AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made
this 2nd day of May, 2000, among Empire Communications Corp., a Nevada
corporation ("Empire"); Xxxxx X. Xxxxx, its sole director, executive officer and
principal stockholder ("Grant"); Front Porch Digital Inc., a Delaware
corporation ("Front Porch"); and the stockholders of Front Porch as listed on
Exhibit A hereto, who execute and deliver a copy of the Agreement (the "Front
Porch Stockholders").
W I T N E S S E T H:
RECITALS
WHEREAS, the respective Boards of Directors of Empire and Front
Porch have adopted resolutions pursuant to which Empire shall acquire and the
Front Porch Stockholders shall exchange 100% of the outstanding common stock of
Front Porch; and
WHEREAS, the sole consideration for 100% interest in Front Porch
shall be the exchange of $0.001 par value common stock of Empire (which shares
are all "restricted securities" as defined in Rule 144 of the Securities and
Exchange Commission) as outlined in Exhibit A; and
WHEREAS, the Front Porch Stockholders shall acquire in exchange the
"restricted securities" of Empire in a reorganization within the meaning of
Section 368(a)(1)(B), Section 351 or other available sections, laws or rules and
regulations of the Internal Revenue Code of 1986, as amended, to the extent
applicable;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, it is agreed:
Section 1
Exchange of Stock
1.1 Number of Shares. The Front Porch Stockholders agree to transfer to
Empire at the closing (the "Closing") 100% of the outstanding securities of
Front Porch, listed in Exhibit A, which is attached hereto and incorporated
herein by reference (the "Front Porch Shares"), in exchange for 9,440,000 shares
of common stock of Empire, as outlined in Exhibit A, on a one for one basis.
Taking into account the current outstanding shares of Empire's common stock,
amounting to 46,400,000 shares and the proposed cancellation of 40,000,000 of
these shares in accordance with Section 1.5 hereof, there will be 15,840,000
outstanding shares of the reorganized Empire on the Closing.
1.2 Delivery of Certificates by Front Porch Stockholders. The transfer
of the Front Porch Shares by the Front Porch Stockholders shall be effected by
the delivery to Empire at the Closing of stock certificate or certificates
representing the transferred shares duly endorsed in blank or accompanied by
stock powers executed in blank with all signatures witnessed or guaranteed to
the satisfaction of Empire and with all necessary transfer taxes and other
revenue stamps affixed and acquired at the Front Porch Stockholders' expense.
1.3 Further Assurances. At the Closing and from time to time
thereafter, the Front Porch Stockholders shall execute such additional
instruments and take such other action as Empire may request in order to
exchange and transfer clear title and ownership in the Front Porch Shares to
Empire.
1.4 Change of Name and Designation and Election of New Directors. At or
simultaneous with the Closing, the Board of Directors and the majority
stockholders of Empire shall have adopted all resolutions required or necessary
to (i) change the name of Empire to "Front Porch Digital Inc." or some similar
name selected by the Board of Directors and to (ii) designate and elect the
following nominees of Front Porch to serve on the Board of Directors of Empire,
until the next annual meeting of the stockholders of Empire and until their
respective successors are elected and qualify or their prior resignations or
terminations:
Xxx Xxxxxxxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxxxxx
1.5 Cancellation of Shares and Resignation of Current Director and
Executive Officer. Xxxxx X. Xxxxx, the sole director and executive officer of
Empire, shall, at or simultaneous with the Closing, (i) cancel to the treasury
of Empire the 40,000,000 shares of common stock of Empire presently owned by her
in consideration of the sum of $50,000; and (ii) following the designation and
election of the nominees of Front Porch to the Board of Directors of Empire,
resign as an officer and a director of Empire.
1.6 Filing of Reports with the Securities and Exchange Commission.
Prior to the Closing, Empire shall have filed its 10-KSB Annual Report for the
year ended December 31, 1999, with the Securities and Exchange Commission, at
its sole cost and expense, which costs and expenses shall have been paid in full
prior to Closing; and Empire shall cause an 8-K Current Report to be dated as of
the Closing concerning this Agreement to be timely filed with the Securities and
Exchange Commission, at its sole cost and expense, which costs and expenses
shall have been paid in full prior to Closing.
1.7 Outstanding Warrants and Stock Options of Front Porch. Empire shall
issue and exchange warrants and stock options to acquire shares of its common
stock on like terms in exchange for the present outstanding warrants or stock
options to acquire common stock of Front Porch, subject to the consent of the
Front Porch warrant holders.
Section 2
Closing
The Closing contemplated by Section 1 shall be held at the offices
of Xxxxxxx X. Xxxxxxxxxx, Esq., Suite 205 Hermes Building, 000 Xxxx 000 Xxxxx,
Xxxx Xxxx Xxxx, Xxxx 00000, on or before ten days following the execution and
delivery of this Agreement, unless another place or time is agreed upon in
writing by the parties. The Closing may be accomplished by wire, express mail or
other courier service, conference telephone communications or as otherwise
agreed by the respective parties or their duly authorized representatives.
Section 3
Representations and Warranties of Empire and Grant
Empire and Grant, jointly and severally, represent and warrant to,
and covenant with, the Front Porch Stockholders and Front Porch as follows:
3.1 Corporate Status. Empire is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and is
licensed or qualified as a foreign corporation in all states in which the nature
of its business or the character or ownership of its properties makes such
licensing or qualification necessary. Empire is a publicly held company, having
previously and lawfully offered and sold a portion of its securities in
accordance with applicable federal and state securities laws, rules and
regulations. Such securities are nominally quoted on the OTC Bulletin Board of
the NASD under the symbol "EPCN." Empire files reports with the Securities and
Exchange Commission pursuant to Section 15(d) of the Securities Exchange Act of
1934, as amended; such reports are accurate in every material respect; and
Empire is "current" in all such filing requirements. Such reports do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
3.2 Capitalization. The authorized capital stock of Empire consists of
50,000,000 shares of $0.001 par value common voting stock, of which
approximately 46,400,000 shares are issued and outstanding, all fully paid and
non-assessable; and 5,000,000 shares of $0.001 par value preferred stock, none
of which are issued and outstanding. There are no outstanding options, warrants
or calls pursuant to which any person has the right to purchase any authorized
and unissued common or preferred stock of Empire.
