AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), is dated as of June
29, 1999 and entered into by and between World House Entertainment, Inc. a
Nevada corporation ("World House"), and 800 America, Inc. a Delaware corporation
("America").
RECITALS
Whereas, World House and America and their respective Boards of Directors
deem it advisable to merge America into World House, as herein contemplated,
pursuant to which merger the holders of shares of common stock of America (the
"America Shares"), will receive, in the aggregate, 10,000,000 shares of common
stock of the surviving corporation (the "Surviving Shares") and the name of
World House will be changed to 800 xxxxxxx.xxx, Inc.;
Whereas, the merger provided for hereby (the "Merger") shall be consummated
in accordance with the terms and conditions hereof and shall be consummated as
of the close of business on the latter of the day on which the duly executed
Certificate of Merger pursuant to Section 252 of the Delaware General
Corporation Law has been duly filed with the Secretary of State of the State of
Delaware or the day on which the duly executed Agreement pursuant to Section
78.485 of the Nevada General Corporation Law has been duly filed with the
Secretary of State of the State of Nevada (the "Effective Date"); it being
understood that the parties shall endeavor to cause the Effective Date to occur
on the same day as the date of the closing of this Agreement (the "Closing
Date").
Whereas, the surviving corporation will issue and deliver to an exchange
agent mutually designated by World House and America (the "Exchange Agent") the
Surviving Shares necessary to effect the exchange of the issued and outstanding
America Shares for Surviving Shares and the exchange of the issued and
outstanding World House Shares for Surviving Shares; and
Whereas, World House and America intend that the Merger shall be recognized
as a tax-free reorganization under the provisions of the Internal Revenue Code
of 1986, as amended (the "Code");
Now Therefore, in consideration of the mutual benefits to be derived from
this Agreement and the provisions hereinafter contained, World House and America
agree as follows:
ARTICLE ONE
MERGER
Section 1.1. Agreement.
World House and America agree to effect the Merger, subject to the terms
and conditions hereof.
Section 1.2. Surviving Corporation
On the Effective Date, America shall be merged into World House, which
latter company shall be the surviving corporation, the name of which shall be
changed to 800 xxxxxxx.xxx, Inc. World House as it exists immediately after the
Effective Date is hereinafter referred to as the "Surviving Corporation".
Section 1.3. Certificate of Incorporation, etc. of Surviving Corporation.
From and after the Effective Date and until duly changed or amended:
(i) the Certificate of Incorporation of World House in effect on the
Effective Date shall be restated in its entirety as agreed to in writing by
World House and America prior to the Closing Date and thereafter shall be the
Certificate of Incorporation of the Surviving Corporation;
(ii) The Bylaws of World House shall be restated in their entirety as
agreed to in writing by World House and America prior to the Closing Date and
thereafter shall be the Bylaws of the Surviving Corporation; and
(iii) The directors of the Surviving Corporation shall be the following
persons:
Section 1.4. Effect of the Merger.
When the Merger shall have become effective pursuant to the Delaware
General Corporation Law and the Nevada General Corporation Law as herein
provided, the separate existence of America shall cease and America shall be
merged into World House. The Surviving Corporation shall have all the rights,
privileges, immunities and powers and shall be subject to all the duties and
liabilities of a corporation organized under the Nevada General Corporation Law,
and shall, in addition, have all the rights, immunities and powers of each of
World House and America. The Surviving Corporation shall thereupon and
2
thereafter possess all the rights, privileges, immunities and franchises, of a
public nature, of each of World House and America. All property, real, personal
and mixed, and all debts due on whatever accounts, including subscriptions to
shares, and all other choses in action, and all and every other interest, of or
belonging to or due to each of World House and America, shall be taken and
deemed to be transferred to and vested in the Surviving Corporation without
further act or deed. The title to any real estate, or any interest therein,
vested in any of such corporations shall not revert or be in any way impaired by
reason of the Merger. The Surviving Corporation shall thereafter be responsible
and liable for all the liabilities and obligations of each of World House and
America, and any claim existing or action or proceeding pending by or against
either of such corporations may be prosecuted as if the Merger had not taken
place or the Surviving Corporation may be substituted in its place. Neither the
rights of creditors nor any liens upon the property of either such corporation
shall be impaired by the Merger.
