PLAN AND AGREEMENT OF REORGANIZATION
BETWEEN
GUINNESS TELLI*PHONE CORPORATION
(A Nevada Corporation)
AND
XXXXXXXXXX.XXX CORPORATION
(A Nevada Corporation)
This Plan and Agreement of Reorganization is entered into this 3rd day
of November, , effective as of the 4th day of August, 2000, by and
between Guinness Telli*Phone Corporation, a Nevada corporation,
(hereinafter referred to as "TELI"), and XxxxXxxxxx.Xxx Corporation, a
Nevada corporation, (hereinafter referred to as "NewsSurfer").
This Plan and Agreement of Reorganization is within the meaning of
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended.
TELI will acquire from NewsSurfer all of the assets specifically
listed in Exhibit "A" to this Agreement and Plan of Reorganization,
which assets shall specifically include all of the issued and
outstanding shares of SIT Romania, and assume specific liabilities as
listed in Exhibit "B" to this Plan and Agreement of Reorganization, in
exchange for the issuance by TELI of a total of 1,000,000 shares of
its authorized but unissued shares. By this acquisition, NewsSurfer
is selling and TELI is acquiring substantially all of the assets of
NewsSurfer, and immediately upon the receipt of the 1,000,000 shares
of TELI by NewsSurfer, it will immediately begin the process of
Dissolution, to pay off its liabilities and thereafter to distribute
the remaining shares of TELI stock to its stockholders in a pro-rata
distribution. The parties understand that it is the intent of all
parties that this be deemed a Tax Free Reorganization as defined in
the Internal Revenue Code.
AGREEMENT
In order to consummate such Plan and Agreement of Reorganization, the
parties hereto, in consideration of the mutual agreements and on the
basis of the representations and warranties hereafter set forth, do
hereby agree, as follows:
ARTICLE I
1.01 Transfer of NewsSurfer Assets and Consideration for Transfer:
Subject to the terms and conditions of this Agreement, NewsSurfer
shall transfer and deliver to TELI all of the assets listed in Exhibit
"A", subject to the liabilities listed in Exhibit "B", which assets
shall include all assets associated with the business conducted or to
be conducted under the name NewsSurfer, including, without limitation,
all of the issued and outstanding shares of SIT Romania, and any and
all inventions, technology, trademarks, works, trade secrets and
proprietary information related to the NewsSurfer business. Without
limiting the scope of the foregoing, NewsSurfer shall transfer all
inventions, including software inventions, Letters Patent obtained or
to be obtained on all inventions, and applications thereof, all trade
and services marks, all registrations of such marks, all corporate
names, domain names, telephone numbers, or other indicia which may be
utilized to identify the source of goods or services of the NewsSurfer
business, all software related to such business, all copyrights to all
materials related to the NewsSurfer business, and all registrations
thereof, including copyrights to software, web page graphics, and
code, all proprietary information related to the NewsSurfer business,
including all trade secret information, all licenses, consents, and
similar authorizations to or for all of the foregoing, and all
documents which relate to the foregoing.
1.02 Consideration for Transfer to TELI: On the closing date,
subject to the terms and conditions of this Agreement, and in full
consideration for the transfer and delivery to TELI of all the assets
of NewsSurfer, as listed in Exhibit "A" to this Plan and Agreement,
TELI shall deliver to NewsSurfer, One Million (1,000,000) shares of
the authorized but un-issued capital stock of TELI, which shares shall
be fully paid and non-assessable shares of TELI. Such shares shall not
be free trading as they are not, as of the time of the closing,
registered or covered by any exemption. Said shares will be
restricted in nature and said restrictions shall be reflected on the
face of all certificates included in the 1,000,000 shares.
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ARTICLE II
2.01 Closing: The time of delivery by NewsSurfer of a Xxxx of Sale
transferring all of the assets listed in paragraph 1.01 of this
Agreement shall be as of the Closing date, and the certificate for
1,000,000 shares, as authorized by the Board of Directors of TELI
being in hand for delivery to Xxxxxx Xxxx, as of the closing date.
For purposes of this Plan and Agreement of Reorganization, closing
date shall be November 3, 2000, with an effective date of August 4,
2000. Effective as of August 4, 2000, all of the revenues
subsequently earned shall be the property of TELI and the expenses of
NewsSurfer the responsibility of TELI.
