AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made
this 26th day of January, 2000, among XxxxxXxxxx.xxx, Inc., a Utah corporation
("CraftClick"); xxxxxxxxxxxxxxx.xxx, Inc., a Wisconsin corporation
("Craftnet"); and all of the stockholders of Craftnet as listed on Exhibit A
hereto and who execute and deliver a copy of the Agreement (the "Craftnet
Stockholders").
W I T N E S S E T H:
RECITALS
WHEREAS, the respective Boards of Directors of CraftClick and
Craftnet have adopted resolutions pursuant to which CraftClick shall acquire
and the Craftnet Stockholders shall exchange 100% of the outstanding common
stock of Craftnet; and
WHEREAS, the sole consideration for 100% interest in Craftnet shall
be the exchange of $0.001 par value common stock of CraftClick (which shares
are all "restricted securities" as defined in Rule 144 of the Securities and
Exchange Commission) as outlined in Exhibit A; and
WHEREAS, the Craftnet Stockholders shall acquire in exchange the
"restricted securities" of CraftClick in a reorganization, and to the extent
applicable or available, within the meaning of Sections 368(a)(1)(B), 351 or
other available sections, laws or rules and regulations of the Internal
Revenue Code of 1986, as amended;
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 Craftnet Stockholders agree to
transfer to CraftClick at the closing (the "Closing") 100% of the outstanding
securities of Craftnet, listed in Exhibit A, which is attached hereto and
incorporated herein by reference (the "Craftnet Shares"), in exchange for
750,000 shares of common stock of CraftClick, also as outlined in Exhibit A.
1.2 Delivery of Certificates by Craftnet Stockholders. The
transfer of the Craftnet Shares by the Craftnet Stockholders shall be effected
by the delivery to CraftClick at the Closing of stock certificate or
certificates representing the transferred shares duly endorsed in blank or
accompanied by stock powers executed in blank with all signatures witnessed or
guaranteed to the satisfaction of CraftClick and with all necessary transfer
taxes and other revenue stamps affixed and acquired at the Craftnet
Stockholders' expense.
1.3 Further Assurances. At the Closing and from time to time
thereafter, the Craftnet Stockholders shall execute such additional
instruments and take such other action as CraftClick may request in order to
exchange and transfer clear title and ownership in the Craftnet Shares to
CraftClick.
1.4 Additional Assets to be Conveyed to and/or Included in the
Assets of Craftnet on Closing. In addition to the assets presently evidenced
in the financial statements of Craftnet, Craftnet and the Craftnet
Stockholders shall convey and/or assign to Craftnet the web site
xxx.Xxxxxxxxxxxxxxx.xxx and all related assets, all intellectual property
related to the this web site and/or the present or contemplated business
operations of Craftnet, including, but not limited to its registered members
and mailing lists, all domain names registered to its business and/or which
relate in any way to its business and the entire content of such web site.
The execution and delivery by Craftnet and the Craftnet Stockholders of this
Agreement shall be deemed to be an assignment and conveyance of such
additional assets, free and clear of any liens or encumbrances.
1.5 Covenant Not to Compete and Use of Confidential
Information. By the execution and delivery of this Agreement, the Craftnet
Stockholders covenant and agree not to compete with CraftClick in any manner
whatsoever relating to the past, present or known proposed business of
Craftnet for a period of two years from the date hereof without the express
written permission of CraftClick; and, the Craftnet Stockholders shall not
divulge, use or otherwise deal with or utilize any of the property, assets or
business of Craftnet, including the assets outlined in Section 1.4 above,
without qualification, without the express written permission of CraftClick.
1.6 Waiver of Buy-Sell Agreement Regarding Craftnet. Craftnet
and the Craftnet Stockholders agree that the terms and provisions of that
certain Buy-Sell Agreement by, between and among them, which is dated June 19,
1998, and as amended, shall not be applicable to this Agreement, and
accordingly, each hereby waives such terms and conditions in their entirety.
1.7 Indemnification and Hold Harmless of Associated Bank Debt.
The Craftnet Stockholders agree to and do hereby, by the execution and
delivery of this Agreement, assume, indemnify and hold CraftClick harmless
from and against any and all principal and interest due and owing by each or
any of them or Craftnet to the Associated Bank, in the approximate amount of
$14,635, as reflected in the financial statements of Craftnet attached hereto
and referred to in Section 4.4 hereof.
