AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (hereinafter called the "Merger
Agreement") is made as of July 31, 1996, by and between Virtual Telecom, Inc., a
Delaware corporation ("Virtual Telecom"), and Moke Acquisition Corp., a Delaware
corporation ("Moke"). Virtual Telecom and Moke are sometimes referred to as the
"Constituent Corporations," with reference to the following facts:
A. The authorized capital stock of Virtual Telecom consists of twenty
million (20,000,000) shares of $.001 par value common stock and ten million
(10,000,000) shares of $.001 par value preferred stock. The authorized capital
stock of Moke consists of twenty million (20,000,000) shares of common stock,
$.001 par value.
B. There are 3,193,540 shares of common stock of Virtual Telecom
outstanding.
C. The directors of the Constituent Corporations deem it advisable and to
the advantage of said corporations that Moke merge into Virtual Telecom upon the
terms and conditions herein provided.
X. Xxxx has no subsidiaries, and has a total of 4,090,448 shares of
common stock issued and outstanding, and no other shares of any class are
outstanding, nor are there any options to acquire, or rights outstanding which
would give any person the right to acquire any share of Moke's stock.
NOW, THEREFORE, the parties do hereby adopt the plan of merger encompassed
by this Merger Agreement and do hereby agree that Moke shall merge with and into
Virtual Telecom on the following terms, conditions, and other provisions:
1. TERMS AND CONDITIONS
1.1 MERGER. Moke shall be merged with and into Virtual Telecom (the
"Merger"), and Virtual Telecom shall be the surviving corporation (the
"Surviving Corporation") effective upon the date when this Merger Agreement or a
Certificate of Merger is filed with the Secretary of State of the State of
Delaware (the "Effective Date").
1.2 SUCCESSION. On the Effective Date, Virtual Telecom shall continue
its corporate existence under the laws of the State of Delaware, and the
separate existence and corporate organization of Moke, 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 liabilities,
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 Corporations, and all property, real, personal and mixed, of each of
the Constituent Corporations, and all debts due to each of the Constituent
Corporations
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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 stockholders, 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 or repaired, and any claim existing or action or
proceeding pending by or against either of the Constituent Corporations may be
prosecuted to judgments 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 MANNER OF ACCOMPLISHING MERGER. The Merger shall be accomplished
by way of converting all of the issued and outstanding shares of Moke for the
common stock of Virtual Telecom at the ratio of .0867471 share of Virtual
Telecom for each one share of Moke outstanding on the effective date of the
Merger. All Moke shares of record outstanding on the date of the Merger will be
deemed "cancelled," and the transfer agent will automatically be instructed to
issue new certificates of Virtual Telecom, based on the above ratio, to each of
the shareholders of Moke, at the address listed in the register of shareholders.
No fractional shares will be issued, but each fractional share will be rounded
up to the next share and a certificate for Virtual Telecom will be issued to
each record holder of Moke accordingly. The exchange will be accomplished
pursuant to an exemption from registration provided by Regulation D, Section 504
in each state where said exemption or a registration of the issuance can be
accomplished. In each state where an exemption from registration is not
available pursuant to Rule 504 of Regulation D or some other available exemption
from registration which can be reasonably complied with, Virtual Telecom shall
issue cash in lieu of the exchanged securities of Moke at par value ($.001 per
share exchanged).
1.5 RIGHTS OF APPRAISAL. This Merger shall be subject to the rights
of appraisal granted to the shareholders of a Delaware corporation in accordance
with the General Corporation Law of the State of Delaware. Should more than five
percent (5%) of the shareholders of Moke, regardless of the number of shares
owned, seek to enforce their rights of appraisal, the Merger shall be deemed
cancelled and all parties relieved of any obligation pursuant to this Agreement.
1.6 OBLIGATIONS OF MOKE TO ISSUE ITS SECURITIES. As of the date of
this Merger Agreement and until the Effective Date, Moke will have no
obligations to issue any additional shares of its common stock to any person or
entity whatsoever, including as a result of having previously issued any
warrants to acquire common stock, any options to acquire its securities as a
result of any employee stock option plan or otherwise, or pursuant to any
employee benefit plan. Moke further represents that the capitalization, as set
forth in paragraph D of the preamble to this Agreement, is true and accurate in
all respects.
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2. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
2.1 CERTIFICATE OF INCORPORATION AND BYLAWS. The Certificate of
Incorporation of Virtual Telecom in effect on the Effective Date shall continue
to be the Certificate of Incorporation of the Surviving Corporation. The Bylaws
of Virtual Telecom shall be the Bylaws of the Surviving Corporation, as they may
be amended from time to time.
