AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of this 31st day of
January, 2000, by and among xXxxxxxx.xxx, Inc., a Nevada corporation
(hereinafter the "Acquiror"), XxxxxxXxxx.xxx, Inc., a Utah corporation
(hereinafter the "Company") Xxxxx Xxxxxxx, Xxx Xxxxx, Xxxx Xxxx, Xxxxxx Xxxxx
and Xxxx Xxxxx, the shareholders of the Company (individually, a "Shareholder"
and collectively, the "Shareholders"), and SF Acquisition Corp., a Utah
corporation ("Newco"), a wholly-owned subsidiary of Acquiror.
WITNESSETH:
WHEREAS, Newco is a wholly-owned subsidiary of Acquiror; and
WHEREAS, the Company wishes to merge with and into Newco, and Acquiror
desires to merge Newco with the Company, so that Newco will be the Surviving
Corporation (as defined below), all upon the terms and subject to the conditions
of this Agreement and in accordance with the laws of the State of Utah;
WHEREAS, in connection with said merger, each Shareholder is willing to
surrender all of the issued and outstanding common shares of the Company owned
by such Shareholder in exchange for the right to receive certain common shares
of the Acquiror, as detailed herein, and further subject to the covenants and
undertakings of the parties hereto; and
WHEREAS, the terms and conditions of the Merger (as defined below), the
mode of carrying the same into effect, the manner of converting the capital
stock of the Company into the right to receive common shares of the Acquiror and
such other terms and conditions as may be required or permitted to be stated in
this Agreement are set forth below; and
WHEREAS, for Federal income tax purposes, it is intended by the parties
hereto that the Merger shall qualify as a reorganization within the meaning of
Sections 368(a)(1)(A) and (a)(2)(D) of the Internal Revenue Code of 1986, as
amended (the "Code"), and that this Agreement shall constitute a "Plan of
Reorganization" for purposes of Section 368 of the Code.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions set forth
herein, the parties mutually covenant and agree with each other as follows:
ARTICLE I
THE MERGER
1.1 Company/Newco Merger. On the Effective Date (as defined in Section
1.3), the Company shall be merged with and into Newco and the separate corporate
existence of the Company shall thereupon cease (said event hereafter referred to
as the "Merger"). Newco shall be the surviving corporation in the Merger (the
"Surviving Corporation). The name of the Surviving Corporation immediately
following the Effective Date shall be "XxxxxxXxxx.xxx, Inc." The separate
corporate existence of the Surviving Corporation with all its rights,
privileges, immunities and franchises shall continue unaffected by the Merger.
1.2 Filing. Simultaneously with the execution hereof, Acquiror, Newco
and the Company will cause Articles of Merger in substantially the form of
Exhibit A attached hereto (the "Articles of Merger") to be executed and filed
with the office of the Utah Division of Corporations and Commercial Code as
provided in Section 16-10a-1105 of the Utah Code (Revised Business Corporation
Act).
1.3 Effective Date of the Merger. The Merger shall be effective at the
time of the filing of the Articles of Merger with the offices of the Utah
Division of Corporations and Commercial Code, referred to in Section 1.2, which
time is herein sometimes referred to as the "Effective Date."
1.4 Effect of the Merger. The Merger shall have the effects set forth
in Sections 16-10a-1106 of the Revised Business Corporation Act.
1.5 Further Assurances. If at any time after the Effective Date, any
party hereto shall consider or be advised that any further deeds, assignments or
assurances in law or in any other things are necessary, desirable or proper to
vest, perfect or confirm, of record or otherwise, in the Surviving Corporation,
the title to any property or rights of the Company acquired or to be acquired by
reason of, or as a result of, the Merger, the parties hereto agree that
Acquiror, the Surviving Corporation, the Company and their proper officers shall
execute and deliver all such proper deeds, assignments and assurances in law and
shall do all things necessary, desirable or proper to vest, perfect or confirm
title to such property or rights in the Surviving Corporation and otherwise to
carry out the purpose of this Agreement, and that the proper officers and
directors of Acquiror, Surviving Corporation and the Company are fully
authorized in the name of Acquiror, Surviving Corporation and the Company
otherwise to take any and all such actions.
1.6 Articles of Incorporation. At the Effective Date, the Articles of
Incorporation of Newco, as amended consistent with this Agreement, shall be the
Articles of Incorporation of the Surviving Corporation, and may be amended from
time to time after the Effective Date as provided by law.
1.7 Bylaws. The Bylaws of Newco, as in effect immediately prior to the
Effective Date, shall continue unchanged as the Bylaws of the Surviving
Corporation, until the same shall thereafter be altered, amended or repealed in
accordance with Utah law, the Articles of Incorporation of the Surviving
Corporation or its Bylaws.
1.8 Directors and Officers.
1.8.1 From and after the Effective Date, each director of
Newco immediately prior to the Effective Date shall continue as a
director of the Surviving Corporation, until his successor is elected
and qualified, or until his earlier death, resignation or removal. If
on or after the Effective Date an vacancy shall exist in the Board of
Directors of the Surviving Corporation, such vacancy may thereafter be
filled in the manner provided by law and the Bylaws of the Surviving
Corporation.
1.8.2 From and after the Effective Date, each officer of Newco
immediately prior to the Effective Date shall continue as an officer of
the Surviving Corporation, in the same capacity, until his successor is
elected and qualified, or until his earlier death, resignation or
removal. Additional officers may be appointed by the Board of Directors
in the manner provided by law and the Bylaws of the Surviving
Corporation.