1.8 Tax Free Exchange. This Agreement shall, to the extent
applicable or available, be made within the meaning of Sections 368(a)(1)(B),
351 or other available sections, laws or rules and regulations of the Internal
Revenue Code of 1986, as amended; however, there is no assurance that the
exchange contemplated by this Agreement will be "tax free," and neither
CraftClick nor its attorneys or agents have made any representations to the
contrary.
1.9 Closing. The Agreement will be deemed to be completed on
receipt of the signatures of the Craftnet Stockholders owning not less than
95% of the outstanding securities of Craftnet, and on acceptance thereof by
CraftClick, as evidence by its execution and delivery of the Agreement by its
President, or other duly authorized officer.
Section 2
Closing
The Closing contemplated by Section 1 shall be held at the offices
of Xxxxxxx X. Xxxxxxxxxx, Esq., Suite 205 Hermes Building, 000 Xxxx 000 Xxxxx,
Xxxx Xxxx Xxxx, Xxxx 00000, on or before ten days following the execution and
delivery of this Agreement, unless another place or time is agreed upon in
writing by the parties. The Closing may be accomplished by wire, express mail
or other courier service, conference telephone communications or as otherwise
agreed by the respective parties or their duly authorized representatives.
Section 3
Representations and Warranties of CraftClick
CraftClick represents and warrants to, and covenants with, the
Craftnet Stockholders and Craftnet as follows:
3.1 Corporate Status. CraftClick 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. CraftClick is a
publicly held company, having previously and lawfully offered and sold a
portion of its securities in accordance with applicable federal and state
securities laws, rules and regulations.
3.2 Capitalization. The current pre-Agreement authorized
capital stock of CraftClick consists of 300,000,000 shares of $0.001 par value
common voting stock, of which approximately 13,252,945 shares are issued and
outstanding, all fully paid and non-assessable; and 5,000,000 shares of $0.001
par value preferred stock, 100,000 shares of which have been designated as
Series A Convertible Preferred Stock, redeemable and convertible into 10
shares of common stock, and which are the only shares of CraftClick preferred
stock which are issued and outstanding. There are various outstanding
options, warrants or calls pursuant to which CraftClick is obligated to issue
additional shares of its authorized and unissued common stock; and there are
no options, warrants or calls to purchase any authorized but unissued shares
of preferred stock.
3.3 Financial Statements. The financial statements of
CraftClick furnished to the Craftnet Stockholders and Craftnet, consisting of
audited financial statements for the years ended March 31, 1999 and 1998, and
the period ended September 30, 1999, attached hereto as Exhibit B and
incorporated herein by reference, are correct and fairly present the financial
condition of CraftClick 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. CraftClick 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 CraftClick which, in the
aggregate, have been materially adverse; (2) damages, destruction or losses of
or to property of CraftClick, payments of any dividend or other distribution
in respect of any class of stock of CraftClick, 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 its employees.
3.6 Title to Property. CraftClick has good and marketable
title to all properties and assets, real and personal, reflected in its
balance sheets, and the properties and assets of CraftClick 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 CraftClick, threatened, against or relating to
CraftClick, 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 CraftClick is party to any material legal proceeding which could have an
adverse effect on CraftClick (financial or otherwise), and none is party to
any action or proceeding wherein any has an interest adverse to CraftClick.
3.8 Books and Records. From the date of this Agreement to the
Closing, CraftClick will (1) give to the Craftnet Stockholders and Craftnet or
their respective representatives full access during normal business hours to
all of CraftClick's offices, books, records, contracts and other corporate
documents and properties so that the Craftnet Stockholders and Craftnet or
their respective representatives may inspect and audit them; and (2) furnish
such information concerning the properties and affairs of CraftClick as the
Craftnet Stockholders and Craftnet or their respective representatives may
reasonably request.
3.9 Tax Returns. CraftClick 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), CraftClick and its representatives will keep
confidential any information which they obtain from the Craftnet Stockholders
or from Craftnet concerning the properties, assets and business of Craftnet.
If the transactions contemplated by this Agreement are not consummated by
January 31, 2000, CraftClick will return to Craftnet all written matter with
respect to Craftnet obtained by CraftClick in connection with the negotiation
or consummation of this Agreement.
