AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is dated
January 20, 2002, and is by and between Space Launches Financing, Inc., a Nevada
corporation (the "Company") and PolyDerm, Inc., a Delaware corporation
("PolyDerm").
R E C I T A L S
WHEREAS, the shareholders of PolyDerm ("Shareholders") own the shares
of capital stock of PolyDerm as set forth in Schedule 1 attached hereto,
constituting all of the issued and outstanding stock of PolyDerm (the "PolyDerm
Shares");
WHEREAS, the Company is a public company, required to file reports
under Section 13 of the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx");
and
WHEREAS, the Company desires to acquire all of the PolyDerm Shares, and
the Shareholders desire to exchange all of the PolyDerm Shares for shares of
voting common stock of the Company, in a transaction that qualifies under
Section 368(a) (1)(B) of the Internal Revenue Code of 1986, as amended (the
"Code").
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in reliance upon the representations and warranties
hereinafter set forth, the parties agree as follows:
I. EXCHANGE OF THE SHARES AND CONSIDERATION
1.01. Shares Being Exchanged. Effective at the
closing of this Agreement (the "Closing"), and subject to the
terms and conditions of this Agreement the Shareholders shall as-
sign, transfer and deliver to the Company all of the PolyDerm
Shares which they own.
1.02. Consideration. Subject to the terms and conditions of this
Agreement, and in consideration of the assignment and delivery of PolyDerm
Shares to the Company, the Company shall at Closing issue to the Shareholders a
number of shares of voting common stock of the Company, $.00001 par value per
share (the "Company Shares"), equal to the number of shares set forth opposite
the Shareholder's name on Schedule 1 attached hereto, or a total of 24,069,884
Company Shares. After the delivery of the 24,069,884 Company Shares to the
Shareholders the outstanding number of the shares of the Company will be
53,710,853.
1.03. Closing. The Closing of the transaction contemplated by this
Agreement (the "Closing") shall take place at the offices of Hand & Hand, 00000
Xxxxx Xxxx, Xxxxx X, Xxxx Xxxxx, Xxxxxxxxxx 00000, 15 days from the date of this
Agreement.
1.04. Deliveries. Concurrently with the execution and
delivery of this Agreement, the parties are delivering the
following documents:
1.04(a) The items and documents set forth in Sections
1.01 and 1.02.
1.04(b) Pursuant to Section 6.01 hereof, Company shall deliver
to Shareholders resolutions of the Company's Board of Directors,
electing Xxxxxx Xxxxx as director and Preisdent, and the following
persons as officers of the Company:
Xxxxxx Xxxxx, Chief Executive Officer
Xxxxxx Xxxxx, President
Xxx Xxxxx, Secretary
1.04(c) The Company Shares described in Section 1.02.
1.05. Filings. Concurrently with the Closing, the
Company shall file the following documents:
1.05(a) A Current Report on Form 8-K with the U.S. Securities
and Exchange Commission, reporting the transactions set forth in this
Agreement, any change of auditors, or other events required to be
reported in such
report.
1.05(b) A Form 3 report of beneficial ownership with the U.S.
Securities and Exchange Commission with respect to each director,
executive officer or greater than 10% holder of Company Shares, signed
by such director, executive officer or shareholder, as the case may be.
1.05(c) A Schedule 13D with the U.S. Securities and Exchange
Commission for each person who is required to file such form as a
result of obtaining greater than 5% beneficial ownership of the
Company's Common Stock as a result of the transactions contemplated by
this Agreement.
II. REPRESENTATIONS AND WARRANTIES OF POLYDERM
PolyDerm represents and warrants to the Company as follows, as of the
date of this Agreement and as of the Closing:
2.01. Organization.
2.01(a). PolyDerm is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
PolyDerm has the corporate power and authority to carry on its business
as presently conducted; and PolyDerm is qualified to do business in all
jurisdictions
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where the failure to be so qualified would have a material
adverse effect on its business.