ARTICLE II
EFFECT OF MERGER ON WORLD HOUSE SHARES AND AMERICA SHARES
Section 2.1 Conversion.
The manner and basis of converting the World House Shares and the America
Shares in the Merger shall be hereafter set forth in this Article II.
Section 2.2. Conversion of America Shares.
Each of the America Shares issued and outstanding on the Effective Date
(excluding America Shares, if any, held in the treasury of America which shall
be treated in the manner set forth in Section 2.6 hereof), and all rights in
respect thereof, shall on the Effective Date, without any action on the part of
any holder thereof, forthwith cease to exist and be converted into and become
exchangeable for 6,666.66 Surviving Shares, validly issued, fully paid and
nonassessable. Commencing immediately after the Effective Date, each certificate
which, prior to the Effective Date, represented such issued and outstanding
America Shares shall evidence ownership of Surviving Shares on the basis set
forth, subject to the limitations set forth in Section 2.5 hereof.
Section 2.3. Conversion of World House Shares.
Each of the World House Shares issued and outstanding on the Effective
Date, and all rights in respect thereof, shall on the Effective Date, without
any action on the part of any holder thereof, forthwith cease to exist and be
converted into and become exchangeable for one Surviving Share, validly issued,
fully paid and nonassessable. Commencing immediately after the Effective Date,
each certificate which, prior to the Effective Date, represented such issued and
outstanding World House Shares shall evidence ownership of Surviving Shares on
the basis set forth above, but subject to the limitations set forth in Section
2.5 hereof.
3
Section 2.4. Fractional Shares.
Fractional shares shall not be issued. Instead, any fraction of a share
less than 0.50 shall be disregarded and the number of shares of the Surviving
Corporation shall be rounded down to the nearest whole share. Any fraction of a
share of 0.50 or greater shall be rounded up to the nearest whole share of the
Surviving Corporation.
Section 2.5 Exchange of Shares.
Subject to the terms and conditions hereof, the Surviving Corporation shall
issue and deliver to the Exchange Agent on the closing date 6,666.66 Surviving
Shares for each America Share issued and outstanding on the Effective Date,
excluding America Shares, if any, held in the treasury of America, and one
Surviving Share for each World House Share issued and outstanding on the
Effective Date. Commencing immediately after the Effective Date and until the
appointment of the Exchange Agent shall be terminated, each holder of a
certificate or certificates theretofore representing America Shares or World
House Shares may surrender the same to the Exchange Agent, and, after the
appointment of the Exchange Agent shall be terminated, any such holder may
surrender any such certificate to the Surviving Corporation. Such holder shall
be entitled upon such surrender to receive in exchange therefor a certificate or
certificates representing the number of Surviving Shares into which the America
Shares or World House Shares theretofore represented by the certificate or
certificates so surrendered shall have been converted as aforesaid. Until so
surrendered and exchanged, each outstanding certificate which, prior to the
Effective Date, represented issued and outstanding America Shares or World House
Shares shall be deemed for all corporate purposes of the Surviving Corporation,
other than the payment of dividends and other distributions, if any, to evidence
ownership of the number of Surviving Shares into which the America Shares or
World House Shares theretofore represented thereby shall have been converted on
the Effective Date. Unless and until any such certificate theretofore
representing America Shares or World House Shares is so surrendered, (i) no
dividend or other distribution, if any, payable to the holders of record of
Surviving Shares as of any date subsequent to the Effective Date shall be paid
to the holder of such certificate in respect thereof, and (ii) the Surviving
Corporation shall pay all such dividends and distributions, if any to the
Exchange Agent (and if the appointment of the Exchange Agent shall be
terminated, to itself) to be held in trust for the record holder of the
certificate or certificates of Surviving Shares to be issued in exchange for
such certificate theretofore representing America Shares or World House Shares.