3.11 Corporate Authority. CraftClick has full corporate power
and authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to the Craftnet Stockholders and Craftnet or their
respective representatives at the Closing a certified copy of resolutions of
its Board of Directors authorizing execution of this Agreement by CraftClick's
officers and performance thereunder, and that the directors adopting and
delivering such resolutions are the duly elected and incumbent directors of
CraftClick.
3.12 Due Authorization. Execution of this Agreement and
performance by CraftClick hereunder have been duly authorized by all requisite
corporate action on the part of CraftClick, and this Agreement constitutes a
valid and binding obligation of CraftClick and performance hereunder will not
violate any provision of the Articles of Incorporation, Bylaws, agreements,
mortgages or other commitments of CraftClick.
3.13 Environmental Matters. CraftClick 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 CraftClick or
CraftClick' predecessors. In addition, to the best knowledge of CraftClick,
there are no substances or conditions which may support a claim or cause of
action against CraftClick or any of CraftClick' current or former officers,
directors, agents or employees, whether by a governmental agency or body,
private party or individual, under any Hazardous Materials Regulations.
"Hazardous Materials" means any oil or petrochemical products, PCB's,
asbestos, urea formaldehyde, flammable explosives, radioactive materials,
solid or hazardous wastes, chemicals, toxic substances or related materials,
including, without limitation, any substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," or "toxic substances" under any applicable federal or state laws
or regulations. "Hazardous Materials Regulations" means any regulations
governing the use, generation, handling, storage, treatment, disposal or
release of hazardous materials, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act and the Federal Water Pollution Control
Act.
3.14 Access to Information Regarding Craftnet. CraftClick
acknowledges that it has been delivered copies of what has been represented to
be documentation containing all material information respecting Craftnet and
Craftnet's present and contemplated business operations, potential
acquisitions, management and other factors; that it has had a reasonable
opportunity to review such documentation and discuss it, to the extent
desired, with its legal counsel, directors and executive officers; that it has
had, to the extent desired, the opportunity to ask questions of and receive
responses from the directors and executive officers of Craftnet, and with the
legal and accounting firms of Craftnet, with respect to such documentation;
and that to the extent requested, all questions raised have been answered to
CraftClick's complete satisfaction.
Section 4
Representations, Warranties and Covenants of Craftnet
and the Craftnet Stockholders
Craftnet and the Craftnet Stockholders represent and warrant to,
and covenant with, CraftClick as follows:
4.1 Ownership. The Craftnet Stockholders respectively own the
Craftnet Shares, free and clear of any liens or encumbrances of any type or
nature whatsoever, and each has full right, power and authority to convey the
Craftnet Shares owned without qualification.
4.2 Corporate Status. Craftnet is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Wisconsin and is licensed or qualified as a foreign corporation in all
states or foreign countries and provinces in which the nature of Craftnet's
business or the character or ownership of Craftnet properties makes such
licensing or qualification necessary.
4.3 Capitalization. The authorized capital stock of Craftnet
consists of 9,000 shares of common stock, no par value per share, of which
1,250 shares are issued and outstanding, all fully paid and non-assessable.
Except as otherwise provided herein, there are no outstanding options,
warrants or calls pursuant to which any person has the right to purchase any
authorized and unissued common stock or other securities of Craftnet.
4.4 Financial Statements. The financial statements of
Craftnet furnished to CraftClick, consisting of unaudited balance sheets for
the period ended January 25, 2000, and the year ended December 31, 1999,
attached hereto as Exhibit D and incorporated herein by reference, are correct
and fairly present the financial condition of Craftnet 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. Craftnet 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 attached hereto and incorporated herein
by reference.
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 Craftnet, in the
aggregate, have been materially adverse; (2) damages, destruction or loss of
or to the property of Craftnet, payment of any dividend or other distribution
in respect of the capital stock of Craftnet, 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. Craftnet 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 Craftnet are
subject to no mortgage, pledge, lien or encumbrance, except as reflected in
the balance sheet or in Exhibit E, with respect to which no default exists.
4.8 Litigation. There is no litigation or proceeding pending,
or to the knowledge of Craftnet, threatened, against or relating to Craftnet
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 Craftnet
is party to any material legal proceeding which could have an adverse effect
on Craftnet (financial or otherwise), and none is party to any action or
proceeding wherein any has an interest adverse to Craftnet.
