REORGANIZATION AGREEMENT
AGREEMENT AND
PLAN OF REORGANIZATION
DATED DECEMBER 22, 1998
BETWEEN
CD-ROM YEARBOOK COMPANY, INC.
AND
0XXXXXXX.XXX, INC.
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement")
is entered into this 22th day of December, 1998 by and between
CD-Rom Yearbook Company, Inc., an Oklahoma corporation ("CD-Rom" and
"Surviving Corporation") and 0xxxxxxx.xxx, a Nevada corporation,
("0xxxxxxx.xxx").
RECITALS
A. Subject to and in accordance with the terms and
conditions of this Agreement and pursuant to the Certificate of
Merger attached hereto as Exhibit A ("Certificate of Merger"), the
parties intend that 0xxxxxxx.xxx will merge with and into Cd-Rom
(the "Merger"), whereby at the Effective Time, all of the
0xxxxxxx.xxx Common Stock will be converted into seventeen million
eight hundred thousand (17,800,000) shares of common stock of Cd-Rom
(the "Cd-Rom Common Stock").
B. For federal income tax purposes, it is intended that the
Merger shall qualify as a tax free reorganization within the meaning
of Section368(a)(1)(A) of the Code.
C. The parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other
as an inducement to the consummation of the Merger.
AGREEMENT
NOW, THEREFORE, in reliance on the foregoing recitals and in
and for the consideration and mutual covenants set forth herein, the
parties agree as follows:
1. CERTAIN DEFINITIONS.
1.1 "AFFILIATE" shall have the meaning set forth in the
rules and regulations promulgated by the Commission pursuant to the
Securities Act.
1.2 "CLOSING" shall mean the closing of the transactions
contemplated by this Agreement.
1.3 "CLOSING DATE" shall mean the date of the Closing.
1.4 "CODE" shall mean the United States Internal Revenue
Code of 1986, as amended.
1.5 "COMMISSION" shall mean the United States Securities and
Exchange Commission.
1.6 "DISSENTING SHARES" shall mean those shares held by
holders who perfect their appraisal rights under the applicable
state laws.
1.7 "EFFECTIVE TIME" shall mean the date and time of the
effectiveness of the Merger under Oklahoma and Nevada law.
1.8 "GAAP" shall mean generally accepted accounting principles.
1.9 "0XXXXXXX.XXX COMMON STOCK" shall mean all of the
outstanding shares of Common Stock of 0xxxxxxx.xxx.
1.10 "MATERIAL ADVERSE EFFECT" shall mean a material adverse
effect on the operations, assets or financial condition (financial
or otherwise) of an entity considered as a whole.
1.11 "SECURITIES ACT" shall mean the Securities Act of 1933,
as amended, or any similar federal statute and the rules and
regulations thereunder, all as the same shall be in effect at the time.
1.12 "TRANSACTION DOCUMENTS" shall mean all documents or
agreements attached as an exhibit or schedule hereto, and set forth
on the Table of Contents.
2. PLAN OF REORGANIZATION.
2.1 THE MERGER. Subject to the terms and conditions of this
Agreement and the Certificate of Merger, 0xxxxxxx.xxx shall be
merged with and into Cd-Rom in accordance with the applicable
provisions of the laws of the States of Oklahoma and Nevada, and
with the terms and conditions of this Agreement and the Certificate
of Merger, so that:
(A) At the Effective Time (as defined in Section 2.5
(below)), 0xxxxxxx.xxx shall be merged with and into Cd-Rom. As a
result of the Merger, the separate corporate existence of
0xxxxxxx.xxx shall cease, and Cd-Rom shall continue as the surviving
corporation, and shall succeed to and assume all of the rights and
obligations of 0xxxxxxx.xxx in accordance with the laws of Delaware.
(B) The Certificate of Incorporation and Bylaws of
Cd-Rom in effect immediately prior to the Effective Time shall be
the Certificate of Incorporation and Bylaws, respectively, of the
Surviving Corporation after the Effective Time unless and until
further amended as provided by law.
(C) Subject to the terms of this Agreement, the
directors and officers of 0xxxxxxx.xxx immediately prior to the
Effective Time shall be the directors and officers of the Surviving
Corporation after the Effective Time. Such directors and officers
shall hold their
position until the election and qualification of
their respective successors or until their tenure is otherwise
terminated in accordance with the Bylaws of the Surviving Corporation.
