AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Plan") is made this 14th day
of July, 1998, among Altmount Holdings, Inc., a Nevada corporation ("AHI");
WordCruncher Publishing Technologies, Inc., a Utah corporation, any and all of
its subsidiaries and fictitious names (hereinafter collectively referred to as
"WordCruncher") and its shareholders (hereinafter "Shareholders").
AHI wishes to acquire one hundred percent (100%) of the issued and
outstanding stock of WordCruncher for and in exchange for stock of AHI, in a
stock for stock transaction intending to qualify as a tax-free exchange
pursuant to Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended. The parties intend for this Plan to represent the terms and
conditions of such tax-free reorganization, which Plan the parties hereby
adopt.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, IT IS AGREED:
Section 1
Terms of Exchange
1.1 Number of Shares. At the closing provided for in Section 2 (the
"Closing") the holders of all the issued and outstanding stock of
WordCruncher agree to assign, transfer, and deliver to AHI all of their shares
of WordCruncher stock, free and clear of all liens, pledges, encumbrances,
charges, restrictions or known claims of any kind, nature or description. AHI
agrees to acquire such shares thereof, by issuing and delivering in exchange
solely common shares of AHI's stock, par value $0.001, in the aggregate of two
million four hundred thirty three thousand three hundred thirty four
(2,433,334) shares. Such 2,433,334 shares shall represent a minimum of 55% of
all the outstanding and fully diluted shares of AHI. Upon transfer of one
hundred percent (100%) of WordCruncher's issued and outstanding shares,
WordCruncher shareholders shall be entitled to receive a certificate(s)
evidencing shares of the exchanged AHI stock as provided by the exchange. The
transaction contemplated herein shall be contingent upon the availability of
an exemption from the registration provisions of Section 5 of the Securities
Act of 1933 and any applicable state securities laws. Upon consummation of the
transaction contemplated, AHI shall merge with WordCruncher and AHI shall
become the surviving corporation.
1.2 Escrow. In order to facilitate the transactions contemplated
herein, simultaneous with the execution hereof, AHI and the Shareholders of
WordCruncher shall execute the Escrow Agreement attached hereto as Exhibit A
(the "Escrow Agreement") and deposit the Shares as set forth in Section 1.1
hereof with the Escrow Depository, as such term is defined in the Escrow
Agreement.
1.3 Anti-Dilution. For all relevant purposes of this Plan, the number
of AHI shares to be issued and delivered pursuant to this Plan shall be
appropriately adjusted to take into account any stock split, stock dividend,
reverse stock split, recapitalization, or similar change in AHI common stock,
which may occur between the date of the execution of this Plan and the date of
the delivery of such shares.
1.4 Delivery of Certificates. The Shareholders shall transfer to AHI at
the Closing the shares of common stock of WordCruncher listed opposite their
respective names on Exhibit B and Exhibit C hereto (the "WordCruncher
Shares") in exchange for an aggregate of 2,433,334 shares of the common stock
of AHI (the "AHI Stock"). 1,833,334 shares of AHI stock shall be issued at
the Closing to the Shareholders, in the numbers shown opposite their
respective names in Exhibit B. 600,000 shares of AHI stock shall be issued on
November 16, 1998 to the Shareholders, in the numbers shown opposite their
respective names in Exhibit C. The transfer of WordCruncher shares by the
Shareholders shall be effected by the delivery to AHI at the Closing of
certificates representing the transferred shares endorsed in blank or
accompanied by stock powers executed in blank, with all signatures guaranteed
by a national bank and with all necessary transfer taxes and other revenue
stamps affixed and acquired at the Shareholders' expense. The Shareholders'
stock listed in Exhibit C shall also be transferred at the Closing and shall
be held in escrow until November 16, 1998.
1.5 Further Assurances. AHI and WordCruncher shall not authorize or
issue shares, other than those called for by this Plan, prior to the Closing.
Subsequent to the execution hereof, and from time to time thereafter, all
parties to this plan shall execute such additional instruments and take such
other action as reasonably necessary to more effectively sell, transfer and
assign clear title and ownership in the WordCruncher and AHI shares.