4.9 Books and Records. From the date of this Agreement to the
Closing, the Craftnet Stockholders will cause Craftnet to (1) give to
CraftClick 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 CraftClick may inspect and audit them; and (2) furnish
such information concerning the properties and affairs of Craftnet as
CraftClick may reasonably request.
4.10 Tax Returns. Craftnet 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), Craftnet, the Craftnet Stockholders and their
representatives will keep confidential any information which they obtain from
CraftClick concerning its properties, assets and business. If the
transactions contemplated by this Agreement are not consummated by January 31,
2000, Craftnet and the Craftnet Stockholders will return to CraftClick all
written matter with respect to CraftClick obtained by them in connection with
the negotiation or consummation of this Agreement.
4.12 Investment Intent. The Craftnet Stockholders are
acquiring the shares to be exchanged and delivered to them under this
Agreement for investment and not with a view to the sale or distribution
thereof, and the Craftnet Stockholders have no commitment or present intention
to sell or otherwise dispose of the CraftClick shares. The Craftnet
Stockholders shall execute and deliver to CraftClick 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 CraftClick being received under the Agreement in exchange for the
Craftnet Shares; receipt of certain material information regarding CraftClick;
and whereby each is compromising and/or waiving any claims each has or may
have against Craftnet under any federal or state securities laws, rules or
regulations or otherwise, by reason of the purchase of any securities of
Craftnet by each or any of them prior to the Closing of the Agreement, or for
any other reason whatsoever.
4.13 Corporate Authority. Craftnet has full corporate power
and authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to CraftClick or its representative at the Closing
a certified copy of resolutions of its Board of Directors authorizing
execution of this Agreement by its officers and performance thereunder.
4.14 Due Authorization. Execution of this Agreement and
performance by Craftnet hereunder have been duly authorized by all requisite
corporate action on the part of Craftnet, and this Agreement constitutes a
valid and binding obligation of Craftnet and performance hereunder will not
violate any provision of the Articles of Incorporation, Bylaws, agreements,
mortgages or other commitments of Craftnet.
4.15 Environmental Matters. Craftnet and the Craftnet
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 Craftnet or its predecessors. In addition, to the best
knowledge of Craftnet, there are no substances or conditions which may support
a claim or cause of action against Craftnet 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 CraftClick. Craftnet and the
Craftnet Stockholders acknowledge that they have been delivered copies of what
has been represented to be documentation containing all material information
respecting CraftClick and its present and contemplated business operations,
potential acquisitions, management and other factors; that they have had a
reasonable opportunity to review such documentation and discuss it, to the
extent desired, with their legal counsel, directors and executive officers;
that they have had, to the extent desired, the opportunity to ask questions of
and receive responses from the directors and executive officers of CraftClick,
and with the legal and accounting firms of CraftClick, 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 Craftnet
and the Craftnet Stockholders
All obligations of Craftnet and the Craftnet 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 CraftClick 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. CraftClick shall have performed and
complied with all of the terms and conditions required by this Agreement to be
performed or complied with by it before the Closing.
5.3 Officers' Certificate. Craftnet and the Craftnet
Stockholders shall have been furnished with a certificate signed by the
President of CraftClick, in such capacity, attached hereto as Exhibit G and
incorporated herein by reference, dated as of the Closing, certifying (1) that
all representations and warranties of CraftClick contained herein are true and
correct; and (2) that since the date of the financial statements (Exhibit B
hereto), there has been no material adverse change in the financial condition,
business or properties of CraftClick, taken as a whole.
Section 6
Conditions Precedent to Obligations of CraftClick
All obligations of CraftClick under this Agreement are subject, at
CraftClick's option, to the fulfillment, before or at the Closing, of each of
the following conditions:
6.1 Representations and Warranties True at Closing. The
representations and warranties of Craftnet and the Craftnet 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. Craftnet and the Craftnet Stockholders
shall have performed and complied with all of the terms and conditions
required by this Agreement to be performed or complied with by them before the
Closing.
6.3 Officers' Certificate. CraftClick shall have been
furnished with a certificate signed by the President of Craftnet, in such
capacity, attached hereto as Exhibit H and incorporated herein by reference,
dated as of the Closing, certifying (1) that all representations and
warranties of Craftnet and the Craftnet 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 Craftnet, taken as a whole.