2.01(b). The copies of the Articles of Incorporation and all
amendments thereto of PolyDerm as certified by the Secretary of State
of Delaware, and the copy of the Bylaws as certified by the Secretary
of PolyDerm, which have heretofore been delivered to the Company, are
complete and correct copies of such Articles of Incorporation as
amended and in effect on the date hereof. All minutes of meetings and
actions in writing without a meeting of the Board of Directors and
shareholders of PolyDerm are contained in the minute book of PolyDerm
heretofore delivered to the Company for examination, and no minutes or
actions in writing have been included in such minute book since such
delivery to the Company that have not also been delivered to the
Company.
2.02. Capitalization.
2.02(a). The authorized capital stock and the issued and
outstanding shares of PolyDerm is as set forth on Exhibit 2.02(a). All
of the issued and outstanding shares of PolyDerm are duly authorized,
validly issued, fully paid and nonassessable.
2.02(b). Except as set forth in Exhibit 2.02(b) there
are no outstanding options, warrants, or rights to purchase
any securities of PolyDerm.
2.03. Subsidiaries and Investments. PolyDerm does not own
any capital stock or have any interest in any corporation, part-
nership or other form of business organization, except as de-
scribed in Exhibit 2.03 hereto.
2.04. Financial Statements. The unaudited financial statements of
PolyDerm as of and for the two years ended December 31, 2001, including the
unaudited balance sheets as of December 31, 2000 and 2001 and the related
unaudited statements of operations, retained earnings, and cash flows for the
two years then ended, (the "Financial Statements") present fairly the financial
position and results of operations of PolyDerm, on a consistent basis. The
financial records of PolyDerm are of such a character and quality that an
unqualified (except as to going concern) audit of the PolyDerm Financial
Statements may be performed within 75 days of the Closing.
2.05. No Undisclosed Liabilities. Other than as described in Exhibit
2.05 hereto, PolyDerm is not subject to any material liability or obligation of
any nature, whether absolute, accrued, contingent, or otherwise and whether due
or to become due, which is not reflected or reserved against in the Financial
Statements, except those incurred in the normal course of business.
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2.06. Absence of Material Changes. Since December 31, 2001,
except as described in any Exhibit hereto or as required or
permitted under this Agreement, there has not been:
2.06(a). any material change in the condition
(financial or otherwise) of the properties, assets,
liabilities or business of PolyDerm, except changes in the
ordinary course of business which, individually and in the
aggregate, have not been materially adverse;
2.06(b). any redemption, purchase or other acquisition of any
shares of the capital stock of PolyDerm, or any issuance of any shares
of capital stock or the granting, issuance or exercise of any rights,
warrants, options or commitments by PolyDerm relating to their
authorized or issued capital stock; or
2.06(c). any change or amendment to the Articles of
Incorporation of PolyDerm.
2.07. Litigation. Except as set forth in Exhibit 2.07 attached hereto,
there is no litigation, proceeding or investigation pending or threatened
against PolyDerm affecting any of its properties or assets against any officer,
director, or stockholder of PolyDerm that might result, either in any case or in
the aggregate, in any material adverse change in the business, operations,
affairs or condition of PolyDerm or its properties or assets, or that might call
into question the validity of this Agreement, or any action taken or to be taken
pursuant hereto.
2.08. Title To Assets. PolyDerm has good and marketable title to all of
its assets and properties now carried on its books including those reflected in
the balance sheets contained in the Financial Statements, free and clear of all
liens, claims, charges, security interests or other encumbrances, except as
described in Exhibit 2.08 attached hereto or any other Exhibit.
2.09. Real Estate. There is set forth on Exhibit 2.09 attached hereto a
brief description of all real estate (including building and improvements) owned
and held by PolyDerm, together with a legal description of such real estate.
PolyDerm has good and marketable title to such real estate in fee simple and
clear of any encumbrances whatsoever except as shown on Exhibit 2.09 hereto.
