every contract, agreement, or arrangement between
Columbus and any person who is or has ever been during
the previous three years an officer of director of
Columbus of person owning of record, or known by
Columbus to own beneficially, 5% or more of the issued
and outstanding common stock of Columbus which is to be
performed in whole or in part after the date hereof. In
all of such circumstances, the contract, agreement, or
arrangement was for a bona fide business purpose of
Columbus and the amount paid or received, whether in
cash, in services, or in kind, was, has been during the
full term thereof, and is required to be during the
unexpired portion of the term thereof, no less favorable
to Columbus than terms available from otherwise
unrelated parties in arm's length transactions. Except
as disclosed in the Columbus Schedules or otherwise
disclosed herein, no officer or director of Columbus or
5% shareholder of Columbus has, or has had during the
preceding three years, any interest, directly or
indirectly, in any material transaction with Columbus.
The Columbus Schedules also include a descriptions of
any commitment by Columbus, whether written or oral, to
lend any funds to, borrow any money from, or enter into
any other material transactions with, any such
affiliated person.
Section 2.23 Labor Agreements and Actions.
Columbus does not bound by or subject to (and none of
its assets or properties is bound by or subject to) any
written or oral, express or implied, contract,
commitment, or arrangement with any labor union, and no
labor union has requested or sought to represent any of
the employees, representatives, or agents of Columbus.
There is no strike or other labor dispute involving
Columbus pending or threatened, which could have a
material adverse effect on the assets, properties,
financial condition, operating results, or business of
Columbus or (as such business is presently conducted and
as it is proposed to be conducted), and Columbus is not
aware of any labor organization activity involving its
employees. Columbus is not aware that any officer or
key employee, or that any group of key employees,
intends to terminate their employment with Columbus, nor
does Columbus have a present intention to terminate the
employment of any of the foregoing. Except as set forth
in the Columbus Schedules, the employment of each
officer and employee of Columbus is terminable at the
will of Columbus.
Section 2.24 Pension Obligations. Columbus does
not have any unfounded pension liability to any person
or entity in connection with any retirement, pension
plan, or similar arrangement.
Section 2,25 Information. The information
concerning Columbus set forth in this Agreement, in the
exhibits hereto, otherwise delivered to TDI in writing
in the due diligence materials, and in the Columbus
Schedules is complete and accurate in all material
respects and does not contain any untrue statement of an
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.
Section 2.26 Columbus Schedules. Columbus has
delivered to TDI schedules, which are collectively,
referred to as the "Columbus Schedules" and which
consist of separate schedules dated as of the date of
execution of this Agreement and documents, instruments
and data as of such date, all certified by a duly
authorized officer of Columbus as Complete, true, and
correct, setting forth the information required to be
disclosed by Columbus pursuant to sections 2.01 through
2.25 of this Agreement. Columbus shall cause the
Columbus Schedules and the other documents, instruments,
and data delivered to TDI hereunder to be updated after
the date hereof and prior to the Closing Date.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF
THE COLUMBUS SHAREHOLDERS
As an inducement to, and to obtain the reliance of
TDI, the Shareholders represent and warrant as follows:
Section 3.01 Ownership of Columbus Stock. Each
of the Shareholders, individually and not jointly and
severally, represent and warrant, (i) that the number of
shares of Columbus Stock set forth in Schedule 2.03 as
being held by them is all of the shares of Columbus
Stock held by such Shareholder; (ii) that such shares
are held both beneficially and of record by such
Shareholder; (iii) that such shares are held free and
clear of any and all liens, claims, or encumbrances;
(iv) that such Shareholder has not transferred or
created any right in any other person or entity to
acquire such shares; and (v) that the Shareholder has
the free and unqualified right to bargain, sell, convey,
transfer, and assign the Columbus Stock, without the
authorization, consent, or approval of any other person
or entity.
Section 3.02 Continuity of Investment. The
Shareholders are acquiring the TDI Common Stock pursuant
to this Agreement for investment and not with a view to
the distribution thereof. None of the Shareholders has
any agreement nor made any commitment to sell the shares
of the TDI Common Stock to be acquired hereunder and
none of the Shareholders has the present intent to sell
or liquidate the TDI Common Stock to be acquired
hereunder.
Section 3.03 Release Agreements. Each of the
Shareholders shall execute and deliver an agreement
releasing any and all claims such Shareholder may have
at or prior to the Closing Date against Columbus of the
technology or other assets held by Columbus.