1.9 Conversion.
1.9.1 On the Effective Date, each outstanding share of the
Company's voting common stock (the "Company Common Stock") (excluding
any treasury shares of the Company), shall be converted into and become
the right to receive .0010676 share of the voting common stock of the
Acquiror (the "Acquiror Common Stock"). Pursuant to the Merger,
Acquiror will issue an aggregate total of 7,500 shares of Acquiror
Common Stock to the Shareholders in exchange for all of their shares of
Company Common Stock in the amounts set forth in Exhibit "B" hereto.
1.9.2 Each treasury share of the Company's Common Stock, if
any, shall be canceled, and no payment shall be made in respect
thereof.
1.10 Surrender of Certificates. As soon as practicable after the
Effective Date, each holder of a certificate or certificates which prior thereto
represented validly issued and outstanding shares of Company Common Stock may
surrender such certificate or certificates to Acquiror or to its designated
transfer agent, and shall receive in exchange therefore a certificate
representing the number of shares of Acquiror Common Stock into which the shares
of the Company's Common Stock theretofore represented by the surrendered
certificate or certificates shall have been converted pursuant to Section 1.9
hereof. Until so surrendered, each certificate that on the Effective Date
represents issued and outstanding shares of the Company's Common Stock shall be
deemed for all corporate purposes to evidence ownership of the number of shares
of Acquiror Common Stock into which the shares of Company Common Stock shall
have been converted.
1.11 Non-Disclosure/Non-Compete Agreements: In consideration of this
transaction and of the obligation of Newco for royalties set forth in paragraph
1.13 below, Shareholders shall execute and deliver to Acquiror, for the benefit
of Acquiror and Newco, agreements in the form attached hereto as Exhibit "C" by
which each agrees for the period stated therein, to hold Company information
confidential and not to compete with Newco or Acquiror for the period stated
therein.
1.12 Assumption of Company's Liabilities: In addition, Newco, as the
Surviving Corporation, shall assume all liabilities of Company, as listed at
Schedule "D" hereto, which Company and Shareholders represent total not more
than $40,000.00. All debts and obligations thus assumed shall be paid or
otherwise satisfied, proportionately, at a rate of 25% of said principal
obligation per month, with the first payment of not less than $10,000 to be made
at Closing.
1.13 Royalty Payments: In addition to the foregoing, and for a period
of ten (10) years from the date hereof, Newco, as the Surviving Corporation,
shall pay to Shareholders an amount equal to three percent (3%) of the gross
revenue of Newco, derived from the advertising and affiliate-associated programs
of the Company. Said royalty payments shall be paid quarterly, within thirty
(30) days following the final business day of each calendar quarter, and shall
be apportioned among Shareholders as Shareholders shall direct in writing.
Absent written instructions, signed by all Shareholders, all royalty payments
will be made by a single check, payable jointly to all Shareholders. The
Surviving Corporation shall provide with each royalty payment an accounting of
revenue upon which said royalty is calculated. Not more often than annually,
Shareholders shall have the right to examine the Surviving Corporation's books
and records, personally or through an authorized representative, during normal
business hours and on not less than fifteen (15) days' prior notice.
Shareholders shall bear the costs of any such examination, except that, in the
event that the examination reveals that the Surviving Corporation underpaid
royalties over the relevant period by more than 5%, the costs of such
examination shall be paid by the Surviving Corporation. Any royalty payments not
made when due shall bear interest at an annual rate of 10%.
1.14 Closing. The closing for the Merger pursuant to this Agreement
(the "Closing") shall be held at 4:00 p.m., Mountain Time, on January 31, 2000
(the "Closing Date"). The Closing shall occur at the offices of counsel for
Acquiror, Snow, Xxxxxxxxxxx & Xxxxxxxxx, 00 Xxxxxxxx Xxxxx, Xxxxxxxx Floor, Salt
Lake City, Utah, unless each party hereto agrees in writing to another location.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
Each of the Shareholders severally represents and warrants as follows:
2.1 Ownership of Stock.
2.1.1. Such Shareholder is the record owner and holder of the
number of fully paid and nonassessable shares of the Company Common
Stock listed in Exhibit "B" hereto as of the date hereof and will
continue to own such Company Common Stock on the Closing Date and all
such shares of common stock are or will be on the Closing Date owned
free and clear of all liens, encumbrances, charges and assessments of
every nature and subject to no restrictions with respect to
transferability.
2.1.2. Except for this Agreement, there are no outstanding
options, contracts, calls, commitments, agreements or demands of any
character relating to the stock of the Company owned by the
Shareholder.
ARTICLE III
REPRESENTATIONS OF THE COMPANY AND SHAREHOLDERS
The Company and each Shareholder severally represent and warrant as
follows:
3.1 Organization and Authority.
3.1.1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Utah with
full power and authority to enter into and perform the transactions
contemplated by this Agreement.
3.1.2 The Company is not qualified or licensed to do business
as a foreign corporation in any jurisdiction.
3.1.3 The copies of the Articles of Incorporation and By Laws
of the Company heretofore delivered to Acquiror are complete and
correct copies of such instruments as presently in effect.
3.1.4. The outstanding shares of Company Common Stock are
legally and validly issued, fully paid and nonassessable.
3.1.5 The minute book of the Company made available to the
Acquiror contains the Articles of Incorporation of the Company, Bylaws,
and accurate records of all meetings and other corporate actions of the
Shareholders and the board of directors (and any committee thereof) of
the Company at which such records were kept.
