[Exhibit 99.1]
REORGANIZATION PLAN AND AGREEMENT
A PLAN AND AGREEMENT dated as of October 23, 2001 by and among REFERRAL HOLDINGS
CORPORATION, a Nevada corporation ("RHC"), Referral Finance Corporation, a
Wyoming corporation ("RFC"), and Xxxxx X. XxXxxxxx ('XxXxxxxx") as Owners Agent
and Representative for the shareholders of RHC.
WITNESSETH:
WHEREAS: 100% of the stock of RFC is held by RHC; and
WHEREAS, RHC has appointed XxXxxxxx as its President and Chief Executive
Officer and as such has the authority to execute this agreement on RHC's behalf
with full authority to obligate RHC to this agreement; and
WHEREAS, the Board of Directors of RHC no longer believes its ownership
interest in RFC to be beneficial to the interests of RHC and is desirous of
divesting itself of such interest; and
WHEREAS, RHC has approved a plan to sell 100% of the stock of RFC to
XxXxxxxx, and RHC wishes to transfer the same to XxXxxxxx as provided herein, in
exchange for the Consideration described herein, and subject to the condition
that RFC be severed from RHC; and
NOW, THEREFORE, in consideration of the foregoing and the mutual premises
herein set forth, and subject to the terms and conditions hereof, the parties
agree as follows:
1. ACQUISITION OF RFC BY XxXxxxxx. On the Closing Date, XxXxxxxx shall
issue and deliver to RHC the consideration described below in exchange for 100%
of the stock in RFC owned by RHC; whereupon, RFC shall then have become wholly
owned by XxXxxxxx.
2. CONSIDERATION. In consideration of the acquisition of RFC, XxXxxxxx
shall pay $10.00 (ten dollars) and other valuable consideration to be paid to
RHC.
3. THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on October 23, 2001 at a place agreed
upon by RHC and XxXxxxxx.
4. REPRESENTATIONS OF RHC. RHC represents and warrants to XxXxxxxx as
follows:
(a) Organization. RHC is duly organized and validly exists as a
business corporation under the laws of the State of Nevada. RHC has no
subsidiaries other than RFC. RHC has the legal power and authority to own,
operate and sell its assets and to carry on its business as now conducted,
and is duly qualified to do business wherever the nature and location of
its business and assets require such qualification.
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(b) Authorization and Capital Stock. RHC has the legal power,
authority and capacity to enter into, execute, deliver and perform its
obligations under this Agreement. This Agreement constitutes the valid and
binding agreement of RHC and is enforceable in accordance with its terms
(subject to applicable bankruptcy, insolvency and other rights affecting
the enforceability of creditors' rights generally and the discretion of the
courts in granting equitable remedies). The authorized capital stock of RFC
consists of 100,000,000 shares of $0.001 par value Common Stock and
20,000,000 shares of $0.001 par value Preferred Stock of which 5,122,504
Common Shares and 4,150,000 Preferred Shares are validly issued, fully
paid, non-assessable and outstanding. There are no other securities,
subscriptive rights or rights, warrants, options, contracts, understandings
or commitments providing for issuance of, or granting rights to acquire any
capital stock of RFC or securities convertible into or exchangeable for
capital stock of RFC.
(c) Assets and Business. RHC makes no representations or warranties
with regard to the assets or business of RFC. XxXxxxxx accepts RFC as is.
(d) Licenses. RHC makes no representations or warranties with regard
to the licenses held by RFC. XxXxxxxx accepts RFC as is. .
(e) Financial Statements. RHC has delivered to XxXxxxxx true, correct
and complete financial statements of as of and for the year ending March
31, 2001 in audited form, and for the quarter ended June 30, 2001 in
reviewed form, from an independent auditing firm of standing up to the
requirements of the SEC and NASD for the level of public reporting selected
by RHC. The financial statements are materially correct and complete and
have been prepared in accordance with generally accepted accounting
principles consistently applied.
(f) Information. All written material furnished or to be furnished by
RHC and the does not and will not contain any statement which is false or
misleading with respect to any material fact, and does not and will not
omit to state any material fact, the omission of which makes the statements
therein false or misleading.