2.2 CONVERSION OF SHARES. Each share of 0xxxxxxx.xxx Common
Stock, issued and outstanding immediately prior to the Effective
Time, will, by virtue of the Merger, and at the Effective Time, and
without further action on the part of any holder thereof, be
converted into one share of fully paid and nonassessable share of
Cd-Rom Common Stock.
2.3 FRACTIONAL SHARES. No fractional shares of Cd-Rom
Common Stock will be issued in connection with the Merger.
2.4 THE CLOSING. Subject to termination of this Agreement
as provided in Section 5 (below), the Closing shall take place at
the offices of M. Xxxxxxx Xxxxxx, 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx
000, Xxxxxxx Xxxxx, XX 00000, as soon as possible upon the
satisfaction or waiver of all conditions set forth in Section 3
hereof, or such other time and place as is mutually agreeable to the
parties.
2.5 EFFECTIVE TIME. Simultaneously with the Closing, the
Certificate of Merger shall be filed in the office of the Secretary
of State of the State of Oklahoma. The Merger shall become
effective immediately upon the filing of the Certificate of Merger
with such office.
2.6 TAX FREE REORGANIZATION. The parties intend to adopt
this Agreement as a tax-free plan of reorganization and to
consummate the Merger in accordance with the provisions of
Section368(a)(1)(A) of the Code. Each party agrees that it will not
take or assert any position on any tax return, report or otherwise
which is inconsistent with the qualification of the Merger as a
reorganization within the meaning of Section368(a) of the Code.
Cd-Rom represents now, and as of the Closing Date, that it presently
intends to continue 0xxxxxxx.xxx's historic business or use a
significant portion of 0xxxxxxx.xxx's business assets in a business.
3. MUTUAL COVENANTS.
3.1 REGULATORY FILINGS; CONSENTS; REASONABLE EFFORTS.
Subject to the terms and conditions of this Agreement, 0xxxxxxx.xxx
and Cd-Rom shall use Cd-Rom respective best efforts to (i) make all
necessary filings with respect to the Merger and this Agreement
under the Securities Act, and applicable blue sky or similar
securities laws and shall use all reasonable efforts to obtain
required approvals and clearances with respect thereto and shall
supply all additional internally prepared information requested in
connection therewith; (ii) make merger notification or other
appropriate filings with federal, state or local governmental bodies
or applicable foreign governmental agencies and shall use all
reasonable efforts to obtain required approvals and clearances with
respect thereto and shall supply all additional internally prepared
information requested in connection therewith; (iii) obtain all
consents, waivers, approvals, authorizations and orders required in
connection with the authorization, execution and delivery of this
Agreement and the consummation of the Merger; and (iv) take, or
cause to be taken, all appropriate action, and do, or cause to be
done, all things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement.
3.2 FURTHER ASSURANCES. Prior to and following the Closing,
each party agrees to cooperate fully with the other parties and to
execute such further instruments, documents and agreements and to
give such further written assurances, as may be reasonably requested
by any other party to better evidence and reflect the transactions
described herein and contemplated hereby and to carry into effect
the intents and purposes of this Agreement.
4. CLOSING MATTERS.
4.1 FILING OF CERTIFICATE OF MERGER. On the date of the
Closing, but not prior to the Closing, the Certificate of Merger
shall be filed with the offices of the Secretary of State of the
State of Oklahoma and the merger of 0xxxxxxx.xxx with and into
Cd-Rom shall be consummated.
4.2 EXCHANGE OF CERTIFICATES. At or within 30 days of the
Closing, Cd-Rom shall deliver and issue to each shareholder of
0xxxxxxx.xxx a certificate or certificates representing the Cd-Rom
Common Stock issuable to such shareholder as consideration in this
Merger.
4.3 DELIVERY OF DOCUMENTS. On or before the Closing, the
parties shall deliver the documents, and shall perform the acts
specified herein, including delivery of the counterpart signature
pages of the Transaction Documents executed by 0xxxxxxx.xxx and/or
Cd-Rom, as the case may be. All documents which 0xxxxxxx.xxx shall
deliver or cause to be delivered shall be in form and substance
reasonably satisfactory to Cd-Rom. All documents which Cd-Rom shall
deliver or cause to be delivered shall be in form and substance
reasonably satisfactory to 0xxxxxxx.xxx.