2.02 Dissolution of NewsSurfer: Immediately upon Closing,
NewsSurfer shall begin the process of dissolving the corporation,
paying off its liabilities, other than the liabilities being herein
assumed by TELI, and thereafter to distribute the TELI shares which it
has received as part of this transaction to its shareholders. The
shares of TELI stock shall be distributed to the shareholders of
NewsSurfer on a pro-rata basis.
ARTICLE III
3.01 Representations and Warranties by NewsSurfer:
1) NewsSurfer is a corporation duly organized and validly existing
and in good standing under the laws of the State of Nevada. It has
all requisite corporate powers and authority to carry on its business
as now being conducted, to enter into this Agreement and to carry out
and perform the terms and provisions of this Agreement. NewsSurfer is
duly qualified, licensed, or domesticated and in good standing as a
foreign corporation authorized to do business in each jurisdiction
wherein the nature of its activities conducted or the character of its
properties make such qualification, licensing, or domestication
necessary.
2) That Strategic Information Technologies Impex SRL (SIT Romania)
is a corporation existing under the laws of the Country of Romania,
and that it is a wholly owned subsidiary of NewsSurfer.
3)
a) NewsSurfer and SIT Romania were duly and lawfully authorized by
its Articles of Incorporation to issue the shares of capital stock
heretofore issued to its shareholders; further, NewsSurfer and SIT
Romania have no other authorized series or class of stock that are
outstanding.
b) NewsSurfer and SIT Romania are not presently liable on account of
any indebtedness for borrowed moneys, except as reflected on the
financial statements described in subparagraph (4), below.
c) NewsSurfer has outstanding option and warrant commitments.
Should the holders of the options and warrants exercise their rights
to convert, the proceeds there from shall belong to NewsSurfer and
shall not be part of the assets being purchased hereunder by TELI, so
long as TELI is not subjected to any further liability other than as
set forth in this Plan and Agreement of Reorganization.
1) A list of all current shareholders of NewsSurfer is attached
Exhibit "C" to this Plan and Agreement of Reorganization.
2) NewsSurfer has furnished TELI with an audited financial statement
of NewsSurfer as of December 31, 1999, and un-audited U.S. financial
statement as of September 30, 2000 (hereinafter referred to as
"Financial Statements"). These financial statements shall incorporate
the operations of SIT Romania as a wholly owned subsidiary of
NewsSurfer. Such financial statements present fairly the financial
condition of NewsSurfer at such dates. Specifically, but not by way
of limitation, the financial statements disclose all of the debts,
liabilities, and obligations of any nature (whether absolute, accrued,
contingent, or otherwise, and whether due or to become due) of
NewsSurfer at the dates thereof.
3) NewsSurfer and its wholly owned subsidiary have not, since
September 30, 2000:
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a) Incurred any obligations or liabilities, absolute, accrued,
contingent or otherwise and whether due or to become due, except
current liabilities incurred in the ordinary course of business, none
of which adversely affects the business or prospects of NewsSurfer and
its subsidiary SIT Romania.
b) Discharged or satisfied any liens or encumbrances, or paid any
obligation or liability, absolute, accrued, contingent or otherwise
and whether due or to become due, other than current liabilities shown
on the financial statements and current liabilities incurred since the
closing of business on the date of the unaudited financial statement,
in each case, in the ordinary course of business;
c) Declared or made any payment or distribution to its Stockholders
or purchased or redeemed, or obligated itself to purchase or redeem,
any of its shares of Capital Stock or other securities.
d) Mortgaged, pledged, or subjected to lien, or any other
encumbrances or charges, any of its assets, tangible or intangible;
e) Sold or transferred any of its assets except for inventory sold
in the ordinary course of business or canceled any debt or claim;
f) Suffered any damage, destruction, or loss (whether or not covered
by insurance) affecting the properties, business, or prospects of
NewsSurfer, or waived any rights of substantial value;
e) Entered into any transaction other than in the ordinary course of
business.
1) There are no legal actions, suits, arbitrations, or other legal
or administrative proceedings pending against NewsSurfer or its
subsidiary SIT Romania that would affect it, its properties and
assets, or business. NewsSurfer and its subsidiary are not in
default with respect to any judgment, order of decree of any
government agency or instrumentality.