3.2 Capitalization of the Company. Immediately prior to the
consummation of the transactions contemplated by this Agreement, the authorized
capital stock of the Company consisted of 50,000,000 shares of common stock,
$.001 par value, of which 7,025,000 shares are issued and outstanding. There are
no shares of preferred stock of the Company, either authorized or issued. There
are no outstanding (a) securities convertible into or exchangeable for the
Company capital stock; (b) options, warrants or other rights to purchase or
subscribe for capital stock of the Company or securities convertible into or
exchangeable for capital stock of the Company; or (c) contracts, commitments,
agreements, understandings or arrangements of any kind relating to the issuance
of any capital stock of the Company, any such convertible or exchangeable
securities or any such options, warrants or rights.
3.3 Subsidiaries. The Company does not own, directly or indirectly, any
capital stock or other equity securities of any other corporation or have any
direct or indirect equity or ownership interest in any other business, including
wholly-owned subsidiaries.
3.4 Performance of This Agreement. The Company has full corporate power
and authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The Board of Directors and Shareholders have taken all
action required by law, the Company's Articles of Incorporation, its By Laws or
otherwise to be taken by them to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, and this
Agreement is a valid and binding agreement of the Company enforceable in
accordance with its terms, except that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will violate any provision of the Articles of Incorporation or By Laws of
the Company, or, except as specified in Section 3.4 of the Disclosure Schedule,
violate, or be in conflict with, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
cause the acceleration of the maturity of any debt or obligation pursuant to, or
result in the creation or imposition of any security interest, lien or other
encumbrance upon any property or assets of the Company, under any agreement or
commitment to which the Company is a party or by which the Company is bound, or
to which the property of the Company is subject, or violate any statute or law
or any judgment, decree, order, regulation or rule of any court or government
authority.
3.5 Financials. True copies of the unaudited financial statements of
the Company consisting of the unaudited balance sheets as of the calendar year
ended December 31, 1999, and statements of operations for such period, have been
delivered by the Company to the Acquiror. These statements have been compiled
in-house by the Company's accountant and have not been examined or certified.
Said financial statements are true and correct in all material respects and
fairly present the financial condition of the Company as of December 31, 1999,
and the earnings for the periods covered, in accordance with generally accepted
accounting principles applied on a consistent basis.
3.6 Leases. The Company has disclosed to Acquiror all leases pursuant
to which the Company leases real or personal property. All such leases are
valid, binding and enforceable in accordance with their terms, and are in full
force and effect; there are no existing material defaults by the Company
thereunder; no event of default has occurred which (whether with or without
notice, lapse of time or the happening or occurrence of any other event) would
constitute a default thereunder; and all lessors under such leases have
consented (where such consent is necessary) to the consummation of the
transactions contemplated by this Agreement without requiring modification in
the rights or obligations of the lessee under such leases. Executed counterparts
of all consents referred to the preceding sentence will be delivered to Acquiror
at the Closing.
3.7 Bank Accounts. The Company has disclosed to Acquiror the names and
locations of all banks, trust companies, savings and loan associations and other
financial institutions at which the Company maintains safe deposit boxes or
accounts of any nature and the names of all persons authorized to draw thereon,
make withdrawals therefrom or have access thereto. At the Closing, the Company
will deliver to Acquiror copies of all records, including all signature or
authorization cards, pertaining to such bank accounts.
3.8 Employment Agreements. The Company has no employment agreements in
as of the Closing Date.
3.9 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions, pending or outstanding or, to the
knowledge of such Shareholder or the Company, threatened against or involving
the Company or its assets, properties, or business, nor does the Company know,
or have reasonable grounds to know, of any basis for any such proceedings,
investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions. In addition, there are no material proceedings
existing, pending or reasonably contemplated to which any officer, director, or
affiliate of the Company or as to which the Shareholder is a party adverse to
the Company or has a material interest adverse to the Company.
3.10 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, fully paid and discharged as
reported by the Company, and there are no unpaid taxes which are, or could
become a lien on the properties and assets of the Company, except as provided
for in the financial statements of the Company, or have been incurred in the
normal course of business of the Company since January 1, 2000. All tax returns
of any kind required to be filed have been filed and the taxes paid or accrued.
3.11 Brokers and Finders. Neither the Company nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement.
3.12 Accuracy of All Statements Made by Company. No representation or
warranty by the Company and such Shareholder in this Agreement, nor any
statement, certificate, schedule or exhibit hereto furnished or to be furnished
by or on behalf of the Company or the Shareholder pursuant to this Agreement,
nor any document or certificate delivered to the Acquiror pursuant to this
Agreement or in connection with actions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a material
fact necessary to make the statement contained therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND NEWCO
The Acquiror and Newco represent and warrant as follows:
4.1 Organization and Good Standing.
4.1.1 The Acquiror is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada with full
power and authority to enter into and perform the transactions
contemplated by this Agreement. The copies of the Articles of
Incorporation and By Laws of the Acquiror heretofore delivered to the
Company and Shareholders are complete and correct copies of such
instruments as presently in effect. Acquiror is not currently qualified
outside the State of Nevada.
4.1.2 Newco is a wholly-owned subsidiary of Acquiror and is a
corporation which shall have been duly organized, validly existing and
in good standing under the laws of the State of Utah with full power
and authority to enter into and perform the transactions contemplated
by this Agreement. The copies of the Articles of Incorporation and By
Laws of Newco heretofore delivered to the Company and Shareholders are
complete and correct copies of such instruments as presently in effect.