ARTICLE IV
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF TDI
As an inducement to, and to obtain the reliance of
Columbus, TDI represents and warrants as follows:
Section 4.01 Organization. TDI is 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 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 is contemplated under the
provisions of this Agreement. There is no jurisdiction
in which TDI is no so qualified in which the character
and location of the assets owned by it, or the nature of
the business transacted by it, requires qualification,
except where failure to do so would not have a material
adverse effect on the business or properties of TDI.
Section 4.02 Authorization. The board of
directors of TDI has authorized the execution and
delivery of this Agreement by TDI and has approved the
consummation of the transactions contemplated hereby.
Approval of the shareholders of TDI is required in
connection with the execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby. This Agreement is the legal, valid
and binding agreement of TDI enforceable between the
parties in accordance with its terms. 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 TDI's articles of incorporation
bylaws. TDI has taken all action required by law, its
articles of incorporation, its bylaws, or otherwise to
authorize the execution and delivery of this Agreement
and the consummation of the transactions contemplated
hereby. No authorization, approval, consent, or order
of, or registration, declaration, or filing with, any
court or governmental body or any other person is
required in connection with the execution and delivery
by TDI of this Agreement and the consummation by TDI of
the transactions contemplated hereby. This issuance and
delivery by TDI of share of TDI Common Stock to the
Shareholders pursuant to this Agreement have been duly
authorized and such shares are validly issued, fully
paid and nonassessable.
Section 4.03 No Conflict With Other Instruments.
The execution of this Agreement and the consummation of
the transactions contemplated hereby, will not result in
the breach of any term or provision of, or constitute
and event of default under, any material contract,
agreement, or instrument to which TDI is a party or to
which any of its properties or operations are subject.
Section 4.04 Information. The information
concerning TDI set forth in this Agreement and in the
exhibits 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.
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
Section 5.01 Access to Properties and Records.
TDI and Columbus have each afforded the officers and
authorized representatives of the other full access to
its properties, books, and records in order that each
has had full opportunity to make such reasonable
investigation as it shall have desired to make of the
affairs of the other, and each will furnish the other
with such additional financial and operating data and
other information as to its business and properties as
the other shall from time to time reasonably request.
Any such investigation of TDI or Columbus shall be
conducted in such a manner as not to interfere
unreasonably with the operations of the other and all
information obtained in connection with such
investigation shall be treated as confidential in
accordance with section 8.01.
Section 5.02 Third-Party Consents. TDI and
Columbus agree to cooperated with each other in order to
obtain required third-party consents to this Agreement
and the transactions herein contemplated.
Section 5.03 Action Prior to Closing. From and
after the date of this Agreement until the Closing Date
and except as set forth in the Columbus Schedules or as
permitted or contemplated by this Agreement, TDI and
Columbus, respectively, will each:
(a) Carry on its business in substantially the same manner
as it has heretofore;
(b) Maintain and keep its assets in as good repair and
condition as at present, except for depreciation due to
ordinary wear and tear and damage due to casualty;
(c) Maintain in full force and effect insurance comparable
in amount and in scope of coverage to that now maintained by
it;
(d) Perform in all material respects all of its obligations
under material contracts, leases, and instruments relating
to or affection its assets, properties, and business;
(e) Use its best efforts to maintain and preserve its
business organization intact, to retain its key employees,
and to maintain its relationship with its material suppliers
and customers;
(f) Fully comply with and perform in all material respects
all obligations and duties imposed upon it by all federal
and state laws and all rules, regulations, and orders
imposed by federal or state governmental authorities.
Section 5.04 Investment Representations and
Warranties. The consummation of this Agreement and the
issuance of TDI Common Stock to the Shareholders
contemplated herein, will be made in reliance on certain
exemptions form the registration requirements under the
Securities Act of 1933, as amended, which set forth
certain conditions under which the offer and sale of
securities shall be made and which depend, among other
items, on the circumstances under which such securities
are acquired. In order to provide documentation for
reliance upon the provisions of such exemptions for such
transactions, the approval by Columbus, the Shareholders
and TDI of this Agreement and the transactions
contemplated hereby and/or the delivery of appropriate
separate representations shall constitute the parties'
acceptance of, and concurrence in, the following
representations and warranties by the Shareholders:
(a) This Agreement is made with the
Shareholders in reliance upon their representation
to TDI, which by their execution of this Agreement
they hereby confirm, that the TDI Common Stock to
be acquired by them will be acquired for
investment for their own account, not as a nominee
or agent, and not with a view to the resale or
distribution of any part thereof, and that they
have no present intentions of selling, granting
any participation in, or otherwise distributing
the same. By executing this Agreement, the
Shareholders further represent that they do not
presently have any contract, undertaking,
agreement or arrangement with any person to sell,
transfer or grant participations to such person or
to any third person, with respect to any of the
TDI Common Stock.