Section 2
Closing
2.1 Closing. The Closing contemplated by Section 1.3 shall be held at
the law offices of Xxxxxx X. Xxxxxxx, Esq. on or before July 31, 1998 or at
such other time or place as may be mutually agreed upon in writing by the
parties. The Closing may also be accomplished by wire, express mail or other
courier service, conference telephone communications or as otherwise agreed by
the respective parties or their duly authorized representatives. In any
event, the closing of the transactions contemplated by this Plan shall be
effected as soon as practicable after all of the conditions contained herein
have been satisfied.
2.2 Closing Events. At the Closing, each of the respective parties
hereto shall execute, acknowledge and deliver (or shall cause to be executed,
acknowledged, and delivered) any agreements, resolutions, rulings, or other
instruments required by this Plan to be so delivered at or prior to Closing,
together with such other items as may be reasonably requested by the parties
hereto and their respective legal counsel in order to effectuate or evidence
the transaction contemplated hereby.
2.3 Officers and Directors. At the Closing, the Board of Directors of
AHI will adopt a resolution to change the officers and directors of AHI as
follows:
M. Xxxxxx Xxxx President, CEO and Director
Xxxxx X. Xxxxxxxx Executive Vice President and Chairman of the
Board of Directors
Xxxxxxx X. Xxxx Senior Vice President, Secretary, Treasurer
and Director
Xxxxx X. Xxxxxxx Director
2.4 Name of the Corporation. At the Closing, the Board of Directors of
AHI will adopt a resolution to change the name of AHI to WordCruncher Internet
Technologies, Inc.
2.5 Mediation Arbitration. If a dispute arises out of or relates to
this Plan, or the breach thereof, and if said dispute cannot be settled
through direct discussions, the parties agree to first endeavor to settle the
dispute in an amicable manner by mediation under the Commercial Mediation
Rules of the American Arbitration Association, before resorting to
arbitration. Thereafter, any unresolved controversy or claim arising out of
or relating this Plan, or breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the Award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
Section 3
Representations, Warranties and Covenants of AHI
AHI represents and warrants to, and covenants with, the Shareholders and
WordCruncher as follows:
3.1 Corporate Status. AHI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. AHI has
full corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry on its
business on all material respects as it is now being conducted, and there is
no jurisdiction in which the character and location of the assets owned by it,
or the nature of the business transacted by it, requires qualification.
Included in the AHI schedules (defined below) are complete and correct copies
of its Articles of Incorporation and Bylaws as in effect on the date hereof.
The execution and delivery of this Plan does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of AHI's
Articles of Incorporation or Bylaws. AHI has taken all action required by
law, its Articles of Incorporation, its Bylaws, or otherwise, to authorize the
execution and delivery of this Plan.
3.2 Capitalization. The authorized capital stock of AHI as of the date
hereof consists of 20,000,000 common shares, par value $0.001. At the Closing
the Board of Directors of AHI will approve a resolution to increase the
authorized capital stock of the AHI to 60,000,000 common shares, par value
$0.001. The common shares of AHI issued and outstanding are fully paid, non-
assessable shares. There are no outstanding options, warrants, obligations
convertible into shares of stock, or calls or any understanding, agreements,
commitments, contracts or promises with respect to the issuance of AHI's
common stock or with regard to any options, warrants or other contractual
rights to acquire any of AHI's authorized but unissued common shares. As of
the Closing, AHI shall have not more than 3,333,334 shares issued and
outstanding.
3.3 Financial Statements.
(a) AHI hereby warrants and covenants to WordCruncher that the
audited financial statements dated May 2, 1997 through (inception) June 16,
1997, fairly and accurately represent the financial condition of AHI and that
no material change has occurred in the financial condition of AHI.
(b) AHI hereby warrants and represents that the audited financial
statements for the periods set forth in subparagraph (a), supra, fairly and
accurately represent the financial condition of AHI as submitted heretofore to
WordCruncher for examination and review.
3.4 Conduct of Business. AHI is a development stage company and has
not engaged in any operational activities prior to the date hereof.
AHI will conduct itself in the following manner pending the Closing:
(a) Certificate of Incorporation and Bylaws. No change will be
made in the Articles of Incorporation or Bylaws of AHI.