Newco is not qualified or licensed to do business as a foreign
corporation in any jurisdiction.
4.2 Capitalization.
4.2.1 Immediately prior to the consummation of the transactions
contemplated by this Agreement, the authorized capital stock of the
Acquiror consisted of 50,000,000 shares of common stock, no par value,
of which 7,854,377 shares are issued and outstanding. There are no
shares of preferred stock of the Acquiror, either authorized or issued.
4.2.2 Immediately prior to the consummation of the transactions
contemplated by this Agreement, the authorized capital stock of Newco
consisted of 25,000,000 shares of common stock, no par value, of which
25,000 shares are issued and outstanding and owned by Acquiror. There
are no shares of preferred stock of Newco, either authorized or issued.
There are no outstanding (a) securities convertible into or
exchangeable for Newco capital stock; (b) options, warrants or other
rights to purchase or subscribe for capital stock of Newco or
securities convertible into or exchangeable for capital stock of Newco;
or (c) contracts, commitments, agreements, understandings or
arrangements of any kind relating to the issuance of any capital stock
of Newco, any such convertible or exchangeable securities or any such
options, warrants or rights.
4.3 Performance of This Agreement. This Agreement constitutes the
legal, valid and binding obligation of Acquiror and of Newco, enforceable
against both in accordance with its terms. Upon the execution and delivery by
Acquiror or Newco of the employment agreements, the employment agreements will
constitute the legal, valid and binding obligation of the entity executing such
agreements, enforceable in accordance with their respective terms. Acquiror and
Newco, each in its own right, has the absolute and unrestricted right, power,
authority and capacity to execute and deliver this Agreement and the employment
agreements and to perform its obligations under this Agreement and the
employment agreements. Neither the execution and delivery of this Agreement nor
the consummation or performance of any of the transactions contemplated in this
Agreement or the employment agreements will, directly or indirectly violate any
provision of the Articles of Incorporation or By Laws of the Acquiror or of
Newco, or, except as specified in Section 4.3 of the Disclosure Schedule,
violate, or be in conflict with, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
cause the acceleration of the maturity of any debt or obligation pursuant to, or
result in the creation or imposition of any security interest, lien or other
encumbrance upon any property or assets of the Company, under any agreement or
commitment to which the Company is a party or by which the Company is bound, or
to which the property of the Company is subject, or violate any statute or law
or any judgment, decree, order, regulation or rule of any court or government
authority.
4.4 Financials. True copies of the unaudited consolidated financial
statements of the Acquiror, consisting of the consolidate balance sheets of
Acquiror and its subsidiaries as of the calendar year ended December 31, 1999,
and statements of operations for such period, have been delivered by the
Acquiror to the Company. Said financial statements are true and correct in all
material respects and fairly present the financial condition of the Acquiror as
of the date thereof, and the earnings for the periods covered, in accordance
with generally accepted accounting principles applied on a consistent basis.
4.5 Liabilities. There are no material liabilities of the Acquiror,
whether accrued, absolute, contingent or otherwise, which arose or relate to any
transaction of the Acquiror, its agents or servants which are not disclosed by
or reflected in said financial statements. As of the date hereof, there are no
known circumstances, conditions, happenings, events or arrangements, contractual
or otherwise, which may hereafter give rise to liabilities, except in the normal
course of business of the Acquiror.
4.6 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions, either threatened, pending or
outstanding against or involving the Acquiror or its subsidiaries, if any, or
their assets, properties, or business, nor does the Acquiror or its subsidiaries
know, or have reasonable grounds to know of any basis for any such proceedings,
investigations or inquiries, product liability or other claims judgments,
injunctions or restrictions.
4.7 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, fully paid and discharged as
reported by the Acquiror, and there are no unpaid taxes which are, or could
become a lien on the properties and assets of the Acquiror. All tax returns of
any kind required to be filed have been filed and the taxes paid or accrued.
4.8 Accuracy of All Statements Made by the Acquiror or Newco. No
representation or warranty by the Acquiror or Newco in this Agreement, nor any
statement, certificate, schedule or exhibit hereto furnished or to be furnished
by the Acquiror or Newco pursuant to this Agreement, nor any document or
certificate delivered to the Company or the Shareholders pursuant to this
Agreement or in connection with actions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits to state or shall omit to
state a material fact necessary to make the statement contained therein not
misleading.
4.9 No Covenant as to Tax Consequences. It is expressly understood and
agreed that neither the Acquiror nor its officers or agents has made any
warranty or agreement, expressed or implied, as to the tax consequences of the
transactions contemplated by this Agreement or the tax consequences of any
action pursuant to or growing out of this Agreement. All parties have consulted
with their respective accountants or attorneys and have obtained adequate
assurances that this Agreement will satisfy their intent, for purposes of
federal income tax, as set forth in the recitals to this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO THE ACQUIROR'S OBLIGATIONS
Each and every obligation of the Acquiror to be performed on the
Closing Date shall be subject to the satisfaction prior thereto of the following
conditions:
5.1 Truth of Representations and Warranties. The representations and
warranties made by the Company and the Shareholders in this Agreement shall be
substantially accurate in all material respects on and as of the Closing Date
with the same effect as though such representations and warranties had been made
or given on and as of the Closing Date.