Upon the surrender of any of such certificate theretofore representing America
Shares or World House Shares, however, the record holder of the certificate or
certificates of Surviving Shares issued in exchange therefor shall receive from
the Exchange Agent or from the Surviving Corporation, as the case may be,
payment of the amount of dividends or other distributions, if any, which
theretofore as of any date subsequent to the Effective Date were paid by the
Surviving Corporation to the Exchange Agent or to itself with respect to such
number of Surviving Shares. No interest shall be payable with respect to the
payment of such dividends and distributions upon surrender of certificates
theretofore representing America Shares or World House Shares. All such
dividends and distributions claimed at the termination of the appointment of the
Exchange Agent shall be released or repaid by the Exchange Agent to the
Surviving Corporation to be held by it in trust for the holders of the Surviving
Shares entitled thereto, and thereafter the holders of the Surviving Shares not
receiving payment of such dividends and distributions shall look only to the
Surviving Corporation for payment thereof, subject to possible forfeiture under
applicable escheat laws.
4
Section 2.6. American Treasury Stock.
On the Effective Date, each American Share, if any, held in the treasury of
America shall be cancelled and retired, and no shares of stock or other
securities of the Surviving Corporation shall be issuable with respect thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
America represents and warrants as follows:
Section 3.1. No Breaches of Statute or Contract; Required Consents.
Neither the execution and delivery of this Agreement or the related
articles of merger by America, nor compliance by America with the terms and
provisions thereof and of the Plan will: (i) conflict with or result in a breach
of any of the provisions of the articles of incorporation, bylaws or other
governing instruments of America, or any judgment, order, decree, or ruling to
which America is a party, or any injunction to which it is subject of any court
of governmental authority or of any agreement, contract or commitment to which
it is a party and which is material to the financial condition of America
considered as a whole, or (ii) require the affirmative consent or approval of
any non-governmental third party (apart from stockholder approval referred to
elsewhere herein).
Section 3.2. Authorization of Agreement.
America has the corporate power to enter into this Agreement and to perform
its obligations hereunder; the execution, delivery and, subject to requisite
stockholder approval, the performance of this Agreement by America has been duly
and validly authorized by the Board of Directors of America, and America has
taken, or will use its best efforts to take prior to the Effective Date, all
action required by law, its Articles of Incorporation and bylaws to authorize
the execution, delivery and performance of this Agreement, the Plan, and related
articles of merger.
Section 3.3. Further Representations.
(a) America is duly organized, validly existing and in good standing
as a corporation under the laws of the State of Delaware; has full corporate
power to carry on its business as it is now being conducted, and to own and
operate the properties and assets it now owns or operates; and is duly qualified
to do business and is in good standing in each jurisdiction where the conduct of
its business or the ownership of its properties require such qualification.
5
(b) Pursuant to its Articles of Incorporation, America is authorized
to issue 1,500 shares of common stock with no par value, of which a total of
1,500 shares are each validly issued, fully paid and nonassessable. America has
no other class of stock or convertible securities outstanding. There are no
existing options, warrants, calls, commitments or rights of any character to
purchase or otherwise acquire from America shares of capital stock of any class,
no outstanding securities of America that are convertible into shares of capital
stock of America of any class, and no options, warrants or rights to purchase
from America any such convertible securities.
(c) America has heretofore delivered to World House accurate and
complete copies of the balance sheet of America at May 31, 1999 (the "America
1999 Balance Sheet") and the related statements of income, stockholders' equity
and changes in financial position of America from inception through May 31,
1999, in each case accompanied by the report thereon of Xxxx X. Xxxxx Xx.,
independent certified public accountant. Such audited balance sheet fairly
presents the financial position of America at the date thereof and all such
audited statements of income, stockholders; equity and changes in financial
position present fairly the results of its operations, changes in stockholders;
equity and changes in financial position for the periods indicated, in
conformity with accounting principles generally accepted in the United States
and consistently applied.
