b. 2.1 Plan of Acquisition
AGREEMENT OF REORGANIZATION
By and Between
American Electric Automobile Company, INC.
A Delaware Corporation,
and
EFM Venture Group and Xxxxxx Xxxxxx,
As SHAREHOLDERS
and
CALIFORNIA ELECTRIC AUTOMOBILE COMPANY, INC.
A California Corporation
AGREEMENT OF REORGANIZATION
THIS AGREEMENT is made effective June 15, 1996, at San Diego, California, by
and between AMERICAN ELECTRIC AUTOMOBILE COMPANY INC., a Delaware Corporation
(hereinafter referred to as "American Electric Automobile Company"), Xxxxxx
Xxxxxx, EFM Venture Group (hereinafter collectively referred to as
"SHAREHOLDERS"), and CALIFORNIA ELECTRIC AUTOMOBILE COMPANY, INC. a California
Corporation (hereinafter referred to as the "CORPORATION").
WHEREAS, the SHAREHOLDERS have represented that they own all of the
outstanding stock of the CORPORATION, and
WHEREAS, American Electric Automobile Company desires to acquire from the
SHAREHOLDERS and the SHAREHOLDERS desire to exchange stock with American
Electric Automobile, 100% of the outstanding stock of the CORPORATION ("the
shares"), and
WHEREAS, the CORPORATION desires that this transaction be consummated.
NOW, THEREFORE, in consideration of the mutual covenants, promises,
conditions, agreements, representations and warranties contained in this
Agreement, setting aside all previous agreements both oral and written the
parties agree as follows:
1. PURCHASE AND SALE OF SHARES
1.1. The parties hereto adopt this Agreement as a Type B tax-free plan of
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code.
1.2. Subject to the terms and conditions set forth in this Agreement, on the
closing, SHAREHOLDERS will transfer and convey to American Electric Automobile
Company, 105,000 shares of common stock in the CORPORATION which represents
100% of the issued and outstanding shares of stock in the CORPORATION.
1.3. As consideration for the transfer of the shares by SHAREHOLDERS,
American Electric Automobile Company shall deliver at the closing,
certificates representing 1,050,000 shares of American Electric Automobile's
common stock.
1.4. The 1,050,000 shares of American Electric Automobile Company' common
stock shall be issued in the amount following each SHAREHOLDER'S name in
Schedule "A".
2. REPRESENTATIONS AND WARRANTIES OF THE PARTIES
2.1. The SHAREHOLDERS represent and warrant that the SHAREHOLDERS are owners,
beneficially and of record, of all the shares free and clear of liens,
encumbrances, security agreements, equities, options, claims charges, and
restrictions, other than any restriction set forth by the California
Commissioner of Corporations. SHAREHOLDERS have full power to transfer the
shares to American Electric Automobile Company without obtaining the consent
or approval of any other person, governmental authority or the Corporation.
2.2. The SHAREHOLDERS and the CORPORATION to the best of their knowledge,
represent and warrant as ollows:
a. CORPORATION is a corporation duly organized validly existing, and in
good standing under the laws of California and has all necessary corporate
powers to own its properties and to operate its business as now owned and
operated by it.
b. The authorized capital stock of the CORPORATION consists of 1,000,000
shares of common stock, having no par value, of which 105,000 shares (the
shares) are issued and outstanding. All the shares are validly issued, fully
paid, and non-Assessable, and such shares have been so issued in full
compliance with all federal and state securities laws. There are no
outstanding subscriptions, options, rights, warrants, convertible securities,
or other agreements or commitments obligating the CORPORATION to issue or to
transfer from treasury any additional shares of its capital stock of any
class.
c. That there is no suit, action, arbitration, or legal administrative,
or other proceeding, to the best knowledge of CORPORATION; against or
effecting CORPORATION or any other business, assets, or financial condition.
d. The financial statements in Exhibit B have been prepared in accordance
with generally accepted accounting principles consistently followed by the
CORPORATION as of the respective dates of said financial statements, and the
results of its operation for the respective periods indicated.
e. That there has not been since the date of the attached financial
statements any material change in the financial condition, liabilities,
assets, business or prospects of the CORPORATION.
f. Since November 19, 1995, that within the times and in the manner
prescribed by law, the CORPORATION has filed all federal, state, and local tax
returns required by law and has paid all taxes assessments, and penalties due
and payable. There are not present disputes as to taxes of any nature payable
by the CORPORATION.
g.The CORPORATION is in possession of all premises leased to it from
others.
h. Neither the SHAREHOLDERS, nor any officer, director, or employee of
the CORPORATION, nor any spouse, child, or other relative of any of these
persons, owns, or has any interest, directly or indirectly, in any of the real
or personal property owned by or leased to the CORPORATION. That the
CORPORATION does not occupy any real property in violation of any law,
regulation, or decree.
i. The execution and delivery of this Agreement by the CORPORATION, and
the performance of its covenants and obligations under it, shall have been
duly authorized by all necessary corporate action, and the CORPORATION shall
have received copies of all resolutions pertaining to that authorization,
certified by the secretary of the CORPORATION.
k. Each SHAREHOLDER is acquiring the stock of the CORPORATION as an
investment and not with a view to distribution, and each hereby consents that
the shares of the CORPORATION, may be legended to the effect that such shares
are not registered under the Securities Act of 1933.
l. The CORPORATION has given no options or other rights to purchase or
subscribe for any shares of stock of the CORPORATION in favor of any person,
firm or corporation. Stockholders do not have preemptive rights.
m. The CORPORATION has no assets or business other than those shown in
these financial statements.
n. The CORPORATION is not party to any employment agreements.