3.3 Financial Statements. The financial statements of Empire furnished
to the Front Porch Stockholders and Front Porch, consisting of audited financial
statements for the years ended December 31, 1999 and 1998, attached hereto as
Exhibit B and incorporated herein by reference, are correct and fairly present
the financial condition of Empire at such dates and for
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the periods involved; such statements were prepared in accordance with generally
accepted accounting principles consistently applied, and no material change has
occurred in the matters disclosed therein, except as indicated in Exhibit C,
which is attached hereto and incorporated herein by reference.
3.4 Undisclosed Liabilities. Empire has no liabilities of any nature
except to the extent reflected or reserved against in its balance sheets,
whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due, except as set
forth in Exhibit C.
3.5 Interim Changes. Since the date of its balance sheets, except as
set forth in Exhibit C, there have been no (1) changes in financial condition,
assets, liabilities or business of Empire which, in the aggregate, have been
materially adverse; (2) damages, destruction or losses of or to property of
Empire, payments of any dividend or other distribution in respect of any class
of stock of Empire, or any direct or indirect redemption, purchase or other
acquisition of any class of any such stock; or (3) increases paid or agreed to
in the compensation, retirement benefits or other commitments to anyone.
3.6 Title to Property. Empire has good and marketable title to all
properties and assets, real and personal, reflected in its balance sheets, and
the properties and assets of Empire are subject to no mortgage, pledge, lien or
encumbrance, except for liens shown therein or in Exhibit C, with respect to
which no default exists.
3.7 Litigation. There is no litigation or proceeding pending, or to the
knowledge of Empire, threatened, against or relating to Empire, its properties
or business, except as set forth in Exhibit C. Further, no officer, director or
person who may be deemed to be an "affiliate" of Empire is party to any material
legal proceeding which could have an adverse effect on Empire (financial or
otherwise), and none is party to any action or proceeding wherein any has an
interest adverse to Empire.
3.8 Books and Records. From the date of this Agreement to the Closing,
Empire will (1) give to the Front Porch Stockholders and Front Porch or their
respective representatives full access during normal business hours to all of
Empire's offices, books, records, contracts and other corporate documents and
properties so that the Front Porch Stockholders and Front Porch or their
respective representatives may inspect and audit them; and (2) furnish such
information concerning the properties and affairs of Empire as the Front Porch
Stockholders and Front Porch or their respective representatives may reasonably
request.
3.9 Tax Returns. Empire has filed all federal and state income or
franchise tax returns required to be filed or has received currently effective
extensions of the required filing dates.
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3.10 Confidentiality. Until the Closing (and thereafter if there is no
Closing), Empire and its representatives will keep confidential any information
which they obtain from the Front Porch Stockholders or from Front Porch
concerning the properties, assets and business of Front Porch. If the
transactions contemplated by this Agreement are not consummated by May 31, 2000,
Empire will return to Front Porch all written matter with respect to Front Porch
obtained by Empire in connection with the negotiation or consummation of this
Agreement.
3.11 Corporate Authority. Empire has full corporate power and authority
to enter into this Agreement and to carry out its obligations hereunder and will
deliver to the Front Porch Stockholders and Front Porch or their respective
representatives at the Closing a certified copy of resolutions of its Board of
Directors authorizing execution of this Agreement by Empire's officers and
performance thereunder, and that the directors adopting and delivering such
resolutions are the duly elected and incumbent directors of Empire.
3.12 Due Authorization. Execution of this Agreement and performance by
Empire hereunder have been duly authorized by all requisite corporate action on
the part of Empire, and this Agreement constitutes a valid and binding
obligation of Empire and performance hereunder will not violate any provision of
the Articles of Incorporation, Bylaws, agreements, mortgages or other
commitments of Empire.
3.13 Environmental Matters. Empire has no knowledge of any assertion by
any governmental agency or other regulatory authority of any environmental lien,
action or proceeding, or of any cause for any such lien, action or proceeding
related to the business operations of Empire or Empire' predecessors. In
addition, to the best knowledge of Empire, there are no substances or conditions
which may support a claim or cause of action against Empire or any of Empire'
current or former officers, directors, agents or employees, whether by a
governmental agency or body, private party or individual, under any Hazardous
Materials Regulations. "Hazardous Materials" means any oil or petrochemical
products, PCB's, asbestos, urea formaldehyde, flammable explosives, radioactive
materials, solid or hazardous wastes, chemicals, toxic substances or related
materials, including, without limitation, any substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," or "toxic substances" under any applicable federal or state laws or
regulations. "Hazardous Materials Regulations" means any regulations governing
the use, generation, handling, storage, treatment, disposal or release of
hazardous materials, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, the Resource
Conservation and Recovery Act and the Federal Water Pollution Control Act.
3.14 Access to Information Regarding Front Porch. Empire acknowledges
that it has been delivered copies of what has been represented to be
documentation containing all material information respecting Front Porch and
Front Porch's present and contemplated business operations, potential
acquisitions, management and other factors; that it has had a reasonable
opportunity to review such documentation and discuss it, to the extent desired,
with its legal counsel, directors and executive officers; that it has had, to
the extent desired, the
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opportunity to ask questions of and receive responses from the directors and
executive officers of Front Porch, and with the legal and accounting firms of
Front Porch, with respect to such documentation; and that to the extent
requested, all questions raised have been answered to Empire's complete
satisfaction.
Section 4
Representations, Warranties and Covenants of Front Porch
Front Porch represents and warrants to, and covenants with, Empire
and Grant as follows:
4.1 Ownership. The Front Porch Stockholders own the Front Porch Shares
free and clear of any liens or encumbrances of any type or nature whatsoever,
and each has full right, power and authority to convey the Front Porch Shares
owned without qualification.
4.2 Corporate Status. Front Porch is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is licensed or qualified as a foreign corporation in all states or foreign
countries and provinces in which the nature of Front Porch's business or the
character or ownership of Front Porch properties makes such licensing or
qualification necessary.
4.3 Capitalization. The authorized capital stock of Front Porch
consists of 35,000,000 shares of common stock, $0.001 par value per share, of
which 9,440,000 shares are issued and outstanding, all fully paid and
non-assessable. Except as otherwise provided herein, there are no outstanding
options, warrants or calls pursuant to which any person has the right to
purchase any authorized and unissued common stock of Front Porch. Front Porch
has outstanding warrants entitling certain warrant holders to acquire an
aggregate of 7,400,000 shares of its common stock at an exercise price of $0.50
per share and outstanding stock options entitling certain option holders to
acquire an aggregate of 2,622,500 shares of its common stock at an exercise
price of $.50 per share; all warrants and stock options are for a period of five
years. These warrants and stock options, subject to the consent of the warrant
holders, shall be exchanged for like warrants or stock options, as applicable,
of Empire in accordance with Section 1.7 hereof.
