EXHIBIT 99.2
PLAN AND AGREEMENT OF REORGANIZATION
by exchange by
CARD-SMART CORP.
of its voting stock for
substantially all the assets of
ICHANCE, INC.
CARD-SMART CORP., a Nevada corporation, (hereinafter called "Buyer"),
and ICHANCE, INC., a Nevada corporation, (hereinafter called "Seller"), hereby
execute this Plan and Agreement of Reorganization (the "Agreement") and agree as
follows:
ARTICLE 1. PLAN OF REORGANIZATION
SECTION 1.01. PLAN ADOPTED. A plan of reorganization of the parties hereto
pursuant to the provisions of Section 368(a)(1)(C) of the Internal Revenue Code
of 1986 is adopted as follows.
(a) Seller will transfer to Buyer substantially all of its assets which
include, but are not limited to, (1) miscellaneous office equipment, (2)
miscellaneous office furniture, (3) computer software work in progress and (4)
all right, title and interest in and to the unregistered xxxx "iChance".
(b) In exchange for the assets transferred by Seller, Buyer will issue
and deliver to Seller Five Million Shares (5,000,000) of its newly issued
restricted shares of its voting common stock.
SECTION 1.02. CLOSING DATE. Subject to the conditions precedent set forth
herein to the obligations of the parties to consummate the transaction, the plan
of reorganization shall be consummated at the office of Gage, Xxxxxxx & Xxxxxx,
LLP, 0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000, on
September 14, 2001, at 10:00 a.m., or such other place and date as may be fixed
by mutual consent of the parties. The date of such consummation is the "Closing
Date" referred to herein.
SECTION 1.03. DUE DILIGENCE. Buyer acknowledges that upon execution of this
Agreement, it has completed any and all due diligence which it wishes to
undertake and approves the assets of Seller.
ARTICLE 2. COVENANTS, REPRESENTATIONS,
AND WARRANTIES OF SELLER
SECTION 2.01. LEGAL STATUS. Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada, with
corporate power to own property and carry on its business as it is now being
conducted. Seller is a sophisticated investor. Seller is duly qualified to do
business in each jurisdiction in which the character and location of its
properties make such qualification necessary.
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SECTION 2.02. SUBSIDIARIES. Seller has two (2) subsidiaries and no interest
in any other corporation,
firm, or partnership. Seller's subsidiaries are as follows:
(a) Software Licensing Networks, Ltd., a Nevis corporation.
Seller owns 100% of the issued and outstanding stock of this corporation.
(b) iChance, Inc., a California corporation. Seller owns 100% of the
issued and outstanding stock of this corporation.
All of Seller's covenants, representations and warranties shall and do apply to
each of Seller's wholly owned subsidiaries.
SECTION 2.03. CAPITALIZATION. Seller has an authorized capitalization of
One Hundred Million (100,000,000) shares of common stock and Five Million
(5,000,000) shares of convertible preferred stock. As of the date of this
Agreement Five Million Eighty One Thousand Two Hundred Ten (5,081,210) shares of
the common stock are validly issued and outstanding, fully paid and
non-assessable and Ninety Seven Thousand Four Hundred Fifty (97,450) shares of
the convertible preferred stock are validly issued and outstanding, fully paid
and non-assessable.
SECTION 2.04. FINANCIAL STATEMENTS. Seller has delivered to Buyer its
latest audited financial statement together with the latest balance sheet of
Seller and the related statements of income and retained earnings for the period
then ended, a copy of which is attached hereto as Exhibit "A" and incorporated
herein by reference. All such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis and present fairly the financial position for its latest fiscal year, and
the results of operations for the period then ended subject, however, to normal
changes resulting from year-end audit of the financial statements.
SECTION 2.05. BUSINESS AND PROPERTIES. (a) Seller has delivered to Buyer
materials regarding its assets and operations which when acquired will be the
businesses and properties of Buyer. The materials are substantially complete and
the information reported therein is correct in all material respects. Except as
previously disclosed to Buyer in writing, Seller does not know of any
circumstances, events, or other information, occurring prior to or subsequent to
August 31, 2001, which would adversely affect the values as of December 31,
2000, or subsequent thereto, set forth in the list of properties.