2) NewsSurfer and SIT Romania have good and marketable title to all
of its properties and assets, including without limitation those
reflected in the Balance Sheet and those used or located on property
controlled by NewsSurfer or SIT Romania in its business on the date of
the Balance Sheet and acquired thereafter (except assets sold in the
ordinary course of business), subject to no mortgage, pledge, lien,
charge, security interest, encumbrance or restriction except those
which (a) are disclosed on the Balance Sheet as securing specified
liabilities; (b) are disclosed in the Schedule of Assets referred to
in Subparagraph 3.01 (8) hereof; or (c) do not materially adversely
affect the use thereof. . As part of this Plan and Agreement of
Reorganization, TELI shall be obligated to assume the liabilities to
AdSmart/Engage Network in the approximate amount of $41,000 and to
Xxxxxxx Xxxxx & Co., P.C. in the amount of $10,000, which amount is
what is owed to Xxxxxxx Xxxxx & Co., P.C. in order for it to complete
the audit of the financial condition of NewsSurfer as of December 31,
1999. All revenues earned after August 3, 2000 shall be the property
of TELI and all expenses since August 3, 2000 shall be reimbursed to
NewsSurfer by TELI from revenues generated from NewsSurfer business
since August 3, 2000.
3) As of the Closing date, NewsSurfer will have delivered to TELI a
Xxxx of Sale transferring all of the assets as described in Exhibit A
to this Plan and Agreement to TELI.
4) NewsSurfer and SIT Romania are not a party to, or otherwise bound
by, any written or oral contract or agreement not made in the ordinary
course of business.
5) The books of account, minute books, stock certificate books and
stock transfer ledgers of NewsSurfer are complete at Closing and also
correct, and there have been no transactions involving the business of
NewsSurfer which property should have been set forth in said
respective books, other than those set forth therein.
6) Since the date of the financial statements there has not been any
material adverse change in, or event or condition materially and
adversely affecting the condition (financial or otherwise) of the
properties, assets or liabilities of NewsSurfer and/or SIT Romania.
3.02 TELI represents and warrants to NewsSurfer and its
stockholders, as follows:
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1) It is an existing corporation and in good standing under the laws
of the State of Nevada. It has all requisite corporate powers and
authority to carry on its business as now being conducted, to enter
into this Agreement and to carry out and perform the terms and
provisions of this Agreement. TELI is qualified, licensed, or
domesticated and in good standing as a foreign corporation authorized
to do business in each jurisdiction wherein the nature of its
activities conducted or the character of its properties make such
qualification licensing, or domestication necessary.
2) TELI's authorized capital stock consists of 100,000,000 shares of
common stock , par value $.01 and 1,000,000 shares of preferred stock,
$.01 par value. At the close of this Agreement 33,266,931 shares of
TELI common stock will be validly issued and outstanding. No
preferred stock has been issued. This figure reflects the
1,000,000 shares beneficially issued to the shareholders of NewsSurfer
as aforementioned in this contract.
3) There are no legal actions, suits, arbitrations or other legal or
administrative proceedings pending against TELI which would affect it,
its properties and assets, or business. TELI is not in default with
respect to any judgment, order of decree of any government agency or
instrumentality.
4) TELI has good and marketable title to all of its properties and
assets, including without limitation those reflected in the Balance
Sheet and those used or located on property controlled by TELI in its
business on the date of the Balance Sheet and subject to no mortgage,
pledge, lien, charge, security interest, encumbrance or restriction
except those which are disclosed on the Balance Sheet as securing
specified liabilities.
3.03 The execution, delivery, and performance of this Agreement has
been duly authorized by all requisite corporate action. This
Agreement constitutes a valid and binding obligation of TELI in
accordance with its terms. No provision of the Articles of
Incorporation and any amendments thereto, by-laws and any amendments
thereto, or of any contract to which TELI is a party or otherwise
found, prevents TELI from delivering good title to its shares of such
capital stock in the manner contemplated hereunder.
1) All of the TELI common shares to be issued to NewsSurfer
shareholders will, when so issued, be validly issued and outstanding,
fully paid and non-assessable.
2) Since the date of the financial statements of TELI that have been
delivered to NewsSurfer, there has not been any material or adverse
change in, or event or condition materially and adversely affecting
the condition of TELI.
