Appendix "A"
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (hereinafter called the "Merger Agreement") is
made as of December 13, 2000, by and between Erly Industries, Inc., a California
corporation ("Erly"), and Torchmail Communications, Inc, a DELAWARE corporation
("Torchmail"). Erly and Torchmail are sometimes referred to as the "Constituent
Corporations."
Recitals
A. Whereas, The authorized capital stock of Erly consists of 15,000,000 shares
of Common Stock, $0.01 par value of which 15,000,000 shares are issued and
outstanding.
B. Whereas, the authorized capital stock of Torchmail, upon effectuation of the
transactions set forth in this Merger Agreement, will consist of 200,000,000
shares of Common Stock, $0.001 par value.
C. Whereas, the directors of the Constituent Corporations deem it advisable and
to the advantage of the Constituent Corporations that Erly merge with and into
Torchmail upon the terms and conditions herein provided, for the sole purpose of
effecting a change of domicile from the State of California to the State of
Delaware.
D. Whereas, the merger will have no effect or change in the nature of the
business or management of the resulting business operating through the surviving
corporation.
Agreement
NOW, THEREFORE, the parties do hereby adopt the plan of reorganization
encompassed by this Merger Agreement and do hereby agree that Erly shall merge
into Torchmail on the following terms, conditions and other provisions:
1. TERMS AND CONDITIONS.
1.1 Merger. Erly shall be merged with and into Torchmail (the "Merger"),
and Torchmail shall be the surviving corporation (the "Surviving Corporation")
effective upon the date when this Merger Agreement is filed with the Secretary
of State of Delaware (the "Effective Date").
1.2 Succession. On the Effective Date, Torchmail shall continue its
corporate existence under the laws of the State of Delaware, and the separate
existence and corporate organization of Erly, except insofar as it may be
continued by operation of law, shall be terminated and cease.
1.3 Transfer of Assets and Liabilities. On the Effective Date, the rights,
privileges, powers and franchises, both of a public as well as of a private
nature, of each of the Constituent Corporations shall be vested in and possessed
by the Surviving Corporation, subject to all of the disabilities, duties and
restrictions of or upon each of the Constituent Corporations; and all and
singular rights, privileges, powers and franchises of each of the Constituent
17
Corporations, and all property, real, personal and mixed, of each of the
Constituent Corporations, and all debts due to each of the Constituent
Corporations on whatever account, and all things in action or belonging to each
of the Constituent Corporations shall be transferred to and vested in the
Surviving Corporation; and all property, rights, privileges, powers and
franchises, and all and every other interest, shall be thereafter the property
of the Surviving Corporation as they were of the Constituent Corporations, and
the title to any real estate vested by deed or otherwise in either of the
Constituent Corporations shall not revert or be in any way impaired by reason of
the Merger; provided, however, that the liabilities of the Constituent
Corporations and of their shareholders, directors and officers shall not be
affected and all rights of creditors and all liens upon any property of either
of the Constituent Corporations shall be preserved unimpaired, and any claim
existing or action or proceeding pending by or against either of the Constituent
Corporations may be prosecuted to judgment as if the Merger had not taken place
except as they may be modified with the consent of such creditors and all debts,
liabilities and duties of or upon each of the Constituent Corporations shall
attach to the Surviving Corporation, and may be enforced against it to the same
extent as if such debts, liabilities and duties had been incurred or contracted
by it.
1.4 Common Stock of Erly and Torchmail. On the Effective Date, by virtue of
the Merger and without any further action on the part of the Constituent
Corporations or their shareholders, (i) each share of Common Stock of Erly
issued and outstanding immediately prior thereto shall be converted into shares
of fully paid and nonassessable shares of the Common Stock of Torchmail at a
ratio of 10 Erly shares to 1 Torchmail share, and (ii) each share of Common
Stock of Torchmail issued and outstanding immediately prior thereto shall be
canceled and returned to the status of authorized but unissued shares.