6.4 Books and Records. The Craftnet Stockholders or the Board
of Directors of Craftnet shall have caused Craftnet to make available all
books and records of Craftnet.
6.5 Stockholder's Consent. Craftnet Stockholders owning not
less than 95% of the outstanding securities of Craftnet shall have executed
and delivered the Agreement.
Section 7
Termination
Prior to Closing, this Agreement may be terminated (1) by mutual
consent in writing; (2) by either the directors of CraftClick or Craftnet and
the Craftnet 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 CraftClick or Craftnet and the Craftnet 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 the obligations, agreements or conditions hereunder may be
waived in writing by the party to whom such compliance is owed.
8.3 Brokers. Each party represents to the other parties
hereunder that no broker or finder has acted for he or it in connection with
this Agreement, and agrees to indemnify and hold harmless the other parties
against any fee, loss or expense arising out of claims by brokers or finders
employed or alleged to have been employed by he or it.
8.4 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given if delivered in
person or sent by prepaid first-class registered or certified mail, return
receipt requested, as follows:
If to CraftClick: 000 Xxxxxx Xxxx.
Xxxxx Xxx Xxx, Xxxxxxxxxx 00000
With a copy to: Xxxxxxx X. Xxxxxxxxxx, Esq.
455 East 000 Xxxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
If to Craftnet: 000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
If to the Craftnet
Stockholders: To the address listed on
Exhibit A
8.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties and supersedes and cancels any other agreement,
representation or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
8.6 Headings. The section and subsection headings in this
Agreement are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
8.7 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of 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.
8.9 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
8.10 Default. In the event of any default hereunder, the
prevailing party in any action to enforce the terms and provisions hereof
shall be entitled to recover reasonable attorney's fees and related costs, and
any action to arising under this Agreement shall be brought in the federal or
state courts of the county and state in which CraftClick maintains its
principal place of business, unless CraftClick otherwise agrees in writing by
CraftClick.
IN WITNESS WHEREOF, the parties have executed this Agreement and
Plan of Reorganization effective the day and year first above written.
CRAFT XXXXX.XXX, INC.
Date: 1/26/00. By/s/Xxxxxx Xxxx
Xxxxxx Xxxx, President
XXXXXXXXXXXXXXX.XXX, INC.
Date: 1/26/00. By/s/Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, President
XXXXXXXXXXXXXXX.XXX, INC. STOCKHOLDERS
Date: 1/26/00 /s/Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Date: 1/26/00 /s/Xxxxxxxxxxx X. Xxxxxx
Xxxxxxxxxxx X. Xxxxxx
Date: 1/26/00 /s/Xxxxx X. Xxxx
Xxxxx X. Xxxx
Date: 1/26/00 /s/Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Dated: 1/26/00 /s/Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
EXHIBIT A
Number of Shares of
Number of Shares CraftClick
Owned of to be
Name Craftnet Received in Exchange
Xxxx X. Xxxxxxx 280 168,750
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Xxxxxxxxxxx X. Xxxxxx 390 232,500
0000 X. 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxx X. Xxxx 50 30,000
0000 X. Xxxxxxxx Xxxx
Xxxx Xxxxx, XX 00000
Xxxxxxx X. Xxxxxxxx 250 150,000
0000 X. 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxxxx X. Xxxxx 280 168,750
000 X. 000xx Xxxxxx
Xxxxxxxxx, XX 00000
1,250 750,000
EXHIBIT B
XXXXXXXXXX.XXX, INC.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
MARCH 31, 1999 and 1998
AND
SEPTEMBER 30, 1999
These reports and filings are available upon request or online at
xxxx://xxx.xxx.xxx
EXHIBIT C
None.
EXHIBIT D
XXXXXXXXXXXXXXX.XXX, INC.
