AGREEMENT AND PLAN OF REORGANIZATION
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This AGREEMENT AND PLAN OF REORGANIZATION ("Agreement"), dated December
30, 2003, between Telco Blue, ("TBLU" or the "Company"), a Delaware
corporation and, Promotional Containers Manufacturing, Inc. ("PCM"), a
Nevada corporation. The parties acknowledge and agree that the terms
and provisions of this Agreement, including without limitation the
shares of stock transferable hereunder, may not be assigned without the
prior written approval of the other party.
The Company's authorized capital consists of 75,000,000 shares of
common stock, par value $0.00l. As of the effective date of this
Agreement, TBLU has approximately 5,500,000 common shares issued and
outstanding.
PLAN OF REORGANIZATION
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The reorganization will comprise in general, the acquisition of PCM by
TBLU pursuant to an I.R.S. qualified tax free exchange whereupon PCM
shall become a wholly owned subsidiary of TBLU, all subject to the
terms and conditions of the agreement hereinafter set forth. For
purposes of this Agreement, the terms "shares", "stock" and/or "common
capital stock", shall be interchangeable.
AGREEMENT
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In order to consummate the foregoing Plan of Reorganization, and in
consideration of the premises and of the representations and
undertakings herein set forth, the parties agree as follows:
1. Transfer of shares. Upon and subject to the terms and conditions
herein stated, TBLU shall acquire from PCM's shareholders, whose
signatures appear below, whom shall transfer, assign, and convey to
TBLU all of the issued and outstanding shares of PCM's common stock to
TBLU in exchange for 28,600,000 shares of TBLU newly issued stock. By
virtue of the transaction, TBLU shall acquire PCM as a going concern,
including all of the properties and assets of PCM of every kind,
nature, and description, tangible and intangible, wherever situated,
including, without limiting the generality of the foregoing, its
business as a going concern, its goodwill, and the corporate name
(subject to changes referred to or permitted herein or occurring in the
ordinary course of business prior to the time of closing provided
herein).
2. Issuance and delivery of stock. In consideration of and in exchange
for the foregoing transfer, assignment, and conveyance, and subject to
compliance by TBLU and PCM with their warranties and undertakings
contained herein, simultaneously at the time of the merger, TBLU shall
caused to be issued and deliver to PCM one or more stock certificates
registered in the name of the undersigned shareholders of PCM, on a
pro-rata basis totaling 28,600,000 shares in exchange for 100% of the
outstanding shares of PCM Common stock. In addition to the float,
which at present is approximately 5,500,000 shares, 6,750,000 shares
shall be issued or shall have been issued to various and several
parties to be determined prior to Closing, of which 1,300,000 shares
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shall be registered in an S-8 registration as set forth in Section 3
below herein. All of the shares exchanged shall, upon such issuance
and delivery, shall be deemed fully paid and non-assessable. It is
anticipated that there will be approximately 40,850,000 shares issued
and outstanding post merger.
3. Registration. Within five business days from Closing, or as soon as
practicable thereafter, the surviving entity will enact an S-8
registration for services rendered for 2,300,000 shares, which includes
the 1,300,000 as set forth in the Section 2 above herein, the names of
which shall be submitted to Xxxxxxx Xxx, Esq., 0000 Xxxxxx Xxx Xxx
Xxxxx #000, Xxx Xxxxx, XX.
4. Dissenting shares: None. PCM represents and warrants that there are
no dissenting shareholders with respect to the proposed merger or
acquisition.
5. Place of closing. The closing of this agreement and all deliveries
hereunder shall take place in person or via electronic closing by fax
or e-mail.
6. Time of closing. The date of closing shall be January 5th, 2004,
unless extended by mutual agreement of the parties. The last date
fixed by mutual agreement of the parties or otherwise becoming
effective under this paragraph shall constitute the closing date.
7. Representations and warranties of TBLU. TBLU and its shareholders
represent and warrant to PCM that:
(a) Corporate status. TBLU is a corporation duly organized and
existing under the laws of the State of Delaware with an authorized
capital stock consisting of 75,000,000 Common shares, of which
5,500,000 common shares are currently issued and outstanding.