(b) The Shareholders understand that the TDI Common
Stock has not been, and will not be, registered under the
Securities Act or state securities laws, by reason of a
specific exemption form the registration provisions of the
Securities Act and applicable state laws which depends upon,
among other things, the bona fide nature of the investment
intent and the accuracy of the representations as expressed
herein. The Shareholders understand that the shares of TDI
Common Stock are characterized as "restricted securities"
under the federal and state securities laws inasmuch as they
are being acquired from TDI in a transaction not involving a
public offering and that under such laws and applicable
regulations such TDI Common Stock may be resold without
registration under the Securities Act and applicable state
laws only in certain limited circumstances.
(c) The Shareholders understand that only a limited public
market now exists for the TDI Common Stock and that TDI has
made no assurances that a public market will exist for the
TDI Common Stock in the future.
(d) Columbus understands that the TDI Common Stock, and any
securities issued in respect thereof or exchange therefore,
may bear one of all of the following legends:
(i) `THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR QUALIFIED UNDER THE STATE
SECURITIES LAWS OF ANY STAT AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEROF UNDER SUCH ACT OF AN AVAILABLE EXEMPTION THEREFROM"
(ii) Any legend required by the Blue Sky laws of any
state to the extent such laws are applicable to the shares
represented by the certificate legend.
(e) The Shareholders acknowledge that neither the SEC nor
the securities commission of any state or other federal
agency has made any determination as to the merits of
acquiring the TDI Common Stock, and that this transaction
involves certain risks.
(f) The Shareholders have received and read this Agreement
and understand the risks related to the consummation of the
transaction herein contemplated.
(g) The Shareholders have such knowledge and experience
in business and financial matters that they are capable of
evaluating TDI and its business operations. The
Shareholders and their representatives have been given the
opportunity to meet with and ask questions of the officers
and directors of TDI to obtain any additional information
they consider material to the acquisition of the TDI Common
Stock.
Section 5.05 Further Documentation. In order to
more fully document reliance on the exemptions as
provided herein, the Shareholders shall execute and
deliver to TDI, at or prior to the Closing, such further
letters of representation, acknowledgment, suitability,
or the like, as TDI and its counsel may reasonably
request in connection with reliance on exemptions from
registration under such securities laws.
Section 5.06 No Legal Opinion. TDI and the
Shareholders 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.
Section 5.07 Release from Personal Liability.
TDI shall use its best efforts, without making any
guarantee with respect thereto, to secure releases from
personal liability of the Shareholders of all
obligations of Columbus. Notwithstanding, the
Shareholders acknowledge and agree that TDI may not be
successful in securing such releases and the failure of
TDI in doing so shall no be a breach under this
Agreement. In any event, TDI covenants and agrees that,
if and to the extent that any creditor of Columbus
requires payment from a Shareholder in respect of any
such person liability, TDI will pay and discharge, and
hold Shareholders harmless from, each such liability and
obligation of Columbus.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
Section 6.01 Conditions Precedent to the
Obligations of the Parties. The obligations of TDI, the
Shareholders and Columbus under the terms of this
Agreement are subject to the satisfaction, at or before
the Closing Date, of the following conditions:
(a) The representations and warranties made by Columbus and
the Shareholders in this Agreement were true when made and
shall be true at the Closing Date with the same force and
effect as if such representations and warranties were made
at and as of the Closing Date.
(b) Columbus and the Shareholders shall have performed or
complied with all covenants and conditions required by this
Agreement to be performed or complied with by Columbus or
the Shareholders prior to or at the Closing.
(c) No litigation, proceeding, investigation, or inquiry
is pending or, to the best knowledge of Columbus of the
Shareholders, threatened, which might result in an action to
enjoin or prevent the consummation of the transactions
contemplated by this Agreement or which might result in a
material adverse change in the assets, properties, or
business of Columbus.
(d) Columbus shall have taken all corporate action
necessary to approve the transactions contemplated by this
Agreement, including, without limitation, obtaining the
requisite approval of the shareholders of Columbus.
(e) TDI shall have received executed employment agreements
of Xxxx Xxxxxx and Xxxxx Xxxxxx in form and substance
acceptable to TDI.
(f) TDI shall have received reports from the Division
of Corporations and Commercial Code of the stat of Utah
confirming that there exist no encumbrances of record on any
of the assets reflected on the most recent balance sheet
included in the Columbus Schedules or used in the business
of Columbus, except set forth in such most recent balance
sheet or the Columbus Schedules.