2.3 American Electric Automobile Company represents and warrants as follows:
a. American Electric Automobile Company is a corporation duly organized,
validly existing, and in good standing under the laws of Delaware and has all
necessary corporate powers to own its properties and to operate its business
as now owned and operated by it; and neither the ownership of its properties
nor the nature of its business requires American Electric Automobile Company
to be qualified in any jurisdiction other than the state of its incorporation.
b. The authorized capital stock of American Electric Automobile Company
consists of 70,000,000 shares, of which 50,000,000 shares are common stock,
having a par value of $0.0001 each, and 20,000,000 are preferred stock, having
a par value of $0.0001 each, 2,450,000 of which are issued fully paid, and
nonassessable, and such shares have been so issued full compliance with all
federal and state securities laws. There are no outstanding subscriptions,
options, rights, warrants, convertible securities, or other agreements or
commitments obligating American Electric Automobile Company to issue or to
transfer from treasury any class of stock.
c. The financial statements in Exhibit A have been prepared in
accordance with generally accepted accounting principles consistently followed
by American Electric Automobile Company throughout the periods indicated and
fairly present the financial position of American Electric Automobile Company
as of the respective dates of said financial Statements, and the results of
its operations for the respective periods indicated.
d. That there has not been since the date of the attached financial
statements any material change in the financial condition, liabilities,
assets, business or prospects of American Electric Automobile Company.
e. That American Electric Automobile Company does not have any debt,
iability, or obligation of any nature, whether accrued, absolute, contingent,
or otherwise, and whether due or to become due, that is not reflected in the
financial statements or set forth in Exhibit A to this Agreement, and that all
debts, liabilities, and obligations incurred after that date were incurred in
the ordinary course of business, and are usual and normal in amount both
individually and in the Agreement.
f. That the total liabilities on the part of American Electric Automobile
Company does not exceed the approximate amount of 1,000.00.
g. That within the times and in the manner prescribed by law, American
Electric Automobile Company has filed all federal, state, and local tax
returns required by law and has paid all taxes, assessments, and penalties
which in American Electric Automobile Company's opinion are due and payable
and has made all filings required by all applicable state and federal laws.
h. That American Electric Automobile Company has good and marketable
title to all of its respective assets and interests in assets, whether real,
personal, mixed, tangible, and intangible, which constitute all the assets and
interests in assets that are used in the business of American Electric
Automobile Company. All these assets are free and clear of restrictions on or
conditions to transfer or assignment, and free and clear of mortgages, liens,
pledges, charges, encumbrances, equities, claims, easements, rights of way,
covenants, conditions or restrictions, except for (i) these disclosed in
American Electric Automobile Company financial statements in Exhibit A to this
Agreement; (ii) the lien of current taxes not yet due and payable; and (iii)
possible minor matters that in the aggregate, are not substantial in amount
and do not materially detract from or interfere with the present or intended
use of any of these assets, nor materially impair business operations. All
real property and tangible personal property of American Electric Automobile
Company is in good operating condition and repair, ordinary wear and
tearexcepted. American Electric Automobile Company is in possession of all
premises leased to it from others.
i. That there is no suit, action, arbitration, or legal administrative,
or other proceeding, or governmental investigation pending or, to the best
knowledge American Electric Automobile Company threatened, against or
affecting AmericanElectric Automobile Company, or any of its business, assets,
or financial condition.
j. The execution and delivery of this Agreement by American Electric
Automobile Company and the performance of its covenants and obligations under
it, shall have been duly authorized by all necessary corporate action, and
SHAREHOLDERS have received copies of all resolutions pertaining to that
authorization, certified by the secretary of American Electric Automobile
Company.
k. That they have had an opportunity to review the financial statements
in Exhibits B to this Agreement and based upon such financial statements they
have entered into this Agreement.
3. DOCUMENTATION, DELIVERY AND COOPERATION
3.1. The CORPORATION will furnish to American Electric Automobile Company for
its examination (i) copies of the Article of Incorporation and By-Laws of the
CORPORATION; (ii) the minute books of the CORPORATION containing all records
required to be set forth of all proceedings, consents, actions, and meetings
of the SHAREHOLDERS and Boards of Directors of the CORPORATION; (iii) all
permits, orders, and consents issued with Respect to corporation, or any
security, and all applications for such permits, orders, and consents; and
(iv) the stock transfer books of the CORPORATION setting forth all transfers
of any capital stock.