FOR THE PERIOD ENDED
JANUARY 25, 2000
AND THE YEAR ENDED
DECEMBER 31, 1999
XXXXXXXXXXXXXXX.XXX
Income Statement
01/01/00 to 01/31/00
Period % YTD %
Income
SALES - INTERNET $3,503.40 56.1 $3,503.40 56.1
SALES - OTHER 100.00 1.6 100.00 1.6
SALES-SPONSORSHIPS 2,500.00 40.0 2,500.00 40.0
SALES-LINKS 900.00 14.4 900.00 14.4
SALES DISCOUNTS (18.00) -0.3 (18.00) -0.3
SHIPPING CHARGES 13.35 0.2 13.35 0.2
SHIPPING CHARGES PAID (751.50) -12.0 (751.50) -12.0
6,247.25 100.0 6,247.25 100.0
Cost of Sales
PRODUCT MERCHANDISE 1,641.88 26.3 1,641.88 26.3
OUTSIDE SERVICES (2,500.00) -40.0 (2,500.00) -40.0
(858.12) -13.7 (858.12) -13.7
Gross Margin 7,105.37 113.7 7,105.37 113.7
Operating Expenses
SALES SALARIES 4,771.38 76.4 4,771.38 76.4
SALARIES-OFFICE & CLERICAL 1,914.63 30.6 1,914.63 30.6
INSURANCE-GROUP HEALTH 524.25 8.4 524.25 8.4
INSURANCE-GROUP DENTAL 34.09 0.5 34.09 0.5
FICA TAX EXPENSE 269.54 4.3 269.54 4.3
FEDERAL UNEMPLOYMENT TAX EXP 34.77 0.6 34.77 0.6
STATE UNEMPLOYMENT TAX EXPENSE 132.60 2.1 132.60 2.1
MEDICARE EXPENSE 63.03 1.0 63.03 1.0
BUSINESS TRAVEL 183.38 2.9 183.38 2.9
BUSINESS MEALS 72.00 1.2 72.00 1.2
PARKING/TOLLS 140.00 2.2 140.00 2.2
POSTAGE 11.89 0.2 11.89 0.2
EXPRESS MAIL 40.50 0.6 40.50 0.6
LEGAL FEES 381.42 6.1 381.42 6.1
OFFICE SUPPLIES 95.03 1.5 95.03 1.5
RENTAL - BUILDING 700.00 11.2 700.00 11.2
TELEPHONE - AMERITECH 215.91 3.5 215.91 3.5
TELEPHONE - FRONTIER 129.07 2.1 129.07 2.1
9,713.49 155.5 9,713.49 155.5
Other Expenses
FEDERAL INCOME TAX 129.32 2.1 129.32 2.1
129.32 2.1 129.32 2.1
Net income (loss)
$ (2,737.44) -43.8 $(2,737.44) -43.8
XXXXXXXXXXXXXXX.XXX
Balance Sheet
as of 01/26/00
Assets
Current Assets
CASH - ASSOCIATED BANK $ 1,669.57
XXXXX CASH 250.00
ACCOUNTS RECEIVABLE-TRADE 14,615.72
PREPAID INSURANCE 752.00
17,287.29
Fixed Assets
FURNITURE & FIXTURES 242.86
COMPUTER EQUIPMENT 1,564.35
COMPUTER SOFTWARE 3,028.64
A/D - FURNITURE & FIXTURES (81.78)
A/D - COMPUTER EQUIPMENT (524.60)
A/D - COMPUTER SOFIWARE (2,041.52)
2,187.95
Total Assets $19,475.24
Liabilities & Equity
Current Liabilities
ACCOUNTS PAYABLE $560.79
ASSOCIATED- CURRENT PORTION 14,265.66
SALARIES PAYABLE 2,612.32
I/C PAYABLE - STARKMEDIA 13,868.50
SALES TAX PAYABLE - MILWAUKEE 13.66
SALES TAX PAYABLE - OTHER 4.19
STATE INCOME TAX PAYABLE (25.00)
31,300.12
Owners'Equity
PAID IN CAPITAL > PAR 27,500.00
RETAINED EARNINGS (AAA) (15,354.47)
DISTRIBUTIONS TO SHAREHOLDERS (2,147.00)
Prior income (19,085.97)
Current income (2,737.44)
(11,824.88)
Total Liabilities & Equity $ 19,475.24
EXHIBIT E
None.
EXHIBIT F
Interwest Transfer Co.
0000 Xxxx Xxxxxx-Xxxxxxxx Xx.
P. O. Xxx 00000
Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxxxxxxx.xxx, Inc.