4.4 Financial Statements. The financial statements of Front Porch
furnished to Empire, consisting of an unaudited balance sheet and statement of
operations as of March 22, 2000, attached hereto as Exhibit D and incorporated
herein by reference, are correct and fairly present the financial condition of
Front Porch as of these dates and for the periods involved, and such statements
were prepared by management in good faith from the books and records of Front
Porch, and no material adverse change has occurred in the matters disclosed
therein, except as indicated in Exhibit E, which is attached hereto and
incorporated herein by reference.
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4.5 Undisclosed Liabilities. Front Porch has no material liabilities of
any nature except to the extent reflected or reserved against in the unaudited
balance sheet, whether accrued, absolute, contingent or otherwise, including,
without limitation, tax liabilities and interest due or to become due, except as
set forth in Exhibit E attached hereto and incorporated herein by reference.
4.6 Interim Changes. Since the date of the unaudited balance sheet,
except as set forth in Exhibit E, there have been no (1) changes in the
financial condition, assets, liabilities or business of Front Porch which, in
the aggregate, have been materially adverse; (2) damages, destruction or loss of
or to the property of Front Porch, payment of any dividend or other distribution
in respect of the capital stock of Front Porch, or any direct or indirect
redemption, purchase or other acquisition of any such stock; or (3) increases
paid or agreed to in the compensation, retirement benefits or other commitments
to their employees.
4.7 Title to Property. Front Porch has good and marketable title to all
properties and assets, real and personal, proprietary or otherwise, reflected in
the unaudited balance sheet, and the properties and assets of Front Porch are
subject to no mortgage, pledge, lien or encumbrance, except as reflected in the
unaudited balance sheet or in Exhibit E, with respect to which no default
exists.
4.8 Litigation. There is no litigation or proceeding pending, or to the
knowledge of Front Porch, threatened, against or relating to Front Porch or its
properties or business, except as set forth in Exhibit E. Further, no officer,
director or person who may be deemed to be an affiliate of Front Porch is party
to any material legal proceeding which could have an adverse effect on Front
Porch (financial or otherwise), and none is party to any action or proceeding
wherein any has an interest adverse to Front Porch.
4.9 Books and Records. From the date of this Agreement to the Closing,
the Front Porch Stockholders will cause Front Porch to (1) give to Empire and
its representatives full access during normal business hours to all of its
offices, books, records, contracts and other corporate documents and properties
so that Empire may inspect and audit them; and (2) furnish such information
concerning the properties and affairs of Front Porch as Empire may reasonably
request.
4.10 Tax Returns. Front Porch has filed all federal and state income or
franchise tax returns required to be filed or has received currently effective
extensions of the required filing dates.
4.11 Confidentiality. Until the Closing (and continuously if there is
no Closing), Front Porch, the Front Porch Stockholders and their representatives
will keep confidential any information which they obtain from Empire concerning
its properties, assets and business. If the transactions contemplated by this
Agreement are not consummated by May 31, 2000, Front Porch and the Front Porch
Stockholders will return to Empire all written matter with
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respect to Empire obtained by them in connection with the negotiation or
consummation of this Agreement.
4.12 Investment Intent. The Front Porch Stockholders are acquiring the
shares to be exchanged and delivered to them under this Agreement for investment
and not with a view to the sale or distribution thereof, and the Front Porch
Stockholders have no commitment or present intention to liquidate Empire or to
sell or otherwise dispose of the Empire shares. The Front Porch Stockholders
shall execute and deliver to Empire on the Closing an Investment Letter attached
hereto as Exhibit F and incorporated herein by reference, acknowledging the
"unregistered" and "restricted" nature of the shares of Empire being received
under this Agreement in exchange for the Front Porch Shares; receipt of certain
material information regarding Empire; and whereby each is compromising and/or
waiving any claims each has or may have against Front Porch by reason of the
purchase of any securities of Front Porch by each or any of them prior to the
Closing of the Agreement.
4.13 Corporate Authority. Front Porch has full corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to Empire or its representative at the Closing a
certified copy of resolutions of its Board of Directors authorizing execution of
this Agreement by its officers and performance thereunder.
4.14 Due Authorization. Execution of this Agreement and performance by
Front Porch hereunder have been duly authorized by all requisite corporate
action on the part of Front Porch, and this Agreement constitutes a valid and
binding obligation of Front Porch and performance hereunder will not violate any
provision of the Articles of Incorporation, Bylaws, agreements, mortgages or
other commitments of Front Porch.
4.15 Environmental Matters. Front Porch and the Front Porch
Stockholders have no knowledge of any assertion by any governmental agency or
other regulatory authority of any environmental lien, action or proceeding, or
of any cause for any such lien, action or proceeding related to the business
operations of Front Porch or its predecessors. In addition, to the best
knowledge of Front Porch, there are no substances or conditions which may
support a claim or cause of action against Front Porch or any of its current or
former officers, directors, agents, employees or predecessors, whether by a
governmental agency or body, private party or individual, under any Hazardous
Materials Regulations. "Hazardous Materials" means any oil or petrochemical
products, PCB's, asbestos, urea formaldehyde, flammable explosives, radioactive
materials, solid or hazardous wastes, chemicals, toxic substances or related
materials, including, without limitation, any substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," or "toxic substances" under any applicable federal or state laws or
regulations. "Hazardous Materials Regulations" means any regulations governing
the use, generation, handling, storage, treatment, disposal or release of
hazardous materials, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, the Resource
Conservation and Recovery Act and the Federal Water Pollution Control Act.
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4.16 Access to Information Regarding Empire. Front Porch and the Front
Porch Stockholders acknowledge that they have been delivered copies of what has
been represented to be documentation containing all material information
respecting Empire and its present and contemplated business operations,
potential acquisitions, management and other factors; that they have had a
reasonable opportunity to review such documentation and discuss it, to the
extent desired, with their legal counsel, directors and executive officers; that
they have had, to the extent desired, the opportunity to ask questions of and
receive responses from the directors and executive officers of Empire, and with
the legal and accounting firms of Empire, with respect to such documentation;
and that to the extent requested, all questions raised have been answered to
their complete satisfaction.