2.10. Contracts and Undertakings. Exhibit 2.10 attached hereto contains
a list of all contracts, agreements, leases, licenses, arrangements, commitments
and other undertakings to which PolyDerm is a party or by which it or its
property is bound. Each of said contracts, agreements, leases, licenses,
arrangements, commitments and undertakings is valid, binding and in full force
and effect. PolyDerm is not in material default, or alleged to be in material
default, under any contract, agreement, lease, license, commitment, instrument
or obligation and no other party to
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any contract, agreement, lease, license, commitment, instrument or obligation to
which PolyDerm is a party is in default thereunder nor does there exist any
condition or event which, after notice or lapse of time or both, would
constitute a default by any party to any such contract, agreement, lease,
license, commitment, instrument or obligation.
2.11. Underlying Documents. Copies of all documents
described in any Exhibit attached hereto (or a summary of any such
contract, agreement or commitment, if oral) have been made
available to the Company and are complete and correct and include
all amendments, supplements or modifications thereto.
2.12. Transactions with Affiliates, Directors and Shareholders. Except
as set forth in Exhibit 2.12 hereto, there are and have been no contracts,
agreements, arrangements or other transactions between PolyDerm, and any
officer, director, or stockholder of PolyDerm, or any corporation or other
entity controlled by the Shareholders, a member of the Shareholders' families,
or any affiliate of the Shareholders.
2.13. No Conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a breach of any term or provision of, or constitute a default under,
the Articles of Incorporation or Bylaws of PolyDerm, or any agreement, contract
or instrument to which PolyDerm is a party or by which it or any of its assets
are bound.
2.14. Ownership of Intellectual Property Rights. PolyDerm owns or has
valid right or license to use all patents, patent rights, trade secrets,
trademarks, trademark rights, trade names, trade name rights, copyrights and
other intellectual property rights (collectively referred to as "Intellectual
Property Rights") which are necessary to operate its business as now operated
and as now proposed to be operated. A brief description of such Intellectual
Property Rights is set forth on Exhibit 2.14 attached hereto. Except as set
forth on Exhibit 2.14, PolyDerm does not have any obligation to compensate any
person, firm, corporation or other entity for the use of any such Intellectual
Property Rights, nor has PolyDerm granted to any person, firm, corporation or
other entity any license or other rights to use in any manner, or waived its
rights with respect to any Intellectual Property Rights of PolyDerm.
2.15. Disclosure. To the actual knowledge of PolyDerm, neither this
Agreement, the Financial Statements nor any other agreement, document,
certificate or written or oral statement furnished to the Company by or on
behalf of PolyDerm in connection with the transactions contemplated hereby,
contains any untrue statement of a material fact or when taken as a whole omits
to state a material fact necessary in order to make the statements contained
herein or therein not misleading.
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2.16 Authority. PolyDerm has full power and authority to enter into
this Agreement and to carry out the transactions contemplated herein. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, have been duly authorized and approved by the
Board of Directors of PolyDerm and no other corporate proceedings on the part of
PolyDerm are necessary to authorize this Agreement and the transactions
contemplated hereby.
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to PolyDerm as follows, as
of the date of this Agreement and as of the Closing:
3.01. Organization.
3.01(a). The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada;
has the corporate power and authority to carry on its business as
presently conducted; and is qualified to do business in all
jurisdictions where the failure to be so qualified would have a
material adverse effect on the business of the Company.
3.01(b). The copies of the Articles of Incorporation, of the
Company, as certified by the Secretary of State of Delaware, and the
Bylaws of the Company are complete and correct copies of the Articles
of Incorporation and the Bylaws of the Company as amended and in effect
on the date hereof. All minutes of meetings and actions in writing
without a meeting of the Board of Directors and shareholders of the
Company are contained in the minute book of the Company and no minutes
or actions in writing without a meeting have been included in such
minute book since such delivery to PolyDerm that have not also been
delivered to PolyDerm.
