EXHIBIT 2.2
FLEX FINANCIAL GROUP, INC.
000 X. Xxxx Xxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
(713) 840-7500
June 30, 1996
Xxxxxxx X. Xxxxxxxx, Xx., President and CEO
American NorTel Communications, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
This letter will evidence our agreement regarding a proposed
merger/spinoff transaction by and between Flex Financial Group, Inc., a Texas
corporation ("Flex Financial"), and American NorTel Communications, Inc., a
Wyoming corporation ("American NorTel").
In consideration of the following representations, promises and
undertakings, the parties agree as follows:
1. Representations by Flex Financial. Flex Financial is a
----------------------------------
Houston, Texas-based company whose operations and financial statements are
described in a Private Placement Memorandum dated October 15, 1995; a copy of
which has been delivered by Flex Financial to American NorTel. Flex Financial
has completed and closed the private placement described in such Memorandum
and seeks a public market for its securities under circumstances that may
require the simultaneous raising of additional capital.
2. Representations by American NorTel. American NorTel is a
-----------------------------------
Wyoming corporation owned by approximately 770 persons that was originally
incorporated in British Columbia, Canada on May 17, 1979. The Company filed
its Certificate of Registration and Articles of Continuance with the Secretary
of State of the State of Wyoming and became a Wyoming corporation effective
February 9, 1993. American NorTel currently operates in the telecommunications
business, providing long distance telephone service in combination with
additional related services in the United States and a number of foreign
countries, including Argentina, Brazil, Mexico, Canada, and Costa Rica.
American NorTel seeks to diversify its business opportunities and
investment potential to its shareholders by engaging in "spinoff" activities
such as are described herein, such spinoffs to involve the distribution, by
way of stock dividends or otherwise, of registered shares of stock of other
companies. American NorTel's shareholder base is described in a letter dated
May 31, 1996 from American NorTel's president, Xxxxxxx X. Xxxxxxxx, Xx. to
Xxxxxxx X. Xxxxxxx, Flex Financial's president.
3. Proposed merger-spinoff. The parties agree to commence
------------------------
taking the steps required to bring to a vote, by the shareholders of Flex
Financial, a proposed spinoff-merger such as is described in letters of May
30, 1996 and June 4, 1996 from M. Xxxxxxx Xxxxxxx, Esq. To Xxxx Xxxxxxxx of
American NorTel, copies of which are attached hereto ("the Spinoff Letters").
4. Terms of the merger-spinoff. The terms of the merger-spinoff
---------------------------
will be as follows:
4.1 The American NorTel subsidiary to be created and which will
be the issuer of the shares of stock that will survive the merger will be
named any name designated by Flex Financial and will be incorporated in any
state designated by Flex Financial. Herein, this American NorTel subsidiary
will be called "Flex Acquisitions." On the effective date of the merger, it
will change its name to Flex Financial Group, Inc., if required to do so by
Flex Financial.
4.2 Flex Acquisitions will sell 20,000 of its shares to American
NorTel for $200, or $0.001 per share, the Common Stock's par value. Unless a
different authorized capital is specified by Flex Financial, Flex Acquisitions
will have authorized capital of 10 million shares of Common Stock, par value
$0.001 per share, and 10 million shares of Preferred Stock, no par value, the
preferences, rights and qualities of each series of the Preferred Stock to be
set by resolutions of Flex Acquisitions's board of directors.
4.3 Flex Acquisitions's counsel, M. Xxxxxxx Xxxxxxx, will be
responsible for drafting the S-4 Registration Statement to be filed with the
Securities and Exchange Commission ("the SEC"), the Wyoming Securities
Commission, the Texas Securities Commission and, if required, any other state
securities regulatory agency.
4.4 The Registration Statement(s) will register (i) 94,000 Flex
Acquisitions shares of Common Stock, to be distributed to the Flex Financial
shareholders in proportion to their Flex Financial shareholdings upon the
effectiveness of the proposed merger, (ii) the distribution by American NorTel
to its shareholders of the 20,000 Flex Acquisitions shares of Common Stock it
earlier purchased, (iii) Flex Acquisitions' warrants, the number and tenor of
which Flex Acquisitions' warrants shall be the same as the Flex Financial
warrants that are issued and outstanding as of the date of this agreement, all
as set forth in Exhibit A attached hereto; (iv) Flex Acquisitions shares and
warrants underlying Class A Stock Options and Unit Purchase Options; (v)
shares of Flex Acquisitions Common Stock to underlie the before-described Flex
Acquisitions warrants, stock options, and unit purchase options; (vi) up to
1,200,000 shares of Common Stock "for the shelf" to be used for possible
acquisitions; and (vii) in the sole discretion of Flex Financial, shares and
warrants underlying up to 100,000 units, each unit consisting of 1 share of
common stock, 2 Class B Warrants and 2 Class C Warrants, at an aggregate
offering price of $6.00 per unit. Exhibit A attached hereto more fully
describes the securities set forth in (iii), (iv) and (v) above.