(g) TDI shall have received a certification that Columbus
is in good standing, dated as of a date within ten (10) days
prior to the Closing Date.
(h) Columbus shall deliver to TDI a certificate, signed by
a duly authorized officer of Columbus and dates as of the
Closing Date, warranting that the foregoing have been
satisfied and that all documents delivered at Closing are
accurate and shall provide reasonable proof thereof as
reasonably required by TDI.
Section 6.03 Conditions Precedent to the
Obligations of Columbus and the Shareholders. The
obligations of Columbus and the Shareholders under this
Agreement are subject to the satisfaction, at or before
the Closing Date, of the following conditions:
(a) The representations and warranties made by TDI in this
Agreement were true when made and shall be true as of the
Closing Date except for changes permitted by this Agreement
or made in the ordinary course of business.
(b) TDI shall have performed and complied with all
covenants and conditions required by this Agreement to be
performed or complied with by TDI prior to or at the
Closing.
(c) No litigation, proceeding, investigation, or inquiry
is pending or, to the best knowledge of TDI, threatened, which
might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this
Agreement or which might result in any adverse material
change in the assets, properties, or business operations of
TDI.
(d) TDI shall deliver to Columbus a certificate, signed
by a duly authorized officer of TDI and dated as of the Closing
Date, warranting that the foregoing have been satisfied and
that all documents delivered at Closing are accurate and
shall provide reasonable proof thereof as reasonably
required by Columbus.
Section 6.04 Other Items. The parties hereto
shall have received such further documents,
certificates, or instruments relating to the
transactions contemplated hereby as they may reasonably
request.
ARTICLE VII
TERMINATION
Section 7.01 Termination. Anything contained in
this Agreement to the contrary notwithstanding, this
Agreement may be terminated at any time prior to the
Closing Date:
(a) by the mutual consent of the board of directors of TDI
and board of directors of Columbus;
(b) by TDI or Columbus, if the Closing shall not have
occurred on or before November 17, 2000 (or such later date
as may be mutually agreed to by TDI and Columbus);
(c) by TDI in the event of any material breach by Columbus
or the Shareholders of any of the agreements,
representations, or warranties of Columbus of the
Shareholders contained herein and the failure of Columbus or
the Shareholders to cure such breach within seven days after
receipt of notice from TDI requesting such breach to be
cured; or
(d) by Columbus of the Shareholders in the event of any
material breach by TDI of any of the agreements,
representations, or warranties of TDI contained herein and
the failure of TDI to cure such breach within seven days
after receipt of notice from Columbus requesting such breach
to be cured.
Section 7.02 Notice of Termination. Any party
desiring to terminate this Agreement pursuant to
section 7.01 shall give notice of such termination to
the other parties to this Agreement.
Section 7.03 Effect of Termination. In the
event that this Agreement shall be terminated pursuant
to this Article VII, all further obligations of the
parties under this Agreement (other than sections 8.01
and 8.02) shall be terminated without further liability
of any party to the other; provide that, nothing herein
shall relieve any party from liability for its willful
breach of this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Confidential Nature of Information.
Each party agrees that it will treat in confidence all
documents, materials and other information which it
shall have obtained regarding the other parties during
the course of the negotiations leading to the
consummation of the transactions contemplated hereby
(whether obtained before of after the date of this
Agreement), the investigation provided for herein
pursuant to section 5.01 and the preparation of this
Agreement and other related documents, and, in the
event the transactions contemplated hereby shall not be
consummated , each party will return to the other party
all copies of non-public documents and materials which
have been furnished in connection therewith. Such
documents, materials and information shall not be
communicated to any third Person (other than to their
respective counsel, accountants, financial advisors or
lenders) and shall not be used for any purpose to the
detriment of the other party. No other party shall use
any confidential information in any manner whatsoever
except solely for the purpose of evaluating the
proposed transaction hereunder; provided, however, that
after the Closing TDI may use or disclose any
confidential information reasonably related to the
business of Columbus or the assets acquired hereunder.
The obligation of each party to treat such documents,
materials and other information in confidence shall not
apply to any information which (i) is or becomes
available to such party from a source other that the
other party, except from insiders and affiliates of
such other party, (ii) is or becomes available to the
public other that as a result of disclosure by such
party or its agents, (iii) is required to be disclosed
under applicable law or judicial process, but only to
the extent it must be disclosed; or (iv) such party
reasonably deems necessary to disclose to obtain any of
the consents or approvals contemplated hereby.