5. TERMINATION OF AGREEMENT.
5.1 TERMINATION. This Agreement may be terminated at any
time prior to the Closing by the mutual written consent of each of
the parties hereto. This Agreement may also be terminated and
abandoned by either 0xxxxxxx.xxx or Cd-Rom, if the Merger is not
effected by January 31, 1999. Any termination of this Agreement
under this Section 5.1 shall be effected by the delivery of written
notice of the terminating party to the other parties hereto.
5.2 LIABILITY FOR TERMINATION. Any termination of this
Agreement pursuant to this Section 5 shall be without further
obligation or liability upon any party in favor of any other party
hereto; provided, that if such termination shall result from the
willful failure of a party to carry out its obligations under this
Agreement, then such party shall be liable for losses incurred by
the other parties as set forth in Section 5.5. The provisions of
this Section 5.2 shall survive termination.
5.3 CERTAIN EFFECTS OF TERMINATION. In the event of the
termination of this Agreement as provided in Section 5.1 herein,
each party, if so requested by the other party, will (i) return
promptly every document (other than documents publicly available)
furnished to it by the other party (or any subsidiary, division,
associate or affiliate of such other party) in connection with the
transactions contemplated hereby, whether so obtained before or
after the execution of this Agreement, and any copies thereof which
may have been made, and will cause its representatives and any
representatives of financial institutions and investors and others
to whom such documents were furnished promptly to return such
documents and any copies thereof any of them may have made; or (ii)
destroy such documents and cause its representatives and such other
representatives to destroy such documents, and such party shall
deliver a certificate executed by its president or vice president
stating to such effect; and
5.4 REMEDIES. No party shall be limited to the termination
right granted in Section 5.1 hereto by reason of the nonfulfillment
of any condition to such party's closing obligations but may, in the
alternative, elect to do one of the following:
(A) proceed to close despite the nonfulfillment of any
closing condition, it being understood that consummation of the
transactions contemplated hereby shall be deemed a waiver of any
misrepresentation or breach of warranty or covenant and of any
party's rights and remedies with respect thereto to the extent that
the other party shall have actual knowledge of such
misrepresentation or breach and the Closing shall nonetheless take
place; or
(B) decline to close, terminate this Agreement as
provided in Section 5.1 hereof, and thereafter seek damages to the
extent permitted in Section 5.5 hereof.
5.5 ARBITRATION. Any dispute arising out of this Agreement,
or its performance or breach, shall be resolved by binding
arbitration conducted by JAMS/Endispute under the JAMS/Endispute
Rules for Complex Arbitration (the "JAMS Rules"). This arbitration
provision is expressly made pursuant to and shall be governed by the
Federal Arbitration Act, 9 U.S.C. Sections 1-14. The parties hereto
agree that pursuant to Section 9 of the Federal Arbitration Act, a
judgment of the United States District Courts for the Southern
District of California shall be entered upon the award made pursuant
to the arbitration. A single arbitrator, who shall have the
authority to allocate the costs of any arbitration initiated under
this paragraph, shall be selected according to the JAMS Rules within
ten (10) days of the submission to JAMS/Endispute of the response to
the statement of claim or the date on which any such response is
due, whichever is earlier. The arbitrator shall conduct the
arbitration in accordance with the Federal Rules of Evidence. The
arbitrator shall decide the amount and extent of pre-hearing
discovery which is appropriate. The arbitrator shall have the power
to enter any award of monetary and/or injunctive relief (including
the power issue permanent injunctive relief and also the power to
reconsider any prior request for immediate injunctive relief by
either of the parties and any order as to immediate injunctive
relief previously granted or denied by a court in response to a
request therefor by either of the parties), including the power to
render an award as provided in Rule 43 of the JAMS Rules; provided,
however, that the arbitrator shall not have the power to award
punitive damages under any circumstances (whether styled as
punitive, exemplary, or treble
damages, or any penalty or punitive type of damages) regardless of whether
such damages may be available under applicable law, the parties hereby
waiving Cd-Rom rights to
recover any such damages. The arbitrator shall award the prevailing
party its costs and reasonable attorneys' fees, and the losing party
shall bear the entire cost of the arbitration, including the
arbitrator's fees. All arbitration shall be held in Orange County,
California. In addition to the above court, the arbitration award
may be enforced in any court having jurisdiction over the parties
and the subject matter of the arbitration. Notwithstanding the
foregoing, the parties irrevocably submit to the nonexclusive
jurisdiction of the state and federal courts situated where the
respondent is domiciled or resides as of the Effective Date in any
action to enforce an arbitration award. With respect to any request
for immediate injunctive relief, that state and federal courts in
Orange County, California shall have exclusive jurisdiction and
venue over any such disputes.
