AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is
made this 31st day of December, 2003, by and between Xxxx, Inc., a Utah
corporation ("Xxxx"); Reflect Scientific, Inc., a California corporation
("Reflect"); and the persons listed in Exhibit A hereof who are the record and
beneficial owners of all of the outstanding common stock of Reflect (the
"Reflect Stockholders").
RECITALS
WHEREAS, the respective Boards of Directors of Xxxx and Reflect
have adopted resolutions pursuant to which Xxxx shall acquire and the Reflect
Stockholders shall exchange 100% of the outstanding common stock of Reflect;
and
WHEREAS, the sole consideration for 100% of the outstanding common
stock of Reflect shall be the exchange of shares of $0.01 par value common
stock of Xxxx, which shares shall all be "restricted securities" as defined in
Rule 144 of the Securities and Exchange Commission, as outlined in Exhibit A;
and
WHEREAS, it is intended that the Reflect Stockholders shall
acquire in exchange such "restricted securities" of Xxxx in a reorganization
within the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended, as 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 Reflect Stockholders agree to
transfer to Xxxx at the closing (the "Closing") 100% of the outstanding
securities of Reflect, which are listed in Exhibit A attached hereto and
incorporated herein by reference (the "Reflect Shares"), in exchange for
22,914,949 shares of the one cent ($0.01) par value "unregistered" and
"restricted" common voting stock of Xxxx.
1.2 Delivery of Certificates by Reflect Stockholders. The
transfer of the Reflect Shares by the Reflect Stockholders shall be effected
by the delivery to Xxxx at the Closing of stock certificate or certificates
representing the Reflect Shares duly endorsed in blank or accompanied by stock
powers executed in blank, with all signatures witnessed or guaranteed to the
satisfaction of Xxxx and with all necessary transfer taxes and other revenue
stamps affixed and acquired at the Reflect Stockholders' expense.
1.3 Further Assurances. At the Closing and from time to time
thereafter, the Reflect Stockholders shall execute such additional instruments
and take such other action as Xxxx may request in order to exchange and
transfer clear title and ownership in the Reflect Shares to Xxxx.
1.4 Condition Subsequent of Required "Broker's Transactions" and
"Manner of Sale" Requirements by SCS, Inc., a Consultant to Reflect, Xxxx X.
Xxxxx, Its Principal, and All of the Current Directors and Executive Officers
of Xxxx. SCS, Inc., a Utah corporation ("SCS"), and its President and sole
stockholder, Xxxx X. Xxxxx, and all of the current directors and executive
officers of Xxxx, shall deliver at the Closing, a Letter Agreement in
satisfactory form to Xxxx and Reflect in consideration of such Closing to the
effect that any securities of Xxxx owned or hereafter acquired by any of them
shall be subject to resale in strict compliance with "broker's transactions"
and "manner of sale" requirements of Rule 144 of the Securities and Exchange
Commission, with the stock certificates representing any such shares to be
imprinted with an appropriate notation reflecting these resale conditions in a
manner that can be reasonably monitored by the reorganized Xxxx.
1.5 Resignation of Present Directors and Executive Officers and
Designation of New Directors and Executive Officers. On Closing, the present
directors and executive officers of Xxxx shall resign and designate the
directors and executive officers nominated by Reflect to serve in their place
and stead, until the next respective annual meetings of the stockholders and
Board of Directors of Xxxx, and until their respective successors shall be
elected and qualified or until their respective prior resignations or
terminations, who shall be Xxx Xxxxx, President and sole director; and Xxxxxx
Xxxxx, Secretary.
1.6 Amendment of Charter. At the Closing, the Board of
Directors of Xxxx shall have adopted all resolutions required or necessary to
change the name of Xxxx to "Reflect Scientific, Inc." or such other or similar
name as shall be designated by Reflect, in accordance with the authority
granted to the Board of Directors under Article XI of the Articles of
Incorporation of Xxxx.