Section 5
Conditions Precedent to Obligations of Front Porch
and the Front Porch Stockholders
All obligations of Front Porch and the Front Porch Stockholders
under this Agreement are subject, at their option, to the fulfillment, before or
at the Closing, of each of the following conditions:
5.1 Representations and Warranties True at Closing. The representations
and warranties of Empire and Grant contained in this Agreement shall be deemed
to have been made again at and as of the Closing and shall then be true in all
material respects and shall survive the Closing.
5.2 Due Performance. Empire shall have performed and complied with all
of the terms and conditions required by this Agreement to be performed or
complied with by it before the Closing.
5.3 Officers' Certificate. Front Porch and the Front Porch Stockholders
shall have been furnished with a certificate signed by the President of Empire,
in such capacity, attached hereto as Exhibit G and incorporated herein by
reference, dated as of the Closing, certifying (1) that all representations and
warranties of Empire contained herein are true and correct; and (2) that since
the date of the financial statements (Exhibit B hereto), there has been no
material adverse change in the financial condition, business or properties of
Empire, taken as a whole.
5.4 Books and Records. Empire or Grant shall have caused Empire to make
available all books and records of Empire, including minute books and stock
transfer records; provided, however, only to the extent requested in writing by
Front Porch at Closing.
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Section 6
Conditions Precedent to Obligations of Empire
All obligations of Empire under this Agreement are subject, at
Empire's option, to the fulfillment, before or at the Closing, of each of the
following conditions:
6.1 Representations and Warranties True at Closing. The representations
and warranties of Front Porch contained in this Agreement shall be deemed to
have been made again at and as of the Closing and shall then be true in all
material respects and shall survive the Closing.
6.2 Due Performance. Front Porch and the Front Porch Stockholders shall
have performed and complied with all of the terms and conditions required by
this Agreement to be performed or complied with by them before the Closing.
6.3 Officers' Certificate. Empire shall have been furnished with a
certificate signed by the Chief Executive Officer of Front Porch, in such
capacity, attached hereto as Exhibit H and incorporated herein by reference,
dated as of the Closing, certifying (1) that all representations and warranties
of Front Porch and the Front Porch Stockholders contained herein are true and
correct; and (2) that since the date of the financial statements (Exhibit D),
there has been no material adverse change in the financial condition, business
or properties of Front Porch, taken as a whole.
6.4 Books and Records. The Front Porch Stockholders or the Board of
Directors of Front Porch shall have caused Front Porch to make available all
books and records of Front Porch, including minute books and stock transfer
records; provided, however, only to the extent requested in writing by Empire at
Closing.
6.5 Front Porch Stockholders' Consent. The Front Porch Stockholders
owning not less than 85% of the outstanding securities of Front Porch shall have
executed and delivered this Agreement.
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Section 7
Termination
Prior to Closing, this Agreement may be terminated (1) by mutual
consent in writing; (2) by either the directors of Empire or Front Porch and the
Front Porch Stockholders if there has been a material misrepresentation or
material breach of any warranty or covenant by the other party; or (3) by either
the directors of Empire or Front Porch and the Front Porch Stockholders if the
Closing shall not have taken place, unless adjourned to a later date by mutual
consent in writing, by the date fixed in Section 2.
Section 8
General Provisions
8.1 Further Assurances. At any time, and from time to time, after the
Closing, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the intent
and purposes of this Agreement.
8.2 Waiver. Any failure on the part of any party hereto to comply with
any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
8.3 Brokers. Each party represents to the other parties hereunder that
no broker or finder has acted for it in connection with this Agreement, and
agrees to indemnify and hold harmless the other parties against any fee, loss or
expense arising out of claims by brokers or finders employed or alleged to have
been employed by he/she/it.
8.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent by
prepaid first-class registered or certified mail, return receipt requested, as
follows:
If to Empire: 000 Xxxx 000 Xxxxx
Xxxxxxxxxxx, Xxxx 00000
With a copy to: Xxxxxxx X. Xxxxxxxxxx, Esq.
455 East 000 Xxxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
If to Front Porch: 0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
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With a copy to: Xxxx X. Xxxxxxx, Esq.
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Front Porch
Stockholders: To the addresses listed on Exhibit A
8.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any other agreement,
representation or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
8.6 Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.7 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Nevada, except to the
extent pre-empted by federal law, in which event (and to that extent only),
federal law shall govern.
8.8 Assignment. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns.
8.9 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.
8.10 Default. In the event of any default hereunder, the prevailing
party in any action to enforce the terms and provisions hereof shall be entitled
to recover reasonable attorney's fees and related costs.
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IN WITNESS WHEREOF, the parties have executed this Agreement and
Plan of Reorganization effective the day and year first above written.
EMPIRE COMMUNICATIONS CORP.
Date: May 2, 2000 By /s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx X. Xxxxx, President
Date: May 2, 2000 /s/ Xxxxx X. Xxxxx
----------------------------------
Xxxxx X. Xxxxx, Individually
FRONT PORCH DIGITAL INC.