(b) Except for business interests and properties sold or otherwise
disposed of in the ordinary course of business since August 1, 2001, on or
within sixty (60) days after the closing date Seller will have good and
marketable title to all of the businesses and interests in its properties, real
and personal, reflected in the list as of August 1, 2001 free and clear of all
mortgages, liens, or encumbrances, other than the following:
(i) The lien of current taxes not yet due and payable.
(ii) Minor exceptions, not in the aggregate material.
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(iii) Such imperfections of title as do not materially detract from
or interfere with the operations, value, or use of the
properties subject thereto or affected thereby, or materially
affect the title thereto.
(c) All leases included among the properties, or to which any of the
properties are subject, are in good standing, valid and effective and, to the
best of Seller's knowledge, information, and belief after reasonable
investigation by Seller, there is not under any of such leases any existing
material default or event of default or event which with notice or lapse of time
or both would constitute a material default.
(d) The equipment, included among the properties, is in good condition
and repair, subject only to ordinary wear and tear.
(e) Except to the extent set forth in Schedule 5 hereto, there exists
no restriction on the right of Seller to convey, assign, and transfer all of the
properties, and convey good title thereto to Buyer.
SECTION 2.06. ACTIVITIES SINCE BALANCE SHEET DATE. Except as previously
disclosed to Buyer in writing, since December 31, 2000, Seller has not:
(a) Suffered any change in its financial condition or the operations of
its business, materially and adversely affecting its properties, or the earning
power thereof, nor suffered any damage, destruction or loss, whether covered by
insurance or not, materially and adversely affecting the properties or the
earning power thereof.
(b) Sold, exchanged, or otherwise disposed of any of its business or
properties or any interest therein.
(c) Except in the ordinary course of business, entered into any
Agreement or arrangement selling, exchanging, or otherwise disposing of any of
its assets or granting any preferential or other right to purchase any of its
assets or rights or requiring the consent of any party to the transfer and
assignment of such assets or rights.
(d) Discharged or satisfied any lien or encumbrance or paid any
obligation or liability, absolute or contingent, other than current liabilities
shown on its balance sheet, including non-current liabilities so shown which
have become current by the passage of time, and current liabilities incurred
since that date in the ordinary course of business.
(e) Except current liabilities incurred or obligations under contracts
entered into in the ordinary course of business, incurred or agreed to incur any
contractual obligation or liability, absolute or contingent.
(f) Issued any stock, bonds, or other corporate securities, or any
options with respect thereto.
(g) Except to the extent consistent with past practice, granted any
increase in the compensation of, or paid any bonus to, any employee.
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(h) Except in the ordinary course of business, waived any right or
claim having value.
(i) Declared or paid any dividends, or made, or agreed to make, any
other distribution to any shareholder.
(j) Mortgaged or pledged or, except in the ordinary course of business,
subjected to lien, charge, or any other encumbrance any of its assets, tangible
or intangible.
(k) Entered into any transaction or transactions the effect of which,
considered as a whole, would be to cause its net ownership in any of its
businesses to be materially less than it was at such date.
(l) Sold, assigned, or transferred any patents, copyrights, or other
intangible assets.
(m) Had any labor troubles other than routine grievance matters, none
of which is material.
(n) Entered into any transaction other than in the ordinary course of
business.
(o) Made any expenditure for capital items, including construction and
work-in-process, or investment in stock of or advances in any form to
corporations or business firms in excess of Five Thousand and No/100ths Dollars
($5,000).
SECTION 2.07. SCHEDULES FURNISHED. Seller has delivered to Buyer the
schedules enumerated below which include information and documentation regarding
Seller's wholly owned subsidiaries. To the extent that any such schedule
identifies any contract, Agreement, or other instrument in general terms in lieu
of specific descriptions thereof, the schedule will be supplemented by setting
forth specific descriptions as Buyer may request. If after the date hereof there
shall be any change in the matters reflected in any such schedule, Seller will
deliver to Buyer prior to the effective date appropriate supplements to the
schedule so affected, making such deletions, modifications, and additions as may
be required in order that Buyer shall have received complete and correct
information as to the matters to be reflected in each such schedule. Each of the
schedules and any supplement thereto, delivered by Seller to Buyer, are
substantially complete and the information reported therein or in any documents
provided hereunder is correct in all material respects as of the date of such
schedule or supplement.