5.2 No Material Adverse Change. As of the Closing Date there shall not
have occurred any material adverse change, financially or otherwise within the
control of the Company, which materially impairs the ability of the Company to
conduct its business or the earning power thereof on the same basis as in the
past.
5.3 Accuracy of Financial Statements. The Acquiror and its
representatives shall be satisfied as to the accuracy of all balance sheets,
statements of income and other financial statements of the Company furnished to
the Acquiror herewith.
5.4 Non-Compete and Non-Disclosure Agreements. All Shareholders shall
have executed and delivered to Acquiror and Newco Non-Compete and Non-Disclosure
Agreements in the form attached hereto as Exhibit "C."
5.5 Time Limit on Closing. Closing shall have taken place by January
31, 2000, contemporarily with the execution of this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE SHAREHOLDERS
Each and every obligation of the Company and the Shareholder to be
performed on the Closing Date shall be subject to the satisfaction prior thereto
of the following conditions:
6.1 Truth of Representations and Warranties. The representations and
warranties made by the Acquiror in this Agreement shall be substantially
accurate in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made or given on
and as of the Closing Date.
6.2 No Material Adverse Change. As of the Closing Date there shall not
have occurred any material adverse change, financially or otherwise, which
materially impairs the ability of the Acquiror to conduct its business.
6.3 Approval of Financial Statements. The Company and Shareholders
shall be satisfied as to the accuracy of all balance sheets, statements of
income and other financial statements of Acquiror.
6.4 Time Limit on Closing. Closing shall have taken place by January
31, 2000.
ARTICLE VII
SECURITY ACT PROVISIONS
7.1 Restrictions on Disposition of Shares. The Shareholders covenant
and warrant that the shares of Acquiror received are acquired for their own
account and not with the present view towards the distribution thereof.
Shareholders further covenant and warrant and that they will not dispose of the
respective shares of Acquiror Common Stock except (i) pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or (ii) in
any other transaction which, in the opinion of counsel, acceptable to the
Acquiror, is exempt from registration under the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder. In order to effectuate the covenants of this sub-section, an
appropriate endorsement will be placed upon each of the certificates of Acquiror
Common Stock at the time of distribution of such shares by Acquiror pursuant to
this Agreement, and stop transfer instructions shall be placed with the transfer
agent for the securities.
7.2 Evidence of Compliance With Private Offering Exemption. The
Shareholders agree to supply the Acquiror with evidence of the financial
sophistication of the Shareholders or evidence of appointment of a sophisticated
investment representative and such other items as counsel for the Acquiror may
require in order to evidence the private offering character of the conversion of
the Company Common Stock for Acquiror Common Stock, pursuant to this Agreement.
Unless otherwise designated to the Acquiror, each Shareholder represents that he
has such knowledge of finance, securities, and investments, generally, to
evaluate the risks of the transaction set forth in this Agreement, and that the
financial capacity of such Shareholder is of such proportion that the total cost
of such Shareholder's commitment in such Acquiror Common Stock would not be
material when compared with his total financial capacity. Each Shareholder
understands that he must bear the economic risk of the investment for an
indefinite period of time because Acquiror Common Stock to be received by each
Shareholder on conversion of the Shareholder's Company Common Stock have not
been registered under applicable securities laws and therefore cannot be sold,
except pursuant to the Put Option Agreement unless they are subsequently
registered under such securities laws or an exemption from such registration is
available; that each certificate will bear a restrictive legend to the effect
that the shares have not been registered under securities laws and are therefore
restricted on transferability and sale of such shares, except for the shares of
Acquiror Common Stock sold by Shareholders pursuant to the Put Option Agreement;
and that, with the exception of the shares subject to the Put Option Agreement,
stop transfer instructions will be placed upon such shares with the transfer
agent of the Acquiror concerning such restrictions.
7.3 Notice of Limitation Upon Disposition. Each Shareholder represents
that he is aware that the shares of Acquiror Common Stock issued to him in
connection with the Merger hereunder will not have been registered pursuant to
the Securities Act of 1933, as amended; and, therefore, under current
interpretations and applicable rules, he may have to retain such shares for a
period of at least one year and at the expiration of such one-year period his
sales may be confined to brokerage transactions of limited amounts requiring
certain notification filings with the Securities and Exchange Commission and
such disposition may be available only if the Acquiror is current in its filings
with the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended, or other public disclosure requirements, and the other
limitations imposed thereby on the disposition of Acquiror Common Stock.
ARTICLE VIII
CLOSING
9.1 Documents To Be Delivered by the Company and the Shareholder. At
the closing the Company and the Shareholders shall deliver to the Acquiror the
following documents:
a. Certificates from each Shareholder for the number of shares
of Company Common Stock set forth on Exhibit "B", such certificates to
be surrendered and cancelled in exchange for certificates reflecting
shares of Acquiror, in the manner and form required by subsections 1.9
and 1.10 hereof
b. Nondisclosure and Noncompete Agreements, in a form attached
as Exhibit "C" hereto.
c. Such other documents of transfer, certificates of authority
and other documents as the Acquiror may reasonably request.
9.2 Documents To Be Delivered by the Acquiror and Newco. At the closing
the Acquiror and Newco shall deliver to the Company and to the Shareholders the
following documents:
a. Certificates for the number of shares of Acquiror Common
Stock into which the Shareholders' respective shares of Company Common
Stock are converted, as determined in sub-section 1.9 hereof.
b. Such other documents of transfer, certificates of authority
and other documents as the Company and/or the Shareholders may
reasonably request.