1.7 Assets and Liabilities of Xxxx at Closing. Xxxx shall have
no material assets and no liabilities at Closing, and all costs incurred by
Xxxx incident to the Agreement or relating to its obligations hereunder shall
have been paid or satisfied or adequate provision for payment or satisfaction
thereof shall have been made.
Section 2
Closing
The Closing contemplated by Section 1.1 shall be held at the
offices of Xxxxxxx X. Xxxxxxxxxx, Esq., Suite 205 Hermes Building, 000 Xxxx
000 Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, 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 Xxxx
Xxxx represents and warrants to, and covenants with, the Reflect
Stockholders and Reflect as follows:
3.1 Corporate Status. Xxxx is a corporation duly organized,
validly existing and in good standing under the laws of the State of Utah 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 (Utah only). Xxxx is a publicly-
held company, having previously and lawfully offered and sold a portion of its
securities in accordance with all applicable federal and state securities
laws, rules and regulations. Its common stock is quoted on the OTC Bulletin
Board of the National Association of Securities Dealers, Inc. (the "NASD")
under the symbol "COLH," though there is no "established trading market" for
these securities. Xxxx is a "reporting issuer" under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), has presently filed all reports
that have been required to be filed by it and is not in violation of any
applicable federal or state securities laws, rules or regulations. All
reports and registration statements that have been filed by Xxxx with the
Securities and Exchange Commission 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 Xxxx
consists of 50,000,000 shares of one cent ($0.01) par value common voting
stock, of which 1,085,051 shares are issued and outstanding, all fully paid
and non-assessable; and 5,000,000 shares of one cent ($0.01) par value
preferred stock, of which no shares are outstanding. There are no outstanding
options, warrants or calls pursuant to which any person has the right to
purchase any authorized and unissued capital stock or other securities of
Xxxx.
3.3 Financial Statements. The financial statements of Xxxx
furnished to the Reflect Stockholders and Reflect, consisting of audited
financial statements for the years ended December 31, 2002 and 2001, attached
hereto as Exhibit B and incorporated herein by reference, and unaudited
financial statements for the period ended September 30, 2003, attached hereto
as Exhibit B-1 and incorporated herein by reference, are correct and fairly
present the financial condition of Xxxx at such dates and for 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. Such financial
statements 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.
3.4 Undisclosed Liabilities. Xxxx 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 Xxxx which, in the aggregate,
have been materially adverse; (2) damages, destruction or losses of or to
property of Xxxx, payments of any dividend or other distribution in respect of
any class of stock of Xxxx, 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
employees.
3.6 Title to Property. Xxxx has good and marketable title to
all properties and assets, real and personal, reflected in its balance sheets,
and the properties and assets of Xxxx 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 Xxxx, threatened, against or relating to Xxxx, 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 Xxxx is
party to any material legal proceeding which could have an adverse effect on
Xxxx (financial or otherwise), and none is party to any action or proceeding
wherein any has an interest adverse to Xxxx.
3.8 Books and Records. From the date of this Agreement to the
Closing, Xxxx will (1) give to the Reflect Stockholders and Reflect or their
respective representatives full access during normal business hours to all of
its offices, books, records, contracts and other corporate documents and
properties so that the Reflect Stockholders and Reflect or their respective
representatives may inspect and audit them; and (2) furnish such information
concerning the properties and affairs of Xxxx as the Reflect Stockholders and
Reflect or their respective representatives may reasonably request.
3.9 Tax Returns. Xxxx 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.
3.10 Confidentiality. Until the Closing (and thereafter if there
is no Closing), Xxxx and its representatives will keep confidential any
information which they obtain from the Reflect Stockholders or from Reflect
concerning the properties, assets and business of Reflect. If the
transactions contemplated by this Agreement are not consummated by December
31, 2003, Xxxx will return to Reflect all written matter with respect to
Reflect obtained by Xxxx in connection with the negotiation or consummation of
this Agreement.