Date: May 2, 2000 By /s/ Xxx Xxxxxxxxx
-------------------------------
Xxx Xxxxxxxxx, CEO
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AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Andreas Moschonikolakis
----------------------------
Name (Please Print)
/s/Andreas Moschonikolakis
----------------------------
Signature
000 Xxx Xxxxxxx Xxxx
----------------------------
Address
Aberdeen, N.J. 07747
----------------------------
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AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Xxxxxxx X. Xxxxx
----------------------------
Name (Please Print)
/s/Xxxxxxx X. Xxxxx
----------------------------
Signature
00 Xxxx Xxxx
----------------------------
Address
Xxxxxx Xxxx, X.X. 00000
----------------------------
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AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Xxxxxxxxx X. Xxxxxx III
----------------------------
Name (Please Print)
/s/Xxxxxxxxx X. Xxxxxx III
----------------------------
Signature
000 Xxxxxxx Xxxx
----------------------------
Address
Xxxxxx Xxxx, X.X. 00000
----------------------------
-16-
AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Xxxxxxx X'Xxxxx Xxxxxxxxxxxx
---------------------------------
Name (Please Print)
/s/Xxxxxxx X'Xxxxx Xxxxxxxxxxxx
---------------------------------
Signature
00 Xxxx Xxxx
---------------------------------
Address
Xxxxxx Xxxx, X.X. 00000
---------------------------------
-17-
AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Xxxxxxx Xxxxxxxx
---------------------------------
Name (Please Print)
/s/Xxxxxxx Xxxxxxxx
---------------------------------
Signature
000 Xxxxxxx Xxxxxx
---------------------------------
Address
Gibbstown, N.J. 08027
---------------------------------
-18-
AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Xxxx Xxxxxxxx
---------------------------------
Name (Please Print)
/s/Xxxx Xxxxxxxx
---------------------------------
Signature
0000 Xxxxxx Xxxxxx
---------------------------------
Address
Xxxxxxxx Xxxxxxx, X.X. 00000
---------------------------------
-19-
AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Xxxxxxx X. Xxxxxx
---------------------------------
Name (Please Print)
/s/Xxxxxxx X. Xxxxxx
---------------------------------
Signature
0 Xxxxxxx Xxxxxx
---------------------------------
Address
Xxx Xxxxx, XX 00000
---------------------------------
-20-
AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Xxx X. Xxxxx
---------------------------------
Name (Please Print)
/s/Xxx X. Xxxxx
---------------------------------
Signature
0 Xxxxxxxxx Xxxxx
---------------------------------
Address
Robbinsville, N.J. 08691
---------------------------------
-21-
AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Xxx Xxxxxxxxx
---------------------------------
Name (Please Print)
/s/Xxx Xxxxxxxxx
---------------------------------
Signature
00 Xxxxxxx Xxxx
---------------------------------
Address
Lawrenceville, N.J. 08648
---------------------------------
-22-
AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Xxxx Xxxxxxxxxxxx
---------------------------------
Name (Please Print)
/s/Xxxx Xxxxxxxxxxxx
---------------------------------
Signature
000 Xxxxxx Xxxxxxx Xxxxx #000
---------------------------------
Address
Xxx Xxxxx, XX 00000
---------------------------------
-23-
AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Xxxxxx Xxxxxxxxxxx
---------------------------------
Name (Please Print)
/s/Xxxxxx Xxxxxxxxxxxx
---------------------------------
Signature
00 Xxxxxxx Xxxx
---------------------------------
Address
Lawrenceville, N.J. 08048
---------------------------------
-24-
AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Xxxxxx Xxxxxxxxxx
---------------------------------
Name (Please Print)
/s/Xxxxxx Xxxxxxxxxx
---------------------------------
Signature
000 Xxxxxx Xxxxx
---------------------------------
Address
Staten Island, N.Y. 10306
---------------------------------
-25-
AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Xxxxxx Xxxxxxxxx
---------------------------------
Name (Please Print)
/s/Xxxxxx Xxxxxxxxx
---------------------------------
Signature
0000 XX 00 Xxxxx
---------------------------------
Xxxxxxx
Xxxxxxx, XX 00000
---------------------------------
-26-
AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE FOR SIGNATURE OF
THE FRONT PORCH STOCKHOLDERS
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 2nd day of May, 2000,
among Empire Communications Corporation, a Nevada corporation ("Empire");
Xxxxx X. Xxxxx, its sole director, executive officer and principal
stockholder ("Grant"); Front Porch Digital Inc., a Delaware corporation
("Front Porch"); the Front Porch stockholders (the "Front Porch
Stockholders"), who are signatories thereto, is executed by the
undersigned, a Front Porch Stockholder as of the date first written above.
The undersigned, through execution and delivery of this Counterpart
Signature page, intends to be legally bound by the terms of the Agreement.
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
---------------------------------
Name (Please Print)
By: /s/Xxxx X. Xxxxxxx, Partner
---------------------------------
Signature
000 Xxxx Xxxxxx
---------------------------------
Address
New York, N.Y 10022
---------------------------------
-27-
EXHIBIT A
FRONT PORCH DIGITAL INC.
Founders' Shares
--------------------------------------------------------------------------------
Grant Shares To Shares Addresses
--------------------------------------------------------------------------------
Andreas Moschonikolakis 60,000 000 Xxx Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxxx 1,000,000 00 Xxxx Xxxx
Xxxxxx Xxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxxxxx X. Xxxxxx III 500,000 000 Xxxxxxx Xxxx
Xxxxxx Xxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxxx X'Xxxxx Xxxxxxxxxxxx 190,000 00 Xxxx Xxxx
Xxxxxx Xxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxx 10,000 000 Xxxxxxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxx Xxxxxxxx 200,000 0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxx, XX 00000
--------------------------------------------------------------------------------
Xxxx Xxxxxx 80,000 0 Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
--------------------------------------------------------------------------------
Xxx Xxxxx 100,000 0 Xxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxx Xxxxxxxxx 6,400,000 00 Xxxxxxx Xxxx
Xxxxxxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxx Xxxxxxxxxxxx 150,000 000 Xxxxxx Xxxxxxx Xxxxx
#000
Xxx Xxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxxxxxxx 300,000 00 Xxxxxxx Xxxxx
Xxxxxxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxxxxx 150,000 000 Xxxxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxx Xxxxxxxxx 100,000 0000 XX 00xx Xxxxx
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx, 200,000 000 Xxxx Xxxxxx, 00xx Xxxxx
XXX Xxx Xxxx, XX 00000
--------------------------------------------------------------------------------
Total
9,440,000
--------------------------------------------------------------------------------
-28-
EXHIBIT B
EMPIRE COMMUNICATIONS CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1999
-29-
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Empire Communications Corporation
(A Development Stage Company)
Springville, Utah
We have audited the accompanying balance sheet of Empire Communications
Corporation (a development stage company) as of December 31, 1999 and the
related statements of operations, stockholders' equity and cash flows for the
years ended December 31, 1999 and 1998 and from inception on April 27, 1995
through December 31, 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Empire Communications
Corporation (a development stage company) as of December 31, 1999 and the
results of its operations and its cash flows for the years ended December 31,
1999 and 1998 and from inception on April 27, 1995 through December 31, 1999 in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company is a development stage company with no
significant operating results to date, which raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 3. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Xxxxx, Xxxxxx & Company
Salt Lake City, Utah
March 27, 2000
-30-
EMPIRE COMMUNICATIONS CORPORATION
(A Development Stage Company)
Balance Sheet
ASSETS
CURRENT ASSETS
Cash $ 14,483
------------
Total Current Assets 14,483
------------
TOTAL ASSETS $ 14,483
============
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Accounts payable $ 5,075
------------
Total Liabilities 5,075
------------
STOCKHOLDERS EQUITY
Preferred stock; authorized 5,000,000 shares at $0.001
par value; no shares issued or outstanding -
Common stock; authorized 50,000,000 shares at $0.001
par value; 23,200,000 shares issued and outstanding 23,200
Additional paid-in capital 102,800
Deficit accumulated during the development stage (116,592)
------------
Total Stockholders Equity 9,408
------------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 14,483
============
The accompanying notes are an integral part of these financial statements.