2.2 DIRECTORS. The directors of Virtual Telecom 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 Virtual Telecom 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.
3. REPRESENTATIONS AND WARRANTIES
Moke represents and warrants to Virtual Telecom as follows:
3.1 ORGANIZATION. Moke is a corporation duly organized, validly
existing, and in good standing under the laws of Delaware, has all necessary
corporate powers to own properties of and carry on a business, and is duly
qualified to do business and is in good standing in Delaware. All actions taken
by the Incorporators, directors and/or shareholders of Moke have been valid and
in accordance with the laws of the State of Delaware. The execution, delivery
and performance by Moke of this Merger Agreement has been duly authorized by the
board of directors and stockholders of Moke.
3.2 CAPITAL. The authorized capital stock of Moke consists of
20,000,000 shares of common stock, $.001 par value, of which 4,090,448 shares
are issued and outstanding. All outstanding shares are fully paid and non
assessable, free of liens, encumbrances, options, restrictions and legal or
equitable rights of others not a party to this Merger Agreement. As of the
Effective Date, there will be no outstanding securities, or other agreements or
commitments obligating Moke to issue or to transfer from treasury any additional
shares of its capital stock. None of the outstanding shares of Moke are subject
to any stock restriction agreements. There are approximately 331 bona fide
shareholders of Moke. All of such shareholders have valid title to such shares
and acquired their shares in a lawful transaction and in accordance with
Delaware corporate law.
3.3 FINANCIAL STATEMENTS. Exhibit A to this Merger Agreement
includes the balance sheets of Moke as of July 11, 1996 and the related
statements of income and retained earnings for the period from inception (April
6, 1996) to July 11, 1996. The financial statements have been prepared in
accordance with generally accepted accounting principles consistently followed
by Moke throughout the periods indicated, and fairly present the financial
position of Moke as of the date of the balance sheet included in the financial
statements, and the results of its operations for the periods indicated.
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3.4 ABSENCE OF CHANGE. Since July 11, 1996, there has not been any
change in the financial condition of operations of Moke, except changes in the
ordinary course of business, which changes have not in the aggregate been
materially adverse.
3.5 LIABILITIES. Moke does not have any debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that is not reflected in Moke's balance sheet
of July 11, 1996. Moke is not aware of any pending, threatened or asserted
claims, lawsuits or contingencies pending, threatened or asserted claims,
lawsuits or contingencies involving Moke or its common stock. There is no
dispute of any kind between Moke and any third party, and no such dispute will
exist on the Effective Date of this Agreement. As of the Effective Date, Moke
will be free from any and all liabilities, claims and/or commitments.
3.6 TAX RETURNS. Within the times and in the manner prescribed by
law, Moke has filed all federal, state, and local tax returns required by law
and has paid all taxes, assessments, and penalties due and payable. No federal
income tax returns of Moke have been audited by the Internal Revenue Service.
The provision for taxes, if any, reflected in Moke's balance sheet as of
July 11, 1996, is adequate for any and all federal, state, county and local
taxes for the period ending on the date of that balance sheet and for all prior
periods, whether or not disputed. There are no present disputes as to taxes of
any nature payable by Moke.
3.7 ABILITY TO CARRY OUT OBLIGATIONS. Moke has the right, power and
authority to enter into, and perform their obligations under this Merger
Agreement. The execution and delivery of this Merger Agreement by Moke and the
performance by Moke of its obligations hereunder will not cause, constitute, or
conflict with or result in (a) any breach or violation or any of the provisions
of or constitute a default under any license, indenture, mortgage, charter,
instrument, articles of incorporation, bylaw, or other agreement or instrument
to which Moke is a party, or by which it may be bound, nor will any consents or
authorizations of any party other than those hereto be required, (b) an event
that would cause Moke to be liable to any party, or (c) an event that would
result in the creation or imposition of any lien, charge, or encumbrance on any
asset of Moke.
3.8 FULL DISCLOSURE. None of the representations and warranties made
by Moke, or in any certificate or memorandum furnished or to be furnished on
behalf of Moke, or on their behalf, contains or will contain any untrue
statement of a material fact, or omit any material fact the omission of which
would be misleading.
3.9 CONTRACTS AND LEASES. Moke does not and has never carried on any
business. Moke is not a party to any contract, agreement or lease. No person
holds a power of attorney from Moke.
3.10 COMPLIANCE WITH LAWS. Moke has complied with, and is not in
violation of any federal, state, or local statute, law, and/or regulation
pertaining to Moke. Moke has complied with all federal and state securities
laws in connection with the offer, sale and distribution of its securities. At
the time Moke filed its Form D with the Securities and Exchange Commission, Moke
was entitled to use the exemption provided by
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Section 504 of the Securities and Exchange Commission relative to the
distribution of its shares or any other transaction described in such Form D.