3.11 Investment Intent. Xxxx is acquiring the Reflect Shares to
be transferred to it under this Agreement for investment and not with a view
to the sale or distribution thereof, and Xxxx has no commitment or present
intention to liquidate Reflect or to sell or otherwise dispose of the Reflect
Shares.
3.12 Corporate Authority. Xxxx has full corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to the Reflect Stockholders and Reflect or their
respective representatives at the Closing a certified copy of resolutions of
its Board of Directors authorizing the execution of this Agreement by its
officers and performance thereunder, and representing that the directors
adopting and delivering such resolutions are the duly elected and incumbent
directors of Xxxx.
3.13 Due Authorization. Execution of this Agreement and
performance by Xxxx hereunder have been duly authorized by all requisite
corporate action on the part of Xxxx, and this Agreement constitutes a valid
and binding obligation of Xxxx and performance hereunder will not violate any
provision of the Articles of Incorporation, Bylaws, agreements, mortgages or
other commitments of Xxxx.
3.14 Environmental Matters. Xxxx 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 Xxxx. In addition,
to the best knowledge of Xxxx, there are no substances or conditions which may
support a claim or cause of action against Xxxx or any of its 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.
3.15 Access to Information Regarding Reflect. Xxxx acknowledges
that it has been delivered copies of what has been represented to be
documentation containing all material information respecting Reflect and its
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 opportunity to ask questions of and receive responses from
the director and executive officer of Reflect, and with the legal and
accounting firms of Reflect, with respect to such documentation; and that to
the extent requested, all questions raised have been answered to its complete
satisfaction.
Section 4
Representations, Warranties and Covenants of Reflect
and the Reflect Stockholders
Reflect and the Reflect Stockholders represent and warrant to, and
covenant with, Xxxx as follows, provided, however, that the Reflect
Stockholders owning less than 10% of the outstanding voting securities of
Reflect shall only make the representations and warranties made in Sections
4.1, 4.12 and 4.16:
4.1 Reflect Shares. The Reflect Stockholders are respectively
the record and beneficial owners of all of the Reflect Shares listed in
Exhibit A, free and clear of adverse claims of third parties; and Exhibit A
correctly sets forth the name, address and the number of Reflect Shares owned
by each of the Reflect Stockholders.
4.2 Corporate Status. Reflect is a corporation duly organized,
validly existing and in good standing under the laws of the State of
California 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.
4.3 Capitalization. The authorized capital stock of Reflect
consists of 20,000,000 shares of no par value common voting stock, of which
10,000 shares are issued and outstanding, all fully paid and non-assessable;
and 750,000 shares of no par value 2002 Series A Convertible Preferred Stock,
of which no shares 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 capital stock or other securities of
Reflect.
4.4 Financial Statements. The financial statements of Reflect
furnished to Xxxx, consisting of audited financial statements for the years
ended December 31, 2002 and 2001, attached hereto as Exhibit D, and
incorporated herein by reference, are correct and fairly present the financial
condition of Reflect as of these dates and for 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 E, which is attached
hereto and incorporated herein by reference. These financial statements 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.
4.5 Undisclosed Liabilities. Reflect has no material
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 E.
4.6 Interim Changes. Since the date of its balance sheets,
except as set forth in Exhibit E, there have been no (1) changes in the
financial condition, assets, liabilities or business of Reflect, which in the
aggregate, have been materially adverse; (2) damages, destruction or loss of
or to the property of Reflect, payment of any dividend or other distribution
in respect of the capital stock of Reflect, 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. Reflect has good and marketable title to
all properties and assets, real and personal, proprietary or otherwise,
reflected in its balance sheets, and the properties and assets of Reflect are
subject to no mortgage, pledge, lien or encumbrance, except for liens shown
therein 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 Reflect, threatened, against or relating to Reflect 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 Reflect
is party to any material legal proceeding which could have an adverse effect
on Reflect (financial or otherwise), and none is party to any action or
proceeding wherein any has an interest adverse to Reflect.