Section 8.02 Expenses. Each party hereto will
pay all costs and expenses incident to its negotiation
and preparation of this Agreement and to its
performance and compliance with all agreements and
conditions contained herein on its part to be performed
or complied with, including the fees, expenses and
disbursements of its counsel and accountants.
Section 8.03 No Brokers. TDI and Columbus
agree that no third person has in any way brought the
parties together or been instrumental in the
negotiation, execution, or consummation of this
Agreement. TDI and Columbus each agree to indemnify
the other against any claim by any third person for any
commission, brokerage, finder's fee, or other payment
with respect to this Agreement or the transactions
contemplated hereby based upon any alleged agreement or
understanding between such party and such third person,
whether expressed or implied, arising from the actions
of such party. The covenants set forth in this section
8.03 shall survive the Closing Date and the
consummation of the transactions herein contemplated.
Section 8.04 Governing Law. This Agreement
shall be governed by, enforced, and construed under and
in accordance with the laws of the United States of
America, and, with respect to other matters of state
law, the laws of the state of Arizona.
Section 8.05 Notices. All notices, demands,
requests, or other communications required or
authorized hereunder shall be deemed given sufficiently
if in writing and if personally delivered; if sent by
facsimile transmission, confirmed with a written copy
thereof sent by overnight express delivery; if sent by
register mail or certified mail, return receipt
requested and postage prepaid; or if sent by overnight
express delivery:
If to Columbus, to: Columbus Companies, Inc.
Attn: Xxxx Xxxxxx
0000 Xxxxx 000 Xxxx
Xxxxxxxxx, XX 00000
Fax: (000)000-0000
With copies to: Xxxxxxx X. Xxxxxxx, Esq.
Ray, Xxxxxxx & Xxxxxxx
00 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Fax: (000)000-0000
If to TDI, to: Travel Dynamics, Inc.
Attn: Xxxxx X. Xxxxxxx
0000 X. Xxxxxxxxxx Xxxx.
Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Fax: (000)000-0000
With copies to: Xxxxx X. Xxxxx, Esq.
Xxxxx, Xxxxx & Xxxxxxx, L.L.C.
Eighth Floor, Bank Xxx Xxxxx
00 Xxxx Xxxxxxxx
Xxxx Xxxx Xxxx, XX 00000
Fax: (000)000-0000
or such other addresses and facsimile numbers as
shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such
notice, demand, request, or other communication shall
be deemed to have been given as of the date so
delivered or sent by facsimile transmission, three days
after the date so mailed, or one day after the date so
sent by overnight delivery.
Section 8.06 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 attorney's
fees, incurred in connection therewith and in enforcing
or collecting and judgment rendered therein.
Section 8.07 Schedules; Knowledge.
Whenever in any section of this Agreement reference is
made to information set forth in the Columbus
Schedules, such reference is to information
specifically set for in such schedules and clearly
marked to identify the section of this Agreement to
which the information relates. Whenever any
representation is made to the "knowledge" of any party,
it shall be deemed to be a representation that no
officer or director of such party, after reasonable
investigation, has any knowledge of such matters.
Section 8.08 Entire Agreement. This
Agreement, together with the documents to be delivered
pursuant hereto, represent the entire agreement between
the parties relating to the subject matter hereof.
There are no other courses of dealing, understanding,
agreements, representations, or warranties, written or
oral, except as set forth herein.
Section 8.09 Survival; Termination.
The representations, warranties, and covenants of the
respective parties shall survive the Closing for a
period of one year.
Section 8.10 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.
Section 8.11 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 may be
enforced concurrently herewith, and no waiver by any
party of the performance of any obligation by the other
shall be constructed as a waiver of the same of any
other default then, therefore, 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 parties hereto
have caused this Agreement to be executed as of the
date first above written.
TRAVEL DYNAMICS, INC.
BY ___________________________
Xxxxx X. Xxxxxxx, President
COLUMBUS COMPANIES, INC.
BY ____________________________
I. Xxxx Xxxxxx, President
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.
TRAVEL DYNAMICS, INC.
BY _____________________________
Xxxxx X. Xxxxxxx, President
COLUMBUS COMPANIES, INC.
BY ______________________________
D. Xxxxx Xxxxxx, President
THE SHAREHOLDERS:
_________________________________
Xxxx Xxxxxx
_________________________________
D. Xxxxx Xxxxxx
TDI COMMON STOCK ISSUED
AT CLOSING ON NOVEMBER 17, 2000
-------------------------------
NUBMER OF SHARES RECIPIENT
---------------- ----------
375,000 I. Xxxx Xxxxxx
375,000 D. Xxxxx Xxxxxx