000 Xxxxxx Xxxx.
Xxxxx Xxx Xxx, Xxxxxxxxxx 00000
Re: Exchange of shares of Xxxxxxxxxxxxxxx.xxx, Inc., a
Wisconsin corporation ("Craftnet"), for shares of
Xxxxxxxxxx.xxx, Inc., a Utah corporation ("Craftclick
or "the Company")
Dear Ladies and Gentlemen:
Pursuant to that certain Agreement and Plan of Reorganization (the
"Agreement") between the undersigned, Craftnet and Craftclick, 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 any and all material documents regarding the Company, including, but
not limited to Articles of Incorporation, Bylaws, minutes of meetings of
directors and stockholders, financial statements and the Company's Annual and
Quarterly and Current Reports filed with the Securities and Exchange
Commission for the past twelve months which can be reviewed in the Xxxxx
Archives at xxx.xxx.xxx. I represent and warrant that no director or officer
of the Company or any associate of either has solicited this exchange; that I
am an "accredited investor" as that term is known under the Rules and
Regulations of the Securities and Exchange Commission; 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 hereby compromise and waive any claims I
have or may have against Craftnet under any federal or state securities laws,
rules or regulations or otherwise, by reason of the purchase of any securities
of Craftnet by me prior to the Closing of the Agreement, or for any other
reason whatsoever.
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, and that I have been encouraged to review the
information and ask any questions I may have concerning the information of any
director or officer of the Company or of the legal and accounting firms for
the Company. I understand that the accounting firm for Craftclick is Xxxxxxx,
XxXxxxxxxx & Assoc., 0000 Xxxxx 000 Xxxx, #000, Xxxx Xxxx Xxxx, Xxxx 00000;
Telephone: (000) 000-0000; and that legal counsel for Craftclick is Xxxxxxx X.
Xxxxxxxxxx, Esq., 000 Xxxx 0xx Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000,
Telephone #000-000-0000.
I also understand that I must bear the economic risk of ownership
of any of the Craftclick shares 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 Craftnet
for use by Craftclick as they are made to induce you to issue me the shares of
Craftclick under the Agreement, and I further represent (of my personal
knowledge or by virtue of my reliance on one or more personal
representatives), and agree as follows, to-wit:
1. That the shares being acquired are being received for
investment purposes and not with a view toward further distribution;
2. That I have a full and complete understanding of the phrase
"for investment purposes and not with a view toward further distribution";
3. That I understand the meaning of "unregistered shares" and
know that they are not freely tradeable;
4. That any stock certificate issued by you to me in connection
with the shares being acquired shall be imprinted with a legend restricting
the sale, assignment, hypothecation or other disposition unless it can be made
in accordance with applicable laws, rules and regulations;
5. I agree that the stock transfer records of your Company
shall reflect that I have requested the Company not to effect any transfer of
any stock certificate representing any of the shares being acquired unless I
shall first have obtained an opinion of legal counsel to the effect that the
shares may be sold in accordance with applicable laws, rules and regulations,
and I understand that any opinion must be from legal counsel satisfactory to
the Company and, regardless of any opinion, I understand that the exemption
covered by any opinion must in fact be applicable to the shares;
6. That I shall not sell, offer to sell, transfer, assign,
hypothecate or make any other disposition of any interest in the shares being
acquired except as may be pursuant to any applicable laws, rules and
regulations;
7. I fully understand that my shares which are being exchanged
for shares of the Company are "risk capital," and I am fully capable of
bearing the economic risks attendant to this investment, without
qualification; and
8. I also understand that without approval of counsel for
Craftclick, all shares of Craftclick to be issued and delivered to me in
exchange for my shares of Craftnet shall be represented by one stock
certificate only and which such stock certificate shall be imprinted with the
following legend or a reasonable facsimile thereof on the front and reverse
sides thereof:
The shares of stock represented by this certificate
have not been registered under the Securities Act of
1933, as amended, and may not be sold or otherwise
transferred unless compliance with the registration
provisions of such Act has been made or unless
availability of an exemption from such registration
provisions has been established, or unless sold
pursuant to Rule 144 under the Act.
Any request for more than one stock certificate must be
accompanied by a letter signed by the requesting stockholder setting forth all
relevant facts relating to the request. Craftclick will attempt to
accommodate any stockholders' request where Craftclick views the request is
made for valid business or personal reasons so long as in the sole discretion
of Craftclick, the granting of the request will not facilitate a "public"
distribution of unregistered shares of common voting stock of Craftclick.