4.5 Flex Financial's auditors, must provide their written
consent to the filing of the Registration Statement and any amendments thereto
before they will be filed with the SEC. The auditors may review but express
no opinion on the interim period, unaudited financial statements and any pro
forma financial statements that will appear in the Registration Statement.
All financial statement materials provided by Flex Financial must meet the
requirements of Item 310 of the SEC's Regulation S-B and of its S-4
Registration Statement.
5. Abandonment of transaction by Flex Financial. Flex Financial
---------------------------------------------
is free to abandon this proposed merger-spinoff at any time, subject only to
its paying all expenses incurred by American NorTel or Flex Acquisitions at
that time. Flex Financial is not obligated to obtain the approval by its
shareholders of the proposed merger with Flex Acquisitions.
6. Costs of the transaction. Flex Financial will pay all costs
------------------------
of the proposed transaction. An estimate of these costs is set forth in the
schedule attached hereto, which schedule also sets forth target completion
dates for the proposed transaction. The estimates are not firm prices but are
made in good faith after inquiry and reflection. American NorTel's and Flex
Acquisitions's attorney, M. Xxxxxxx Xxxxxxx, will xxxx his time at $150 per
hour. Should the transaction be abandoned or should the transaction be
completed before the $35,000 attorney's fee, required to be deposited in
Xxxxxxx' law firm's trust account, be earned, the balance will be returned to
Flex Financial. Should the $35,000 prove to be less than is earned, the
shortfall will be paid by Flex Financial to Xxxxxxx upon the approval of his
statements. No estimate is included in the attached schedule of Flex
Financial's own attorney's fees.
7. Market stabilization. After the merger-spinoff should be
---------------------
effected and for the periods set forth below, Flex Financial will obtain, from
the beneficial owners of at least 80% of its presently outstanding shares of
capital stock, an agreement that each such shareholder will not sell any of
his, her or its shares of post-merger Flex Acquisitions stock without first
obtaining the written authorization of the president of Flex Financial, which
authorization shall be given only for pressing, economic reasons deemed
satisfactory to Flex Financial's president: 90 days, unless Flex
Acquisitions's stock has traded at an average price of $7.50/share for a
period of 45 days.
8. Governing law. The effect and interpretation of this
--------------
Agreement will be governed by the laws of Texas.
FLEX FINANCIAL GROUP, INC.
By: /S/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, President
AMERICAN NORTEL COMMUNICATIONS, INC.
By:/S/ X. X. Xxxxxxxx, Xx.
Xxxxxxx X. Xxxxxxxx, Xx., President
EXHIBIT A
Flex Acquisitions' securities issuable for and
convertible from Flex Financial securities
===============================================================
TITLE OF EACH CLASS OF
SECURITIES TO BE AMOUNT TO BE
REGISTERED REGISTERED
---------------------------------------------------------------
Unit Purchase Options - Bridge Loan
Units issuable upon exercise of the Unit
Purchase Options
Common Stock issuable upon exercise of the Unit
Purchase Options 8,333
---------------------------------------------------------------
Class B Warrants issuable upon exercise of the
Unit Purchase Options 16,666
---------------------------------------------------------------
Common Stock issuable upon exercise of Class B
Bridge Loan warrants which underlie the Unit
Purchase Options 16,666
---------------------------------------------------------------
Class C Warrants issuable upon exercise of the
Unit Purchase Options 16,666
---------------------------------------------------------------
Common Stock issuable upon exercise of Class C
Bridge Loan warrants which underlie the Unit
Purchase Options 16,666
---------------------------------------------------------------
Units, each consisting of one share of common
stock, $.001 par value, two Class B Warrants and
two Class C Warrants
Common Stock ($.001 par value) 14,000
---------------------------------------------------------------
Class B Warrants 28,000
---------------------------------------------------------------
Common Stock Underlying Class B Warrants 28,000
---------------------------------------------------------------
Class C Warrants 28,000
---------------------------------------------------------------
Common Stock Underlying Class C Warrants 28,000
---------------------------------------------------------------
Founders' Common Stock 80,000
---------------------------------------------------------------
Class A Options 80,000
---------------------------------------------------------------
Common Stock Underlying Class A Options 80,000
TOTAL
===============================================================