(b) Capitalization, etc. AHI will not make any change in its
authorized or issued shares of any class, declare or pay any dividend or other
distribution, or issue, encumber, purchase or otherwise acquire any of its
shares of any class.
3.5 Options, Warrants and Rights. AHI has no options, warrants or stock
appreciation rights related to the authorized but unissued AHI common stock.
There are no existing options, warrants, calls, or commitments of any
character relating to the authorized and unissued AHI common stock, except
options, warrants, calls, or commitments, if any, to which AHI is not a party
and by which it is not bound.
3.6 Title to Property. AHI has good and marketable title to all of its
properties and assets, real and personal, proprietary or otherwise, as will be
reflected in the balance sheets of AHI, and the properties and assets of AHI
are subject to no mortgage, pledge, lien or encumbrance, unless as otherwise
disclosed in its financial statements.
3.7 Litigation. There are no actions, suits, or proceedings, pending,
or, to the best knowledge of AHI, threatened by or against or effecting AHI at
law or in equity, or before any governmental agency or instrumentality,
domestic or foreign, or before any arbitrator of any kind; AHI does not have
any knowledge of any default on its part with respect to any judgment, order,
writ, injunction, decree, warrant, rule, or regulation of any court,
arbitrator, or governmental agency or instrumentality. AHI and its principals
have no knowledge of any facts or circumstances which could give rise to any
action or proceeding.
3.8 Books and Records. From the date hereof, and for any reasonable
period subsequent thereto, AHI and its present management will (i) give to the
Shareholders and WordCruncher, or their duly authorized representatives, full
access, during normal business hours, to all of its books, records, contracts
and other corporate documents and properties so that the Shareholders and
WordCruncher, or their duly authorized representatives, may inspect them; and
(ii) furnish such information concerning the properties and affairs of AHI as
the Shareholders and WordCruncher, or their duly authorized representatives,
may reasonably request. Any such request to inspect AHI's books shall be
directed to AHI's counsel, Xxxxxx X. Xxxxxxx, at the address set forth herein
under Section 10.4 Notices.
3.9 Confidentiality. Until the Closing (and thereafter if there is no
Closing), AHI and its representatives will keep confidential any information
which they obtain from the Shareholders or from WordCruncher concerning its
properties, assets and the proposed business operations of WordCruncher. If
the terms and conditions of this Plan imposed on the parties hereto are not
consummated on or before 5:00 p.m. MST on July 31, 1998 or otherwise waived or
extended in writing to a date mutually agreeable to the parties hereto, AHI
will return to WordCruncher all written matter with regard to WordCruncher
obtained in connection with the negotiations or consummation of this Plan.
3.10 Conflict with Other Instruments. The transactions contemplated by
this Plan will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or other
material agreements or instrument to which AHI was or is a party, or to which
any of its assets or operations are subject, and will not conflict with any
provision of the Articles of Incorporation or Bylaws of AHI.
3.11 Corporate Authority. AHI has full corporate power and authority to
enter into this Plan and to carry out its obligations hereunder and will
deliver to the Shareholders and WordCruncher, or their respective
representatives, at the Closing, a certified copy of resolutions of its Board
of Directors authorizing execution of this Plan by its officers and
performance thereunder.
3.12 Consent of Shareholders. AHI hereby warrants and represents that
the Shareholders of AHI, being the owners of a majority of the issued and
outstanding stock of the Corporation consented in writing to the authorization
to execute this Agreement and Plan of Reorganization as between AHI and
WordCruncher pursuant to a stock-for-stock transaction in which AHI would
acquire one hundred percent of the issued and outstanding shares of
WordCruncher in exchange for the issuance of a total of 2,433,334 common
shares of AHI and thereby WordCruncher shall merge with and into AHI.
3.13 Special Covenants and Representations Regarding the Exchanged AHI
Stock. The consummation of this Plan and the transactions herein contemplated
include the issuance of the exchanged AHI shares to the Shareholders, which
constitutes an offer and sale of securities under the Securities Act of 1933,
as amended, and applicable states' securities laws. Such transaction shall be
consummated in reliance on exemptions from the registration and prospectus
requirements of such statutes which depend interlace on the circumstances
under which the Shareholders acquire such securities. In connection with the
reliance upon exemptions from the registration and prospectus delivery
requirements for such transactions, at the Closing, Shareholders shall cause
to be delivered to AHI a Letter(s) of Investment Intent in the form attached
hereto as Exhibit D and incorporated herein by reference.
