Exhibit 99.1
Reverse Merger Agreement
The key provisions of this Agreement are as follows:
PLAN OF MERGER OF IBL WITH AND INTO OFSM;
The Merger;
Adoption of Plan;
Proposals to be approved by Shareholders of both IBL and OFSM;
Establishment of Record Date; Effective Date of the Merger;
Instruments and Further Assurances;
ARTICLES OF INCORPORATION; DIRECTORS & OFFICERS; BY-LAWS;
Articles of Incorporation;
Directors and Officers;
By-Laws;
CONVERSION AND EXCHANGE OF SHARES;
Conversion of Shares;
Exchange of Certificates or Delivery of Shares;
CLOSING; EFFECTIVE DATE OF MERGER;
Closing;
Effective Date;
REPRESENTATIONS AND WARRANTIES OF OFSM;
Organization, Standing, Qualification, etc;
Capitalization;
Articles of Incorporation, By-Laws and Minutes;
Financial Statements and Assets;
Authorization;
Litigation;
Subsidiaries;
Compliance with Law and Other Instruments;
Contracts and Commitments;
Liabilities;
Title to Properties and Related Matters;
Directors and Officers;
Tax Returns;
Brokers/Agents/Finders/Consultants;
Prior Sales;
Shareholder List;
Transfer Agent and Market Maker(s);
Compliance with Laws and Regulations;
Material Contract Defaults;
Absence of Certain Changes or Events;
Books and Records;
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REPRESENTATIONS AND WARRANTIES OF IBL;
Organization, Standing, Qualification, etc;
Capitalization;
Articles of Incorporation and By-Laws;
Financial Statements and Assets;
Authorization;
Litigation;
Subsidiaries;
Compliance with Law and Other Instruments;
Contracts and Commitments;
Liabilities;
Title to Properties and Related Matters;
Directors and Officers;
Tax Returns;
Brokers:
Shareholder List;
Compliance with Laws and Regulations;
Material Contract Defaults;
Absence of Certain Changes or Events;
Books and Records;
COVENANTS OF IBL PRIOR TO EFFECTIVE DATE OF MERGER;
Stockholders' Meeting;
Access;
Representations;
Preservation of Business;
Approvals;
Notice of Breach;
Negotiations with Third Parties;
Information To Be Supplied;
Proxy or Information Statement;
COVENANTS OF OFSM PRIOR TO THE EFFECTIVE DATE OF MERGER;
Stockholders' Meeting;
Access;
Representations;
Preservation of Business;
Approvals;
Public Announcements;
Notice of Breach;
Negotiations with Third Parties;
Required Information;
Proxy or Information Statement;
CONDITIONS TO OBLIGATIONS OF OFSM AND IBL;
Stockholder Approval;
FURTHER CONDITIONS TO OBLIGATIONS OF OFSM;
Representation Letter;
Investment and Acknowledgment Letters;
Litigation;
Opinion of Counsel to IBL;
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FURTHER CONDITIONS TO OBLIGATIONS OF IBL;
Representation Letter;
Litigation;
Opinion of Counsel to OFSM;
TERMINATION: ABANDONMENT OF MERGER;
Termination;
Liability;
MISCELLANEOUS;
Notices:
Waivers;
Amendments;
Governing Law and Time;
Parties:
Complete Agreement Severability;
Multiple Copies;
AMENDMENT TO AGREEMENT AND PLAN OF MERGER;
ATTACHMENT A - Summary of Dissenters' Rights of Appraisal under Delaware Law
ATTACHMENT B - Articles of Merger;
ATTACHMENT C - Certificate of Amendment to Articles of Incorporation;
ATTACHMENT D - IBL Board of Directors Resolution approving merger
ATTACHMENT E - OFSM Board of Directors Resolution approving merger
ATTACHMENT F- Resignation of OFSM Officers
ATTACHMENT G- Legal Opinions
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Reverse Merger Agreement.
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated and made effective as of this
29th day of January, 2004, by and between Ocean Fresh Seafood Market Place, Inc.
, a publicly held Florida corporation ("OFSM") and International Builders
Limited , a Delaware corporation ("IBL").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of OFSM and IBL deem the merger of IBL
with and into OFSM on the terms herein set forth to be desirable and in the best
interests of their respective stockholders and, subject to approval by their
respective shareholders, desire to adopt this Agreement and Plan of Merger to
result in a Type A Merger which is a tax-free reorganization within the meaning
of Section 368(a)(1)(A) of the Internal Revenue Code of 1954, as amended, and
WHEREAS, the Boards of Directors of OFSM and IBL have approved this
Agreement and Plan of Merger (the "Agreement") and have directed that the
Agreement and the merger contemplated hereby be submitted to their respective
stockholders for adoption.
NOW THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements contained herein, OFSM and
IBL hereby agree that IBL shall be merged with and into OFSM, which shall be the
surviving corporation, and that the plan, terms and conditions of such merger
shall be as follows:
ARTICLE 1
Terms of the Merger
1.01 Merger Terms and Conditions. The principal terms of the merger are as
follows:
a.) OFSM shareholders will be allowed via the Merger to exchange, on a one for
one basis, all their issued and outstanding shares of Common Stock for shares of
IBL Class A Common Stock as outlined in Article 3 of this Agreement. Shares of
OFSM Common Stock not exchanged for IBL Class A Common Stock shall be exchanged
for Class A Common Stock of the surviving corporation.
b.) In addition to any other provisions of this Agreement, seven per cent (7%)
or 425,562 shares, whichever is greater, of the surviving corporation's issued
and outstanding Class A Common Stock (6,079,462) shall be provided to the
following parties in the following allotments:
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1) Odette Holdings, Ltd. Shall receive 325,562;
2) Xxxx Xxxxxxx shall receive 20,000 shares; and
3) Gion Limited shall receive the remaining 80,000 shares. Odette Holdings, Ltd.
shall also receive any excess in the event seven per cent (7%) of the surviving
corporation's issued and outstanding Class A Common Stock exceeds 425,562
shares.
c.) IBL agrees to pay Xx. Xxxxx additional consideration in the amount of
$35,000 within 45 days after the date the Merger is effective.
d.) IBL will within 20 days after the Merger closes pay off OFSM's payables that
are outstanding at the time of the Merger. The amount to be paid by IBL shall
not exceed $35,000.
e.) IBL agrees to have the Form 15C211 filed with the Securities Exchange
Commission (SEC) within 20 days after the Merger closes. If the Form 15C211 is
not filed with the SEC within 20days IBL agrees to issue Xx. Xxxxx 50,000
additional shares of Class A Common Stock.
f.) Immediately after the merger the $62,124 liability recorded as "due to
shareholder " on the OFSM Financial Statements will be converted into equity to
purchase Class A Common Stock in the surviving Corporation. The shares will be
purchased at the most recent purchase price that accredited investors have
purchased IBL Class A Common Stock, which is $2.00 per share.
g.) The parties acknowledge that IBL has two classes of stock. Class A Common
Stock and Class B Common Stock, and that Class B Common Stock has special voting
rights. In matters to be decided by shareholder vote Class A Shareholders have
one (1) vote per share owned and Class B shareholders have 10 votes per share
owned. The parties further acknowledge that Xx. Xxxxxx Xxxxxxxx the Chairman and
Chief Executive Officer of IBL is the only IBL shareholder who owns Class B
Common Stock. The parties agree that subsequent to the Amendment of the Articles
of Incorporation of OFSM to provide for the issuance of Class B Common Stock ,
Xx. Xxxxxxxx will be issued five hundred thousand (500,000) shares of Class B
Common Stock. The five hundred thousand shares of Class B Common Stock that Xx.
Xxxxxxxx will receive is the equivalent amount of Class B Common Stock that Xx.
Xxxxxxxx currently owns in IBL
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Plan of Merger of IBL with and into OFSM.