1.5 Stock certificates. On and after the Effective Date, all of the
outstanding certificates which prior to that time represented shares of the
Common Stock or of the Preferred Stock of Erly shall be deemed for all purposes
to evidence ownership of and to represent the shares of Torchmail into which the
shares of Erly represented by such certificates have been converted as herein
provided and shall be so registered on the books and records of the Surviving
Corporation or its transfer agents. The registered owner of any such outstanding
stock certificate shall, until such certificate shall have been surrendered for
transfer or conversion or otherwise accounted for to the Surviving Corporation
or its transfer agent, have and be entitled to exercise any voting and other
rights with respect to and to receive any dividend and other distributions upon
the shares of Torchmail evidenced by such outstanding certificate as above
provided.
2. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS.
2.1 Articles of Incorporation. The Articles of Incorporation of Torchmail
in effect on the Effective Date shall continue to be the Articles of
Incorporation of the Surviving Corporation.
2.2 Directors. The directors of Erly immediately preceding the Effective
Date shall become the directors of the Surviving Corporation on and after the
Effective Date to serve until the expiration of their terms and until their
successors are elected and qualified.
2.3 Officers. The officers of Erly immediately preceding the Effective Date
shall become the officers of the Surviving Corporation on and after the
Effective Date to serve at the pleasure of its Board of Directors.
18
3. MISCELLANEOUS.
3.1 Further Assurances. From time to time, and when required by the
Surviving Corporation or by its
successors and assigns, there shall be executed and delivered on behalf of Erly
such deeds and other instruments, and there shall be taken or caused to be taken
by it such further and other action, as shall be appropriate or necessary in
order to vest or perfect in or to conform of record or otherwise, in the
Surviving Corporation the title to and possession of all the property,
interests, assets, rights, privileges, immunities, powers, franchises and
authority of Erly and otherwise to carry out the purposes of this Merger
Agreement, and the officers and directors of the Surviving Corporation are fully
authorized in the name and on behalf of Erly or otherwise to take any and all
such action and to execute and deliver any and all such deeds and other
instruments.
3.2 Amendment. At any time before or after approval by the shareholders of
Erly, this Merger Agreement may be amended in any manner (except that, after the
approval of the Merger Agreement by the shareholders of Erly, the principal
terms may not be amended without the further approval of the shareholders of
Erly) as may be determined in the judgment of the respective Board of Directors
of Torchmail and Erly to be necessary, desirable, or expedient in order to
clarify the intention of the parties hereto or to effect or facilitate the
purpose and intent of this Merger Agreement.
3.3 Conditions To Merger. The obligations of the Constituent Corporations
to effect the transactions contemplated hereby are subject to satisfaction of
the following conditions (any or all of which may be waived by either of the
Constituent Corporations in its sole discretion to the extent permitted by law):
the Merger shall have been approved by the shareholders of Erly in accordance
with applicable provisions of the California Corporations Code; and Erly, as
sole shareholder of Torchmail, shall have approved the Merger in accordance with
the General Corporation Law of the State of Delaware; and any and all consents,
permits, authorizations, approvals, and orders deemed in the sole discretion of
Erly to be material to consummation of the Merger shall have been obtained.
3.4 Abandonment or Deferral. At any time before the Effective Date, this
Merger Agreement may be terminated and the Merger may be abandoned by the Board
of Directors of either Erly or Torchmail or both, notwithstanding the approval
of this Merger Agreement by the shareholders of Erly or Torchmail, or the
consummation of the Merger may be deferred for a reasonable period of time if,
in the opinion of the Boards of Directors of Erly and Torchmail, such action
would be in the best interest of such corporations. In the event of termination
of this Merger Agreement, this Merger Agreement shall become void and of no
effect and there shall be no liability on the part of either Constituent
Corporation or its Board of Directors or shareholders with respect thereto,
except that Erly shall pay all expenses incurred in connection with the Merger
or in respect of this Merger Agreement or relating thereto.
3.5 Counterparts. In order to facilitate the filing and recording of this
Merger Agreement, the same may be executed in any number of counterparts, each
of which shall be deemed to be an original.
IN WITNESS WHEREOF, this Merger Agreement, having first been duly approved by
the Boards of Directors of Erly and Torchmail, is hereby executed on behalf of
each said corporation and attested by their respective officers thereunto duly
authorized.
19
ERLY INDUSTRIES, INC.,
a California Corporation
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _______________________________ By_____________________________
President and CEO Secretary
TORCHMAIL COMMUNICATIONS, INC.,
a Delaware Corporation
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _______________________________ By_____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and CEO ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
20