(a) Schedule 1 - Off-Balance Sheet Liabilities and Obligations: This
schedule lists all indebtedness or liabilities affecting Seller or any of its
assets or rights which arise under sale and leaseback arrangements, through-put
Agreements, and any other Agreements or arrangements which fall within the
category or concept of off-balance sheet financing.
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(b) Schedule 2 - Guaranties: This schedule lists all indebtedness or
liabilities of any person, firm, or corporation, which Seller has guaranteed or
otherwise become liable for, absolutely or contingently.
(c) Schedule 3 - Certain Material Contracts: This schedule lists all
Agreements, contracts, and other instruments, to the extent not listed in any
other schedule, not cancelable by Seller on ninety (90) days notice without
penalty which involve a payment or payments to be made by or to Seller, or a
liability or liabilities of or to Seller, in excess of five thousand dollars
($5,000) any year.
(d) Schedule 4 - Pending Litigation: This schedule lists all litigation
and proceedings pending or threatened in courts and governmental commissions and
bureaus affecting Seller or any of its properties or rights which are not fully
covered by insurance.
(e) Schedule 5 - Restrictions on Transfer of Properties: This schedule
lists any of the properties, the transfer of which by Seller as herein
contemplated is subject to any restriction, or which requires the consent of any
third party, pursuant to a preferential or other right of purchase or otherwise,
and describes in detail each such restriction, consent requirement, or purchase
right.
(f) Schedule 6 - Options, Warrants, or Other Stock Purchase Rights:
This schedule lists all commitments by Seller to issue shares of capital stock
pursuant to outstanding options, warrants, or rights of conversion.
(g) Schedule 7 - Employment and Deferred Compensation Contracts: This
schedule lists all employment, deferred compensation, and similar contracts by
which Seller is bound.
SECTION 2.08. COMPLIANCE WITH LAWS AND REGULATIONS. Seller, to the best of
its knowledge, is in compliance with all laws, regulations, and orders
applicable to its business.
SECTION 2.09. AGREEMENT NOT VIOLATIVE OF LAW OR INSTRUMENT. The execution
and carrying out of this Agreement and compliance with the provisions thereof by
Seller will not violate, with or without the giving of notice or passage of
time, any provision of law applicable to the Seller, and will not conflict with,
or result in the breach or termination of any provision of, or constitute a
default under, or result in the creation of any lien, charge, or encumbrance
upon any of the businesses or properties, pursuant to any corporate charter,
bylaws, indenture, mortgage, deed of trust, or other Agreements or instrument to
which Seller is a party or by which Seller of any of its properties may be
bound.
SECTION 2.10. TAXES. Seller has filed all federal, state, county, and other
local tax returns which are required to be filed, and will make payment of all
taxes which have or may become due pursuant to said returns or pursuant to any
assessment received by Seller.
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SECTION 2.11. NOT IN DEFAULT. Seller has not received any notice of default
and, to the knowledge of any of its officers or directors, is not in default
under:
(a) Any order, writ, injunction, or decree of any court or any
commission or other administrative agency.
(b) Any Agreement or obligation to which it is a party or by which it
is bound or to which it may be subject.
SECTION 2.12. NOT OBLIGATED FOR BROKER'S FEE. Seller has not incurred any
obligation or liability, contingent or otherwise, for a broker's or finder's fee
in respect of the matters provided for in this Agreement.
SECTION 2.13. CONTRACT OR COMMITMENT RELATING TO BUSINESSES OR PROPERTIES.
Except as set forth in the list of business and/or properties, Seller does not
have any lease, contract, or commitment, written or oral, which relates to any
of the properties, and it has duly complied with all provisions of such lease,
contract, or commitment set forth in the list and is not in default with respect
to any of them.
SECTION 2.14. LITIGATION. Except for matters disclosed in Schedule 4, there
is no litigation, proceeding, or governmental investigation pending, or, to the
knowledge of any of the officers or directors of Seller, threatened, affecting
Seller or any of its properties, or its right to enter into this Agreement or to
perform its obligations hereunder, nor do any of such officers or directors know
of any ground for any such litigation, proceeding, or investigation.
SECTION 2.15. INSURANCE. Seller now has in force fire, liability, and other
insurance with respect to its properties as set forth in Schedule S and, except
in accordance with the written approval of Buyer pending the closing date, will
not change, increase, or decrease any such insurance.