(d) America has delivered to World House the following documents, all
of which have been signed for identification by the President of America and are
dated as of the date hereof. (i) a list of all the liabilities and obligations
of America as of May 31, 1999 (Schedule "A") ; and (ii) a list of all property
and all other assets of America as of May 31, 1999 (Schedule "B"). America has
good and marketable title to all properties and assets, real and personal,
described in Schedule "B". All of the properties and assets listed on Schedule
"B" are free and clear of all mortgages, pledges, liens, charges, security
interests or other encumbrances of any nature whatsoever, except for mortgages,
pledges, liens, charges, security interests or other encumbrances as set forth
in Schedule "B", liens for current taxes not yet due and payable, and
imperfections of title, easements and encumbrances, if any, that are not
substantial in character, amount or extent and do not materially detract from
the value, or interfere with the present or proposed use, of the property or
assets subject thereto or affected thereby, or otherwise materially impair
business operations. All leases pursuant to which America leases any substantial
amount of real or personal property are in good standing, valid and effective in
accordance with their respective terms, and under none of these leases is there
any existing default, event of default or event that with notice or the lapse of
time, or both, would constitute a default and in respect to which America has
not taken adequate steps to prevent a default from occurring.
6
(e) Between May 31, 1999 and the date of this Agreement there has not
been any material adverse change in the financial condition or in the
operations, business or property of America.
(f) The structures, equipment, computers, and other physical assets of
America that are necessary to the operation of the business being conducted by
it are in good operating condition and repair, subject only to the ordinary wear
and tear of the business.
(g) Neither America nor, to the knowledge of its shareholders, any
other party have breached any material provision of, or defaulted in any
material respect of the terms of any contract or agreement to which America is a
party which would have a materially adverse effect upon the business or
financial condition of America.
(h) America will deliver such other lists, descriptions, information,
schedules, documents and reports as may reasonably be requested by World House
(i) To the best knowledge of its shareholders, there is no default or
claim, purported or alleged default, or statement of facts under which lack of
notice or the lapse of time, or both, would constitute a default on any
obligation to be performed by America under any material lease, contract, plan
or other arrangement.
(j) No suit, action or legal, administrative or arbitration
proceeding, which might materially and adversely affect the overall financial
condition, business or property of America is pending or, to the knowledge of
its shareholders, threatened.
(k) Its shareholders have no knowledge of any tax liability or claim
by any taxing authority for due but unpaid taxes, interest or penalties, nor has
America been advised of any request or demand for audit by any taxing authority.
(l) America owns or possesses, or reasonably believes it can acquire
on reasonable terms, adequate patent rights or other rights to use patent
rights, inventions, trademarks, service marks, trade names and copyrights
necessary to conduct the business now operated by it, and America has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any patent, patent rights, inventions, trademarks,
service marks, trade names or copyrights which, individually or in the
aggregate, if subject of an unfavorable decision, ruling or finding, would have
a material adverse effect upon the business, operations, properties, assets or
condition, financial or otherwise, of America.
(m) The representations and warranties of its shareholders and America
shall be as of the date of this Agreement and as of the date of the Effective
Date. Any such representation made as of such dates shall survive the Closing
Date. All representations and warranties of America are based upon knowledge
only of its officers and directors and no one else.
7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WORLD HOUSE
World House represents and warrants as follows:
Section 4.1. Accuracy of Information Statement and Exchange Act Filings.
The information concerning World House contained, or incorporated by
reference, in the information statement informing the shareholders of World
House of the Merger and the Exchange Act filings of World House which have been
provided to America are responsive in all material respects to the requirements
of the appropriate forms and related rules and regulations, and do not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make such information not misleading; provided, however, that as to
information supplied to World House by America which is included in the
information statement, World House represents only that it has no knowledge of
any such untrue statement or misleading omission.
Section 4.2. Status of Surviving Corporation Shares.
The shares of the Surviving Corporation's Shares to be issued to the
America Shareholders pursuant to this Agreement and Plan, when so issued, will
be duly and validly authorized and issued, fully paid and nonassessable.
Section 4.3. No Breach of Contract; Required Consents.