1.02. The Merger. On the Effective Date of the Merger (as defined in Article
1.05), IBL shall be merged with and into OFSM, the separate existence of IBL
(except as it may be continued by operation of law) shall cease, and OFSM as the
surviving corporation shall continue its corporate existence under the laws of
the State of Florida and OFSM shall possess all of the rights, privileges,
immunities, powers, franchises and authority, of a public as well as of a
private nature, and be subject to all the restrictions, disabilities and duties
of IBL; and all and singular, the rights, privileges, immunities, powers,
franchises and authority of IBL, and all assets and property of every
description, real, personal and mixed, and every interest therein, wherever
located, and all debts or other obligations belonging to or due to IBL on
whatever account, as well for stock subscriptions as all other things in action
or belonging to IBL on whatever account, as well as for stock subscriptions as
all other things in action or belonging to IBL, shall be vested in OFSM; and all
assets, property, rights, privileges, immunities, powers, franchises and
authority, and all and every other interest, shall be thereafter as effectually
the property of OFSM as they were of IBL, but all rights of creditors and all
liens upon any property of IBL shall be preserved unimpaired, and all debts,
liabilities and duties of IBL shall thenceforth be attached to OFSM and may be
enforced against OFSM to the same extent as if said debts, liabilities and
duties had been incurred or contracted by OFSM prior to this transaction.
1.03. Adoption of Plan. Requirement of Shareholder Approval of Both IBL and
OFSM; Dissenters' Rights; Notification. The Merger transaction contemplated
hereby will require shareholder approval of the transaction under both Florida
and Delaware corporate law. See Sections 607.1101 through 607.1320, Florida
Statutes Annotated (FSA), as amended, titled MERGER. OFSM intends to accomplish
such approval by means of a consent of a majority of its shareholders as
authorized by Section 607.1101, FSA, If Florida law requires that OFSM give
dissenters' rights of appraisal as contemplated in FSA Sections 607.1302 and
607.1320, titled RIGHTS OF SHAREHOLDERS TO DISSENT, OFSM will do so.
Accordingly, OFSM shall not solicit proxies even though, as a Section 12(g)
"reporting company," it is subject to the Proxy Rules promulgated under Section
14(a) of the Securities Exchange Act of 1934 ("the '34 Act"). OFSM will instead
provide its shareholders with an Information Statement as required under Section
14(c) of the '34 Act and the 14C series of rules promulgated there under by the
Securities and Exchange Commission ("Commission"). OFSM will also notice-up a
shareholders' meeting in East Providence, RI at an appropriate time immediately
in advance of the anticipated Closing at which it will welcome shareholders to
attend and vote their shares if they so desire. In an effort to establish an
exemption from registration for this transaction, OFSM will also be providing
such Information Statement, among other materials such as purchaser suitability
questionnaires and the like to the Shareholders of IBL. IBL shall conduct its
own shareholders' meeting, after its shareholders have received appropriate
disclosure materials on OFSM and the transaction contemplated hereby, and they
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have had the opportunity to have any questions they or a purchaser
representative, as applicable, may have, answered. See Exhibit 10.02 hereto
(containing a form of investment and acknowledgment letter each IBL Shareholder
is to sign and furnish OFSM prior to Closing). In seeking approval of the
transaction by a majority of IBL's shareholders, IBL shall also be obligated, as
and if required by Delaware corporate law, to give its Shareholders dissenter's
rights of appraisal.
1.04. Proposals To Be Approved By the Shareholders of Both IBL and OFSM. The
Shareholders of both IBL and OFSM shall approve the following proposals: (i)
approval of this Plan and Agreement of Merger ("Agreement"), including the
issuance of the finder's, agent's or consultant's shares to be issued in
connection therewith (see Article 5.14 below); (2) approval of the name change
for OFSM to "International Builders Limited"; (3) approval of the slate of
directors to assume positions on the Board of OFSM upon the Closing, persons to
be designated by IBL (see Article 2.02 below); and (4) approval of any other
amendments to the Articles of Incorporation of OFSM if necessary, such as to
broaden the scope of its corporate purpose to include the business operations
presently carried on by IBL.
1.05. Establishment of Record Date. The Record Date for those OFSM shareholders
entitled to vote on this Agreement shall be January 29, 2004 or a later date not
more than thirty (30) days prior to the date OFSM's Information Statement is
disseminated to OFSM's shareholders. IBL shall establish its own record date, if
necessary, for its shareholders to vote on and approve the transaction in
accordance with Delaware corporate law.
1.06. Effective Date of the Merger. The merger shall become effective as of the
close of business on the date of filing as provided in Article 4.02 (the
"Effective Date of the Merger").
1.07. Instruments and Further Assurances. From time to time, as and when
requested by OFSM, or by its successors or assigns, the officers and directors
of IBL last in office shall execute and deliver such deeds and other instruments
for transfer and shall take or cause to be taken such further or such other
actions as shall be reasonably necessary in order to vest or perfect in OFSM, or
to confirm of record or otherwise to OFSM, to the extent such officers and
directors have the power so to do, title to and possession of all the property,
interests, assets, rights, privileges, immunities, powers, franchises and
authority of IBL.
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ARTICLE 2
Articles of Incorporation, Directors and Officers and By-Laws.
2.01. Articles of Incorporation. Except as provided below, the Articles of
Incorporation of OFSM, as in effect on the Effective Date of the Merger, shall
be the Articles of Incorporation of OFSM, as the surviving corporation, until
they are amended as provided therein or by law. Upon the Effective Date of the
Merger, the Articles of Incorporation of OFSM shall be amended to change the
name of OFSM to "International Builders Limited," among other amendments as may
be necessary to effectuate and carry out the terms and provisions of this
Agreement. A copy of the form of Amended Articles of Incorporation of OFSM and
the form of Articles of Merger to be filed in both the States of Delaware and
Florida, thereby establishing the Effective Date of the Merger, are attached
hereto as Exhibit 2.01.
2.02. Directors and Officers. Upon the Effective Date of the Merger, the Board
of Directors and Officers of OFSM, the surviving corporation, shall consist of
the persons identified in Exhibit 2.02 hereto. Said directors shall hold office
as provided in the By-Laws of the surviving corporation. At the OFSM
shareholders' meeting to be held pursuant to Article 8.01 below, the
shareholders of OFSM will vote on the election of the persons listed in Exhibit
2.02 to be directors of OFSM until its next annual meeting or until they or any
one of them resign and their respective resignations are accepted.
2.03. By-Laws. The By-Laws of OFSM, as in effect on the Effective Date of the
Merger, shall be the By-Laws of the surviving corporation, until they are
amended as provided therein or otherwise by law.
ARTICLE 3
Conversion and Exchange of Shares.
3.01 Conversion of Shares. The manner of converting or exchanging the shares
of OFSM and IBL shall be as follows:
(a) Each share of the Common Capital Stock, $.001 par value per share, of OFSM
("OFSM Common Stock") that is issued and outstanding on the Effective Date of
the Merger shall be exchanged on a one for one basis for shares of Class A
Common Stock of the surviving corporation.
(b) Each share of Common Capital Stock, $0.01 par value per share, of IBL ("IBL
Common Stock") that is issued and outstanding on the Effective Date of the
Merger shall, by virtue of the merger, be converted, one-for-one, into a total
of five million three hundred eighty three thousand nine hundred sixty four
(5,383,964) fully paid and non-assessable shares of OFSM Common Stock. Nine
individuals also have outstanding options (330,000) and warrants (2,667,500) to
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acquire two million nine hundred ninety seven thousand five hundred (2,997,500)
shares of IBL at $2.00 per share, The warrants and options expire in the years
2004 and 2005. See Article 6.02 below. If any part or portion of such currently
outstanding options and warrants to acquire an additional 2,997,500 shares of
IBL stock are exercised prior to Closing, additional OFSM Common Stock shall be
issued upon Closing to such persons so exercising his or her option(s) or any
part thereof. No fractional shares of OFSM Common Stock will be issued to IBL
Shareholders upon conversion of the IBL Common Stock to OFSM Common Stock.
Taking into consideration the 695,498 shares of OFSM remaining after the
Closing, the 425,562 shares to be issued to OFSM's majority shareholder and
adding in the 5,383,964 shares to be issued to the Shareholders of IBL in the
exchange, there will be no less than 6,505,024 shares of OFSM then-issued and
outstanding upon the Effective Date. (This figure ignores taking into
consideration the issuance of any shares issuable to the IBL optionees and
warrant holders prior to Closing by IBL, an event that could occur. Such options
and warrants must legally survive Closing.)