SECTION 2.16. APPROVAL OF BOARD. The Board of Directors of Seller, acting
at a special meeting thereof called for the purpose and duly held on September
13, 2001, has duly approved the transactions contemplated hereby and has
authorized the execution and delivery of this Agreement by Seller, and the
performance by Seller. A copy of Seller's Board of Directors Resolution is
attached hereto as Exhibit "B" and incorporated herein by reference.
SECTION 2.17. CHARACTER OF STATEMENTS. The information provided and to be
provided by Seller and its officers and directors to Buyer pursuant to this
Agreement, for use in any proxy statement or listing application, does not and
will not contain any statement which, at the time and in the light of the
circumstances under which it is made, is false or misleading with respect to any
material fact, and does not and will not omit to state any material fact in
order to make the statements therein not false or misleading.
SECTION 2.19. NO OTHER REPRESENTATIONS AND WARRANTIES. Seller makes no
other representations and warranties not set forth herein.
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ARTICLE 3. COVENANTS, REPRESENTATIONS,
AND WARRANTIES OF BUYER
SECTION 3.01. LEGAL STATUS. Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada, with
corporate power to own property and carry on its business as it is now being
conducted.
SECTION 3.02. SUBSIDIARIES. Buyer has no subsidiaries or any interest in
any other corporation, firm, or partnership.
SECTION 3.03. CAPITALIZATION. Buyer has an authorized capitalization of
Twenty Five Million (25,000,000) shares of common stock. As of the date of this
Agreement Nine Million Three Hundred Sixty Thousand (9,360,000) shares of the
common stock are validly issued and outstanding, fully paid and non-assessable.
A copy of Buyer's stock ledger, dated August 14, 2001, and confirmed and
acknowledged by Buyer's transfer agent, is attached hereto as Exhibit "C" and
incorporated herein by reference.
SECTION 3.04. FINANCIAL STATEMENTS. (a) Buyer has delivered to Seller its
latest audited balance sheet and the related audited statements of income and
retained earnings, a copy of which is attached hereto as Exhibit "D" and
incorporated herein by reference. All such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis and present fairly the financial position of Buyer.
(b) Buyer's auditor shall have confirmed, in a writing addressed to
Seller, attached hereto as Exhibit "E" and incorporated herein by reference,
that said auditor has no disagreements with Buyer's current management regarding
any matter affecting such auditor's audited financial statements for Buyer.
SECTION 3.05. PROPERTIES. (a) Buyer has delivered to Seller a list as of
December 31, 2000, of the properties of Buyer. The list is substantially
complete and the information reported therein is correct in all material
respects. Except as previously disclosed to Seller in writing, Buyer does not
know or any circumstances, events, or other information, occurring prior to or
subsequent to December 31, 2000, which would adversely affect the values as of
December 31, 2000, or subsequent thereto, set forth in the list of the
properties.
(b) Except for properties and interests in properties sold or otherwise
disposed of in the ordinary course of business since December 31, 2000, on the
closing date Buyer will have good and marketable title to all of the properties
and interests in properties, real and personal, reflected in the list as of
December 31, 2000, free and clear of all mortgages, liens, or encumbrances,
other than the following:
(i) The lien of current taxes not yet due and payable.
(ii) Minor exceptions, not in the aggregate material.
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(iii) Such imperfections of title or easements as do not materially
detract from or interfere with the operations, value, or use
of the properties subject thereto or affected thereby, or
materially affect the title thereto.
(c) Any leases included among the properties, or to which any of the
properties are subject, are in good standing, valid and effective and, to the
best of Buyer's knowledge, information, and belief after reasonable
investigation by buyer, there is not under any of such leases any existing
material default or event of default or event which with notice or lapse of time
or both would constitute a material default and in respect of which Buyer has
not taken adequate steps to prevent a default from occurring.
SECTION 3.06. ACTIVITIES SINCE BALANCE SHEET DATE. Except as previously
disclosed to Seller in writing, since December 31, 2000, Buyer has not:
(a) Suffered any change in its financial condition or the operations of
its business, materially and adversely affecting its properties, or the earning
power thereof, nor suffered any damage, destruction, or loss, whether covered by
insurance or not, materially and adversely affecting the properties or the
earning power thereof.