ARTICLE IX
CONDUCT OF BUSINESS AFTER CLOSING
On and after the Effective Date and except as otherwise expressly
consented to or approved by each of the Shareholders, the Surviving Corporation
and Acquiror in writing, Acquiror and the Surviving Corporation will each carry
on their respective businesses diligently and substantially in the same manner
as heretofore conducted, and none shall incur any material liabilities, except
in the ordinary course of business.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 Publicity. The parties agree that no publicity, release or other
public announcement concerning the transaction contemplated by this Agreement
shall be issued by any party hereto without the advance approval of both the
form and substance of the same by the other parties and their counsel, which
approval, in the case of any publicity, release or other public announcement
required by applicable law, shall not be unreasonably withheld or delayed.
11.2 Default. Should any party to this Agreement default in any of the
covenants, conditions, or promises contained herein, the defaulting party shall
pay all costs and expenses, including a reasonable attorney's fee, which may
arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder or by the statutes of the State of Utah.
11.3 Assignment. Except as otherwise expressly set forth herein, this
Agreement may not be assigned in whole or in part by any party hereto without
the prior written consent of the other party or parties, which consent shall not
be unreasonably withheld, and then solely to the extent set forth in such
consent.
11.4 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their respective heirs,
executors, administrators, successors and assigns.
11.5 Partial Invalidity. If any term, covenant, condition or provision
of this Agreement or the application thereof to any person or circumstance shall
to any extent be invalid or unenforceable, the remainder of this Agreement or
application of such term or provision to persons or circumstances other than
those as to which it is held to be invalid or unenforceable shall not be
affected thereby and each term, covenant, condition or provision of this
Agreement shall be valid and shall be enforceable to the fullest extent
permitted by law.
11.6 No Other Agreements. This Agreement constitutes the entire
Agreement between the parties and there are and will be no oral representations
which will be binding upon any of the parties hereto.
11.7 Survival of Covenants. Etc. All covenants, representations, and
warranties made herein to any parties or in any statement or document delivered
to any party hereto, shall survive the making of this Agreement and shall remain
in full force and effect for a period of three years immediately following the
Effective Date.
11.8 Further Action. The parties hereto agree to execute and deliver
such additional documents and to take such other and further action as may be
reasonably required to carry out fully the transactions contemplated herein.
11.9 Amendment. This Agreement or any provision hereof may not be
changed, waived, terminated or discharged except by means of a written
supplemental instrument signed by the party or parties against whom enforcement
of the change, waiver, termination, or discharge is sought.
11.10 Headings. The descriptive headings of the various Sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
11.11 Counterparts. This agreement may be executed in two or more
partially or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument.
11.12 Full Knowledge. By their signatures, the parties acknowledge that
they have carefully read and fully understand the terms and conditions of this
Agreement, that each party has had the benefit of counsel, or has been advised
to obtain counsel, and that each party has freely agreed to be bound by the
teens and conditions of this Agreement.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Agreement
and Plan of Merger as of the day and year first above written.
ACQUIROR: xXXXXXXX.XXX, INC.
By_________________________________
Xxxxxxx X. Xxxxxxx, Xx., CFO
NEWCO: SF ACQUISITION CORP.
By_________________________________
Xxxxxxx X. Xxxxxxx, Xx., President
COMPANY: XXXXXXXXXX.XXX, INC.
By_________________________________
Xxxxx Xxxxxxx, President
SHAREHOLDERS: ____________________________________
Xxxxx Xxxxxxx, Individually
____________________________ ____________________________________
Xxx Xxxxx, Individually Xxxx Xxxx, Individually
___________________________ ____________________________________
Xxxx Xxxxx, Individually Xxxxxx Xxxxx, Individually
EXHIBIT"A"
TO AGREEMENT AND PLAN OF MERGER
(Articles of Merger)
ARTICLES OF MERGER
of
XXXXXXXXXX.XXX, INC.
(a Utah corporation)
into
SF ACQUISITION CORP.
(a Utah corporation)
The undersigned officers, the respective presidents and secretaries of
XxxxxxXxxx.xxx, Inc., a Utah corporation ("StinkyFeet") and SF Acquisitions
Corp., a Utah corporation ("Acquisition"), hereby certify that the Agreement and
Plan of Merger dated January 31, 2000 (hereinafter the "Plan") was approved by
the shareholders of StinkyFeet by unanimous consent of its shareholders on
January 31, 2000, and was approved by the sole shareholder of Acquisition by
unanimous consent action of such sole shareholder on January 31, 2000.
1. The number of shares outstanding of each class of each corporation
which were entitled to vote on the Plan, and the number of shares of each class
of each corporation consenting and not consenting to the Plan, is as follows:
Class Shares Consenting Not Consenting
Outstanding
------- ------------- ----------- --------------
StinkyFeet Common Stock
($.001 par value) 7,025,000 7,025,000 -0-
Acquisition Common Stock 25,000 25,000 -0-
(no par)
2. The number of votes cast for the Plan by each constituent entity was
sufficient for approval of the Plan.
3. All of the presently outstanding shares of Acquisition are owned and
held by xXxxxxxx.xxx, Inc., a Nevada corporation ("iShopper").
4. The effective date of the merger shall be the time of the completion
of filing of the Articles of Merger in the State of Utah.