3.02 Exchange of Certificates or Delivery of Shares. On and after the Effective
Date of the Merger, each holder of a certificate or certificates representing
IBL Common Stock, upon presentation and surrender of such certificate or
certificates to OFSM or its transfer agent, Interwest Transfer Xx.Xxx. shall be
entitled to receive in exchange therefore a certificate or certificates
representing the number of full shares of OFSM Common Stock to which he is
entitled, as provided in Article 3.01. Until so presented and surrendered in
exchange for a certificate representing OFSM Common Stock, each certificate
which represented issued and outstanding shares of IBL Common Stock on the
Effective Date of the Merger shall, except as provided in the following
sentence, be deemed for all purposes to evidence ownership of the number of full
shares of OFSM Common Stock into which such shares of IBL Common Stock have been
converted pursuant to the merger. Until surrender of such certificates in
exchange for certificates representing OFSM Common Stock, the holder thereof
shall not be entitled to vote at any shareholders meeting of OFSM.
ARTICLE 4
Closing; Effective Date of Merger.
4.01 Closing. The closing of the transaction contemplated by this Agreement
shall take place at 0000 Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xxx Xxxxx , Xxxxxxxxxx,
at such date and time, within five (5) business days after the satisfaction or
waiver of the last of the conditions set forth in Articles 9, 10 and 11 hereof
to be satisfied or waived, as the parties may fix. The closing of such
transactions is herein called the "Closing" and the date of that Closing is
referred to herein as the "Closing Date."
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4.02 Effective Date. Subject to the conditions in this agreement and to the
execution and filing of certificates or articles of merger and other documents
as may be required by Florida and Delaware corporate law, the merger shall
...become effective at the close of business on such date as such filings are
made or at such other date as stated in the certificate or articles of merger
(the "Effective Date of the Merger"). Unless this Agreement shall have been
terminated pursuant to the provision of Article 12 hereof, such filings shall be
made on or as soon as practicable after the Closing.
ARTICLE 5
Representations and Warranties of OFSM.
5.01. Organization, Standing, Qualification, etc. OFSM is a publicly held
"development stage" Florida corporation duly organized, validly existing and in
good standing under the laws of the State of Florida. Its registered agent is
Xxxxxx Xxxxx, 0000 X. Xxxxxxx Xxx., #000-00, Xxxx Xxxxx XX 00000, phone no.
(561) 000- 0000. OFSM has all the requisite corporate power and is duly
authorized, qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own its properties
and assets and to carry on its business as it is presently being conducted. To
the best knowledge, information and belief of management, the nature of OFSM's
business and the ownership of its properties do not require it to become
qualified in any state as a foreign corporation and therefore, it has not done
so. OFSM was originally incorporated in the State of Florida on October 4, 1996
under the name Elm Tree Capital Corp. The Company then changed its name to Cyber
close out. Com, Inc. and later to Sitzen. Com, Inc. In October 1999 the Company
changed its name to OFSM. In November 2000, it filed a Form 10-SB with the
Commission by which it became a Section 12(g) "reporting company" under the
Securities Exchange Act of 1934 ("the '34 Act"). All of OFSM filings with the
Commission since November 2000 are available on XXXXX, the Commission's publicly
available Database. As of December 31, 2003, OFSM had approximately 27
stockholders of record. Its transfer agent is Interwest Transfer Co., Inc.
located in Salt Lake City, Utah.
5.02. Capitalization. The authorized capital stock of OFSM consists of
750,000,000 shares of common stock, with $.001 par value, of which 695,498
shares are currently issued and outstanding. All issued and outstanding shares
are duly authorized, fully paid, validly issued and non-assessable in accordance
with applicable law. No dividends or other distribution of the assets of OFSM
have been declared or paid in the capital stock of OFSM. Except for the
transactions contemplated by this Agreement, there are no outstanding warrants,
options, preemptive rights or rights to subscribe for or purchase any shares of
OFSM's capital stock or any outstanding securities that are convertible into
OFSM's capital stock. The OFSM Shares to be issued pursuant to this Agreement
have been duly authorized and, when issued to the shareholders of IBL in
exchange for their IBL Common Stock will be validly issued, fully paid and
non-assessable.
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5.03 Articles of Incorporation, By-Laws and Minutes. The complete Articles of
Incorporation and the By-Laws of OFSM, as will be in effect on the Effective
Date of the Merger, are attached hereto as Exhibit 5.03.
5.04. Financial Statements and Assets.
(a) OFSM's audited financial statements for its 2003 fiscal year ended December
31, 2003, are anticipated to reflect approximately $85,000 in negative net worth
or shareholders' equity.
Attached hereto as Exhibit 5.04 are the complete audited financial statements of
OFSM as of December 31, 2002 and Unaudited financial statements for the quarter
ending September 30, 2003 (hereinafter referred to as the "OFSM Financial
Statements").
All such financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved. As of the date of any of such balance sheets, except as and to the
extent reflected or reserved against therein, OFSM did not have any liabilities
or obligations (absolute or contingent) which should be reflected in a balance
sheet or the notes thereto prepared in accordance with generally accepted
accounting principles, and all assets reflected therein are, to the best
knowledge, information and belief of management, properly reported and present
fairly the value of the assets of OFSM in accordance with generally accepted
accounting principles. To the best knowledge, information and belief of
management, such statements of operations present fairly the results of
operations of OFSM for the periods indicated. To the best knowledge, information
and belief of management, such statements of changes in financial position
present fairly the information that should be presented therein in accordance
with generally accepted accounting principles.
The books and records, financial and others, of OFSM are in all material
respects complete and correct and have been maintained in accordance with good
business and accounting practice.
5.05. Authorization. The Board of Directors of OFSM has approved the Agreement
and the transaction contemplated hereby, has authorized the execution and
delivery of this Agreement of OFSM and has authorized the execution and delivery
of this Agreement of OFSM and has authorized the submission of this Agreement
and the transactions contemplated hereby to the OFSM shareholders for their
consideration with the recommendation that it be approved or that it believes a
majority of the shareholders will in fact consent to the transaction without the
need to solicit such approval. OFSM has full power, authority and legal right to
enter into this Agreement and this Agreement constitutes a legal, valid and
binding obligation of OFSM enforceable in accordance with its terms.
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5.06. Litigation. There is no action, suit, proceeding or investigation pending,
at law or in equity, or to the knowledge of OFSM's management, threatened,
against or affecting OFSM before or in any court, either state or federal,
public board, or body which calls into question the creation, organization or
existence of OFSM, the validity of this Agreement or the authority of OFSM to
execute, deliver and carry out the terms of the Agreement or which judgment,
order or finding can reasonably be expected to have a material adverse effect on
the condition (financial or otherwise) of OFSM. OFSM has no knowledge of any
default on its part with respect to any judgment, order, writ, injunction,
decree, award, rule or regulation of any court, arbitrator or governmental
agency or instrumentality.
5.07. Subsidiaries. OFSM does not own, directly or indirectly, any interest or
investment, whether in equity or debt, in any corporation, business, trust or
other entity.
5.08. Compliance with Law and Other Instruments. OFSM is not in violation or
default of any term of its Articles of Incorporation or By-Laws, or of any
agreement, contract, commitment, instrument, indenture, judgment, decree or
order, applicable to it and, to the best of management's knowledge, it has
timely filed all reports and any other documents required by it to be filed with
any governmental agency, including the Commission. The execution, delivery and
performance of this Agreement and the taking of action contemplated hereby will
not result in any violation of or be in action contemplated hereby will not
result in any violation of or be in conflict with or constitute a default under
(a) the Article of Incorporation or By-Laws of OFSM, or (b) any material
agreement or instrument to which OFSM or any consolidated subsidiary is a party
or by which it is bound, or (c) any material judgment, decree or order to which
OFSM is subject, or result in the creation of any material lien, charge or
encumbrance on any of the properties or other assets of OFSM.