3) TELI warrants and represents that it will use it's best efforts
to accomplish the registration of these shares, as soon as possible
after the Closing of this transaction, and if TELI has an existing
registration statement in process with the Securities and Exchange
Commission and if doing so does not materially interfere with the
primary intent of the existing registration, TELI shall allow
NewsSurfer to "piggy-back" these shares to the then current
registration statement.
ARTICLE IV
4.01 NewsSurfer covenants that all statements made herein and hereto
are true and correct and may be relied upon by TELI, and TELI
covenants that all statements made herein and hereto are true and
correct and may be relied upon by NewsSurfer.
4.02 NewsSurfer covenants and warrants that all books, records and
financial statements employed or used in connection with this
Agreement are true and correct to the best knowledge of its Officers
and Directors, and that the right to examine same has been extended
to TELI and its representatives.
4.03 Federal Securities Act - Unregistered Stock.
1) Each NewsSurfer stockholder acknowledges that the shares of TELI
common stock to be delivered to him pursuant to this Agreement have
not and are not registered under the 1933 Act, as amended, and that
accordingly such stock is not fully transferable except as permitted
62
under various exemptions contained in the 1933 Act, and the rules of
the Security and Exchange Commission interpreting said Act. The
provisions contained in this paragraph are intended to ensure
compliance with the 1933 Act, as amended. TELI has agreed to register
these shares as soon as possible after the execution of this agreement
and the delivery of the shares to the shareholders of NewsSurfer, and,
should there be an existing registration statement on file with the
Securities and Exchange Commission, to "piggy-back" these shares to
the existing registration statement, so long as the filing does not
interfere with the primary intent of the existing registration.
2) Each NewsSurfer stockholder agrees that the certificates
evidencing the shares he will receive, pending the registration of
these shares, shall contain substantially the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THE SAME ARE
REGISTERED UNDER THE SECURITIES ACT OF 1933, OR THE COMPANY RECEIVES
AN OPINION FROM COUNSEL SATISFACTORY TO IT THAT SUCH REGISTRATION IS
NOT REQUIRED FOR SALE OR TRANSFER OR THAT THE SHARES HAVE BEEN LEGALLY
SOLD IN BROKER TRANSACTIONS PURSUANT TO RULE 144 OF THE RULES AND
REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION PROMULAGTED
UNDER THE SECURITIES ACT OF 1933."
ARTICLE V
5.01 Paragraph and other headings contained in this Agreement are
for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
5.02 This Agreement shall be construed under and in accordance with
the laws of the State of Nevada.
5.03 This Agreement shall be binding on and inure to the benefit of
and be enforceable by the NewsSurfer shareholders and TELI, their
respective heirs, executors, administrators, legal representatives,
successors, and assigns, except as otherwise expressly provided
therein.
5.04 Should there be any litigation arising from this transaction,
the prevailing party shall be entitled to recover reasonable
attorney's fees from the other party, which fees may be set by the
court in the trial of such action or may be enforced in a separate
action brought for that purpose. These fees shall be in addition to
any other relief which may be awarded.
5.05 NewsSurfer hereby covenants and agrees that a majority of the
shareholders of NewsSurfer have consented to the terms and conditions
of this Plan and Agreement of Reorganization and that immediately
after the execution of this Plan and Agreement of Reorganization that
it will call for a Shareholder's Meeting and obtain the ratification
of this Plan and Agreement by all of the Shareholders. It shall be
responsible to comply with the terms and conditions of NRS Section
78.3793.
ARTICLE VI
6.01 Change of Name: Immediately after the completion of this Plan
and Agreement of Reorganization, the directors of NewsSurfer shall
immediately cause the name of the corporation to be changed and to
immediately transfer the rights to this name to TELI
IN WITNESS WHEREOF, the parties have executed this Plan and Agreement
of Reorganization on the date first set forth, at Mill Valley,
California.
GUINNESS TELLI*PHONE CORPORATION
By: /s/Xxxxxxxx X. Guinness
---------------------------------
Xxxxxxxx X. Guinness, President & CEO
By: /s/Xxxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxx, Secretary
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XXXXXXXXXX.XXX CORPORATION
By /s/Xxxxxx Xxxx
-----------------------------
Xxxxxx Xxxx, President
By /s/Xxxxxx Xxxxxx
----------------------------
Xxxxxx Xxxxxx, Secretary