(b) Disposition of assets. Since September 30, 2003, there has been
no material adverse change in the assets or liabilities or in the
condition, financial or other of TBLU, except changes occurring in the
ordinary course of business and changes referred to or permitted
herein. All assets presently in TBLU shall be spun out prior to
Closing and there shall be no assets in the Company at the time of
Closing.
(c) Lawsuits and claims. TBLU is not a party to or threatened by any
litigation, proceeding, or controversy before any court or
administrative agency which might result in any change in the business
or properties of TBLU or which change would be substantially adverse
taking into account the entire business and properties of TBLU; TBLU is
not in default with respect to any judgment, order, writ, injunction,
decree, rule, or regulation of any court or administrative agency.
However, prior to Closing, TBLU will form a subsidiary corporation with
the intent to pursue a potential civil and/or criminal action against
its former President, Xxx XxXxxxxx and others.
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(d) Taxes. TBLU has filed with the appropriate governmental agencies
all tax returns required by such agencies to be filed by it and is not
in default with respect to any such filing. TBLU has paid all taxes
claimed to be due by state and local taxing authorities and has not
been examined by representatives of the United States Internal Revenue
Service for federal taxes since inception.
(e) Financial Condition: TBLU represents and warrants that it will
have no material liabilities except as disclosed in this Agreement at
the time of Closing.
(f) Financial Statements. TBLU represents and warrants that it
will complete full audits of its financial statements for the past year
according to GAAP and that the same shall be certified as true and
correct by the current officers and directors of TBLU.
(g) No Misstatements: TBLU has not made any material
misrepresentation of its financial condition or failed to disclose any
material fact which, if disclosed, would cause PCM not to close.
8. Representations and warranties of PCM. PCM represents and warrants
to TBLU that:
(a) Corporate status. PCM is a Nevada corporation in good standing
duly organized and existing under the laws of the State of Nevada, with
an authorized capital stock consisting of 30,000,000 shares of common
stock, $0.001 par value, of which 20,000,000 are Class A common shares,
5,000,000 Class B common shares, and 5,000,000 in Preferred shares.
All shares have been duly issued and are outstanding fully paid and
non-assessable. One million shares of Class A common stock has been
issued to Xxxxx Xxxxx, 1,000 shares of Class A common stock has been
issued to Xxxxxxx D, Xxxxx, 1,000 shares of Class A common stock has
been issued to Xxxxx X. Xxxxx, XX and 1,000 shares of Class A common
stock have been issued to Xx Xxxxxxx. All issuances of PCM common
stock shall be exchanged for newly issued TBLU stock. PCM has no
subsidiary.
(b) Corporate authority. PCM and its shareholders have the corporate
right and authority to acquire and operate the properties and business
now owned and operated by it and to issue and deliver the number of
shares of its Common stock required to be issued hereunder to TBLU.
(c) Disposition of assets.
(1) On March 22, 2003, Show Me, Ink., a Nevada corporation,
purchased the assets known as "GMB", from Mid-America Photographers of
Texas, with the effective date of April 1, 2003. Show Me. Ink.,
assigned 100% of their interest in said assets owned by PCM, Inc. on
December 1, 2003 to PCM, Inc. A copy of the agreement between Show
Me, Inc. and Mid-America Photographers of Texas shall be incorporated
herein and is attached hereto as Exhibit "A". A copy of the assignment
between Show Me, Ink. and PCM whereby PCM assumed the assets acquired
by Show Me, Ink., shall be incorporated herein and is attached hereto
as "Exhibit B".
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(d) Lawsuits and claims. PCM is not a party to or threatened by any
litigation, proceeding, or controversy before any court or
administrative agency which might result in any change in the business
or properties of PCM or which change would be substantially adverse,
taking into account the entire business and properties of PCM.
(e) Taxes. PCM has filed with the appropriate governmental agencies
all tax returns required by such agencies to be filed by it and is not
in default with respect to any such filing. PCM has paid all taxes
claimed to be due by state and local taxing authorities and has not
been examined by representatives of the United States Internal Revenue
Service for federal taxes during the past three fiscal years.
(f) PCM and the undersigned shareholders have not made any material
misrepresentation of its financial condition or failed to disclose any
material fact or information which has been reasonably requested by
TBLU.
(g) For a period of six months after the merger as described herein,
Xxxxx Xxxxx, as the surviving entity's newly appointed President hereby
agrees not to issue any new shares except for a bona-fide acquisition
or bona-fide financing a price not less than 1/2 of the bid price of
the stock at the time of funding and no PIPES transactions for a period
of twelve months post merger.