5.09. Contracts and Commitments.
There are no material contracts, agreements, franchises, license agreements or
other commitments to which OFSM is a party or by which it or any of its
properties are bound;
OFSM is not a party to any contract, agreement, other commitment or instrument
or subject to any charter or other corporate restriction or any judgment, order,
wit, injunction, decree or award which materially and adversely affects, or in
the future may (as far as OFSM can now foresee), materially and adversely
affect, the business, operations, properties, assets or condition of OFSM; and
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OFSM is not a party to any material oral or written (i) contract for the
employment of any officer or employee which is not terminable on 30 days' (or
less) notice, (ii) profit sharing, bonus, deferred compensation, stock option,
severance pay, pension or retirement plan, agreement or arrangement, (iii)
agreement, contract or indenture relating to the borrowing of money, (iv)
guaranty of any obligation, other than one on which OFSM is a primary obligor,
for the borrowing of money or otherwise, excluding endorsements made for
collection and other guaranties of obligations, which, in the aggregate do not
exceed $1,000, (v) consulting or other similar contract with an unexpired term
of more than one year or providing for payments in excess of $1,000 in the
aggregate, (vi) collective bargaining agreement, (vii) agreement with any
present or former officer or director of OFSM, or (viii) consent, agreement or
other commitment involving payments by it of more than $1,000 in the aggregate.
5.10. Liabilities. Except as disclosed or provided for in the OFSM Financial
Statements, OFSM, to the best of its knowledge after due inquiry, has no debt,
obligation or liability of any nature, whether accrued, absolute, contingent or
otherwise, whether due or to become due to any person or entity, including any
of its officers, directors, or shareholders, in excess of $1,000.
5.11. Title to Properties and Related Matters. OFSM has good and marketable
title to all of its properties, interests in properties and assets, real and
personal, which are reflected in the latest balance sheet included in the OFSM
Financial Statements or acquired after that date (except properties, interests
in properties and assets sold or otherwise disposed of since such date in the
ordinary course of business), free and clear of all mortgages, liens, pledges,
charges, or encumbrances except: (i) statutory liens or claims not yet
delinquent, (ii) such imperfections of title and easements as do not and will
not materially detract from or interfere with the present or proposed use of the
properties subject thereto or affected thereby, or otherwise materially impair
present business operations of such properties, and (iii) as described in the
OFSM Financial Statements.
5.12. Directors and Officers. The Board of Directors and principal officers of
OFSM, as of the date hereof, are those persons identified in Exhibit 5.12
hereto.
5.13. Tax Returns. Within the times and in the manner prescribed by law, OFSM
has filed all federal, state and local tax returns required by law and has paid
all taxes, assessments and penalties due and payable. All taxes and governmental
charges levied or assessed against the property or the business of OFSM have
been paid, other than taxes or charges the payment of which is not yet due or
which, if due, is not yet delinquent or is being contested in good faith or has
not been finally determined.
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5.14. Brokers/Agents/Finders/Consultants. Other than a finder's fee, agent's fee
or consultant's fee payable to Xxxxxx Xxxxxxx and Business Acquisitions
Strategies Inc. , neither OFSM nor any officer or director of OFSM has employed
any broker, finder, consultant or agent or has agreed to pay or has otherwise
incurred any brokerage fee, finder's fee, consulting fee or commission with
respect to the transactions contemplated by this Agreement. In this regard and
upon Closing, Xxxxxx Xxxxxxx, a individual, shall be entitled to receive a fee
of ninety six thousand four hundred ninety nine (96,499) pre-merger "restricted"
shares and Business Acquisitions Strategies Inc. shall be entitled to receive
one hundred ninety two thousand nine hundred ninety nine (192,999) pre-merger
"restricted" shares. Both Xxxxxx Xxxxxxx and Business Acquisitions Strategies
Inc. shall execute investment letters to the effect that the consultant's shares
they shall be so acquiring as a fee are acquired for investment purposes only
and not with a view to the further distribution thereof. In the event that OFSM,
after Closing, registers any shares with the Commission, IBL and its principals
hereby agree that it shall register the 289,498 shares subject of this paragraph
and, if necessary or otherwise advisable, it will register such shares with the
Commission on a Form S-8. In addition, if necessary to take Xxxxxx Xxxxxxx and
Business Acquisition Strategies Inc. out of the parameters of Section 16(b), the
"short-swing profit" statute under the '34 Act, OFSM and IBL shall submit the
approval such 289,498 share finder's, agent's or consultant's fee to their
respective shareholders as part of their mutual adoption of this Plan and
Agreement. With the exception of, or subject to, the foregoing, IBL and its
officers jointly and severally agree to indemnify and hold IBL and its officers
and directors harmless from and against any fee, loss or expense arising out of
claims by brokers, finders or consultants employed or alleged to have been
employed by them in connection with this transaction.
5.15. Prior Sales. OFSM has not privately offered and sold any of its securities
within the last two (2) years and therefore, it need not attach hereto as
Exhibit 5.15 a list setting forth the names and addresses of the purchasers of
any securities of OFSM so offered and sold and whether any such purchaser is a
5% or more shareholder.
5.16. Shareholder List. Attached hereto as Exhibit 5.16 is an alphabetical list,
as of a date within thirty (30) days for the date hereof, of all of the
shareholders of OFSM and the number of shares of OFSM Common Stock owned by
each. Such list also identifies which stock certificates have stop transfer
orders and which have restrictive legends placed upon them.
5.17. Transfer Agent . OFSM's transfer agent is and has been Interwest Transfer
Co., Inc. located at 0000 Xxxx 0000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx
00000, phone no. 000-000-0000. There is no affiliation, direct or indirect, by
and among Interwest Transfer Co., Inc. and any current or former officer and
director of OFSM, including principal shareholder of OFSM, Xxxxxx X. Xxxxx.
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5.18. Compliance with Laws and Regulations. OFSM has complied with all
applicable statues and regulations of any federal, state or other applicable
jurisdiction or agency thereof, except to the extent that noncompliance would
not materially and adversely affect the business, operations, properties, assets
or condition of OFSM or except to the extent that noncompliance would not result
in the incurrence of any material liability.
5.19. Material Contract Defaults. Neither OFSM nor any other party is in default
in any material respect under the terms of any outstanding contract, agreement,
lease or other commitment which is material to the business, operations,
properties or assets or the condition of OFSM, and there is no event of default
or event which, with notice of lapse of time or both, would constitute a default
in any material respect under any such contract, agreement, lease or other
commitment in respect of which it has not taken adequate steps to prevent such a
default from occurring.
5.20. Absence of Certain Changes or Events. Since December 31, 2003 and except
as set forth in or permitted by this Agreement and the Exhibits hereto, there
has not been, with respect to OFSM:
(a) Any change in the business, operations, method of management or accounting,
or financial condition or the manner of conducting the business of OFSM other
than changes in the ordinary course of business, none of which has had a
material adverse effect on such business, operations or financial condition,
taken as a whole, or changes resulting from compliance with this Agreement;
(b) Any damage, destruction or loss (whether or not covered by insurance)
materially and adversely affecting the assets, business, operations or condition
of OFSM;
(c) Any declaration, setting aside or payment of any dividend or other
distribution in respect of the shares of OFSM of any class, or any direct or
indirect redemption, purchase or other acquisition of any shares of any class of
OFSM;
(d) Any material increase in the direct or indirect compensation or other
benefits payable or to become payable by OFSM to any of its officers, directors,
employees or agents over the respective rates and amounts set forth the in the
OFSM Financial Statements;
(e) Any sale, lease, abandonment or other disposition by OFSM of any real
property otherwise than in the ordinary course of business, or any sale,
assignment, transfer, license or other disposition by OFSM of any tangible or
intangible asset;
(f) Any grant of any option, warrant or right to purchase, or other right to
acquire shares of any class of OFSM granted to any person;
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(g) Any employment, bonus or deferred compensation agreement entered into
between OFSM and any of its directors, officers or other employees or
consultants;
(h) Any issuance of shares of OFSM beyond the shares then issued and
outstanding.