6. MISCELLANEOUS.
6.1 GOVERNING LAWS. It is the intention of the parties
hereto that the internal laws of the State of California
(irrespective of its choice of law principles) shall govern the
validity of this Agreement, the construction of its terms, and the
interpretation and enforcement of the rights and duties of the
parties hereto.
6.2 BINDING UPON SUCCESSORS AND ASSIGNS. Subject to, and
unless otherwise provided in, this Agreement, each and all of the
covenants, terms, provisions, and agreements contained herein shall
be binding upon, and inure to the benefit of, the permitted
successors, executors, heirs, representatives, administrators and
assigns of the parties hereto.
6.3 SEVERABILITY. If any provision of this Agreement, or
the application thereof, shall for any reason and to any extent be
invalid or unenforceable, the remainder of this Agreement and
application of such provision to other persons or circumstances
shall be interpreted so as best to reasonably effect the intent of
the parties hereto. The parties further agree to replace such void
or unenforceable provision of this Agreement with a valid and
enforceable provision which will achieve, to the extent possible,
the economic, business and other purposes of the void or
unenforceable provision.
6.4 ENTIRE AGREEMENT. This Agreement, the exhibits hereto,
the documents referenced herein, and the exhibits thereto,
constitute the entire understanding and agreement of the parties
hereto with respect to the subject matter hereof and thereof and
supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied,
written or oral, between the parties with respect hereto and
thereto. The express terms hereof control and supersede any course
of performance or usage of the trade inconsistent with any of the
terms hereof.
6.5 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original as
against any party whose signature appears thereon and all of which
together shall constitute one and the same instrument. This
Agreement
shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of
the parties reflected hereon as signatories.
6.6 EXPENSES. Except as provided to the contrary herein,
each party shall pay all of its own costs and expenses incurred with
respect to the negotiation, execution and delivery of this
Agreement, the exhibits hereto, and the other Transaction Documents.
6.7 AMENDMENT AND WAIVERS. Any term or provision of this
Agreement may be amended, and the observance of any term of this
Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by a
writing signed by the party to be bound thereby. The waiver by a
party of any breach hereof for default in payment of any amount due
hereunder or default in the performance hereof shall not be deemed
to constitute a waiver of any other default or any succeeding breach
or default.
6.8 SURVIVAL OF AGREEMENTS. All covenants, agreements,
representations and warranties made herein shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby notwithstanding any investigation
of the parties hereto and shall terminate on the date one year after
the Closing Date.
6.9 NO WAIVER. The failure of any party to enforce any of
the provisions hereof shall not be construed to be a waiver of the
right of such party thereafter to enforce such provisions.
6.10 ATTORNEYS' FEES. Should suit be brought to enforce or
interpret any part of this Agreement, the prevailing party shall be
entitled to recover, as an element of the costs of suit and not as
damages, reasonable attorneys' fees to be fixed by the court
(including without limitation, costs, expenses and fees on any
appeal). The prevailing party shall be the party entitled to
recover its costs of suit, regardless of whether such suit proceeds
to final judgment. A party not entitled to recover its costs shall
not be entitled to recover attorneys' fees. No sum for attorneys'
fees shall be counted in calculating the amount of a judgment for
purposes of determining if a party is entitled to recover costs or
attorneys' fees.
6.11 NOTICES. Any notice provided for or permitted under
this Agreement will be treated as having been given when (a)
delivered personally, (b) sent by confirmed telex or telecopy, (c)
sent by commercial overnight courier with written verification of
receipt, or (d) mailed postage prepaid by certified or registered
mail, return receipt requested, to the party to be notified, at the
address set forth below, or at such other place of which the other
party has been notified in accordance with the provisions of this
Section 6.11.