3.02. Capitalization of the Company. The authorized capital stock of
the Company consists of 99,000,000 shares of Common Stock, par value $.00001 per
share, of which 6,017,471 shares are outstanding prior to the stock split
described in Section 6.02, and 1,000,000 shares of preferred stock, of which
1,000 shares of Series A Preferred Stock are outstanding. All outstanding shares
are duly authorized, validly issued, fully paid and non-assessable. Following
the issuance of Company Shares and the forward stock split described in Sections
6.02 and 6.03, the capitalization of the Company shall be as set forth on
Schedule II.
3.03. Subsidiaries and Investments. The Company does not
own any capital stock or have any interest in any corporation,
partnership, or other form of business organization.
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3.04. Authority. The Company has full power and authority to enter into
this Agreement and to carry out the transactions contemplated herein. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, and the issuance of the Company Shares in accordance with
the terms hereof, have been duly authorized and approved by the Board of
Directors of the Company and no other corporate proceedings on the part of
Company are necessary to authorize this Agreement, the transactions contemplated
hereby and the issuance of the Company Shares in accordance with the terms
hereof.
3.05. No Undisclosed Liabilities. Other than as described
in Exhibit 3.05 hereto, the Company is not subject to any material
liability or obligation of any nature, whether absolute, accrued,
contingent, or otherwise and whether due or to become due.
3.06. Litigation. There is no litigation, proceeding or investigation
pending or to the knowledge of the Company, threatened against the Company
affecting any of its properties or assets, or, to the knowledge of the Company,
against any officer, director, or stockholder of the Company that might result,
either in any case or in the aggregate, in any material adverse change in the
business, operations, affairs or condition of the Company or any of its
properties or assets, or that might call into question the validity of this
Agreement, or any action taken or to be taken pursuant hereto.
3.07. Title To Assets. The Company has good and marketable title to all
of its assets and properties now carried on its books including those reflected
in the balance sheet contained in the Company's financial statements, free and
clear of all liens, claims, charges, security interests or other encumbrances,
except as described in the balance sheet included in the Company's financial
statements or on any Exhibits attached hereto.
3.08. Contracts and Undertakings. Exhibit 3.08 attached hereto contains
a list of all contracts, agreements, leases, licenses, arrangements, commitments
and other undertakings to which the Company is a party or by which it or its
property is bound. Each of said contracts, agreements, leases, licenses,
arrangements, commitments and undertakings is valid, binding and in full force
and effect. The Company is not in material default, or alleged to be in material
default, under any contract, agreement, lease, license, commitment, instrument
or obligation and, to the knowledge of the Company, no other party to any
contract, agreement, lease, license, commitment, instrument or obligation to
which the Company is a party is in default thereunder nor, to the knowledge of
the Company, does there exist any condition or event which, after notice or
lapse of time or both, would constitute a default by any party to any such
contract, agreement, lease, license, commitment, instrument or obligation.
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3.09. Underlying Documents. Copies of all documents
described in any Exhibit attached hereto (or a summary of any such
contract, agreement or commitment, if oral) have been made
available to PolyDerm and are complete and correct and include all
amendments, supplements or modifications thereto.
3.10. Transactions with Affiliates, Directors and Shareholders. Except
as set forth in Exhibit 3.10 hereto, there are and have been no contracts,
agreements, arrangements or other transactions between the Company, and any
officer, director, or 5% stockholder of the Company, or any corporation or other
entity controlled by any such officer, director or 5% stockholder, a member of
any such officer, director or 5% stockholder's family, or any affiliate of any
such officer, director or 5% stockholder.
3.11. No Conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a breach of any term or provision of, or constitute a default under,
the Certificate of Incorporation or Bylaws of the Company, or any agreement,
contract or instrument to which the Company is a party or by which it or any of
its assets are bound.
3.12. Disclosure. To the actual knowledge of the Company, neither this
Agreement nor any other agreement, document, certificate or written or oral
statement furnished to PolyDerm and the Shareholders by or on behalf of the
Company in connection with the transactions contemplated hereby, contains any
untrue statement of a material fact or when taken as a whole omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.