3.2. At the closing, the SHAREHOLDERS shall deliver to American Electric
Automobile Company the following instruments, in form and substance
satisfactory to American Electric Automobile Company and its counsel:
a. A certificate or certificates representing the shares, registered in
the names of the SHAREHOLDERS, duly endorsed by the SHAREHOLDERS transfer or
accompanied by an assignment of the shares duly executed by the SHAREHOLDERS.
On submission of that certificate or certificates to the CORPORATION for
transfer, the CORPORATION shall issue to American Electric Automobile Company
a certificate representing the shares, registered in the name of American
Electric Automobile Company.
b. The stock books, stock ledgers, minute books, and corporate seals of
the CORPORATION, and
3.3. At the closing, American Electric Automobile Company shall deliver to
SHAREHOLDERS the following instruments and documents:
a. The share certificates as set forth in paragraph1.3.
3.4. All of the parties further agree that they will do all things necessary
and reasonable to accomplish and facilitate the transfer of the shares in
conformance with any and all governmental bodies and regulatory agencies, and
that they will sign and execute any and all documents necessary to bring about
and perfect the purposes of the Agreement.
4.1. The obligations of the SHAREHOLDERS hereunder are, at the option of the
SHAREHOLDERS, subject to the conditions that on or before the Closing:
a. The SHAREHOLDERS shall not have discovered any material error, or
misstatement or omission in the representations, and warranties made by
American Electric Automobile Company, herein, and all the terms and conditions
of this Agreement to be complied with and performed by American Electric
Automobile Company at or before the Closing shall have been complied with and
performed in all material respects.
b. The representations and warranties made by American Electric
Automobile Company in this Agreement shall be correct in all material respects
at and as of the Closing.
c. The Commissioner of Corporations of the State of California has
issued, if necessary, the appropriate permit or permits pursuant to the
California Corporations Code the qualification of the securities which are the
subject of this Agreement.
4.2. The obligations of American Electric Automobile Company hereunder are,
at the option of American Electric Automobile Company, subject to the
conditions that on or before the Closing:
a. American Electric Automobile-Company shall not have discovered any
material error, misstatement or omission in the presentations and warranties
made by the SHAREHOLDERS of the CORPORATION, and all the terms and conditions
of this Agreement to be complied with and performed by the SHAREHOLDERS and
the CORPORATION on or before the Closing shall have been complied with and
performed in all material respects.
b. The representations and warranties made by the SHAREHOLDERS and the
CORPORATION in this Agreement shall be correct in all material respects at and
as of the Closing.
c. The Commissioner of Corporations of the State of California has, if
necessary, issued the appropriate permit or permits pursuant to the California
Corporations Code for the qualification of the securities which are the
subject of this Agreement.
4.3. The Closing under this Agreement shall take place at the law offices of
Xxxxxxx Xxx, 0000 Xxxxxx Xxx Xxx Xxxxx Xxx. 000, Xxx Xxxxx, XX 00000, or at
such place, time or date, as may be agreed upon by the parties.
This Agreement may be signed in one or more counterparts.
American Electric California Electric
Automobile Company, Inc Automobile Company, Inc.
(a Delaware Corporation) (a California Corporation)
\\ Xxxxxx X. Xxxxx \\ \\ Xxxxxx X. Xxxxx \\
STOCKHOLDERS
\\ Xxxxxx X. Xxxxx \\
--------------------------
EFM Venture Group
\\ Xxxxxx Xxxxxx \\
--------------------------
Xxxxxx Xxxxxx
Exhibit B
SELECTED FINANCIAL INFORMATION
SUMMARY BALANCE SHEET DATA: September 1, 1996
Current Assets:
Cash in Bank $ 200.00
Note Receivable $ 1,000.00
Electric Auto $ 35,000.00
Total Assets: $ 36,200.00
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Note on Electric Auto $ 35,000.00
Stockholder's Equity $ 200.00
Total Liabilites
& Stockholder's Equity $ 36,200.00
SUMMARY STATEMENT OF OPERATIONS DATA:
(for six months ending June 30, 96)
Total Income $ 0
Net Loss $ 0
Net Loss Per Share: $ 0
EXHIBIT A
SELECTED FINANCIAL INFORMATION
SUMMARY BALANCE SHEET DATA: September 1, 1996
Current Assets: $ 0.00
Other Assets: $ 0.00
Total Assets: $ 0.00
Total Liabilities: $ 0.00
Shareholders Equity $ 0.00
SUMMARY STATEMENT OF OPERATIONS DATA:
(for six months ending June 30, 96)
Total Income $ 0
Net Loss $ 0
Net Loss Per Share: $ 0
Schedule A
Shareholders Stock Aquired by American Stock Issued
Electric Automobile Co. in Exchange
EFM Venture Group 10,000 shares 100,000 shares
Xxxxxx Xxxxxx 95,000 shares 950,000 shares