4.9 Books and Records. From the date of this Agreement to the
Closing, the Reflect Stockholders will cause Reflect to (1) give to Xxxx 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 Xxxx may inspect and audit them; and (2) furnish such
information concerning the properties and affairs of Reflect as Xxxx may
reasonably request.
4.10 Tax Returns. Reflect 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), Reflect, the Reflect Stockholders and their
representatives will keep confidential any information which they obtain from
Xxxx concerning its properties, assets and business. If the transactions
contemplated by this Agreement are not consummated by December 31, 2003,
Reflect and the Reflect Stockholders will return to Xxxx all written matter
with respect to Xxxx obtained by them in connection with the negotiation or
consummation of this Agreement.
4.12 Investment Intent. The Reflect Stockholders are
respectively 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 Reflect Stockholders respectively have no commitment or
present intention to liquidate Xxxx or to sell or otherwise dispose of the
Xxxx shares of common stock. The Reflect Stockholders shall execute and
deliver to Xxxx 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 common stock of Xxxx being received under
this Agreement in exchange for the Reflect Shares, and receipt of certain
material information regarding Xxxx, including all reports and other
documentation filed by it with the Securities and Exchange Commission during
the past 12 months.
4.13 Corporate Authority. Reflect has full corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to Xxxx or its representative at the Closing a
certified copy of resolutions of its Board of Directors authorizing the
execution of this Agreement by its officers and performance thereunder and
representing that the directors adopting and delivering such resolutions are
the duly elected and incumbent directors of Xxxx.
4.14 Due Authorization. Execution of this Agreement and
performance by Reflect hereunder have been duly authorized by all requisite
corporate action on the part of Reflect, and this Agreement constitutes a
valid and binding obligation of Reflect and performance hereunder will not
violate any provision of the Articles of Incorporation, Bylaws, agreements,
mortgages or other commitments of Reflect, other than required notices.
4.15 Environmental Matters. Reflect and the Reflect 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 Reflect or its predecessors. In addition, to the best knowledge
of Reflect, there are no substances or conditions which may support a claim or
cause of action against Reflect 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.
4.16 Access to Information Regarding Xxxx. Reflect and the
Reflect Stockholders acknowledge that they have had access to all material
information that is contained in the Xxxxx Archives of the Securities and
Exchange Commission respecting Xxxx 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, director and executive
officer; that they have had, to the extent desired, the opportunity to ask
questions of and receive responses from the directors and executive officers
of Xxxx, and with the legal and accounting firms of Xxxx, 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 Reflect, the Reflect Stockholders
All obligations of Reflect and the Reflect 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 Xxxx 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. Xxxx 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.
5.3 Officers' Certificate. Reflect and the Reflect Stockholders
shall have been furnished with a certificate signed by the President of Xxxx,
in such capacity and personally, attached hereto as Exhibit G and incorporated
herein by reference, dated as of the Closing, certifying (1) that all
representations and warranties of Xxxx contained herein are true and correct;
and (2) that since the date of the financial statements (Exhibit B and B-1
hereto), there has been no material adverse change in the financial condition,
business or properties of Xxxx, taken as a whole.
5.4 Assets and Liabilities of Xxxx. Xxxx shall have no material
assets and no liabilities at Closing, and all costs, expenses and fees
incident to the Agreement shall have been paid or adequate provision for
payment thereof shall have been made.
5.5 Resignation of Directors and Executive Officer and
Designation of New Directors and Executive Officers. The present directors
and executive officers of Xxxx shall resign, in seriatim, and shall have
designated the nominees of Reflect as directors and executive officers of the
reorganized Xxxx to serve in their place and stead, until the next respective
annual meetings of the stockholders and Board of Directors of Xxxx, and until
their respective successors shall be elected and qualified or until their
respective prior resignations or terminations, who shall be: Xxx Xxxxx,
President and a director; and Xxxxxx Xxxxx, Secretary.