(b) Except in the ordinary course of business, sold, exchanged, or
otherwise disposed of, or entered into any Agreement or arrangement to sell,
exchange, or otherwise dispose of, any of its properties, rights, or any
interest therein.
SECTION 3.07. LITIGATION. There are no actions or proceedings pending, or,
to the knowledge of Buyer, threatened against, by, or affecting the Buyer in any
court or before any governmental agency, domestic or foreign, which, if decided
adversely to the Buyer, would materially and adversely affect the condition or
operations, financial or otherwise, of Buyer. The Buyer, to its knowledge, is
not in default with respect to any order, writ, injunction, or decree of any
such court or agency.
SECTION 3.08. EMPLOYMENT OF SELLER EMPLOYEES. At the closing, Buyer will
offer to employ those employees of Seller listed in Schedule 7, upon terms and
conditions satisfactory to Buyer.
SECTION 3.09. STATUS OF SHARES DELIVERABLE. The shares of stock of Buyer
deliverable pursuant to this Agreement, when issued and delivered as provided in
this Agreement, will be validly issued and outstanding shares of common stock of
Buyer, fully paid and non-assessable, and will be restricted voting stock of the
Buyer.
SECTION 3.10. APPROVAL OF BOARD. The Board of Directors of Buyer, acting at
a special meeting thereof called for the purpose and duly held on September 14,
2000, has duly approved the transactions contemplated hereby and has authorized
the execution and delivery of this Agreement by Buyer, and the performance by
Buyer. The resolution giving such authorization and approval have not since been
altered, amended or revoked. A copy of Buyer's Board of Directors Resolution is
attached hereto as Exhibit "F" and incorporated herein by reference.
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SECTION 3.11. NO OTHER REPRESENTATIONS AND WARRANTIES. Buyer makes no other
representations and warranties not set forth herein.
ARTICLE 4. CONDUCT OF BUSINESS OF
SELLER PENDING CLOSING
SECTION 4.01. PRESERVATION OF AND ACCESS TO PROPERTIES, INFORMATION, AND
DOCUMENTS. From the date of this Agreement until the closing date, Seller will:
(a) Except for depreciation through ordinary wear and tear, maintain
and keep its businesses and properties in as good financial condition as at
present.
(b) Use its best efforts to perform all its obligations under contracts
relating to or affecting the businesses and/or its properties.
SECTION 4.02. SUBMISSION TO SHAREHOLDER. Seller has secured majority
consent of its outstanding shares, for this Agreement and the plan distribution
contemplated by Section 1.01 hereof. A copy of the Shareholders' Resolution
approving the transactions contemplated by this Agreement is attached hereto as
Exhibit "G" and incorporated herein by reference.
SECTION 4.03. FURNISH PROXY AND LISTING INFORMATION. Seller, and its
officers and directors, will furnish to Buyer such information as shall be
needed for use in any proxy statement or listing application which may be
required or deemed desirable by Buyer in order to consummate the transactions
contemplated hereby.
SECTION 4.04. SATISFY CONDITIONS PRECEDENT. Seller will use its best
efforts to cause the satisfaction of all conditions precedent contained in this
Agreement.
ARTICLE 5. CONDUCT OF BUSINESS OF BUYER PENDING CLOSING
SECTION 5.01. CARRY ON BUSINESS AS USUAL. Pending the consummation of the
plan of reorganization, Buyer will carry on its business in substantially the
same manner as heretofore.
SECTION 5.02. SATISFY CONDITIONS PRECEDENT. Buyer will use its best efforts
to cause the satisfaction of all conditions precedent contained in this
Agreement.
SECTION 5.03. NEGATIVE COVENANTS. Except with the prior written consent of
Seller, Buyer will not declare or pay any dividend, or declare or make any other
distribution to its shareholders.
SECTION 5.04. SUBMISSION TO SHAREHOLDERS. Buyer shall submit to its
outstanding shares of each class for their approval, if necessary, this
Agreement and the principal terms of the shares-for-assets exchange described in
it. Buyer shall use its best efforts to cause its outstanding shares of each
class to approve this Agreement in the manner required by Nevada's Corporation
Law.
