Plan and Agreement of Reorganization
By Exchange By DIVERSIFIED RESEARCH, INC.
A Nevada Corporation
Of its voting stock for Stock in and of
IMMEDIATE MUSIC CORP., a Delaware Corporation
Diversified Research, Inc., a Nevada corporation (hereinafter
sometimes called "Diversified") and Immediate Music Corp., a Delaware
corporation, (hereinafter sometimes called "Immediate") hereby agree as
follows:
Article I
Plan Adopted
Section 1.01: Plan of Reorganization.
A plan of reorganization of Diversified and Immediate is hereby adopted
as follows:
a. Immediate will transfer to Diversified all of their right, title, and
interest in and to comprising one hundred percent (100%) of the issued
and outstanding shares thereof, pursuant to the terms and conditions
hereinafter set forth.
b. In exchange for the shares transferred by Immediate pursuant to this
agreement, Diversified will cause to be issued and delivered to
Immediate, three million five hundred thousand (3,500,000) shares of
Diversified's One Mil ($0.001) par value common stock, constituting
56.45 percent (56.45%) of the total shares of Diversified which will be
outstanding immediately after closing.
Additionally, the Diversified will file the appropriate documents with
the Nevada Secretary of State to change the name of Diversified to
Immediate Music Corp. The said common stock of Diversified shall, when
issued, be fully paid and nonassessable.
Closing Date
Section 1.02:
Subject to the conditions set forth herein, the plan of reorganization
shall be closed and consummated on or before February 28, 1997, at such
place as may be fixed by mutual consent of the parties. The date of such
consummation is the "Closing Date" or "Closing" as referred to herein.
Article II
Covenants, Representations, and Warranties of Diversified
Legal Status
Section 2.01:
Diversified is a corporation duly organized, validly existing and in
good standing under the laws of Nevada with lawful power to conduct all
businesses in which it is engaged in all jurisdictions in which it is
found.
Section 2.02:
Diversified has an authorized capitalization of Fifty Million
(50,000,000) common shares of One Mil ($0.001) par value. There are
presently Two Million (2,700,000) shares thereof outstanding.
Diversified warrants that there will immediately after the closing of
this agreement, be not more than six million two hundred thousand
(6,200,000) common shares outstanding. There are no further contracts
or other documents requiring the issuance of further shares of
Diversified. There are no outstanding options, warrants, or securities
convertible into common stock of Diversified.
Financial Condition
Section 2.03:
The financial statement of Diversified which is attached hereto as
Exhibit 1, fully and accurately represents the financial condition of
Diversified at the date indicated.
Violative of Any Instrument
Section 2.04:
The performance of Diversified of its obligations under this agreement
will not result in any breach of the terms of the conditions of, or
constitute a default under, and agreement or instrument to which
Diversified is a party, or by the terms of which Diversified is bound.
Material Contracts
Section 2.05:
Diversified is not, and at the closing date will not be a party to, or
bound by any material, oral, or written contract for the employment of
any officer or employee or commitment for any special bonus,
compensation or severance pay; or any pension, profit-sharing,
retirement, or stock purchase plan with its employees or others; or any
contract with any labor union.
Litigation
Section 2.06:
There are not now, and at the closing there will not be any material
claims, actions, proceedings, or investigations pending or threatened
against Diversified in any court or regulatory agency, nor any orders,
writs, or injunctions issued out of any such court or agency affecting
Diversified.
Taxes
Section 2.07:
Diversified does not owe any state, federal, or local taxes and has
filed all tax returns required to be filled by it excepting those
related to accrued taxes for the current year, filings on which are not
yet due.
Securities to be Issued
Section 2.08:
The shares of Diversified to be issued pursuant to this agreement are
of One Mil ($0.001 ) par value and have equal voting rights as all other
shares of Diversified outstanding. Immediate hereby acknowledges its
awareness that said shares will not, when issued, have been registered
under either the Securities Act of 1933 or under the Uniform Securities
Act of any state; but are being issued in reliance on the exemption from
federal regulation provided by Section 4(2) of the Securities Act of
1933 for transactions not involving any public offering and from state
registration by applicable isolated transaction exemptions. In
connection therewith, Immediate acknowledges, warrants, and represents
as follows:
It has received and reviewed, as to Diversified, certain information
prepared by Diversified pursuant to Rule 15c2-11 of the Exchange Act,
including certified financial statements, prior to the completion of
this transaction.