(i) Any indebtedness incurred by OFSM for borrowed money not now repaid, or any
commitment to borrow money entered into by OFSM;
(j) Any amendment of the Article of Incorporation or By-Laws of OFSM;
(k) Any material obligation or liability, absolute or contingent, paid except
current liabilities reflected in or shown on the most recent balance sheet
included in the OFSM Financial Statements and current liabilities incurred since
that date in the ordinary course of business or in connection with this
transaction;
(l) Any sale or transfer, or any agreement, arrangement or option for the sale
or transfer, of any of its assets, property or rights having an aggregate value
of $10,000 or more (other than in the ordinary course of business); or (m) Any
other material transaction.
Notwithstanding the foregoing, any or all of the foregoing changes or events
shall be permitted upon the written consent of IBL by action or its Board of
Directors, evidenced by the delivery by IBL to OFSM of a certified copy of
resolutions of such Board specifying the change or event consented to by IBL.
5.21. Books and Records. From the date of this Plan to the Closing, OFSM will
(1) give to IBL and its Shareholders, or their respective representatives, full
access during normal business hours to all of its offices, books, records,
contracts and other corporate documents and properties so that IBL and its
Shareholders, or their respective representatives, may inspect and audit them;
and (2) furnish such information concerning the properties and affairs of OFSM
as IBL and its Shareholders, or their respective representatives may reasonably
request.
ARTICLE 6
Representations and Warranties of IBL.
IBl hereby warrants and represents to OFSM as follows:
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6.01. Organization, Standing, Qualification, etc. IBL is a Delaware corporation
engaged in the construction, real estate development and gaming. It was duly
organized in October 2001 as International Builders Limited. IBL is validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power necessary to engage in the business it is
currently engaged in. It is duly authorized, qualified, franchised and licensed
under all applicable laws, regulations, ordinances and orders of public
authorities to own its properties and assets and to carry on its business as it
is presently being conducted. IBL is qualified to do business in all states
where the nature of IBL's business and the ownership of its properties require
it to become qualified as a foreign corporation.
6.02. Capitalization. The authorized capital stock of IBL consists of 16,000,000
shares of common stock, having a par value of $0.01, of which no more than
5,383,964 shares will be issued and outstanding as of the Effective Date of the
Merger. (This figure does not account for, or include, the potential exercise of
certain outstanding options and warrants to acquire 2,997,500 additional IBL
shares at $2.00 per share. See also Article 3.01(b) above.) All outstanding
shares of IBL are duly authorized, fully paid, validly issued and non-assessable
in accordance with applicable law. No dividends or other distribution of the
assets of IBL have been declared or paid in the capital stock of IBL. Except as
set forth in Exhibit 6.02 attached hereto, there are no outstanding warrants,
options, preemptive rights or rights to subscribe for or purchase any shares of
IBL's capital stock or any outstanding securities that are convertible into
`IBL's capital stock.
6.03. Articles of Incorporation and By-Laws. The complete Articles of
Incorporation and the By-Laws of IBL as will be in effect on the Closing Date,
are attached hereto as Exhibit 6.03.
6.04. Financial Statements and Assets.
(a) As of December 31, 2003, IBL had received $492,833 in paid in capital. If
and when its outstanding stock options of 330,000 and warrants of 2,667,500
shares exercisable at $2.00 per share are in fact exercised, it shall receive an
additional $5,995,000 in paid in capital. As of the date of this Agreement, IBL
has a total of 5,383,964 common capital shares issued and outstanding and the
outstanding stock options and warrants to acquire 2,997, 500 additional shares
at $2.00 per share.
Attached hereto as Exhibit 6.04 are the audited IBL Financial Statements for the
year ending December 31, 2002 and the unaudited balance sheet and income
statement of IBL as of its most recent quarter preceding the Closing. The 2002
year end audited Financial Statements were prepared by the accounting firm which
will undertake and prepare its post-Closing audited financial statements
(collectively referred to as the "IBL Financial Statements"). If other
supplementary accounting information, in addition to that identified in the
previous sentence, is necessary for Closing, IBL shall prepare such. IBL is
informed and believes that within 75 days of Closing the transaction, it must
file, as part of an 8-K Current Report to be filed within 15 days of Closing, an
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audited balance sheet for its most recent fiscal year end, audited income
statements for its most recent two fiscal year ends and other standard
inclusions such as a statement of stockholders' equity and statement of cash
flows. IBL is on track with its auditors in preparing such audited financial
statements.
All such financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved. As of the date of any of such balance sheets, except as and to the
extent reflected or reserved against therein, IBL `s liabilities or obligations
(absolute or contingent) have been reflected in a balance sheet or the notes
hereto prepared in accordance with generally accepted accounting principles, and
all assets reflected therein are properly reported and present fairly the value
of the assets of IBL in accordance with generally accepted accounting
principles. Such statements of operations present fairly the results of
operations of IBL for the periods indicated. Such statements of changes in
financial position present fairly the information that should be presented
therein in accordance with generally accepted accounting principles.
6.05. Authorization. The Board of Directors of IBL has approved this Agreement
and the transactions contemplated hereby, has authorized the execution and
delivery of this Agreement by IBL, and has authorized the submission of this
Agreement and the transaction contemplated hereby to the IBL shareholders for
their consideration with the recommendation that it be approved. IBL has full
power, authority and legal right to enter into this Agreement and to consummate
the transactions contemplated hereby and this Agreement constitutes a legal,
valid and binding obligation of IBL enforceable in accordance with its terms.
6.06. Litigation. There is no action, suit, proceeding or investigation pending,
at law or in equity, or to the knowledge of IBL's management, threatened,
against or affecting IBL before or in any court, either state or federal, public
board, or body which calls into question the creation, organization or existence
of IBL, the validity of this Agreement or the authority of IBL to execute,
deliver and carry out the terms of the Agreement or which judgment, order or
finding can reasonably be expected to have a material adverse effect on the
condition (financial or otherwise) of IBL. IBL has no knowledge of any default
on its part with respect to any judgment, order, writ, injunction, decree,
award, rule or regulation of any court, arbitrator or governmental agency or
instrumentality.
6.07. Subsidiaries. IBL does not own, directly or indirectly, any interest or
investment, whether equity or debt, in any corporation, business, trust or other
entity.
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6.08. Compliance with Law and Other Instruments. Except as set forth in Exhibit
6.08, IBL is not in violation or default of any term of its Articles of
Incorporation or By-Laws, or of any agreement, contract, commitment, instrument,
indenture, judgment, decree or order, applicable to it and has timely filed all
reports and any other documents required by it to be filed with any governmental
agency. The execution, delivery and performance of this Agreement and the taking
of action contemplated hereby will not result in any violation of or be in
conflict with or constitute a default under (a) the Articles of Incorporation or
By-Laws of IBL, or (b) any material agreement or instrument to which IBL or any
consolidated subsidiary is a party or by which it is bound, or (c) any material
judgment, decree or order to which IBL is subject, or result in the creation of
any material lien, charge or encumbrance on any of the properties of IBL.
6.09. Contracts and Commitments. IBL is not a party to any contract, agreement,
other commitment or instrument or subject to any charter or other corporate
restriction or any judgment, order, writ, injunction, decree or award which
materially and adversely affects, or in the future may (as far as IBL can now
foresee), materially and adversely affect, the business, operations, properties,
assets or condition of IBL.
6.10 Liabilities. Except as set forth in the IBL Financial Statements or in any
exhibit, IBL to the best of its knowledge, after due inquiry, has no debt,
obligation or liability of any nature, whether accrued, absolute, contingent or
otherwise, whether due or to become due to any person or entity, including any
of its officers, directors, or shareholders, in excess of $1,000.
6.11 Title to Properties and Related Matters. IBL has good and marketable title
to all of its properties, interests in properties and assets, real and personal,
which are reflected in the latest balance sheet included in the IBL Financial
Statements or acquired after that date (except properties, interests in
properties and assets sold or otherwise disposed of since such date in the
ordinary course of business), free and clear of all mortgages, liens, pledges,
charges or encumbrances except: (i) statutory liens or claims not yet
delinquent, (ii) such imperfections of title and easements as do not and will
not materially detract from or interfere with the present or proposed use of the
properties subject thereto or affected thereby, or otherwise materially impair
present business operations of such properties; or (iii) as described in the IBL
Financial Statements.