3.11 LITIGATION. Moke is not (and has not been) a party to any suit,
action, arbitration, or legal, administrative, or other proceeding, or pending
governmental investigation. To the best knowledge of Moke, there is no basis
for any such action or proceeding and no such action or proceeding is threatened
against Moke. Moke is not subject to or in default with respect to any order,
writ, injunction, or decree of any federal, state, local or foreign court,
department, agency, or instrumentality.
3.12 CONDUCT OF BUSINESS. Prior to the Effective Date, Moke shall
conduct its business in the normal course, and shall not (without the prior
written approval of Virtual Telecom): (i) sell, pledge or assign any assets;
(ii) amend its Articles of Incorporation or Bylaws; (iii) declare dividends,
redeem or sell stock or other securities; (iv) incur any liabilities;
(v) acquire or dispose of any assets, enter into any contract, guarantee
obligations of any third party; or (vi) enter into any other transaction.
3.13 CORPORATE DOCUMENTS. Copies of each of the following documents,
which are true, complete and correct in all material respects, will be attached
to and made a part of this Agreement:
(i) Articles of Incorporation;
(ii) Bylaws;
(iii) Minutes of Shareholders Meetings;
(iv) Minutes of Directors Meetings;
(v) An Opinion Letter from our attorney attesting to the
validity and condition of the Corporation;
(vi) List of Officers and Directors;
(vii) List of Shareholders;
(viii) Copy of Form D filed with Securities and Exchange
Commission;
(ix) Balance Sheet as of December 31, 1995, together with other
financial statements described in Section 2.03;
(x) Secretary of State Filing Receipt;
(xi) Copies of all federal and state income tax returns of
Moke;
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(xii) Stock register and stock certificate records of Moke
and a current, accurate list of Moke shareholders;
(xiii) A copy of Form M-11 filed with the State of New York.
3.14 CLOSING DOCUMENTS. All minutes, consents or other documents
pertaining to Moke to be delivered as of the Effective Date shall be valid and
in accordance with the laws of Delaware.
4. MISCELLANEOUS
4.1 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 Moke 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 Moke 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 Moke or otherwise to take any
and all such action and to execute and deliver any and all such deeds and other
instruments.
4.2 AMENDMENT. At any time before or after approval by the
shareholders of Moke, this Merger Agreement may be amended in any manner (except
that, after the approval of the Merger Agreement by the shareholders of Moke,
the principal terms may not be amended without the further approval of the
shareholders of Moke) as may be determined in the judgment of the respective
Board of Directors of Virtual Telecom and Moke 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.
4.3 CONDITIONS TO MERGER. The obligation of the Constituent
Corporations to effect the transactions contemplated hereby is 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):
(a) the Merger shall have been approved by the shareholders of
Moke in accordance with applicable provisions of the General Corporation Law of
the State of Delaware; and
(b) the Merger shall have been approved by the shareholders of
Virtual Telecom in accordance with applicable provisions of the General
Corporation Law of the State of Delaware; and
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(c) any and all consents, permits, authorizations, approvals,
and orders deemed in the sole discretion of Moke to be material to consummation
of the Merger shall have been obtained; and
(d) the securities issued by Virtual Telecom may be issued
pursuant to an exemption from registration pursuant to the Securities Act of
1933, as amended, Regulation D, Section 504, and the shareholders who reside in
certain states which comport with said Regulation D, Section 504, or other
tandem exemptions from registration, may receive unrestricted securities in
exchange for the securities of Moke; and
(e) an audit of the books and records of Moke, conducted in
accordance with generally accepted accounting practices, shall have been
delivered to Virtual Telecom.
4.4 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 Moke or Virtual Telecom or both, notwithstanding
the approval of the Merger by the shareholders of Moke or Virtual Telecom, 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 Moke and Virtual Telecom, 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.
4.5 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.
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IN WITNESS WHEREOF, this Merger Agreement, having first been duly approved
by the Boards of Directors of Moke and Virtual Telecom, is hereby executed on
behalf of each said corporation and attested by their respective officers
thereunto duly authorized.
MOKE ACQUISITION CORP.,
a Delaware corporation
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
President
ATTEST:
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
Secretary
VIRTUAL TELECOM, INC.,
a Delaware corporation
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, Chief Executive Officer
ATTEST:
/s/ Xxxxxx Xxxxx
--------------------------
Xxxxxx Xxxxx
Secretary