Neither the execution and delivery of this Agreement nor compliance by
World House with the terms of provisions hereof and of the Plan will: (i)
conflict with or result in a breach of any of the provisions of the Articles of
Incorporation or bylaws or other governing instruments of World House, or any
judgment, order, decree, or ruling to which World House is a party, or any
injunction to which it is subject of any court or government authority, or of
any agreement, contract or commitment to which World House is a party and which
is material to the financial condition or results of operations or conduct of
the business of World House considered as a whole, or (ii) require the
affirmative consent or approval of any nongovernmental third party.
Section 4.4. Authorization of Agreement.
World House has the corporate power to enter into this Agreement and to
perform its obligations hereunder; the execution, delivery and performance of
this Agreement by World House have been duly and validly authorized and approved
by the Board of Directors of World House; and World House has taken, or will use
its best efforts to take prior to the Effective Date, all action required by
law, its Articles of Incorporation or bylaws to authorize the execution,
delivery and performance of this Agreement and the Plan.
8
ARTICLE V
CONDUCT AND TRANSACTIONS PRIOR
TO EFFECTIVE DATE
Section 5.1. Access; Operation of Business between the date of this
Agreement and the Effective Date.
(a) Access. America and World House each agrees to furnish the other
with such financial and operating data and other information with respect to the
business and properties of it as the other shall from time to time reasonably
request in furtherance of consummating the Merger; provided, however, that any
such investigation shall not affect any of the representations and warranties
hereunder. In the event of termination of this Agreement, America and World
House will each return to the other all documents and other material obtained
from the other in connection with the transactions contemplated hereby, and each
shall maintain the confidentiality of such materials.
(b) Conduct of Business. Except for the sale of Songs For The Planet,
Inc., the wholly owned subsidiary of World House described more fully in Section
6.3(d) of this Agreement, America and World House shall continue to conduct
their business in conformity with established industry practice in a diligent
manner and will use their best efforts to preserve intact their present business
organizations and preserve their relationships with persons having business
dealings with them.
(c) No Mergers. America and World House will not merge or consolidate
with any other corporation, or acquire any stock or, except in the ordinary
course of business, any business, property or assets of any other person, firm,
association, corporation or other business organization.
(d) No Securities Issuances. America and World House will not issue
any shares of any class of their capital stock, or enter into any contract, or
grant any option, warrant or right, calling for the issuance of any such shares,
and will not create or issue any securities convertible into any such shares or
convertible into securities in turn so convertible or enter into any contract,
or grant any option, warrant or right, calling for the issuance of any such
convertible securities. Notwithstanding the above, it is the intention of World
House to forward split its issued and outstanding common stock on the basis of
two and one half for one prior to the Effective Date. The effect of such forward
split of shares will be that World House will have 1,950,000 post forward split
Shares issued and outstanding as of the Effective Date.
9
Section 5.2. Preparation of Information Statement.
Both America and World House acknowledge that they will participate in the
preparation of the information statement to be sent to the shareholders of the
Surviving Corporation relating to the disclosure of the Merger.
Section 5.3 Stockholder Approval of America.
America acknowledges and represents that the execution of this Agreement by
Xxxx Xxxx as the sole shareholder of America, shall constitute all necessary
shareholder approval of the transaction contemplated hereby as is necessary
under Delaware law. Xxxx Xxxx further acknowledges and represents that the
shares of the Surviving Corporation he or his assigns may acquire as a result of
the Merger contemplated herein are being acquired for investment purposes only
and not with a view toward their redistribution or reoffering. All stock
certificates representing Shares of the Surviving Corporation issued to the
shareholders of America shall be endorsed with the following restrictive legend:
The shares represented by this certificate have not been registered under
the Securities Act of 1933. The shares have been acquired for investment and may
not be offered, sold, or otherwise transferred in the absence of an effective
registration statement for the shares under the Securities Act of 1933, or a
prior opinion of counsel satisfactory to the issuer, that registration is not
required under the Act.
Section 5.4. Stockholder Approval of World House.