3.13. Financial Statements. The financial statements of the Company set
forth in its Form 10-KSB for the year ended December 31, 2000 and its Form
10-QSB for the quarter ended September 30, 2001 present fairly the financial
position and results of operations of the Company, on a consistent basis.
3.14. Absence of Material Changes. Since September 30,
2001, except as described in any Exhibit hereto or as required or
permitted under this Agreement, there has not been:
3.14(a) any material change in the condition (financial or
otherwise) of the properties, assets, liabilities or business of
Company, except changes in the ordinary course of business which,
individually and in the aggregate, have not been materially adverse.
3.14(b) any redemption, purchase or other acquisition of any
shares of the capital stock of Company, or any issuance of any shares
of capital stock or the granting, issuance or exercise of any rights,
warrants, options or commitments by PolyDerm relating to their
authorized or issued capital stock.
8
3.14(c) any amendment to the Certificate of
Incorporation of Company.
IV. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
All representations, warranties and covenants of the Company and
PolyDerm contained herein shall survive the consummation of the transactions
contemplated herein and remain in full force and effect.
V. CONDITIONS TO CLOSING
5.01. Conditions to Obligation of PolyDerm. The
obligations of PolyDerm and Shareholders under this Agreement
shall be subject to each of the following conditions:
5.01(a) Representations and Warranties of Company to be True.
The representations and warranties of Company herein contained shall be
true in all material respects at the Closing with the same effect as
though made at such time. Company shall have performed in all material
respects all obligations and complied in all material respects, to its
actual knowledge, with all covenants and conditions required by this
Agreement to be performed or complied with by it at or prior to the
Closing.
5.01(b) No Legal Proceedings. No injunction or restraining
order shall be in effect, and no action or proceeding shall have been
instituted and, at what would otherwise have been the Closing, remain
pending before a court to restrain or prohibit the transactions
contemplated by this Agreement.
5.01(c) Statutory Requirements. All statutory requirements for
the valid consummation by Company of the transactions contemplated by
this Agreement shall have been fulfilled. All authorizations, consents
and approvals of all governments and other persons required to be
obtained in order to permit consummation by Company of the transactions
contemplated by this Agreement shall have been obtained.
5.02. Conditions to Obligations of Company. The obli-
gation of Company under this Agreement shall be subject to the
following conditions:
5.02(a) Representations and Warranties of PolyDerm to be True.
The representations and warranties of PolyDerm herein contained shall
be true in all material respects as of the Closing, and shall have the
same effect as though made at the Closing; Purchaser shall have
performed in all material respects all obligations and complied in all
material respects, to its actual knowledge, with all covenants and
conditions required by this Agreement to be performed or complied with
by it prior to the Closing.
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5.02(b) No Legal Proceedings. No injunction or restraining
order shall be in effect prohibiting this Agreement, and no action or
proceeding shall have been instituted and, at what would otherwise have
been the Closing, remain pending before the court to restrain or
prohibit the transactions contemplated by this Agreement.
5.02(c) Statutory Requirements. All statutory requirements for
the valid consummation by PolyDerm of the transactions contemplated by
this Agreement shall have been fulfilled. All authorizations, consents
and approvals of all governments and other persons required to be
obtained in order to permit consummation by PolyDerm of the
transactions contemplated by this Agreement shall have been obtained.
VI. CERTAIN AGREEMENTS
6.01. Reporting Requirements. The Company shall file all
reports required by the Securities Exchange Act of 1934 and shall
maintain its books and records in accordance with Sections 12 and 13
thereof. The parties agree that the failure of the Company to make such
filings or to so maintain its books and records shall constitute a
material breach of this Agreement.
6.02. Forward Stock Split, Name Change, and Preferred Stock.
On or prior to Closing the Company shall effect a 4-for-1 forward stock
split of its common stock. Upon Closing the Company shall present for
cancellation the outstanding certificates representing all of the
Series A Preferred Stock. Immediately upon Closing the Company shall
file with the Securities and Exchange Commission an information
statement to carry out an amendment to the Articles of Incorporation of
the Company, changing the name of the Company to "PolyDerm, Inc.".