5.6 Name Change of Xxxx. The requirements of Section 1.6 hereof
shall have been fully satisfied at Closing.
5.7 Satisfaction of Condition Subsequent of Required "Broker's
Transactions" and "Manner of Sale" Requirements by SCS, Inc., a Consultant to
Reflect, Xxxx X. Xxxxx, Its Principal, and All of the Current Directors and
Executive Officers of Xxxx. SCS, Xxxx X. Xxxxx and all of the current
directors and executive officers of Xxxx shall have executed and delivered to
Xxxx the Letter Agreement referenced in Section 1.4 hereof in satisfactory
form to Xxxx and Reflect.
Section 6
Conditions Precedent to Obligations of Xxxx
All obligations of Xxxx under this Agreement are subject, at their
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 Reflect and the Reflect Stockholders
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. Reflect and the Reflect 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' and Stockholders' Certificate. Xxxx shall have
been furnished with a certificate signed by the President of Reflect, attached
hereto as Exhibit H and incorporated herein by reference, dated as of the
Closing, certifying (1) that all representations and warranties of Reflect and
the Reflect 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
Reflect, taken as a whole.
6.4 Books and Records. The Reflect Stockholders or the Board of
Directors of Reflect shall have caused Reflect to make available all books and
records of Reflect, including minute books and stock transfer records;
provided, however, only to the extent requested in writing by Xxxx at Closing.
6.5 Acceptance by Reflect Stockholders. The terms of this
Agreement shall have been accepted by all of the Reflect Stockholders by the
execution and delivery of a copy of the Agreement and related instruments.
6.5 Satisfaction of Condition Subsequent of Required "Broker's
Transactions" and "Manner of Sale" Requirements by SCS, Inc., a Consultant to
Reflect, Xxxx X. Xxxxx, Its Principal, and All of the Current Directors and
Executive Officers of Xxxx. SCS, Xxxx X. Xxxxx and all of the current
directors and executive officers of Xxxx shall have executed and delivered to
Xxxx the Letter Agreement referenced in Section 1.4 hereof in satisfactory
form to Xxxx and Reflect.
Section 7
Termination
Prior to Closing, this Agreement may be terminated (1) by
mutual consent in writing; (2) by either the directors of Xxxx or Reflect and
the Reflect 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 Xxxx or Reflect and the Reflect 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 that no
broker or finder has acted for each or any of them in connection with this
Reorganization 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 each or any of them.
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 Xxxx: 0000 Xxxxxxxx Xxxx., Xx. 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
With a copy to: Xxxxxxx X. Xxxxxxxxxx, Esq.
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
If to Reflect: 000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
If to the Reflect
Stockholder: To the Addresses listed in 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 Utah,
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;
provided however, that any assignment by any party of any rights under this
Agreement without the prior written consent of the other parties shall be
void.
8.9 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.
8.10 Default. In the event of default hereunder, the non-
defaulting and prevailing party in any action to enforce the terms and
provisions hereof shall be entitled to recover reasonable costs and expenses
incurred in enforcing this Agreement, including attorney's fees and associated
costs.
IN WITNESS WHEREOF, the parties have executed this Agreement and
Plan of Reorganization effective the day and year first above written.
XXXX, INC.
Dated: 12/30/03. By /s/ Xxxxx X. Xxxxxx, President
REFLECT SCIENTIFIC, INC.
Dated: 12/30/03. By /s/ Xxx Xxxxx, President
Reflect Stockholders:
Dated: 12/30/03. /s/ Xxx Xxxxx
Dated: 12/30/03. /s/ Xxxxxxx Xxxxx
DIVERSIFIED INVESTMENTS, LLC
Dated: 12/30/03. By /s/ Xxxxx Xxxxxx, Manager
Dated: 12/30/03. /s/ Xxxxx Xxxxxx
SCS, INC.