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ARTICLE 6. CONDITIONS PRECEDENT
TO OBLIGATIONS OF BUYER TO CLOSE
SECTION 6.01. The obligations of the Buyer hereunder are, at its option,
subject to the conditions that on or before the closing date:
(a) COMPLIANCE WITH TERMS, CONDITIONS, AND COVENANTS. All the terms,
conditions, and covenants of this Agreement to be complied with by the Seller on
or before the closing date shall have been complied with, and Seller shall have
delivered to Buyer a certificate signed by its chairman and treasurer to such
effect.
(b) TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties by Seller herein shall be correct, as of the closing date, with the
same force as though such representations and warranties had been made on the
closing date, and Seller shall have delivered to Buyer a certificate signed by
its chairman and treasurer to such effect and as to such other matters as the
Buyer may reasonably request.
(c) PERMIT GRANTED. The Nevada Secretary of State or other official as
appropriate shall have granted to Buyer an appropriate permit, if necessary,
authorizing it to issue shares of its common stock in accordance with this
Agreement.
(d) APPROVAL BY OUTSTANDING SHARES. The principal terms of this
Agreement and the shares-for-assets exchange covered by it shall have been
approved as required by the Nevada Revised Statutes and by the outstanding
shares of each class of both Buyer and Seller.
ARTICLE 7. CONDITIONS PRECEDENT TO
OBLIGATIONS OF SELLER TO CLOSE
SECTION 7.01. The obligations of the Seller hereunder are, at its option,
subject to the conditions that on or before the closing date:
(a) COMPLIANCE WITH TERMS, CONDITIONS, AND COVENANTS. All the terms,
conditions, and covenants of this Agreement to be complied with by Buyer on or
before the closing date shall have been complied with, and Buyer shall have
delivered to Seller a certificate signed by its President to such effect.
(b) TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by Buyer herein shall be correct, as of the closing date, with
the same force as though such representations and warranties had been made on
the closing date, and Buyer shall have delivered to Seller a certificate signed
by its chief executive officer to such effect and as to such other matters as
the Seller may reasonably request.
(c) NO TAX RULING. Seller has not received a written ruling or rulings
of the Internal Revenue Service, to the effect that the sale of the assets and
business of Seller and the distribution to the shareholders of Seller of the
shares of common stock of Buyer will not result in the recognition of any
taxable income or deductible loss by Seller or by its shareholders.
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(d) NO SUBSTANTIAL ADVERSE CHANGE. There shall have been no substantial
adverse change in the financial condition or operations of Buyer and no
suspension of trading in its stock on the Over The Counter Electronic Bulletin
Board.
(e) APPROVAL OF SHAREHOLDERS. All corporate proceedings requisite to
the sale and transfer by Seller and its Shareholders of its voting stock, and
its liquidation and dissolution, shall have been approved and consented to by
the Shareholders of Seller in the manner required by applicable law or other
applicable requirements. A copy of Seller's Shareholders' Resolution is attached
hereto as Exhibit "G" and incorporated herein by reference.
(f) APPROVAL BY OUTSTANDING SHARES. The principal terms of this
Agreement have been approved, as required by the Nevada Revised Statutes and by
a majority of the outstanding shares of each class of both Buyer and Seller.
ARTICLE 8. CONSUMMATION OF
TRANSACTION
SECTION 8.01. CONSIDERATION OF SELLER. Seller will deliver to Buyer, on the
closing date, all of its assets, including, but not limited to, intellectual
property.
SECTION 8.02. CONSIDERATION OF BUYER. (a) Except for liabilities and
obligations specified in Subsection (b), upon receipt of the assets of Seller,
Buyer will assume, and will deliver to Seller, the appropriate instruments
evidencing assumption by Buyer of all of the liabilities and obligations of
Seller reflected or referred to in its list of properties and thereafter
incurred in the ordinary course of business to and including the closing date,
including all obligations under Agreements, contracts, and other arrangements to
which it is a part.
(b) Buyer shall assume and be responsible for any and all liabilities
of the Seller.
(c) Buyer shall cause to be delivered to Seller at the closing date
Five Million (5,000,000) shares of Buyer's restricted voting common stock.
(d) The directors of Buyer shall tender their resignations effective
upon closing of this transaction and Buyer shall cooperate with Seller in the
election of a new Board of Directors.
SECTION 8.03. POST CLOSING ACTIONS OF SELLER. Within twelve (12) months of
the Closing Date, Seller shall distribute to its current shareholder the shares
of common stock of Buyer received pursuant to the exchange as well as any other
assets held by Seller at such time.