6.12 Directors and Officers. The Board of Directors and principal officers of
IBL, as of the date hereof, are those persons identified in Exhibit 6.12 hereto.
6.13. Tax Returns. Within the times and in the manner prescribed by law, IBL has
filed all federal, state and local tax returns required by law and has paid all
taxes, assessments and penalties due and payable. All taxes and governmental
charges levied or assessed against the property or the business of IBL have been
paid, other than taxes or charges the payment of which is not yet due or which,
if due, is not yet delinquent or is being contested in good faith or has not
been finally determined.
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6.14. Brokers. Neither IBL nor any officer or director of IBL has employed any
broker, finder or agent or has agreed to pay or has otherwise incurred any
brokerage fee, finder's fee or commission with respect to the transactions
contemplated by this Agreement. IBL agrees to indemnify and hold OFSM and its
officers and directors harmless from and against any fee, loss or expense
arising out of claims by brokers or finders employed or alleged to have been
employed by it.
6.15 Shareholder List. Attached hereto as Exhibit 6.15 is an alphabetical list
of all of the shareholders of IBL and the number of shares of IBL Common Stock
owned by each of them.
6.16 Compliance with Laws and Regulations. IBL has complied with all applicable
statutes and regulations of any federal, state or other applicable jurisdiction
or agency thereof, except to the extent that noncompliance would not materially
and adversely affect the business, operations, properties, assets or condition
of IBL or except to the extent that noncompliance would not result in the
incurrence of any material liability.
6.17 Material Contract Defaults. Neither IBL nor any other party is in default
in any material respect under the terms of any outstanding contract, agreement,
lease or other commitment which is material to the business, operations,
properties or assets or the condition of IBL and there is no event of default or
event which, with notice of lapse of time or both, would constitute a default in
any material respect under any such contract, agreement, lease or other
commitment in respect of which it has not taken adequate steps to prevent such a
default from occurring.
6.18 Absence of Certain Changes or Events. Since December 31, 2003, and except
in connection with or as set forth in or permitted by this Agreement and the
Exhibits hereto, there has not been, with respect to IBL:
Any change in the business, operations, method of management or account, or
financial condition or the manner of conducting the business of IBL other than
changes in the ordinary course of business, none of which has had a material
adverse effect on such business, operations or financial condition, taken as a
whole;
Any damage, destruction or loss (whether or not covered by insurance) materially
and adversely affecting the assets, business, operations or condition of IBL;
17
Any declaration, setting aside or payment of any dividend or other distribution
in respect of the shares of IBL of any class, or any direct or indirect
redemption, purchase or other acquisition of any shares of any class of IBL by
IBL;
Any material increase in the direct or indirect compensation or other benefits
payable or to become payable by IBL to any of its officers, directors, employees
or agents over the respective rates and amounts set forth in the IBL Financial
Statements;
Any sale, lease, abandonment or other disposition by IBL of any real property
otherwise than in the ordinary course of business, or any sale, assignment,
transfer, license or other disposition of IBL of any tangible or intangible
asset;
Any material obligation or liability, absolute or contingent, paid or incurred
except current liabilities in the ordinary course of business and costs incurred
in connection with this transaction;
Any material obligation or liability, absolute or contingent, paid except
current liabilities reflected in or shown on the most recent balance sheet
included in the IBL Financial Statements, and current liabilities incurred since
that date in the ordinary course of business or in connection with this
transaction; or
Any sale or transfer, or any agreement arrangement or option for the sale or
transfer, of any of its assets, property or rights having an aggregate value of
$10,000 or more (other than in the ordinary course of business).
Notwithstanding the foregoing, any or all of the foregoing changes or events
shall be permitted upon the written consent of OFSM by Action or its Board of
Directors, evidenced by the delivery by OFSM to IBL of a certified copy of
resolutions of such Board specifying the change or even consented to by OFSM.
6.19. Books and Records. From the date of this Plan to the Closing, IBL will (1)
give to OFSM full access during normal business hours to all of its offices,
books, records, contracts and other corporate documents and properties so that
OFSM may inspect and audit them; and (2) furnish such information concerning the
properties and affairs of IBL as OFSM may reasonably request.
Article 7
Covenants of IBL Prior to Effective Date of Merger.
Between the date hereof and the Effective Date of the Merger:
7.01. Stockholders' Meeting. The Board of Directors of IBL will submit this
Agreement to its stockholders for their approval, and will recommend such
approval, at a meeting thereof to be duly called and held at the earliest
practicable date as may be agreed upon in writing by OFSM and IBL.
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7.02. Access. IBL will afford to the officers and other authorized
representatives of OFSM, access to the plants, properties, books and records of
IBL and will furnish OFSM with such additional financial and operating data and
other information as to the business and properties of IBL, as may be necessary
for OFSM to evaluate thoroughly, prior to the Effective Date of the Merger, the
business, assets, operations and financial condition of IBL, as OFSM may from
time to time reasonably request. If, for any reason, the merger contemplated by
the agreement is not consummated, OFSM will use its best efforts to cause all
confidential information obtained by it from IBL to be treated as such, will
also use its best efforts not to use such information in a manner detrimental to
IBL and will promptly return to IBL all documents, papers, books, records and
other materials (and all copies thereof) obtained from IBL in the course of its
investigation and evaluation of IBL.
7.03. Representations. IBL will take all action necessary to render accurate, as
of the Effective Date of the Merger, IBL's representations and warranties
contained herein, and it will refrain from taking any action that would render
any such representation or warranty inaccurate as of such time. IBL will use its
best efforts to perform or cause to be satisfied each covenant or condition to
be performed or satisfied by it.
7.04. Preservation of Business. IBL will carry on its business in substantially
the same manner as it has heretofore and shall perform in all material respects
all of its obligations under material contracts, leases and documents relating
to or affecting its assets, property and business and will use its best efforts
to preserve intact its business organization and its good will with its
suppliers, customers and other having business relations with it.
7.05. Approvals. IBL will use its best efforts to obtain all licenses or other
approvals required to be obtained by it from any appropriate governmental or
regulatory body or other person in connection with the carrying out of the
transactions contemplated by this Agreement and the continued operation of its
business after the merger.
7.06. Notice of Breach. IBL will immediately give notice to OFSM of the
occurrence of any event or the failure of any event to occur that results in a
breach of any of IBL's representations or warranties or a failure by IBL to
comply with any covenant, condition or agreement contained herein.
7.07. Negotiations with Third Parties. IBL will not, without the prior approval
of OFSM, initiate or encourage discussions or negotiations with third parties
relating to or otherwise approve (or approve without prior discussions with OFSM
any unsolicited offer regarding) any merger, sale, or other disposition of any
substantial part of IBL's assets or stock.
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7.08. Information To Be Supplied. IBL will furnish OFSM with all information
concerning IBL, its officers, directors and shareholders that is reasonably
required for inclusion in the proxy statement or information statement materials
to be used by OFSM to obtain the approval of IBL's and OFSM's shareholders to
this Plan and Agreement (the "Proxy Materials").
7.09. Proxy or Information Statement. As of the date of mailing of the Proxy or
Information Statement and as of the date of IBL's Stockholders Meeting referred
to in Article 7.01, the information provided and to be provided by IBL to OFSM
for use in the Proxy Materials and in any other proxy material to be used by IBL
or OFSM in connection with the merger will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.
ARTICLE 8
Covenants of OFSM Prior to the Effective Date of Merger.
Between the date hereof and the Effective Date of the Merger:
8.01. Stockholders' Meeting. While it is anticipated that a majority of the
Shareholders of OFSM will approve this Agreement by consent, the Board of
Directors of OFSM will nonetheless submit this Agreement to its stockholders for
their approval and will conduct a Shareholders Meeting in East Providence, RI,
to be duly called and held at the earliest practicable date as may be agreed
upon in writing by OFSM and IBL. At that meeting, the Board of Directors of OFSM
will also nominate the persons listed in Exhibit 2.02 to be elected to the Board
of Directors of OFSM and will recommend their election to the OFSM shareholders.