You are requested and instructed to issue a stock certificate as
follows, to-wit:
Xxxxx X. Xxxx and Xxxxx Xxxx JTRS 30,000
(Name(s) and Number of Shares)
0000 Xxxxxxxx Xxxx
(Xxxxxxx)
Xxxx Xxxxx, XX 00000
(City, State and Zip Code)
If joint tenancy with full rights of survivorship is
desired, put the initials JTRS after your names.
Dated this 26th day of January, 2000.
Very truly yours,
/s/Xxxxx X. Xxxx
Xxxx Xxxxxxx and Xxxxxxxxx Xxxxxxx JTRS 168,750
(Name(s) and Number of Shares)
0000 X. 00xx Xxxxxx
(Xxxxxxx)
Xxxxxxxxx, XX 00000
(City, State and Zip Code)
If joint tenancy with full rights of survivorship is
desired, put the initials JTRS after your names.
Dated this 26th day of January, 2000.
Very truly yours,
/s/Xxxx Xxxxxxx
Xxxxxxxxxxx X. Xxxxxx Xxxxxxxx X. Xxxxx JTRS 232,500
(Name(s) and Number of Shares)
0000 X. 00xx Xxxxxx
(Xxxxxxx)
Xxxxxxxxx, XX 00000
(City, State and Zip Code)
If joint tenancy with full rights of survivorship is
desired, put the initials JTRS after your names.
Dated this 26th day of January, 2000.
Very truly yours,
/s/Xxxxxxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxx 150,000
(Name(s) and Number of Shares)
0000 X. 00xx Xxxxxx
(Xxxxxxx)
Xxxxxxxxx, XX 00000
(City, State and Zip Code)
If joint tenancy with full rights of survivorship is
desired, put the initials JTRS after your names.
Dated this 26th day of January, 2000.
Very truly yours,
/s/Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx and Xxxxx X. Xxxxx
(Name(s) and Number of Shares)
000 X. 000xx Xxxxxx
(Xxxxxxx)
Xxxxxxxxx, XX 00000
(City, State and Zip Code)
If joint tenancy with full rights of survivorship is
desired, put the initials JTRS after your names.
Dated this 26th day of January, 2000.
Very truly yours,
/s/Xxxxxxx X. Xxxxx
EXHIBIT G
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Xxxxxxxxxx.xxx, Inc., a Utah
corporation ("Craftclick"), represents and warrants the following as required
by the Agreement and Plan of Reorganization (the "Agreement") between
Craftclick and Xxxxxxxxxxxxxxx.xxx, Inc., a Wisconsin corporation
("Craftnet"), and the stockholders of Craftnet (the "Craftnet Stockholders"):
1. That he is the President of Craftclick and has been
authorized and empowered by its Board of Directors to execute and deliver this
Certificate to Craftnet and the Craftnet Stockholders.
2. Based on his personal knowledge, information, belief and
opinions of counsel for Craftclick regarding the Agreement:
(i) All representations and warranties of Craftclick
contained within the Agreement are true and correct;
(ii) Craftclick 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 Craftclick as set forth in its
financial statements for the periods ended March 31,
1999 and 1998, and September 30, 1999, except as set
forth in Exhibit C to the Agreement.
XXXXXXXXXX.XXX, INC.
By/S/Xxxxxx Xxxx
Xxxxxx Xxxx, President
EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Xxxxxxxxxxxxxxx.xxx, Inc., a
Wisconsin corporation ("Craftnet"), represents and warrants the following as
required by the Agreement and Plan of Reorganization (the "Agreement") between
Craftnet, its stockholders (the "Craftnet Stockholders") and Xxxxxxxxxx.xxx,
Inc., a Utah corporation ("Craftclick"):
1. That he is the President of Craftnet and has been authorized
and empowered by its Board of Directors to execute and deliver this
Certificate to Craftclick.
2. Based on his personal knowledge, information, belief:
(i) All representations and warranties of Craftnet
contained within the Agreement are true and correct;
(ii) Craftnet 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 Craftnet as set forth in its
unaudited balance sheets for the period ended January
25, 2000, and the year ended Decembe 31, 1999, except
as set forth in Exhibit E to the Agreement.
XXXXXXXXXXXXXXX.XXX, INC.
By/S/Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, President