(g) Taxes. RHC has duly filed all tax returns and reports (or
extensions for filing such returns and reports) related to its business
required to be filed and has duly paid all taxes and other governmental
charges ("Taxes") upon RFC's properties, assets, income, franchises,
licenses, stock issuances or transfers or sales related to its business.
There are no unpaid taxes which are a lien on RFC's properties and assets,
except liens for Taxes not yet due and payable. RFC has not adopted a plan
of liquidation under any tax code, or entered into any contract to merge or
consolidate with or sell all or any substantial part of its assets to any
other firm or corporation.
(h) Litigation. RHC makes no representations or warranties with regard
to the existing or pending litigation with regard to RFC. XxXxxxxx accepts
RFC as is.
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(i) Authority. On or before the closing date, RHC will have taken all
necessary legal action to approve the execution and delivery of this
Agreement and the performance of its obligations hereunder and all
transactions contemplated hereby will have been duly authorized by all
requisite corporate action on the part of RHC, and no further
authorization, approval or consent is necessary. Neither the Directors nor
any other present OWNERS of RHC will have any appraisal or other
dissenters' rights respecting the transactions contemplated hereby.
(j) Compliance with Other Instruments. Etc. Neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will conflict with or result in violation of or
constitute a default under and is not prohibited by the Articles of
Incorporation or By-Laws of RHC, the provisions of any agreement, mortgage,
indenture, franchise, license, permit, or other consent, approval
authorization, lease or other instrument, judgement, decree, order, law or
regulation by which RHC is bound or by which RHC's business or assets may
be affected.
(k) Governmental and Other Consents. Etc. No consent, approval or
authorization of or declaration or filing with any governmental authority
or other person or entity, domestic or foreign, on the part of RHC is
required in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.
(l) Compliance with Law. Etc. RHC has complied with and is not in
default in any respect under any law, ordinance, requirement, regulation,
judgement, decree or order applicable to it or its business or RFC and RHC
has not received notice of any claimed default with respect to any of the
foregoing.
(m) Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been conducted without the
intervention of any other person or entity, and in such a manner so as not
to give rise to any valid claim against RHC, RFC or XxXxxxxx for a finder's
or brokerage fee or like payment.
(n) Restricted Securities. The RFC stock to be transferred hereunder,
upon will not have been "registered" and therefore will be "restricted
securities", as those terms are used under the Securities Act of 1933, as
amended (the "1933 Act"), and the rules and regulations thereunder. By
execution of this Agreement, XxXxxxxx agrees, represents and warrants that
his acquisition of the RFC shares hereunder is for investment only, for his
own account (both of record and beneficially) and not with a view to
"distribution" as that term is used under the 1933 Act. The RFC shares to
be transferred hereunder may bear a legend substantially as follows: "THE
SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES
LAW, AND MAY NOT BE TRANSFERRED UNLESS THE CORPORATION RECEIVES AN OPINION
OF COUNSEL, AT THE REQUEST OF THE PRESIDENT, SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH TRANSFER OR OTHER DISPOSITION CAN BE
MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND ALL
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APPLICABLE FEDERAL AND STATE SECURITIES LAWS. BY ACQUIRING THE SHARES OF
STOCK REPRESENTED BY THIS CERTIFICATE, EACH STOCKHOLDER REPRESENTS THAT HE
HAS ACQUIRED SUCH SHARES OF STOCK FOR INVESTMENT AND THAT HE WILL NOT SELL
OR OTHERWISE DISPOSE OF THE SHARES OF STOCK WITHOUT REGISTRATION OR OTHER
COMPLIANCE WITH THE AFORESAID ACT AND RULES AND REGULATIONS THEREUNDER."