SECTION 8.04. EXPENSES. Each party hereto shall pay its own expenses
incident to this Agreement and the transactions contemplated hereby, including
all fees of its counsel, accountants, and employees whether or not such
transactions shall be consummated.
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ARTICLE 9. INTERPRETATION AND
ENFORCEMENT
SECTION 9.01. INDEMNIFICATION. (a) Each party hereto agrees to protect,
defend, indemnify, and hold harmless the other party, its successors and
assigns, against and in respect of all loss, damage, or expense occasioned by
any breach by such indemnifying party of any of its representations, warranties,
covenants, or Agreements contained herein.
(b) Each party hereto will indemnify and hold harmless the other party
against and in respect of any claim for brokerage or other commission relative
to this Agreement or to the transactions contemplated hereby, based in any way
on Agreements, arrangements, or understandings claimed to have been made by such
party with any third party.
(c) Seller agrees to indemnify and hold harmless the Buyer from any
loss, damage, or expenses, including reasonable counsel fees, sustained or
incurred by Buyer by reason of any claim asserted against Buyer to pay or
discharge any liability or obligation of Seller not expressly assumed by Buyer
under the terms hereof.
SECTION 9.02. SPECIFIC PERFORMANCE. Seller acknowledges that the assets to
be transferred to Buyer pursuant to plan and Agreement are unique and that Buyer
will have no adequate remedy at law if Seller shall fail to perform any of its
obligations hereunder. In such event, Buyer shall have the right, in addition to
all other rights, and remedies, to specific performance of this plan and
Agreement of reorganization.
SECTION 9.03. SURVIVAL OF COVENANTS, REPRESENTATIONS, AND WARRANTIES. All
covenants, Agreements, representations, and warranties made hereunder and in any
certificates delivered at the closing shall be deemed to be material and to have
been relied upon by Buyer and Seller, notwithstanding any investigation made by
Buyer and Seller or on their respective behalf, and shall survive the closing.
SECTION 9.04. ASSIGNMENT. Except with the written consent of the other
party, the rights and obligations under this Agreement shall not be assignable
by either party. Nothing herein expressed or implied is intended to confer upon
any person, other than the parties hereto or their respective successors,
assigns, heirs, and legal representatives, any fights, remedies, or liabilities
under or by reason of this Agreement.
SECTION 9.05. NOTICES. Any notice or other communication required or
permitted hereunder shall be deemed to be properly given when deposited in the
United States mails for transmittal by certified or registered mail, postage
prepaid, or when deposited with a public telegraph company for transmittal,
charges prepaid, if such communication is addressed:
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(a) In the case of Seller, to:
iChance, Inc.
Attn: Xxxxx Xxxxxx, President
0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
or to such other person or address as Seller may from time to
time furnish to Buyer for the purpose.
With a copy, which shall not constitute notice of service of
process, to:
Gage, Xxxxxxx & Xxxxxx, LLP
Attn: B. Xxxxxx Xxxxxxx, III, Esq.
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
000-000-0000
000-000-0000 FAX
(b) In the case of Buyer prior to Closing, to:
Card-Smart Corp.
Xxxxxxxx Xxxxxxxxxxxxxxx, President
00000 X. 00xx Xxxxxx
Xxxxxxx, XX 00000
or to such other person or address as Buyer may from time to
time furnish to Seller for the purpose.
(c) In the case of Buyer after Closing, to:
iChance, Inc.
Attn: Xxxxx Xxxxxx, President
0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
or to such other person or address as Seller may from time to
time furnish to Buyer for the purpose.
With a copy, which shall not constitute notice of service of
process, to:
Gage, Xxxxxxx & Xxxxxx, LLP
Attn: B. Xxxxxx Xxxxxxx, III, Esq.
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
000-000-0000
000-000-0000 FAX
13
SECTION 9.06. ENTIRE AGREEMENT; COUNTERPARTS. This instrument and the
exhibits hereto contain the entire Agreement between the parties with respect to
the transaction contemplated hereby. It may be executed in any number of
counterparts, each of which shall be deemed an original, but such counterparts
together constitute only one and the same instrument. A facsimile signature
shall constitute an original signature.