3.14 Undisclosed or Contingent Liabilities. AHI hereby represents and
warrants that it has no undisclosed or contingent liabilities which have not
been disclosed to WordCruncher in writing or in this Agreement or in any
Exhibit attached hereto.
3.15 Information. The information concerning AHI set forth in this
Plan, and the AHI schedules attached hereto, are complete and accurate in all
material respects and do not contain, or will not contain, when delivered, any
untrue statement or a material fact or omit to state a material fact the
omission of which would be misleading to WordCruncher in connection with this
Plan.
3.16 Title and Related Matters. AHI has good and marketable title to
all of its properties, interests in properties, and assets, real and personal,
which are reflected, or will be reflected, in the AHI balance sheets, free and
clear of any and all liens and encumbrances.
3.17 Contracts or Agreements. AHI is not bound by any material
contracts, agreements or obligations which it has not already disclosed to
WordCruncher in writing or in this Agreement or in any Exhibit attached
hereto.
3.18 Governmental Authorizations. AHI has all licenses, franchises,
permits and other government authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof.
3.19 Compliance with Laws and Regulations. AHI has complied with all
applicable statutes and regulations of any federal, state, or other applicable
jurisdiction or agency thereof, except to the extent that noncompliance would
not materially and adversely effect the business, operations, properties,
assets, or condition of AHI or except to the extent that noncompliance would
not result in the occurrence of any material liability, not otherwise
disclosed to WordCruncher.
3.20 Approval of Plan. The Board of Directors of AHI has authorized the
execution and delivery of this Plan by AHI and have approved the Plan and the
transactions contemplated hereby. AHI has full power, authority, and legal
right to enter into this Plan and to consummate the transactions contemplated
hereby.
3.21 Investment Intent. AHI is acquiring the WordCruncher Shares to be
transferred to it under this Plan for the purpose of merging with WordCruncher
and not with a view to the sale or distribution thereof, and AHI shall cancel
the WordCruncher Shares upon the completion of the merger.
3.22 Unregistered Shares and Access to Information. AHI understands
that the offer and sale of the WordCruncher Shares have not been registered
with or reviewed by the Securities and Exchange Commission under the
Securities Act of 1933, as amended, or with or by any state securities law
administrator, and no federal, state securities law administrator has reviewed
or approved any disclosure or other material concerning WordCruncher or the
WordCruncher Shares. AHI has been provided with and reviewed all information
concerning WordCruncher, the WordCruncher Shares as it has considered
necessary or appropriate as a prudent and knowledgeable investor to enable it
to make an informed investment decision concerning the WordCruncher Shares.
AHI has made an investigation as to the merits and risks of its acquisition of
the WordCruncher Shares and has had the opportunity to ask questions of, and
has received satisfactory answers from, the officers and directors of
WordCruncher concerning WordCruncher, the WordCruncher Shares and related
matters, and has had an opportunity to obtain additional information necessary
to verify the accuracy of such information and to evaluate the merits and
risks of the proposed acquisition of the WordCruncher Shares.
3.23 Obligations. AHI is not aware of any outstanding obligations to
any of its employees or consultants as of the Closing.
3.24 AHI Schedules. AHI has delivered to WordCruncher the following
items listed below, hereafter referred to as the "AHI Schedules", which is
hereby incorporated by reference and made a part hereof. A certification
executed by a duly authorized officer of AHI on or about the date within the
Plan is executed to certify that the AHI Schedules are true and correct.
(a) Copy of Articles of Incorporation, as amended, and Bylaws;
(b) Financial statements;
(c) Shareholder list;
(d) Resolution of Directors approving Plan;
(e) Consent of Shareholders approving Plan;
(f) Officers' Certificate as required under Section 6.2 of the
Plan;
(g) Opinion of counsel as required under Section 6.4 of the Plan;
(h) Certificate of Good Standing.