8.02. Access. OFSM will afford to the officers and other authorized
representatives of IBL, access to the plants, properties, books and records of
OFSM and will furnish IBL with such additional financial and operating data and
other information as to the business and properties of OFSM, as may be necessary
for IBL to evaluate thoroughly, prior to the Effective Date of the Merger, the
business, assets, operations and financial condition of IBL, as IBL may from
time to time reasonably request. If, for any reason, the merger contemplated by
the Agreement is not consummated, IBL will use its best efforts to cause all
confidential information obtained by it from OFSM to be treated as such, will
also use its best efforts not to use such information in a manner detrimental to
OFSM and will promptly return to OFSM all documents, papers, books, records and
other materials (and all copies thereof) obtained from OFSM in the course of its
investigation and evaluation of OFSM.
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8.03. Representations. OFSM will take all action necessary to render accurate,
as of the Effective Date of the Merger, OFSM's representations and warranties
contained herein, and it will refrain from taking any action that would render
any such representation or warranty inaccurate as of such time. OFSM will use
its best efforts to perform or cause to be satisfied each covenant or condition
to be performed or satisfied by it.
8.04. Preservation of Business. OFSM will carry on its business in substantially
the same manner of it has heretofore and shall perform in all material respects
all of its obligations under material contracts, leases and documents relating
to or affecting its assets, property and business and will use its best efforts
to preserve intact its business organization and its good will with its
suppliers, customers and other having business relations with it.
8.05. Approvals. OFSM will use its best efforts to obtain all licenses or other
approvals required to be obtained by it from any appropriate governmental or
regulatory body or other person in connection with the carrying out of the
transactions contemplated by this Agreement.
8.06. Public Announcements. OFSM will not, without the prior consent of IBL (or,
in the case of an announcement required by applicable securities law, without
prior consultation with IBL) make any announcement to the public concerning the
transactions contemplated by this Agreement. In this regard, IBL has already
agreed that OFSM may file an 8-K Current Report with the Commission 15 days
after January 29, 2004, attaching copies of the Reverse Merger Agreement and the
Press Release of same date.
8.07. Notice of Breach. OFSM will immediately give notice to IBL of the
occurrence of any event or the failure of any event to occur that results in a
breach of any representation or warranty by OFSM or a failure by OFSM to comply
with any covenant, condition or agreement contained herein.
8.08. Negotiations with Third Parties. OFSM will not, without the prior approval
of IBL, initiate or encourage discussions or negotiations with third parties
relating to or otherwise approve (or approve without prior discussions with IBL
any unsolicited offer regarding) any merger, sale, or other disposition of any
substantial part of OFSM's assets or stock.
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8.09. Required Information. OFSM will furnish IBL with all information
concerning OFSM that is reasonably required for inclusion in the proxy or other
disclosure materials used by IBL to obtain approval of this Plan and Agreement
from its Shareholders.
8.10. Proxy or Information Statement. As of the date of the mailing of the Proxy
Materials and as of the date of the OFSM stockholders meeting to be held
pursuant to Article 8.01, the information provided and to provided by OFSM to
IBL for use in OFSM's Information Statement and in any other proxy soliciting
material to be used by IBL or OFSM in connection with the merger, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein in light of the
circumstances under which they were made, not misleading.
ARTICLE 9
Conditions to Obligations of OFSM and IBL.
The obligations of OFSM and IBL to effect the merger hereunder are, at their
respective elections, subject to the satisfaction or waiver of the following
condition:
9.01. Stockholder Approval. On or before the Closing, OFSM's and IBL's
stockholders shall have approved this Agreement.
ARTICLE 10
Further Conditions to Obligations of OFSM.
The obligation of OFSM to effect the merger hereunder is, at is option, subject
to the satisfaction or waiver of the following further conditions:
10.01. Representation Letter. All of the representations and warranties of IBL
contained in this Agreement shall be true as of the Effective Date of the Merger
as though such representations and warranties were then made in exactly the same
language, and IBL shall have performed all obligations and complied with all
covenants required by this Agreement to be performed or complied with by it
prior to the Effective Date of the Merger. At the Closing, OFSM shall have
received a certificate, dated the Closing, executed by the President and by the
Secretary of IBL, certifying in such detail as OFSM may reasonably request as to
the accuracy of such representations and warranties and the fulfillment of such
obligations and compliance with such covenants as of the Closing.
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10.02. Investment and Acknowledgment Letters. Prior to his or her receipt of the
certificate for shares of OFSM common stock to be issued to him or her, each
shareholder of IBL shall have executed and delivered to OFSM an investment
letter in the form attached hereto as Exhibit 10.02 wherein each such
shareholder acknowledges that the shares of OFSM Common Stock to be issued to,
and received by, him or her after the Effective Date of the Merger are being
issued pursuant to an exemption from registration under the Securities Act of
1933, as amended, and applicable state securities laws and may therefore not be
subsequently sold or transferred unless and until that shareholder registers the
same or such proposed sale or transfer is exempt from registration. Each IBL
shareholder shall also represent and acknowledge in such investment letter that
the shares of OFSM acquired pursuant to this Agreement are acquired for
investment purposes only and without a view to the further distribution thereof
and that a standard restrictive legend to such effect shall be imprinted on the
OFSM stock certificate he or she receives. As set forth in Exhibit 10.02, each
IBL shareholder shall further acknowledge and list that which he or she has
relied upon in deciding whether to accept the terms of this proposed Merger and
each shall additionally warrant and represent, inter alia, that he or she has
had the opportunity to consult with counsel about this transaction and otherwise
had the opportunity to ask OFSM's accountants and OFSM management any questions
about the transaction that he or she might have had. See again Exhibit 10.02.
10.03. Litigation. No action shall have been instituted by any governmental
agency challenging the legality of the merger or seeking to prevent or delay
consummation of the transactions contemplated by this Agreement which shall have
resulted in preliminary or permanent injunctive relief prohibiting consummation
of the merger.
10.04. Opinion of Counsel to IBL. OFSM shall receive an opinion dated the
Closing Date of Xxxxxx X. Xxxxxxxx, Esq., counsel to IBL, satisfactory to IBL,
to the effect that:
IBL is a corporation validly existing and in good standing under the laws of the
State of Delaware and has all the requisite corporate power to own, lease and
operate its assets and carry on its business as now being conducted in any
jurisdiction in which it is now conducting business;
The execution and delivery by IBL of this Agreement and the consummation of the
transactions contemplated hereby will not conflict with or result in the breach
of any provision of IBL's Articles of Incorporation or By-Laws or constitute
default or give rise to right of termination, cancellation or acceleration under
any of the terms, conditions or provisions of any known mortgage, indenture,
license agreement or obligation or violate any court order, writ, injunction or
decree applicable to IBL or any of its properties or assets of which such
counsel has knowledge after making inquiry of the principal executive officers
with respect thereto;
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Based solely on a review of the Articles of Incorporation, By-Laws, corporate
minutes and stock record books of IBL, (i) the authorized capital stock of IBL
is as set forth in Article 6.01, and the shares of IBL stock referred to in
Article 6.01 constitute all of the issued and outstanding shares of capital
stock of IBL; (ii) the outstanding shares of IBL capital stock are validly
issued, fully paid and non-assessable and are not subject to any pre-emptive
rights of any shareholder of IBL; and (iii) except as set forth in Exhibit 6.02,
there are no outstanding subscriptions, options, rights, warrants, convertible
securities, or other agreements or commitments known to such counsel obligating
IBL to issue or transfer from treasury any additional shares of its capital
stock of any class;
This Agreement has been duly and validly authorized, executed and delivered and
constitutes the legal and binding obligation of IBL except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally;
Such counsel does not know of any suit, action, arbitration, or legal,
administrative or other proceeding or governmental investigation pending or
threatened against or affecting IBL or its business or properties or financial
or other condition; and
IBL's issuance of its securities to its existing shareholders is not in
violation of any state or federal securities laws and that appropriate
exemptions from registration were available for all offers and sales of existing
IBL securities.