-31-
EMPIRE COMMUNICATIONS
(A Development Stage Company)
Statements of Operations
From
Inception on
For the Years Ended April 27,
December 31, 1995 through
-------------------------- December 31,
1999 1998 1999
------------- ------------ ------------
REVENUES $ - $ - $ -
------------- ------------ ------------
EXPENSES
General and administrative 10,156 - 10,156
------------- ------------ ------------
Total Expenses 10,156 - 10,156
------------- ------------ ------------
LOSS FROM OPERATIONS (10,156) - (10,156)
------------- ------------ ------------
OTHER INCOME
Interest income 70 - 70
------------- ------------ ------------
Total Other Income 70 - 70
------------- ------------ ------------
LOSS BEFORE DISCONTINUED
OPERATIONS (10,086) - (10,086)
------------- ------------ ------------
DISCONTINUED OPERATIONS
Loss on discontinued operations - (81,422) (106,506)
------------- ------------ ------------
Total Discontinued Operations - (81,422) (106,506)
------------- ------------ ------------
NET LOSS $ (10,086)$ (81,422) $ (116,592)
============= ============ ============
BASIC NET LOSS PER SHARE
Loss from operations $ (0.00)$ -
Discontinued operations - (0.03)
------------- ------------
Basic Net Loss Per Share $ (0.00)$ (0.03)
============= ============
The accompanying notes are an integral part of these financial statements.
-32-
EMPIRE COMMUNICATIONS CORPORATION
(A Development Stage Company)
Statement of Stockholders' Equity
Deficit
Accumulated
Common Stock Additional During the
-------------------------- Paid-in Development
Shares Amount Capital Stage
---------- ----------- ---------- ------------
Balance, April 27, 1995 - $ - $ - $ -
Common stock issued for
cash at $0.001 per share 2,000,000 2,000 (1,000) -
Recapitalization of G.E.C., Inc. 1,000,000 1,000 4,000 -
Net loss for the period ended
December 31, 1996 - - - (5,125)
---------- ----------- ---------- ------------
Balance, December 31, 1996 3,000,000 3,000 3,000 (5,125)
Common stock issued for
cash at $1.00 per share 200,000 200 99,800 -
Net loss for the year ended
December 31, 1997 - - - (19,959)
---------- ----------- ---------- ------------
Balance, December 31, 1997 3,200,000 3,200 102,800 (25,084)
Net loss for the year ended
December 31, 1998 - - - (81,422)
---------- ----------- ---------- ------------
Balance, December 31, 1998 3,200,000 3,200 102,800 (106,506)
Common stock issued for cash
at $0.001 per share 20,000,000 20,000 - -
Net loss for the year ended
December 31, 1999 - - - (10,086)
---------- ----------- ---------- ------------
Balance, December 31, 1999 23,200,000 $ 23,200 $ 102,800 $ (116,592)
========== =========== ========== ============
The accompanying notes are an integral part of these financial statements.
-33-
EMPIRE COMMUNICATIONS CORPORATION
(A Development Stage Company)
Statements of Cash Flows
From
Inception on
For the Years Ended April 27,
December 31, 1995 through
-------------------------- December 31,
1999 1998 1999
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (10,086) $ (81,422) $ (116,592)
Adjustments to reconcile net loss to net
cash used by operating activities:
Loss on sale of subsidiary - 58,930 58,930
Changes in assets and liabilities:
Increase in accounts payable 4,569 506 5,075
------------ ------------ ------------
Net Cash Used by Operating Activities (5,517) (21,986) (52,587)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of subsidiary - 16,912 16,912
Investment in subsidiary - - (75,842)
------------ ------------ ------------
Net Cash Used by Investing Activities - 16,912 (58,930)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash acquired in recapitalization of
subsidiary - - 5,000
Common stock issued for cash 20,000 - 121,000
------------ ------------ ------------
Net Cash Provided by Financing
Activities 20,000 - 126,000
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH 14,483 (5,074) 14,483
CASH AT BEGINNING OF PERIOD - 5,074 -
------------ ------------ ------------
CASH AT END OF PERIOD $ 14,483 $ - $ 14,483
============ ============ ============
Cash Paid for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
-34-
EMPIRE COMMUNICATIONS CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Operating History
The Company was incorporated in the State of Nevada on April 27, 1995,
under the name of Landmark Leasing, Corp.
The Company planned on operating as a leasing company of residential
property, commercial property, vehicles, and related activities. The
Company has discontinued pursuing any of these activities and
accordingly remains a development stage company. The Company changed
its name to Litigation Economics, Inc. on December 22, 1996. The
Company changed its name to Empire Communications Corporation on March
23, 1998.
On December 22, 1996, the Company acquired all of the outstanding stock
of G.E.C., Inc., (the Subsidiary) for 1,000,000 shares of the Company's
common stock valued at $.001 per share or $1,000 which represented the
capital contributed to the subsidiary. The acquisition of the
Subsidiary was recorded as a recapitalization of the Subsidiary,
whereby the acquired company is treated as the surviving entity for
accounting purposes. The Subsidiary was formed on July 31, 1996 in the
State of Idaho. The Subsidiary was engaged in the field of economic
advising and consulting and commenced principal business operations
during 1997. Accordingly, the subsidiary was also considered a
development stage company. On December 1, 1998, the Company sold all of
the outstanding stock of the Subsidiary for $16,911.
Summary of Significant Accounting Policies
a. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a December 31 year end.
b. Basic Net Loss Per Share
The computation of basic net (loss) per share of common stock is based
on the weighted average number of shares outstanding during the period
of the financial statements.