Dated: 12/30/03. By /s/ Xxxx X. Xxxxx
EXHIBIT A
Number of Shares Number of Shares of
Owned of Xxxx to be
Name and Address Reflect Received in Exchange
Xxx Xxxxx 8,171 18,723,250
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Xxxxxxx Xxxxx 43.6 100,000
Suite 205
455 East 000 Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Diversified Investments, LLC 733.8 1,681,500
Suite 200
455 East 000 Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxx Xxxxxx 43.6 100,000
Suite 200
455 East 000 Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
SCS, Inc. 1,008 2,310,199
Suite 200
455 East 000 Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
______ _________
Totals: 10,000 22,914,949
EXHIBIT B
XXXX, INC.
AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 2002 AND 2001
See the Registrant's 10-KSB Annual Report for the year ended December
31, 2002, filed with the Securities and Exchange Commission on March 31, 2003.
EXHIBIT B-1
XXXX, INC.
UNAUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2003
See the Registrant's 10-QSB Quarterly Report for the quarter ended
September 30, 2003, filed with the Securities and Exchange Commission on
October 9, 2003.
EXHIBIT C
None.
EXHIBIT D
REFLECT SCIENTIFIC, INC.
AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
See Item 7 of this Current Report.
EXHIBIT E
None.
EXHIBIT F
Xxxx, Inc.
0000 Xxxxxxxx Xxxx., Xx. 000
Xxxxx Xxxxxx, XX 00000
Re: Exchange of shares of Reflect Scientific, Inc., a
California corporation ("Reflect"), for shares of
Xxxx, Inc., a Utah corporation ("Xxxx" or the
"Company")
Dear Ladies and Gentlemen:
Pursuant to that certain Agreement and Plan of Reorganization (the
"Agreement") between the undersigned, Reflect, the stockholders of Reflect and
Xxxx, 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 received and
personally reviewed a copy of the Agreement and any and all material documents
regarding the Company, including, but not limited to its reports 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 General Rules and Regulations of the Securities and
Exchange Commission; 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 further understand that immediately prior to the completion of
the Plan, Xxxx had little, if any assets, of any measurable value, and that in
actuality, the completion of the Agreement and the exchange of my shares of
Reflect for shares of Xxxx results in a decrease in the actual percentage of
ownership that my shares of Reflect represented in Reflect prior to the
completion of the Plan.
I understand that you have and will make books and records of your
Company available to me for my inspection in connection with the contemplated
exchange of my shares, options or warrants, 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 accountant for the
Company is Mantyla, McReynolds, 0000 Xxxxx 000 Xxxx, #000, Xxxx Xxxx Xxxx,
Xxxx 00000, Telephone: (000) 000-0000; and that legal counsel for Xxxx is
Xxxxxxx X. Xxxxxxxxxx, Esq., 000 Xxxx 000 Xxxxx, #000, Xxxx Xxxx Xxxx, Xxxx,
Telephone: (000) 000-0000.
I also understand that I must bear the economic risk of ownership
of any of the Xxxx shares, options or warrants for a long period of time, the
minimum of which will be one (1) year, as these 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 Reflect
for use by Xxxx as they are made to induce you to issue me the shares of Xxxx
under the Plan, 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,
options or warrants 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 Xxxx,
all shares of Xxxx to be issued and delivered to me in exchange for my shares
of Reflect shall be represented by one certificate only and which such
certificate shall be imprinted with the following legend or a reasonable
facsimile thereof on the front and reverse sides thereof:
The shares, options or warrants 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. Xxxx will attempt to accommodate any
stockholders' request where Xxxx views the request is made for valid business
or personal reasons so long as in the sole discretion of Xxxx, the granting of
the request will not facilitate a "public" distribution of unregistered shares
of Xxxx.
You are requested and instructed to issue a stock certificate as
follows:
Xxx Xxxxx
Dated this 30th day of December, 2003.