0xxxxxxx.xxx:
0xxxxxxx.xxx, Inc.
000 X. Xxxx Xxxxxx, Xxxxx X-0
Xxx Xxxxx, XX 00000
Facsimile No: 000-000-0000
Cd-Rom:
CD-Rom Yearbook Company, Inc.
c/o Xxxxx Xxxx
000 X. Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile No.: 000-000-0000
Such notice will be treated as having been received upon actual
receipt.
6.12 TIME. Time is of the essence of this Agreement.
6.13 CONSTRUCTION OF AGREEMENT. This Agreement has been
negotiated by the respective parties hereto and Cd-Rom attorneys and
the language hereof shall not be construed for or against any party.
The titles and headings herein are for reference purposes only and
shall not in any manner limit the construction of this Agreement
which shall be considered as a whole.
6.14 NO JOINT VENTURE. Nothing contained in this Agreement
shall be deemed or construed as creating a joint venture or
partnership between any of the parties hereto. No party is by
virtue of this Agreement authorized as an agent, employee or legal
representative of any other party. No party shall have the power to
control the activities and operations of any other and Cd-Rom status
is, and at all times, will continue to be, that of independent
contractors with respect to each other. No party shall have any
power or authority to bind or commit any other. No party shall hold
itself out as having any authority or relationship in contravention
of this Section 6.14.
6.15 PRONOUNS. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the person, persons, entity or entities
may require.
6.16 FURTHER ASSURANCES. Each party agrees to cooperate
fully with the other parties and to execute such further
instruments, documents and agreements and to give such further
written assurances, as may be reasonably requested by any other
party to better evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the intents
and purposes of this Agreement.
6.17 ABSENCE OF THIRD-PARTY BENEFICIARY RIGHTS. No
provisions of this Agreement are intended, nor shall be interpreted,
to provide or create any third-party beneficiary rights or any other
rights of any kind in any client, customer, affiliate, stockholder,
partner of any party hereto or any other person or entity except
employees and stockholders of 0xxxxxxx.xxx specifically referred to
herein, and, except as so provided, all provisions hereof shall be
personal solely between the parties to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
CD-ROM YEARBOOK COMPANY, INC. 0XXXXXXX.XXX, INC.
an Oklahoma corporation a Nevada corporation
By:/s/Xxxxx Xxxx By:/s/Xxxxxxx X. Xxxxxxxxxxx
Xxxxx Xxxx, President Xxxxxxx X. Xxxxxxxxxxx, President
ATTEST: ATTEST:
/s/Xxxxx Xxxx /s/Xxxxxxx X. Xxxxxxxxxxx
Xxxxx Xxxx, Secretary Xxxxxxx X. Xxxxxxxxxxx, Secretary
0xxxxxxx.xxx, Inc.
Secretary's Certificate
The undersigned, Xxxxxxx X. Xxxxxxxxxxx, Secretary of
0xxxxxxx.xxx, Inc., a Nevada corporation and one of the merging
corporations mentioned in the foregoing Agreement and Plan of
Reorganization (the "Agreement"), certifies that the Agreement has
been adopted by the written consent of the shareholders of all of
the outstanding stock of 0xxxxxxx.xxx, Inc. entitled to vote thereon
in accordance with the provisions of the General Corporation Law of
the State of Nevada.
Dated: December 22, 1998
/s/Xxxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Secretary of 0xxxxxxx.xxx, Inc.
CD-Rom Yearbook Company, Inc.
Secretary's Certificate
The undersigned, Xxxxx Xxxx, Secretary of CD-Rom Yearbook
Company, Inc., an Oklahoma corporation and one of the merging
corporations mentioned in the foregoing Agreement and Plan of
Reorganization (the "Agreement"), certifies that the Agreement has
been adopted by the affirmative vote of the holders of a majority of
the outstanding Common Stock of CD-Rom Yearbook Company, Inc.
entitled to vote thereon at a meeting held pursuant to notice in
accordance with the provisions of the Oklahoma General Corporation Law.
Dated: December 22, 1998
/s/Xxxxx Xxxx
Xxxxx Xxxx
Secretary of CD-Rom Yearbook, Inc.