Section 4
Representations, Warranties and Covenants of WordCruncher
WordCruncher represents and warrants to, and covenants with, the
Shareholders and AHI as follows:
4.1 Corporate Status. WordCruncher is a corporation duly organized,
validly existing and in good standing under the laws of the State of Utah
incorporated on November 5, 1996. WordCruncher has full corporate power and
is duly authorized, qualified, franchised, and licensed under all applicable
laws, regulations, ordinances, and orders of public authorities to own all of
its properties and assets and to carry on its business on all material
respects as it is now being conducted, and there is no jurisdiction in which
the character and location of the assets owned by it, or the nature of the
business transacted by it, requires qualification. Included in the
WordCruncher schedules (defined below) are complete and correct copies of its
Articles of Incorporation and Bylaws as in effect on the date hereof. The
execution and delivery of this Plan does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of
WordCruncher's Articles of Incorporation or Bylaws. WordCruncher has taken
all action required by law, its Articles of Incorporation, its Bylaws, or
otherwise, to authorize the execution and delivery of this Plan.
4.2 Capitalization. The authorized capital stock of WordCruncher as of
the date hereof consists of 500,000 common shares. As of the date hereof all
common shares of WordCruncher issued and outstanding are fully paid, non-
assessable shares. There are no outstanding options, warrants, obligations
convertible into shares of stock, or calls or any understanding, agreements,
commitments, contracts or promises with respect to the issuance of
WordCruncher's common stock or with regard to any options, warrants or other
contractual rights to acquire any of WordCruncher's authorized but unissued
common shares.
4.3 Conduct of Business. WordCruncher was incorporated on November 5,
1996, under the laws of Utah.
WordCruncher will use its best efforts to maintain and preserve its
business organization, employee relationships and goodwill intact, and will
not, without the prior written consent of AHI, enter into any material
commitments except in the ordinary course of business.
WordCruncher agrees that WordCruncher will conduct itself in the
following manner pending the Closing:
(a) Certificate of Incorporation and Bylaws. No change will be
made in the Certificate of Incorporation or Bylaws of WordCruncher.
(b) Capitalization, etc. WordCruncher will not make any change in
its authorized or issued shares of any class, declare or pay any dividend or
other distribution, or issue, encumber, purchase or otherwise acquire any of
its shares of any class.
4.4 Title to Property. WordCruncher has good and marketable title to
all of its properties and assets, real and personal, proprietary or otherwise,
as will be reflected in the balance sheets of WordCruncher, and the properties
and assets of WordCruncher are subject to no mortgage, pledge, lien or
encumbrance, unless as otherwise disclosed in its financial statements.
4.5 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of WordCruncher, threatened by or against
or effecting WordCruncher at law or in equity, or before any governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of
any kind; WordCruncher does not have any knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree, warrant, rule,
or regulation of any court, arbitrator, or governmental agency or
instrumentality.
4.6 Books and Records. From the date hereof, and for any reasonable
period subsequent thereto, WordCruncher and its present management will (i)
give to AHI, or their duly authorized representatives, full access, during
normal business hours, to all of its books, records, contracts and other
corporate documents and properties so that AHI, or their duly authorized
representatives, may inspect them; and (ii) furnish such information
concerning the properties and affairs of WordCruncher as the Shareholders and
WordCruncher, or their duly authorized representatives, may reasonably
request. Any such request to inspect WordCruncher's books shall be directed
to WordCruncher's representative, at the address set forth herein under
Section 10.4 Notices.
4.7 Confidentiality. Until the Closing (and thereafter if there is no
Closing), WordCruncher and its representatives will keep confidential any
information which they obtain from the Shareholders or from WordCruncher
concerning its properties, assets and the proposed business operations of
WordCruncher. If the terms and conditions of this Plan imposed on the parties
hereto are not consummated on or before 5:00 p.m. MST on July 31, 1998 or
otherwise waived or extended in writing to a date mutually agreeable to the
parties hereto, WordCruncher will return to AHI all written matter with regard
to AHI obtained in connection with the negotiations or consummation of this
Plan.