World House shall obtain approval of the Merger by consent of a majority of
shareholders in interest without a shareholder meeting as provided by Nevada
law.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF WORLD HOUSE AND AMERICA
Section 6.1. General Conditions.
The obligations of the parties hereto to effect the Merger shall be subject
to the following conditions:
(a) No Governmental Proceedings. No governmental action or proceeding
shall have been instituted or be threatened at the Closing Date by or before a
court or other governmental body, agency or authority to restrain or prohibit
the transactions contemplated by this Agreement.
10
(b) No Litigation. There shall be no litigation pending at the Closing
Date challenging the authority of either America or World House or the officers
or directors of either to enter into this Agreement or seeking to restrain or
prohibit the transactions contemplated hereby, which the Board of Directors of
either America or World House shall reasonably believe to present a substantial
risk either of restraining or prohibiting such transactions or of resulting in
the award of material damages or other relief.
(c) Statutory Requirements and Approvals. All statutory requirements
for the valid consummation by America and World House of the transactions
contemplated by this Agreement and the Plan shall have been fulfilled; no
approvals of the transactions contemplated by this Agreement shall be required
from any federal or state governmental agency or authorities.
Section 6.2. Conditions of Obligation of World House.
The obligation of World House to effect the Merger shall be subject to the
following conditions:
(a) Representations and Warranties of America to be True. The
representations and warranties of America herein contained shall be true in all
material respects at the Closing Date with the same effect as though made at
such time, except to the extent waived hereunder or affected by the transactions
contemplated herein; America shall have performed all obligations and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by it at or prior to the Closing Date; and America shall have
delivered to World House a certificate of America in form and substance
satisfactory to World House, dated the Closing Date and signed by its President
or Vice President to all such effects.
(b) Certificate of Xxxx Xxxx. World House shall have received a
certificate dated the Closing Date and signed by Xxxx Xxxx to all such effects
and to the effect that the statements contained in the America certificate
described above and in any other written documents delivered by or on behalf of
America pursuant to the provisions of this Agreement constitute representations
and warranties of America under this Agreement to the same extent as if herein
set forth in full.
(c) Auditors Letters. Xxxx X. Xxxxx Xx. shall have delivered to World
House a letter dated the date of the Form 8-K report to be filed by World House
in connection with the Merger and the Closing Date, each to the effect that: (i)
he is an independent accountant within the meaning of the Securities Act of 1933
and the applicable published rules and regulations thereunder; (ii) in his
opinion, the financial statements of America examined by him and included in the
Form 8-K filed by World House in connection with the Merger comply as to form
11
and content with the applicable accounting requirements of Regulation SX
promulgated under the Securities Act of 1933; and (iii) on the basis of
procedures (but not an examination in accordance with generally accepted
auditing standards) consisting of:
(1) reading the minutes of meetings of the Board of Directors of
America since May 31, 1999 as set forth in the minute books
through a specified date not more than five business days prior
to the delivery of such letter;
(2) reading the unaudited financial statements of America for the
period from May 31, 1999 to the date not more than five business
days prior to the delivery of such letter;
(3) making inquiries of certain officials of America who have
responsibility for financial and accounting matters regarding the
specific items for which representations are requested below;
nothing has come to his attention as a result of the foregoing procedures that
cause him to believe that:
(1) at the date of the latest available interim financial statements
there was any change in the capital stock or long-term debt of
America or any decreases in net current assets or net assets as
compared with amounts shown in the latest balance sheet included
in the Form 8-K report of World House or
(2) for the period from the date of the latest financial statements
included in the Form 8-K report of World House to the date of the
latest available interim financial statements there were any
decreases, as compared with the corresponding period in the
preceding year, in net revenues or in the total or per share
amounts of net income, except in all instances for such changes
or decreases with the Form 8-K report discloses have occurred or
may occur, or he shall state any specific changes or decreases.
and (iv) it contains such other information as reasonably requested by World
House.
(d) Exercise of Dissenter's Rights. Holders of no more than one
percent of the issued and outstanding shares of America shall have given notice
of their intention to receive payment in cash pursuant to their dissenter's
rights. In the event that more than one percent of the issued and outstanding
shares give such notice, World House may waive the condition and proceed with
the Merger.