1999 1998
------------ -------------
Numerator (loss) $ (10,086) $ (81,422)
------------ -------------
Denominator - shares 18,597,260 3,200,000
------------ -------------
Loss per share $ (0.00) $ (0.03)
============ =============
35
EMPIRE COMMUNICATIONS CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
c. Provision for Taxes
At December 31, 1999, the Company has net operating loss carryforwards
of approximately $116,000 that may be offset against future taxable
income through 2019. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater
chance the operating loss carryforwards will expire unused.
Accordingly, the potential tax benefits of the operating loss
carryforwards are offset by a valuation allowance of the same amount.
d. Cash and Cash Equivalents
For purposes of the financial statement presentation, the Company
considers all highly liquid investments with a maturity of three months
or less to be cash equivalents.
e. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
f. Revenue Recognition
The Company currently has no source of revenues. Revenue recognition
policies will be determined when principal operations begin.
NOTE 2 - COMMON STOCK OPTIONS
In October of 1996, the Board of Directors adopted the 1996 Stock
Option Plan (the "Plan"), allowing the Company to offer its key
employees, officers, directors, consultants, and sales representatives
an opportunity to acquire a proprietary interest in the Company. The
total number of shares reserved and available for distribution under
the Plan were 400,000 shares. These shares will underlie the Options
issued by the Company pursuant to the Plan. The Option holders will not
be protected against dilution if the Company should issue additional
shares of common stock in the future. Neither the Options, nor the
shares underlying the Options have pre-emptive rights. The plan was
amended on March 13, 1998 to increase the shares available under the
plan to 800,000 pre-split. Accordingly, with the effect of the 2 for 1
forward stock split 1,600,000 shares became available under the plan in
1998. As of December 31, 1999, no activity has transpired with regard
to the Plan.
36
EMPIRE COMMUNICATIONS CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash and has not had significant operations. To date, the
Company has been able to cover operating costs with existing financial
resources. The Company is seeking a merger with an existing, operating
company. In the interim, officers of the Company have committed to make
capital contributions or advances to the Company should additional
funds be needed to pay operating expenses.
NOTE 4 - STOCK TRANSACTIONS
On March 13, 1998 the Company approved a 2-for-1 forward stock split.
These financial statements have been retroactively restated to reflect
the change.
On March 25, 1999, the Company issued 20,000,000 shares of common stock
for $20,000 to a related party.
NOTE 5 - DISCONTINUED OPERATIONS
On December 31, 1998, the Company agreed to sell all of its
ownership of G.E.C., Inc. to the individual from whom it was
originally purchased for $16,911 in cash. All prior operations have
been classified as discontinued.
37
The following is a summary of the discontinued operations:
From
Inception on
For the April 27,
Year Ended 1995 Through
December 31, December 31,
1998 1998
------------ ------------
REVENUES $ - $ -
------------ ------------
EXPENSES
General and administrative 22,492 47,576
------------ ------------
Total Expenses 22,492 47,576
------------ ------------
LOSS FROM OPERATIONS (22,492) (47,576)
------------ ------------
LOSS ON SALE OF SUBSIDIARY (58,930) (58,930)
------------ ------------
NET LOSS FROM DISCONTINUED OPERATIONS $ (81,422) $ (106,506)
============ ============
No income tax benefit has been attributed to the loss from discontinued
operations.
38
EXHIBIT C
None.
39
EXHIBIT D
FRONT PORCH DIGITAL INC.
UNAUDITED FINANCIAL STATEMENTS
Balance Sheet and Statement of Operations for the period ended
March 22, 2000
40
FRONT PORCH DIGITAL INC.
Balance Sheet
As of March 22, 2000
[Unaudited]
Assets
Current Assets
Cash and cash equivalents $ 155,000
Accounts Receivable $ 22,780
Total Current Assets $ 177,780
Property and Equipment - Net $ 211,552
Total Assets $ 389,332
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable $ 114,297
Notes Payable $ 300,000
Total Current Liabilities $ 414,297
Stockholders' Equity
Common Stock Issued
11,800,000 Shares $ 11,800
Total Stockholders Equity $ (24,965)
Total Liabilities and Stockholders' Equity $ 389,332
41
FRONT PORCH DIGITAL INC.
Statement of Operations
As of March 22, 2000
[Unaudited]
For the Month
March 2000 Year To Date
Revenues
Encoding Services $ - $ -
DVD Authoring Services $ 22,750 $ 22,750
Web Solutions $ - $ -
Other $ - $ -
Total Revenues $ 22,750 $ 22,750
Operating Expenses
Salaries $ 25,089 $ 50,178
Payroll Taxes & Benefits $ 16,429 $ 32,858
Consulting/Contractor Fees $ 11,000 $ 11,000
Office Rent $ 11,800 $ 23,600
Equipment Lease $ 10,989 $ 21,978
Travel Expense $ 2,263 $ 13,969
Insurance Expense $ 3,814 $ 7,628
Other $ 3,877 $ 7,104
Total Operating Expenses $ 85,261 $ 168,315
Net Loss $ (62,511) $ (145,565)
Weighted Average Number of
Common Shares Outstanding $11,800,000
Loss Per Common Share $ (0.01)
42
EXHIBIT E
In April 2000, the Company borrowed $500,000.00 from one investor on
the same terms as the Bridge Loan in March 2000.
43
EXHIBIT F
Interwest Transfer Company
Transfer Agent & Registrar Agent
0000 Xxxxxx Xxxxxxxx Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Empire Communications Corp.
000 Xxxx 000 Xxxxx
Xxxxxxxxxxx, Xxxx 00000
Re: Exchange of shares of Front Porch Digital, Inc., a Delaware
corporation ("Front Porch"), for shares of Empire
Communications Corp., a Nevada corporation ("Empire
or "the Company")
Dear Ladies and Gentlemen:
Pursuant to that certain Agreement and Plan of Reorganization (the
"Agreement") among Empire, Xxxxx X. Xxxxx, Front Porch and the stockholders of
Front Porch, I acknowledge that I have approved this exchange; that I am aware
of all of the terms and conditions of the Agreement; that I have had the
opportunity to receive and personally review a copy of any and all material
documents regarding the Company, including, but not limited to Articles of
Incorporation, Bylaws, minutes of meetings of directors and stockholders,
financial statements and the Company's reports which have been filed with the
Securities and Exchange Commission during the past 12 months. I represent and
warrant that no director or officer of the Company or any associate of either
has solicited this exchange; that I am an "accredited investor" as that term is
known under the Rules and Regulations of the Securities and Exchange Commission
(see Exhibit "A" hereto); and/or, I represent and warrant that I have sufficient
knowledge and experience to understand the nature of the exchange and am fully
capable of bearing the economic risk of the loss of my entire cost basis.