9. Interim conduct of business by PCM. Until the time of closing, PCM
will conduct its business in the ordinary and usual course, and prior
to the time of closing it will not, without the written consent of
TBLU, borrow any money, incur any liability other than in the ordinary
and usual course of business or in connection with the performance or
consummation of this agreement, encumber or permit to be encumbered any
of its properties and assets, dispose or contract to dispose of any
property except in the regular and ordinary course of business, enter
into any lease or contract for the purchase of real estate, form or
cause to be formed any subsidiary, pay any bonus or special
remuneration to any officer or employee, declare or pay any dividends,
make any other distributions to its shareholders, or issue, sell, or
purchase any stock, notes, or other securities.
10. Access to information. From the date hereof each party shall allow
the other free access to its files and audits, including any and all
information relating to taxes, commitments, and contracts, real estate
and personal property titles, and financial condition. From the date
hereof each party agrees to cause its auditors to cooperate with the
other in making available all financial information requested,
including the right to examine all working papers pertaining to audits
made by such auditors.
11. Conditions and obligations of TBLU. Unless at the time of closing
the following conditions are satisfied, TBLU shall not be obligated to
make the transfer, assignment and conveyance as set forth in Section 1
herein, and otherwise to effectuate its part of the reorganization
herein provided:
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(a) The representations and warranties of PCM set forth herein, are,
on the date hereof and as of the time of closing, substantially
correct.
(b) The directors and shareholders of PCM have approved the
consummation of this agreement and the matters herein provided.
(c) No litigation or proceeding is threatened or pending for the
purpose of with the probably effect of enjoining or preventing the
consummation of this agreement or which would materially affect PCM
operation or its assets.
(d) PCM has complied with its agreements herein to be performed by
it prior to the time of Closing.
12. Conditions of obligations of PCM. Unless at the time of closing the
following conditions are satisfied, PCM shall not be obligated to issue
and deliver the shares of its Common stock as set forth in Section 2
herein, and otherwise to effectuate its part of the reorganization
herein provided:
(a) The representations and warranties of TBLU set forth in Section
7 (a) - (g) inclusive, are, on the date hereof and as of the time of
closing, substantially correct subject to any change made because of
any action approved by PCM.
(b) The directors of TBLU have approved and the holders of all of
the outstanding shares of TBLU have voted in favor of the consummation
of this agreement and the matters herein provided.
(c) No litigation or proceeding is threatened or pending for the
purpose or with the probable effect of enjoining or preventing the
consummation of this agreement or which would materially affect TBLU
operation of the properties and business to be acquired by it
hereunder.
(d) At Closing the present officers and directors of TBLU shall
resign and the following shall be appointed to assume the duties and
responsibilities as officers and directors of the surviving entity:
Xxxxx Xxxxx President and Director
Xxxxx Xxxxxx Vice-President and Director
Xxxxxx Xxxxxxx Treasurer and Director
Xxxxx X. Xxxx Secretary
(e) As the surviving entity, Xxxxx Xxxxx, in his capacity as the
President of Telco Blue, hereby avers that the company will not enact a
reverse split for a period of 24 consecutive months after the date of
Closing.
(f) Xxxxx Xxxxx, in his capacity as the President of Telco Blue,
agrees that within 5 business days after receiving a request from a
Telco Blue shareholder, that it will pro-actively assist any
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shareholder that possesses Rule 144 restricted shares by submitting
written authorization to the company's transfer agent instructing them
to remove the Rule 144 restrictive legend on any Telco Blue certificate
where the shareholder has submitted the appropriate paperwork and, if
that shareholder qualifies to have the legend the removed.
13. Abandonment of agreement. If by reason of the provisions of
Sections 1 or 2 above herein, either party is not obligated to
effectuate the reorganization, then either party which is not so
obligated may terminate and abandon this agreement by delivering to the
other party written notice of termination prior to the time of closing,
and thereupon this agreement shall be terminated without further
obligation or liability upon either party in favor of the other.
14. Authorization by shareholders. PCM and TBLU shall promptly take
such action as may be necessary to call special meetings of their
respective shareholders to authorize the consummation of this agreement
and the matters herein provided, and each will recommend to its
shareholders that this agreement and the matters herein provided, and
all other matters necessary or incident thereto, be approved,
authorized, and consummated.