5. INDEMNIFICATION OF RFC AND XxXxxxxx.
(a) Notwithstanding the events to take place on the Closing Date, and
regardless of any investigation at any time made by or on behalf of RHC or
any information that either of them may have, RFC and XxXxxxxx agree to
fully indemnify, defend, save and hold RHC harmless in the event that RHC
shall at any time following the Closing Date, suffer any expense, damage,
liability, lost cost or deficiency, or shall have asserted against it any
claim, demand or suit, which arises out of or results from, or if RHC shall
pay or become obligated to pay any sum or incur any expense (including
reasonable attorney's fees) on account of the following: (i) any inaccuracy
in any representation or the breach of any warranty of RFC or XxXxxxxx
hereunder; (ii) any failure of RFC or XxXxxxxx duly to perform or observe
any term, provision, covenant, agreement or condition hereunder on the part
of RFC or XxXxxxxx to be performed or observed; (iii) any material
misrepresentation in, or omission from, any statement, exhibit,
certificate, schedule or other document furnished on or after the date
hereof pursuant to this Agreement by RFC or XxXxxxxx (or any representative
thereof); (iv) any and all claims, demands, suits, actions, causes of
action, proceedings, losses, liabilities, judgements, including but not
limited to, costs and legal and other expenses, incident to any of the
matters otherwise indemnified against by this Section 6 must be asserted by
RHC no later than 30 days after the Closing Date.
(b) The foregoing indemnification is in addition to all of RFC's and
XxXxxxxx'x other rights and remedies under law or in equity for any breach
by RHC and RFC's and XxXxxxxx'x right of offset for any Consideration or
other sum which RFC or XxXxxxxx is obligated to pay to RHC is expressly
preserved.
6. INDEMNIFICATION OF RHC.
(a) Notwithstanding the events to take place on the Closing Date,
and regardless of any investigation at any time made by or on behalf
of RFC or XxXxxxxx or any information that either of them may have,
RHC agrees to fully indemnify, defend, save and hold RFC and XxXxxxxx
harmless in the event that RFC or XxXxxxxx shall at any time during
the 30 day period following the Closing Date, suffer any expense,
damage, liability, loss, cost or deficiency, or shall have asserted
against it any claim, demand or suit, which arises out of or results
from, or if RFC or XxXxxxxx shall pay or become obligated to pay any
sum or incur any expense (including reasonable attorney's fees) on
account of the following: (i) any inaccuracy in any representation or
the breach of any warranty of RHC hereunder; (ii) any failure of RHC
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duly to perform or observe any Term, provision, covenant, agreement or
condition hereunder on the part of RHC to be performed or observed;
(iii) any material misrepresentation in, or omission from, any
statement, exhibit, certificate, schedule or other document furnished
on or after the date hereof pursuant to this Agreement by RHC ( or any
representative thereof); (iv) any and all claims, demands, suits,
actions, causes of action, proceedings, losses, liabilities,
judgements, including but not limited to, costs and legal and other
expenses, incident to any of the matters otherwise indemnified against
by this Section 6 must be asserted by RFC or XxXxxxxx no later than 30
days after the Closing Date.
(b) The foregoing indemnification is in addition to all of RFC's
and XxXxxxxx'x other rights and remedies under law or in equity for
any breach by RHC and RFC's and XxXxxxxx'x right of offset for any
Consideration or other sum which RFC or the XxXxxxxx is obligated to
pay to RHC is expressly preserved.
If any section of this Agreement shall be determined by a court
of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
7. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas and shall be binding on and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.
9. HEADINGS. The descriptive headings of the several paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
REFERRAL HOLDINGS CORPORATION.
Attest:
/s/ Xx X. Xxxxxxxx /s/ Xxxxx X. XxXxxxxx
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Xx X. Xxxxxxxx, Secretary Xxxxx X. XxXxxxxx, President
REFERRAL FINANCE CORPORATION
Attest:
/s/Xxxxx X. XxXxxxxx
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Xxxxx X. XxXxxxxx, President
/s/ Xxxxx X. XxXxxxxx
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Xxxxx X. XxXxxxxx, individually
Attest:
/s/ Xx X. Xxxxxxxx
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Xx X. Xxxxxxxx, Secretary
By their agent and representative:
/s/Xxxxx X. XxXxxxxx
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Witness:
/s/Xx Xxxxxxxx
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