5. An abbreviated copy of the completed Plan of Merger is attached
hereto. A complete copy of the Agreement and Plan of Merger, including exhibits
and schedules, is on file at the principal offices of xXxxxxxx.xxx, Inc., at
0000 Xxxxx 000 Xxxx, Xxxxx, Xxxx, and shall be made available, without cost, to
any shareholder of Acquisition, xXxxxxxx.xxx, Inc. or StinkyFeet.
6. The following amendments to the Articles of Incorporation of
Acquisition were duly approved by the shareholders of each constituent entity
and are hereby made to the Articles of Incorporation of Acquisition:
a. Amend Article First of the Articles of Incorporation to
read as follows:
The name of the corporation is XxxxxxXxxx.xxx, Inc.
b. Amend Article Tenth to read as follows:
Directors: The corporation shall be governed by a
Board of Directors and shall have not less than three (3) nor more
than five (5) directors as determined, from time to time, by the
Board of Directors. The original Board of Directors shall be
comprised of three (3) persons. The names and addresses of the
persons who are to serve as directors until the first annual
meeting of shareholders and until their successors are elected and
shall qualify are as follows:
Xxxxx Xxxxxxx
0000 Xxxxx 000 Xxxx
Xxxxx, Xxxx 00000
Xxxxxxx X. Xxxxxxx, Xx.
0000 Xxxxx 000 Xxxx
Xxxxx, Xxxx 00000
Xxx Xxxxx
0000 Xxxxx 000 Xxxx
Xxxxx, Xxxx 00000
IN WITNESS WHEREOF, XxxxxxXxxx.xxx, Inc., formerly known as SF Acquisitions
Corp., a Utah corporation, as the surviving entity, has caused these Articles of
Merger to be executed by its president, this 31st day of January, 2000.
XxxxxxXxxx.xxx, Inc.
f/k/a SF Acquisitions Corp.
A Utah Corporation
By ___________/s/______________________
Xxxxxxx X. Xxxxxxx, President
PLAN OF MERGER
(Abbreviated for Filing with Articles of Merger)
This Plan of Merger, is agreed to as of this 31st day of January, 2000,
by and among xXxxxxxx.xxx, Inc., a Nevada corporation (hereinafter the
"Acquiror"), XxxxxxXxxx.xxx, Inc., a privately-held Utah corporation
(hereinafter the "Company") Xxxxx Xxxxxxx, Xxx Xxxxx, Xxxx Xxxx, Xxxxxx Xxxxx
and Xxxx Xxxxx, the shareholders of the Company (individually, a "Shareholder"
and collectively, the "Shareholders"), and SF Acquisition Corp., a Utah
corporation ("Newco").
WITNESSETH:
WHEREAS, Newco is a wholly-owned subsidiary of Acquiror; and
WHEREAS, the Company wishes to merge with and into Newco, and Acquiror
desires to merge Newco with the Company, so that Newco will be the Surviving
Corporation (as defined below), all upon the terms and subject to the conditions
of this Agreement and in accordance with the laws of the State of Utah;
WHEREAS, in connection with said merger, each Shareholder is willing to
surrender all of the issued and outstanding common shares of the Company owned
by such Shareholder in exchange for the right to receive certain common shares
of the Acquiror, as detailed herein, with an accompanying stock put option
agreement, as described herein, by which the Shareholders shall have the right,
without solicitation, to sell to a third party, at an agreed price, and at an
agreed rate of purchase, a portion of the Acquiror stock thus received; and
WHEREAS, the terms and conditions of the Merger (as defined below), the
mode of carrying the same into effect, the manner of converting the capital
stock of the Company into the right to receive common shares of the Acquiror and
such other terms and conditions as may be required or permitted to be stated in
this Agreement are set forth below; and
WHEREAS, for Federal income tax purposes, it is intended by the parties
hereto that the Merger shall qualify as a reorganization within the meaning of
Sections 368(a)(1)(A) and (a)(2)(D) of the Internal Revenue Code of 1986, as
amended (the "Code"), and that this Agreement shall constitute a "Plan of
Reorganization" for purposes of Section 368 of the Code.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions set forth
herein, the parties mutually covenant and agree with each other as follows:
THE MERGER
1.1 Company/Newco Merger. On the Effective Date (as defined in Section
1.3), the Company shall be merged with and into Newco and the separate corporate
existence of the Company shall thereupon cease (said event hereafter referred to
as the "Merger"). Newco shall be the surviving corporation in the Merger (the
"Surviving Corporation). The name of the Surviving Corporation immediately
following the Effective Date shall be "XxxxxxXxxx.xxx, Inc." The separate
corporate existence of the Surviving Corporation with all its rights,
privileges, immunities and franchises shall continue unaffected by the Merger.
1.2 Filing. Simultaneously with the execution hereof, Acquiror, Newco
and the Company will cause Articles of Merger to be executed and filed with the
office of the Utah Division of Corporations and Commercial Code as provided in
Section 16-10a-1105 of the Utah Code (Revised Business Corporation Act).
1.3 Effective Date of the Merger. The Merger shall be effective at the
time of the filing of the Articles of Merger with the offices of the Utah
Division of Corporations and Commercial Code, referred to in Section 1.2, which
time is herein sometimes referred to as the "Effective Date."
1.4 Effect of the Merger. The Merger shall have the effects set forth
in Sections 16-10a-1106 of the Revised Business Corporation Act.