I understand that the Company has and will make books and records of
the Company available to me for my inspection in connection with the
contemplated exchange of my shares, and that I have been encouraged to review
the information and ask any questions I may have concerning the information of
any director or officer of the Company or of the legal and accounting firms for
the Company. I understand that the accounting firm for Empire is Xxxxx Xxxxxx &
Co., 00 Xxxxx Xxxx Xxxxxx, Xx. 0000, Xxxx Xxxx Xxxx, Xxxx 00000, Telephone
#000-000-0000; and that legal counsel for Empire is Xxxxxxx X. Xxxxxxxxxx, Esq.,
000 Xxxx 0xx Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000, Telephone
#000-000-0000.
I also understand that I must bear the economic risk of ownership of
any of the Empire shares for a long period of time, the minimum of which will be
one (1) year, as these
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shares are "unregistered" shares and may not be sold unless any subsequent offer
or sale is registered with the United States Securities and Exchange Commission
or otherwise exempt from the registration requirements of the Securities Act of
1933, as amended (the "Act"), or other applicable laws, rules and regulations.
I intend that you rely on all of my representations made herein and
those in the personal questionnaire (if applicable) I provided to Front Porch
for use by Empire as they are made to induce you to issue me the shares of
Empire under the Agreement, and I further represent (of my personal knowledge or
by virtue of my reliance on one or more personal representatives), and agree as
follows, to-wit:
1. That the shares being acquired are being received for
investment purposes and not with a view toward further distribution;
2. That I have a full and complete understanding of the phrase
"for investment purposes and not with a view toward further distribution";
3. That I understand the meaning of "unregistered shares" and
know that they are not freely tradeable;
4. That any stock certificate issued by you to me in connection with
the shares being acquired shall be imprinted with a legend restricting the sale,
assignment, hypothecation or other disposition unless it can be made in
accordance with applicable laws, rules and regulations;
5. I agree that the stock transfer records of your Company shall
reflect that I have requested the Company not to effect any transfer of any
stock certificate representing any of the shares being acquired unless I shall
first have obtained an opinion of legal counsel to the effect that the shares
may be sold in accordance with applicable laws, rules and regulations, and I
understand that any opinion must be from legal counsel satisfactory to the
Company and, regardless of any opinion, I understand that the exemption covered
by any opinion must in fact be applicable to the shares;
6. That I shall not sell, offer to sell, transfer, assign,
hypothecate or make any other disposition of any interest in the shares being
acquired except as may be pursuant to any applicable laws, rules and
regulations;
7. I fully understand that my shares which are being exchanged for
shares of the Company are "risk capital," and I am fully capable of bearing the
economic risks attendant to this investment, without qualification; and
8. I also understand that without approval of counsel for Empire all
shares of Empire to be issued and delivered to me in exchange for my shares of
Front Porch shall be
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represented by one stock certificate only which shall be imprinted with the
following legend or a reasonable facsimile thereof on the front and reverse
sides thereof:
The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not
be sold or otherwise transferred unless compliance with the
registration provisions of such Act has been made or unless
availability of an exemption from such registration provisions has
been established, or unless sold pursuant to Rule 144 under the Act.
Any request for more than one stock certificate must be accompanied
by a letter signed by the requesting stockholder setting forth all relevant
facts relating to the request. Empire will attempt to accommodate any
stockholders' request where Empire views the request is made for valid business
or personal reasons so long as in the sole discretion of Empire the granting of
the request will not facilitate a "public" distribution of unregistered shares
of common voting stock of Empire.
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You are requested and instructed to issue a stock certificate as
follows, to-wit:
--------------------------------------------------------
(Name(s) and Number of Shares)
--------------------------------------------------------
(Address)
--------------------------------------------------------
(City, State and Zip Code)
If joint tenancy with full rights of survivorship is desired, put
the initials JTRS after your names.
Dated this day of , 2000.
--------- -----------------------
Very truly yours,
---------------------------
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EXHIBIT G
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Empire Communications Corp., a
Nevada corporation ("Empire"), represents and warrants the following as
required by the Agreement and Plan of Reorganization (the "Agreement")
between Empire and Front Porch Digital, Inc., a Delaware corporation ("Front
Porch"), and the stockholders of Front Porch (the "Front Porch Stockholders"):
1. That she is the President of Empire and has been authorized
and empowered by its Board of Directors to execute and deliver this Certificate
to Front Porch and the Front Porch Stockholders.
2. Based on her personal knowledge, information, belief and
opinions of counsel for Empire regarding the Agreement:
(i) All representations and warranties of Empire contained
within the Agreement are true and correct;
(ii) Empire has complied with all terms and provisions required
of it pursuant to the Agreement; and
(iii) There have been no material adverse changes in the financial
position of Empire as set forth in its financial statements
for the periods ended December 31, 1999 and 1998, except as
set forth in Exhibit C to the Agreement.
EMPIRE COMMUNICATIONS CORP.
By
-----------------------------
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EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the Chief Executive Officer of Front Porch Digital
Inc., a Delaware corporation ("Front Porch"), represents and warrants the
following as required by the Agreement and Plan of Reorganization (the
"Agreement") among Front Porch, its stockholders (the "Front Porch
Stockholders"), Empire Communications Corp., a Nevada corporation ("Empire") and
Xxxxx X. Xxxxx, the sole director and principal stockholder of Empire:
1. That he is the CEO of Front Porch and has been authorized
and empowered by its Board of Directors to execute and
deliver this Certificate to Empire.
2. Based on his personal knowledge, information, belief:
(i) All representations and warranties of Front Porch contained
within the Agreement are true and correct;
(ii) Front Porch has complied with all terms and provisions
required of it pursuant to the Agreement; and
(iii) There have been no material adverse changes in the financial
position of Front Porch as set forth in its balance sheet
and statement of operations for the period ended March 22,
2000, except as set forth in Exhibit E to the Agreement.
FRONT PORCH DIGITAL, INC.
By
--------------------------
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