15. Listing of TBLU stock issued to PCM. TBLU shall not be required to
prepare and file a registration statement under the Securities Act of
1933 covering the shares of Common stock to be delivered hereunder,
though it is not precluded from do so; However, within the proscribed
time as set forth by Rule 8-K, PCM shall be obligated to prepare and
file an 8-K information statement providing the requisite information
on the acquisition.
16. Brokers' fees. Neither party has incurred nor will incur any
liability for brokerage fees or agents' commissions in connection with
the transactions contemplated hereby.
17. Execution of documents. At any time and from time to time after the
time of closing, TBLU will execute and deliver to PCM and PCM will
execute and deliver to TBLU such further conveyances, assignments, and
other written assurances as PCM or TBLU shall reasonably request in
order to vest and confirm PCM's shareholders and TBLU, respectively,
title to the shares and/or assets to be and intended to be transferred,
assigned, and conveyed hereunder.
18. Parties in interest. Nothing herein expressed or implied is
intended or shall be construed to confer upon or to give any person,
firm, or corporation other than the parties hereto any rights or
remedies under or by reason hereof.
19. Completeness of agreement. This agreement contains the entire
understanding between the parties hereto with respect to the
transactions contemplated hereby.
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20. Survival of Representations and Warranties. Each of the parties
hereto hereby agrees that all representations and warranties made by or
on behalf of him or it in this Agreement or in any document or
instrument delivered pursuant hereto shall survive for a period of
three (3) years following the Closing Date and the consummation of the
transactions contemplated hereby.
21. General Provisions.
21.1 Headings and Interpretation. The headings used in this
Agreement are for reference purposes only and shall not affect the
meaning or interpretation of any term or provision of this Agreement.
21.2 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is
not affected in any manner adverse to any party.
21.3 Entire Agreement. This Agreement represents the entire
understanding of the parties with reference to the matters set forth
herein. This Agreement supersedes all prior negotiations, discussions,
correspondence, communications and prior agreements among the parties
relating to the subject matter herein.
21.4 Amendment. This Agreement may not be amended or modified except
by an instrument in writing signed by the parties hereto.
21.5 Applicable Law. This Agreement shall be governed by the
substantive laws of the State of Nevada, without regard to its conflict
of laws provisions.
21.6 Notices:
If to PCM, Inc.:
0000 Xxxxxx Xx. #000
Xxxxxxxxx, XX 00000
000-000-0000 (Phone)
000-000-0000 (Fax)
Attn: Xxxxx Xxxxx, President
If to Telco Blue, Inc.:
0000 00xx Xxx., Xxx. 000
Xxxxx X.X.
Xxxxxx X0X - 0X0
000-000-0000 (Phone)
000-000-0000(Fax)
Attn: Xxxxxx Xxxxxx
Copy to:
Xxxxxx X. Xxxxxxx, Esq.
Attorney for TBLU
000-000-0000 (Fax)
000-000-0000 (Phone)
21.7 Counterparts and Facsimile Transmission Copies of Originals.
This Agreement may be executed in several original or facsimile copy
counterparts and all so executed and transmitted shall constitute one
Agreement, binding on all the parties hereto even though all the
parties are no signatories to the original or the same counterpart.
Facsimile transmitted signatures shall be deemed valid as though they
were originals and the parties may perform any and all obligations and
duties in reliance on the facsimile copies.
21.8 Further Assurances, Additional Documents, Etc. The parties will
cooperate with each other to accommodate the intent of this agreement.
PCM and TBLU will exchange all financial records of the respective
company in a timely fashion so that there will be a seamless financial
transition. Failure to timely provide all corporate and financial
information on each respective company shall constitute a breach of
this Agreement and the non-breaching party shall have the right to
terminate this Agreement or seek damages at its sole discretion.
IN WITNESS WHEREOF, the parties hereto have executed, or caused their
duly authorized representatives to execute, this Agreement and Plan of
Reorganization as of the date first written above.
PCM, Inc.
/s/Xxxx Xxxxx
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By: Xxxxx Xxxxx, President
Telco Blue, Inc.
/s/Xxxxxx Xxxxxx
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By: Xxxxxx Xxxxxx, President
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