1.5 Further Assurances. If at any time after the Effective Date, any
party hereto shall consider or be advised that any further deeds, assignments or
assurances in law or in any other things are necessary, desirable or proper to
vest, perfect or confirm, of record or otherwise, in the Surviving Corporation,
the title to any property or rights of the Company acquired or to be acquired by
reason of, or as a result of, the Merger, the parties hereto agree that
Acquiror, the Surviving Corporation, the Company and their proper officers shall
execute and deliver all such proper deeds, assignments and assurances in law and
shall do all things necessary, desirable or proper to vest, perfect or confirm
title to such property or rights in the Surviving Corporation and otherwise to
carry out the purpose of this Agreement, and that the proper officers and
directors of Acquiror, Surviving Corporation and the Company are fully
authorized in the name of Acquiror, Surviving Corporation and the Company
otherwise to take any and all such actions.
1.6 Articles of Incorporation. At the Effective Date, the Articles of
Incorporation of Newco, as amended consistent with the Agreement, shall be the
Articles of Incorporation of the Surviving Corporation, and may be amended from
time to time after the Effective Date as provided by law.
1.7 Bylaws. The Bylaws of Newco, as in effect immediately prior to the
Effective Date, shall continue unchanged as the Bylaws of the Surviving
Corporation, until the same shall thereafter be altered, amended or repealed in
accordance with Utah law, the Articles of Incorporation of the Surviving
Corporation or its Bylaws.
1.8 Directors and Officers.
1.8.1 From and after the Effective Date, each director of
Newco immediately prior to the Effective Date shall continue as a
director of the Surviving Corporation, until his successor is elected
and qualified, or until his earlier death, resignation or removal. If
on or after the Effective Date an vacancy shall exist in the Board of
Directors of the Surviving Corporation, such vacancy may thereafter be
filled in the manner provided by law and the Bylaws of the Surviving
Corporation.
1.8.2 From and after the Effective Date, each officer of Newco
immediately prior to the Effective Date shall continue as an officer of
the Surviving Corporation, in the same capacity, until his successor is
elected and qualified, or until his earlier death, resignation or
removal. Additional officers may be appointed by the Board of Directors
in the manner provided by law and the Bylaws of the Surviving
Corporation.
1.9 Conversion.
1.9.1 On the Effective Date, each outstanding share of the
Company's voting common stock (the "Company Common Stock") (excluding
any treasury shares of the Company), shall be converted into and become
the right to receive .0010676 share of the voting common stock of the
Acquiror (the "Acquiror Common Stock"). Pursuant to the Merger,
Acquiror will issue an aggregate total of 7,500 shares of Acquiror
Common Stock to the Shareholders in exchange for all of their shares of
Company Common Stock in the amounts set forth in Exhibit "B" hereto.
1.9.2 Each treasury share of the Company's Common Stock, if
any, shall be canceled, and no payment shall be made in respect
thereof.
1.10 Surrender of Certificates. As soon as practicable after the
Effective Date, each holder of a certificate or certificates which prior thereto
represented validly issued and outstanding shares of Company Common Stock may
surrender such certificate or certificates to Acquiror or to its designated
transfer agent, and shall receive in exchange therefore a certificate
representing the number of shares of Acquiror Common Stock into which the shares
of the Company's Common Stock theretofore represented by the surrendered
certificate or certificates shall have been converted pursuant to Section 1.9
hereof. Until so surrendered, each certificate that on the Effective Date
represents issued and outstanding shares of the Company's Common Stock shall be
deemed for all corporate purposes to evidence ownership of the number of shares
of Acquiror Common Stock into which the shares of Company Common Stock shall
have been converted.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Agreement
and Plan of Merger as of the day and year first above written.
ACQUIROR: xXXXXXXX.XXX, INC.
By___________/s/____________________
Xxxxxxx X. Xxxxxxx, CFO
NEWCO: SF ACQUISITIONS CORP.
By___________/s/____________________
Xxxxxxx X. Xxxxxxx, President
COMPANY: XXXXXXXXXX.XXX, INC.
By__________/s/____________________
Xxxxx Xxxxxxx, President
SHAREHOLDERS: __________/s/________________
Xxxxx Xxxxxxx, Individually
__________/s/________________
Xxx Xxxxx, Individually
__________/s/________________
Xxxx Xxxx, Individually
__________/s/________________
Xxxxxx Xxxxx, Individually
__________/s/________________
Xxxx Xxxxx, Individually
EXHIBIT "B"
TO AGREEMENT AND PLAN OF MERGER
NO. OF SHARES OF NO. OF SHARES OF
NAME OF THE COMPANY THE ACQUIROR
SHAREHOLDERS TO BE SURRENDERED TO BE ISSUED
------------ ------------------- --------------
Xxxxx Xxxxxxx 2,000,000 2,135
Xxx Xxxxx 2,000,000 2,135
Xxxx Xxxx 2,000,000 2,135
Xxxxxx Xxxxx 1,000,000 1,068
Xxxx Xxxxx 25,000 27
EXHIBIT "C"
TO AGREEMENT AND PLAN OF MERGER
Nondisclosure and Noncompete Agreement
EXHIBIT "D"
TO AGREEMENT AND PLAN OF MERGER
STINKYFEET ASSETS & LIABILITIES
EXHIBIT "E"
TO AGREEMENT AND PLAN OF MERGER
DISCLOSURE SCHEDULE
XxxxxxXxxx.xxx, Inc. Bank Accounts:
XxxxxxXxxx.xxx, Inc. has no employees or contracts with independent contractors.