12
Section 6.3. Conditions of Obligation of America.
The obligations of America to effect the Merger shall be subject to the
following conditions:
(a) Representations and Warranties of World House to be True. The
representations and warranties of World House herein contained shall be true in
all material respects at the Closing Date with the same effect as though made at
such time, except to the extent waived hereunder or affected by the transactions
contemplated herein; World House shall have performed all obligations and
complied with all covenants and conditions required by this Agreement to be
performed or complied with by it prior to the Closing Date; and World House
shall have delivered to America a certificate of World House in form and
substance satisfactory to America, dated the Closing Date and signed by its
President and its principal financial officer, to all such effects.
(b) Exercise of Dissenter's Rights. Holders of no more than ten
percent of the issued and outstanding shares of World House shall have given
notice of their intention to receive payment in cash pursuant to their
dissenter's rights. In the event that more than ten percent of the issued and
outstanding shares give such notice, America may waive the condition and proceed
with the Merger.
(c) Subscription for Surviving Corporation Shares. By the Date of
Closing, the Surviving Corporation shall have received subscriptions from
investors to purchase 300,000 Surviving Corporation Shares for a total
consideration of Five Hundred Thousand Dollars ($500,000) and shall have also
received from investors subscriptions to purchase (i) 125,000 Surviving
Corporation Shares at a purchase price of $2.00 within 90 days of the Effective
Date and (ii) 125,000 Surviving Corporation Shares at a purchase price of $2.00
per share within 180 days of the Effective Date.
(d) Songs For The Planet, Inc., a wholly owned subsidiary of World
House, shall have been purchased by Xxxxxxxxx Xxxxxx for Ten Dollars and other
good and valuable consideration and all debt owed by Songs For The Planet, Inc.
to World House shall have been forgiven on the Date of Closing.
ARTICLE VII
INDEMNIFICATION
Section 7.1. Continuation of Representations and Warranties.
World House and America agree that the representations, warranties and
covenants of World House and America contained herein or in any instrument or
certificate delivered hereunder shall survive the Effective Date of the Merger,
regardless of any investigation or inquiry by or on behalf of World House and
America.
13
Section 7.2. Indemnification by America.
America agrees to indemnify and hold harmless World House and each person,
if any, who controls World House within the meaning of Section 15 of the 1933
Act against any and all losses, liabilities, claims, damages and expenses
(including interest, expenses of litigation and attorney's fees) arising out of
or as a result of any inaccuracy or breach of any of the representations,
warranties and covenants of America contained in this Agreement and contained in
any instrument, schedule or certificate delivered to World House pursuant to
this Agreement, or the defense or settlement of any claim asserted against World
House challenging any such representation, warranty and covenant, or the failure
or default of America to perform or observe any covenant or condition under this
Agreement.
Section 7.3. Indemnification by World House.
World House agrees to indemnify and hold harmless America and each person,
if any, who controls America against any and all losses, liabilities, claims,
damages and expenses (including interest, expenses of litigation and attorneys'
fees) arising out of or as a result of any inaccuracy or breach of any of the
representations, warranties and covenants of World House contained in this
Agreement and contained in any instrument or certificate, delivered to America
pursuant to this Agreement, or the defense or settlement of any claim asserted
against America challenging any such representation, warranty and covenant, or
the failure or default of World House to perform or observe any covenant or
condition under this Agreement.
Section 7.4. Notice.
Each indemnified party shall give prompt notice to each indemnifying party
of any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve it
from any liability which it may have otherwise than on account of this
Agreement. An indemnifying party may participate at its own expense in the
defense of such action. In no event shall the indemnifying parties be liable for
the fees and expenses of more than one counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
14
ARTICLE VIII
MODIFICATION, WAIVERS AND ABANDONMENT
Section 8.1. Modification.