SECTION 9.07. CONTROLLING LAW. The validity, interpretation, and
performance of this Agreement shall be controlled by and construed under the
laws of the State of Nevada, the state in which the Buyer and Seller hereto are
incorporated.
SECTION 9.08. JURISDICTION. The parties hereto expressly and irrevocably
consent to the jurisdiction of the State of Nevada. Any action brought by or
against either party in connection with the negotiation, execution, performance,
termination, or breach of this Agreement shall be brought in the County of
Xxxxx, and the parties hereby agree that Xxxxx County shall be a convenient and
exclusive forum for the hearing of any such action.
SECTION 9.09. ATTORNEYS' FEES. Should it be necessary to institute any
action to enforce the terms of this Agreement, the parties hereby agree that the
prevailing party in any such action shall be entitled to recover its reasonable
attorneys' fees, as well as all costs of the action, including, but not limited
to court or arbitration tribunal costs, filing fees, exhibit fees, forensic
consultant fees, litigation support costs and expert witness fees. Further,
recoverable attorney fees and costs shall include the costs for such items for
any appeals. This paragraph shall remain independent from any judgment entered
to enforce its terms, shall not merge therewith, and shall entitle the
prevailing party to attorneys fees and costs incurred in connection with post
judgment collection and enforcement efforts.
SECTION 9.10. FURTHER ACTIONS AND ASSURANCES. At any time before or after
the Closing Date, each party will execute, acknowledge, and deliver all further
assignments, conveyances, assurances, instruments of transfer, or other
documents reasonably requested by any other party, and will take all other
actions consistent with the terms of this Agreement that may reasonably be
requested by such party for the purpose of assigning, transferring, granting,
conveying, and confirming or reducing to possession, all of the Shares to be
purchased and sold pursuant to this Agreement.
SECTION 9.11. SEVERABILITY. If any provision of this Agreement is held by a
court to be unenforceable or invalid for any reason, the remaining provisions of
this Agreement shall be unaffected by such holding. If the invalidation of any
such provision materially alters the Agreement of the parties, then the parties
shall immediately adopt new provisions to replace those, which were declared
invalid.
14
SECTION 9.12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart will be deemed to be an original
instrument if such counterpart bears the original signatures of the parties
hereto; however, all such counterparts together will constitute but one
Agreement.
IN WITNESS WHEREOF, the parties hereto execute this Agreement on September 14,
2001, at San Diego, California.
SELLER: ICHANCE, INC.
A Nevada Corporation
BY: /s/ Xxxxx Xxxxxx
----------------
Xxxxx Xxxxxx, President
BY: /s/ Xxxxx Xxxxxx
----------------
Xxxxx Xxxxxx, Secretary
BUYER: CARD-SMART CORP.
A Nevada Corporation
BY: /s/ Xxxxxxxx Xxxxxxxxxxxxxxx
----------------------------
Xxxxxxxx Xxxxxxxxxxxxxxx, President
BY: /s/ Xxxxxxxx Xxxxxxxxxxxxxxx
----------------------------
Xxxxxxxx Xxxxxxxxxxxxxxx, Secretary
15
Exhibit A
Seller's Audited Financial Statements
For Periods Ending
December 31, 1998, 1999 and 20009
With unaudited Stub Period Ending
June 30, 2001
[attached]
16
Exhibit B
Seller's Board of Directors' Resolution
[attached]
17
Exhibit C
Stock Ledger
[attached]
18
Exhibit D
Buyer's Audited Financial Statements
[attached]
19
Exhibit E
Auditor's Confirmation
[attached]
20
Exhibit F
Buyer's Board of Directors' Resolution
[attached]
21
Exhibit G
Seller's Shareholders' Resolution
[attached]
22
Schedule 1
Seller's Off-Balance Sheet Liabilities and Obligations
1. None.
23
Schedule 2
Guaranties
1. None.
24
Schedule 3
Certain Material Contracts
1. Previously disclosed.
25
Schedule 4
Pending Litigation
[attached]
26
Schedule 5
Restrictions on Transfers of Properties
1. None.
27
Schedule 6
Options, Warrants, or Other Stock Purchase Rights
1. Seller has optioned the right for Corazon Industries Corporation, a
Philippine corporation, to acquire up to 90,000 shares of its free trading stock
for the price of $1.00 per share.
28
Schedule 7
Employment and Deferred Compensation Contracts
1. None.
29