ARTICLE 11
Further Conditions to Obligations of IBL.
The obligation of IBL to effect the merger hereunder is, at its option, subject
to the satisfaction or waiver of the following further conditions:
11.01. Representation Letter. All of the representations and warranties of OFSM
contained in this Agreement shall be true as of the Effective Date of the Merger
as though such representations and warranties were then made in exactly the same
language, and OFSM shall have performed all obligations and complied with all
covenants required by this Agreement to be performed or complied with by it
prior to the Effective Date of the Merger. At the Closing, IBL shall have
received a certificate, dated the Closing, executed by the President and the
Secretary or Vice-President of OFSM, certifying as to the accuracy of such
representations and warranties and the fulfillment of such obligations and
compliance with such covenants as of the Closing.
11.02. Litigation. No action shall have been instituted by any governmental
agency challenging the legality of the merger or seeking to prevent or delay
consummation of the transactions contemplated by this Agreement which shall have
resulted in preliminary or permanent injunctive relief prohibiting consummation
of the merger.
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11.03. Opinion of Counsel to OFSM. IBL shall receive an opinion dated the
Closing Date from the legal counsel to OFSM, in form satisfactory to IBL, to the
effect that:
OFSM is a corporation validly existing and in good standing under the laws of
the State of Florida and has all the requisite corporate power to own, lease and
operate its assets and carry on its business as now being conducted in any
jurisdiction in which it is now conducting business;
The shares of OFSM Common Stock to be issued to the shareholders of IBL are duly
authorized and will be, upon the effectiveness of the merger, legally issued,
fully paid and non-assessable;
The execution and delivery by OFSM of this Agreement and the consummation of the
transactions contemplated hereby will not conflict with or result in the breach
of any provision of OFSM's Articles of Incorporation or By-Laws or constitute
default or give rise to right of termination, cancellation or acceleration under
any of the terms, conditions or provisions of any known mortgage, indenture,
license agreement or obligation or violate any court order, writ, injunction or
decree applicable to OFSM or any of its properties or assets of which such
counsel has knowledge after making inquiry of the principal executive officers
with respect thereto;
Based solely on a review of the Articles of Incorporation, By-Laws, corporate
minutes and stock record books of OFSM, (i) the authorized capital stock of OFSM
is as set forth in Article 5.02, and the shares of OFSM Common Stock referred to
in Article 5.02 constitute all of the issued and outstanding shares of capital
stock of OFSM; (ii) the outstanding shares of OFSM Common Stock are validly
issued, fully paid and non-assessable and are not subject to any pre-emptive
rights, warrants, convertible securities, or other agreement or commitments
known to such counsel obligating OFSM to issue or transfer from treasury any
additional shares of its capital stock of any class;
This Agreement has been duly and validly authorized, executed and delivered and
constitutes the legal and binding obligation of OFSM except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally;
Such counsel does not know of any suit, action, arbitration, or legal,
administrative or other proceeding or governmental investigation pending or
threatened against or affecting OFSM or its business or properties or financial
or other condition; and
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The issuance of the OFSM shares to be issued to the Shareholders of IBL as
provided for herein shall be exempt from state and federal securities
registration. In this regard, IBL agrees to cooperate and assist counsel in
submitting and receiving back the necessary purchaser suitability questionnaires
and other offeree materials necessary to establish that OFSM shall have an
exemption from state and federal registration for the issuance of the shares
subject of this Agreement. In the event that Rule 506 of Regulation D of the
General Rules and Regulations of the Commission is not an available exemption
for OFSM's issuance of its shares to the Shareholders of IBL upon Closing, IBL
agrees to further cooperate in providing counsel with the necessary factual and
other information concerning IBL's shareholders and their relationship to it,
its principals and each other as necessary to enable counsel to issue a closing
opinion that the issuance of the OFSM shares to the Shareholders of IBL, as
provided for in this Plan and Agreement, is a "transaction not involving any
public offering" under Section 4(2) of the Securities Act of 1933 ("the '33
Act") and the Blue Sky Laws of the various states in which certain IBL
Shareholders reside.
ARTICLE 12
Termination: Abandonment of Merger.
12.01. Termination. This Agreement may be terminated and the merger abandoned at
any time prior to the Effective Date of the Merger, whether before or after
submission to or approval by the stockholders of OFSM: (a) by mutual agreement
of the Boards of Directors of OFSM and IBL; or (b) by the Board of Directors of
either IBL or OFSM if the Closing shall not have taken place on or prior to
February 28, 2004, other than by reason of default by the terminating party.
12.02. Liability. In the event of termination of this agreement, and abandonment
of the merger by either OFSM or IBL as provided in this Agreement, this
Agreement shall forthwith become wholly void and of no effect and (except for
liability of a party where default by such party has occasioned the termination
of this Agreement and abandonment of the merger by the non-defaulting party)
there shall be no liability on the part of either OFSM or IBL or their
respective officers, directors or stockholders (except as set forth in the last
sentence of Articles 7.02 and 8.02).
ARTICLE 13
Miscellaneous.
13.01. Notices. Any notice, request, instruction or other document to be given
under this Agreement after the date hereof by any party hereto to any other
shall be in writing and shall be delivered personally or sent by registered or
certified mail, postage prepaid, if to OFSM, addressed to it at: 0000 Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, XX 00000 Attention: Xxxxxx X. Xxxxx., and if
to IBL, addressed to it at 0000 Xxxxxx Xxxxx Xxxx, Xxxxx 000,Xxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx, with a copy or copies to Xxxxxx X. Xxxxxxxx. , Esq.,
0000 Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, XX 00000.
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13.02. Waivers. Each party may, by written instrument, extend the time for the
performance of any of the obligations or other acts of any party hereto, and (a)
waive any inaccuracies of such other party in the representations and warranties
contained herein or in any document delivered pursuant to this Agreement, (b)
waive compliance with any of the covenants of such other party contained in this
Agreement, (c) waive such other party's performance of any of the obligations
set out in this Agreement and (d) waive any condition to its obligation to
effect the merger. Any agreement on the part of any party hereto for any such
extension or waiver shall be validly and sufficiently authorized for the
purposes of this Agreement if it is authorized and executed as to OFSM, by its
President, and as to IBL, by its President.
13.03. Amendments. This Agreement may be amended at any time prior to the
Effective Date of the Merger, whether before or after the meeting of
stockholders of OFSM, by a written instrument executed by OFSM and IBL with the
approval of their respective Boards of Directors, provided that no amendment
shall change the exchange ratios set forth in Articles 3.01 without the approval
of the stockholders of both IBL and OFSM.
13.04. Governing Law and Time. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware and Florida and any
conflict in such laws shall be resolved according to conflicts of law
principles. Time shall be of the essence of this Agreement.
13.05. Parties. This Agreement shall inure to the benefit of and be binding upon
OFSM and IBL and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties to this Agreement and their
respective successors, and any person who controls OFSM or IBL within the
meaning of Section 15 of the Securities Act of 1933, and the heirs and legal
representatives of each of them, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained in this
Agreement. This Agreement and all conditions and provisions of this Agreement
are intended to be for the sole and exclusive benefit of the parties to this
Agreement and their respective successors, heirs and legal representatives and
such controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
13.06. Complete Agreement Severability. This Agreement contains the entire
understanding between the parties and supersedes any and all prior agreements
between the parties. If any provision of this Agreement is found to be void by
any court of competent jurisdiction, the remaining provisions shall remain in
full force and effect.
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13.07. Multiple Copies. This Agreement may be executed in multiple copies, each
of which shall constitute an original, but all of which shall constitute one and
the same agreement.
IN WITNESS WHEREOF, OFSM and IBL have caused this Agreement and Plan of Merger
to be executed as of the date first above written.
OCEAN FRESH SEAFOOD MARKET PLACE, INC
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By: /s/ Xxxxxx X. Xxxxx, President
INTERNATIONAL BUILDERS LIMITED
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By: /s/ Xxxxxx Xxxxxxxx, CEO