America and World House may, by mutual consent of the respective Board of
Directors, amend, modify or supplement this Agreement in such manner as may be
mutually agreed upon in a writing executed by America and World House at any
time before or after action thereon by the stockholders of America and World
House; provided, however, that no such amendment, modification or supplement
shall affect the rights of the stockholders of America or World House in a
manner which is materially adverse to such stockholders in the judgment of the
Board of Directors of America and World House, respectively.
Section 8.2. Waivers.
Each of America and World House may, pursuant to action by its respective
Board of Directors, by an instrument in writing, extend the time for or waive
the performance of any of the obligations of the other or waive compliance by
the other with any of the covenants or conditions contained herein; provided,
however, that no such waiver or extension shall affect the rights of the
stockholders of World House or America in a manner which would be materially
adverse to such stockholders.
Section 8.3. Abandonment.
The Merger may be abandoned before the Closing Date of the Merger without
liability on the part of any party hereto exercising such right of abandonment
or restriction on the future activities of either party hereto:
(a) Mutual Consent. By the mutual consent of the Boards of Directors
of World House and America evidenced by a writing executed by World House and
America or;
(b) Lapse of Time. By the Board of Directors of World House or America
if the Effective Date has not occurred on or prior to August 31, 1999; provided,
however, that such date shall be extended for up to twenty-five (25) days in the
event an order restraining or prohibiting the Merger has been issued by any
public authority or court.
The power of abandonment provided for by this Section 8.3 may be
exercised by World House or America only by their respective Boards of Directors
and will be effective only after written notice thereof, signed on behalf of the
party for which it is given by its Chairman of the Board or President, shall
have been given to the other. If the Merger shall be abandoned, no articles of
merger or certificates relating to the Merger shall be filed by the officers of
any such party in the States of Nevada and Delaware. Abandonment shall not
effect any rights theretofore accruing hereunder.
15
ARTICLE IX
ADDITIONAL MATTERS
Section 9.1. Management.
The parties agree that the Surviving Corporation shall continue to have the
same management after the contemplated Merger that America had prior to the
Merger.
Section 9.2. Closing.
The Closing of the Merger contemplated by this Agreement shall take place
at such time and place as may be convenient to all the parties but in no event
later than August 31, 1999. At the Closing America and World House shall deliver
and exchange the certificates specified in Sections 6.2(a) and 6.3(a) of this
Agreement. In addition, World House shall deliver to the Surviving Corporation
the cash and/or subscriptions for the Surviving Corporation Shares specified in
Section 6.3(c).
Section 9.3. Notices.
All notices, requests, demands and other communications which are required
of permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered personally or when mailed by registered or certified mail,
postage pre-paid, as follows:
If to World House to:
c/o Xxxxx X. Xxxx
00000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
If to America to:
c/o Xxxx Xxxx
0000 X. Xx. Xxxxxx Xxxx, Xxxxx X
Xx. Xxxxxx, Xxxxxxxxx 00000
16
Section 9.4. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Nevada.
Section 9.5. Entire Agreement.
This Agreement supersedes any and all oral or written agreements heretofore
made relating to the subject matter hereof and constitutes the entire agreement
of the parties relation to the subject matter hereof.
Section 9.6. No Implied Rights or Remedies.
Except as otherwise expressly provided herein, nothing herein expressed or
implied is intended or shall be construed to confer upon or to give any person,
firm or corporation, other than World House and America and their stockholders,
any rights or remedies under or by reason of this Agreement.
Section 9.7. Headings.
The headings in this Agreement are inserted for convenience of reference
only and shall not be part of, or control or affect the meaning of, this
Agreement.
Section 9.8. Counterparts.
This Agreement may be executed in several counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed on its behalf and attested by its officers there unto duly
authorized, all as of the day and year first above written.
World House Entertainment, Inc.,
a Nevada corporation
By: /s/Xxxxxxxxx Xxx Xxxxxx
---------------------------
Xxxxxxxxx Xxx Xxxxxx
President
800 America, Inc.,
a Delaware corporation
By: /s/Xxxx Xxxx
----------------
Xxxx Xxxx
President
17