6.03. Brokers Shares. On Closing Company shall
issue 5,371,085 shares to Xxx Xxxx Enterprises, Ltd. and
200,000 shares to SoCal Securities for their investment
banking and consulting fees.
VII. MISCELLANEOUS
7.01. Finder's Fees, Investment Banking Fees. Neither PolyDerm nor the
Company have retained or used the services of any person, firm or corporation in
such manner as to require the payment of any compensation as a finder or a
broker in connection with the transactions contemplated herein, except for the
persons described in Section 6.03.
7.02. Tax Treatment. The transaction contemplated hereby is
intended to qualify as a so-called "tax-free" reorganization under
the provisions of Section 368 of the Internal Revenue Code.
Company and PolyDerm acknowledge, however, that they each have
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been represented by their own tax advisors in connection with this transaction;
that neither has made any representation or warranty to the other with respect
to the treatment of such transaction or the effect thereof under applicable tax
laws, regulations, or interpretations; and that no attorney's opinion or private
revenue ruling has been obtained with respect to the effects thereof under the
Internal Revenue Code of 1986, as amended.
7.03. Further Assurances. From time to time, at the other party's
request and without further consideration, each of the parties will execute and
deliver to the others such documents and take such action as the other party may
reasonably request in order to consummate more effectively the transactions
contemplated hereby.
7.04. Parties in Interest. Except as otherwise expressly provided
herein, all the terms and provisions of this Agreement shall be binding upon,
shall inure to the benefit of and shall be enforceable by the respective heirs,
beneficiaries, personal and legal representatives, successors and assigns of the
parties hereto.
7.05. Entire Agreement; Amendments. This Agreement, including the
Schedules, Exhibits and other documents and writings referred to herein or
delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to its
subject matter. This Agreement may be amended only by a written instrument duly
executed by the parties or their respective successors or assigns.
7.06. Headings, Etc. The section and paragraph headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretations of this
Agreement.
7.07. Pronouns. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine or neuter,
singular or plural, as the identity of the person, persons, entity
or entities may require
7.08. 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 in-
strument.
7.09. Governing Law. This Agreement shall be governed by
the laws of the State of Nevada applicable to contracts to be
performed in the State of Nevada.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto as the date first above written.
SPACE LAUNCHES FINANCING, INC. POLYDERM, INC.
By: By:
Name: Name:
Title: Title:
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SCHEDULE I
NUMBER OF SHARES NUMBER OF
OF POLYDERM SHARES OF
COMMON STOCK COMPANY
NAMES OF OWNED AND COMMON STOCK
SHAREHOLDERS TO BE DELIVERED TO BE RECEIVED
Xxxxxxxx Xxxx Xxxxxxx 750,000 6,806,581
Xxxxxxx Xxxxxxxxxxxx 750,000 6,806,581
Xxxxx Xxxxxx 750,000 6,806,581
Xxxx Xxxxxx 100,000 907,544
Xx Xxxxx 25,000 226,886
Xxx Xxxxxxxxx 25,000 226,886
Xxxxxx Xxxxxx 25,000 226,886
Xxxx Xxxxx 25,000 226,886
Xxxxxxx Xxxxxxx 1,200 10,890
Xxxx Xxxxx 1,000 9,075
Xxxxx Xxxxxxxxx 75,000 680,658
Sandlot Ventures, Inc. 125,000 1,134,430
Total 2,652,200 24,069,884
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SCHEDULE II
(All numbers give effect to the 4-for-1 forward stock split)
Existing shareholders 24,069,884
PolyDerm, Inc. shareholders 24,069,884
Shares issued under
Section 6.04 - Xxx Xxxx Enterprises, Ltd. 5,371,085
- SoCal Securities 200,000
Total 53,710,853
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