Immediate is a business entity managed by persons of sufficient business
experience to evaluate this transaction. Immediate is financially able
to bear the risk of its investment in Diversified's common shares.
Immediate is purchasing Diversified's shares for its own account, for
purposes of investment and not with a view to distribution, except as
hereinafter noted.
Immediate consents to the placement one each certificate representing
their shares of Diversified of a standard form investment legend stating
that the shares are not registered under the Securities Act of 1993 and
cannot be sold, hypothecated, or transferred without registration or
under an appropriate exemption from registration. Immediate acknowledges
its familiarity with Rules 144 and 237 of the Securities Act of 1934
which generally govern resale of restricted securities, and further
concedes that Diversified has not represented, directly or indirectly,
that the exemption provided by either rule will ever be available to
Immediate or its assignees. Immediate intends to transfer the shares
issued to it hereunder pro rata, to its stockholders; and intends to
rely on applicable "private offering" and/or isolated transactions in
so doing one million five hundred thousand shares (1,500,000) will be
issued and outstanding prior to the reorganization. In delivering such
shares to its stockholders, Immediate agrees to take all reasonable
measures to insure that those stockholders are taking their shares for
investment and not with a view to distribution, that they understand the
rules limiting secondary transfer of the shares, and that the
certificates bear appropriate restrictive legends.
Immediate hereby consents to the placement of "stop-transfer"
instructions as to all shares issued to it hereunder and agrees to
procure consent to such instructions from its transferees.
Article III
Access to Business Records of Diversified Pending the Closing
Section 3.01:
Diversified will afford Immediate or its accredited representatives,
pending closing, full access during normal business hours to all
properties, books, accounts, contracts, commitments, and records of
every kind of Diversified.
Section 3.02:
In addition, Diversified will permit Immediate to make extracts or
copies of all such documents and to supply such additional
information or material as may be reasonably necessary to fully
inform Immediate of the condition of Diversified. All such
information shall be held in confidence.
Article IV
Covenants, Representations, and Warranties of Immediate
Legal Status
Section 4.01:
Immediate is a corporation duly organized existing, and in good
standing under the governing laws of the state of Delaware with
legal authority to enter into this transaction.
Corporate Approval
Section 4.02:
Immediate warrants that it has taken all corporate actions and duly
adopted all resolutions required by its charters and by-laws to permit
its officers to enter into this transaction as its authorized agents.
Material Contracts
Section 4.03:
Immediate is not, and at the closing date will not be a party to, or
bound by any material, oral, or written contract for the employment of
any officer or employee or commitment for any special bonus,
compensation or severance pay; or any pension, profit-sharing,
retirement, or stock purchase plan with its employees or others; or any
contract with any labor union.
Litigation
Section 4.05:
There are not now, and at the closing there will not be any material
claims, actions, proceedings, or investigations pending or threatened
against Immediate in any court or regulatory agency which would bar or
infringe the conveyances contemplated hereby or the value of the assets
conveyed.
Taxes
Section 4.06:
Immediate does not owe any state, federal, or local taxes, and has
filed all tax returns required to be filed by it.
Article V
Conduct of Business of Immediate Pending the Closing
Section 5.01:
Immediate shall be entitled to conduct their regular and ordinary
business pending the closing.
Miscellaneous
Section 6.01: Notices.
Any notice or other communications required hereby shall be deemed
delivered when deposited in the United States mails for transmittal
by certified or registered mail, postage prepaid, return receipt
requested, addressed to the respective corporate and individual
parties hereto as set forth on Exhibit 2 hereto.
Section 6.02: Entire Agreement Counterparts.
This instrument and the exhibits and schedules hereto contain the
entire agreement of the parties. It may be executed in any number of
counterparts, each of which shall be deemed original, but such
counterparts together constitute only one and the same instrument.
Section 6.03: Controlling Law.
The validity, interpretation of terms and performance of this
agreement shall be governed by and constructed under the laws of
Nevada. WHEREFORE, we have set our hands hereto this 28th day of
February, 1997.
Attest DIVERSIFIED RESEARCH, INC.
Xxxxxxxxx Xxxxxxx, Secretary By: Xxxxx Xxxxxxxx, President
Attest
IMMEDIATE MUSIC CORP.
By:
, Director
President
Witness
, Vice President