Very truly yours,
/s/ Xxx Xxxxx
Reflect Stockholder
Xxx Xxxxx
Print Name
0000 Xxxxx Xxxxx
Xxxxx Xxxxxx Xxxxxxx
Xxx. Xxxx, XX 00000
Print City, State and Zip Code
You are requested and instructed to issue a stock certificate as
follows:
M.E. Xxxxx Consulting Serv. Inc.
Dated this 30th day of December, 2003.
Very truly yours,
/s/ Xxxxxxx Xxxxx
Reflect Stockholder
Xxxxxxx Xxxxx
Print Name
000 Xxxx 000 Xxxxx, #000
Xxxxx Xxxxxx Xxxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Print City, State and Zip Code
You are requested and instructed to issue a stock certificate as
follows:
Diversified Instruments, LLC
Dated this 30th day of December, 2003.
Very truly yours,
/s/ Diversified Instruments, LLC
Xxxxx X. Xxxxxx, Manager
Reflect Stockholder
Diversified Instruments, LLC
Xxxxx X. Xxxxxx, Manager
Print Name
000 Xxxx 000 Xxxxx, #000
Xxxxx Xxxxxx Xxxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Print City, State and Zip Code
You are requested and instructed to issue a stock certificate as
follows:
Xxxxx X. Xxxxxx
Dated this 30th day of December, 2003.
Very truly yours,
/s/ Xxxxx X. Xxxxxx
Reflect Stockholder
Xxxxx X. Xxxxxx
Print Name
000 Xxxx 000 Xxxxx, #000
Xxxxx Xxxxxx Xxxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Print City, State and Zip Code
You are requested and instructed to issue a stock certificate as
follows:
SCS, INC.
Dated this 30th day of December, 2003.
Very truly yours,
/s/ SCS, Inc.
Xxxx X. Xxxxx
Reflect Stockholder
SCS, Inc.
Xxxx X. Xxxxx
Print Name
000 Xxxx 000 Xxxxx, #000
Xxxxx Xxxxxx Xxxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Print City, State and Zip Code
EXHIBIT G
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Xxxx, Inc., a Utah corporation
("Xxxx"), represents and warrants the following as required by the Agreement
and Plan of Reorganization (the "Agreement") between Xxxx and Reflect
Scientific, Inc., a California corporation ("Reflect"), and the stockholders
of Reflect (the "Reflect Stockholders"), to-wit:
1. That he is the President of Xxxx and has been authorized and
empowered by its Board of Directors to execute and deliver this Certificate to
Reflect and the Reflect Stockholders;
2. Based upon his personal knowledge, information, belief and
opinions of counsel for Xxxx regarding the Agreement:
(i) All representations and warranties of Xxxx contained
within the Agreement are true and correct;
(ii) Xxxx 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 Xxxx as set forth in its
financial statements for the years ended December 31,
2002 and 2001, and the period ended September 30,
2003, except as set forth in Exhibit C to the
Agreement.
XXXX, INC.
By /s/ Xxxxx X. Xxxxxx, President
EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Reflect Scientific, Inc., a
California corporation ("Reflect"), represents and warrants the following as
required by the Agreement and Plan of Reorganization (the "Agreement") between
Reflect, its stockholders (the "Reflect Stockholders") and Xxxx, Inc., a Utah
corporation ("Xxxx"), to-wit:
1. That he is the President of Reflect and has been authorized
and empowered by its Board of Directors to execute and deliver this
Certificate to Xxxx;
2. Based on his personal knowledge, information, belief:
(i) All representations and warranties of Reflect
contained within the Agreement are true and correct;
(ii) Reflect 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 Reflect as set forth in its
financial statements for the years ended December 31,
2002 and 2001, except as set forth in Exhibit E to the
Agreement.
REFLECT SCIENTIFIC, INC.
By /s/ Xxx Xxxxx