4.8 Investment Intent. The Shareholders shall evidence their intent to
acquire the unregistered and restricted common shares of AHI delivered to them
under this Plan for investment purposes and not with a view to the subsequent
sale or distribution by execution and delivery of an Investment Letter to AHI.
Such Investment Letter shall be similar in form to that attached hereto as
Exhibit D, and shall be received by AHI on the date of Closing, or no later
than the date on which the restricted shares are issued and delivered to the
Shareholders.
4.9 Unregistered Shares and Access to Information. WordCruncher
represents that it understands that the offer and sale of AHI shares to be
exchanged for the WordCruncher Shares has not been registered with or reviewed
by the securities and Exchange Commission under the Securities Act of 1933, as
amended, or with or by any state securities law administrator, and no federal
or state securities law administrator has reviewed or approved any disclosure
or other material facts concerning AHI or AHI stock. WordCruncher represents
that it has provided to its shareholders all information concerning AHI and
the AHI Stock, to be exchanged for the WordCruncher Shares as it has
considered necessary or appropriate for a prudent and knowledgeable investor
to make an informed investment decision concerning the AHI shares.
WordCruncher and the Shareholders have had the opportunity to make an
investigation as to the merits and risks of their acquisition of the AHI
shares, to be exchanged for the WordCruncher Shares, and have had the
opportunity to ask questions of, and receive satisfactory answers from, the
officers and directors of AHI concerning AHI shares to be exchanged for the
WordCruncher Shares and related matters, and have had an opportunity to obtain
additional information necessary to verify the accuracy of such information
and to evaluate the merits and risks of the proposed acquisition of the AHI
shares to be exchanged for the WordCruncher Shares.
4.10 Title to Shares. The Shareholders are the beneficial and record
owners, free and clear of any liens and encumbrances, of whatever kind or
nature, of all of the shares of WordCruncher of whatever class or series,
which the Shareholders have contracted to exchange.
4.11 Contracts.
(a) Set forth in the WordCruncher Schedules are copies or
descriptions of all material contracts which written or oral, all agreements,
franchises, licenses, or other commitments to which WordCruncher is a party or
by which WordCruncher or its properties are bound.
(b) Except as may be set forth in the WordCruncher Schedules,
WordCruncher is not a party to any contract, agreement, corporate restriction,
or subject to any judgment, order, writ, injunction, decree, or award, which
materially and adversely effect the business, operations, properties, assets,
or conditions of WordCruncher.
(c) Except as set forth in the WordCruncher Schedules, WordCruncher
is not a party to any material oral or written (i) contract for employment of
any officer which is not terminable on 60 days (or less) notice; (ii) profit
sharing, bonus, deferred compensation, stock option, severance, or any other
retirement plan of arrangement covered by Title IV of the Employee Retirement
Income Security Act, as amended, or otherwise covered; (iii) agreement
providing for the sale, assignment or transfer of any of its rights, assets or
properties, whether tangible or intangible, except sales of its property in
the ordinary course of business with a value of less than $5,000; or (iv)
waiver of any right of any value which in the aggregate is extraordinary or
material concerning the assets or properties scheduled by WordCruncher, except
for adequate value and pursuant to contract. WordCruncher has not entered
into any material transaction which is not listed in the WordCruncher
Schedules or reflected in the WordCruncher financial statements.
4.12 Material Contract Defaults. WordCruncher is not in default in any
material respect under the terms of any contract, agreement, lease or other
commitment which is material to the business, operations, properties or
assets, or condition of WordCruncher, and there is no event of default or
event which, with notice of lapse of time or both, would constitute a default
in any material respect under any such contract, agreement, lease, or other
commitment in respect of which WordCruncher has not taken adequate steps to
prevent such default from occurring, or otherwise compromised, reached a
satisfaction of, or provided for extensions of time in which to perform under
any one or more contract obligations, among others.
4.13 Conflict with Other Instruments. The consummation of the within
transactions will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or other
material agreement or instrument to which WordCruncher was or is a party, or
to which any of its assets or operations are subject, and will not conflict
with any provision of the Articles of Incorporation or Bylaws of WordCruncher.
4.14 Governmental Authorizations. WordCruncher is in good standing in
the State of Utah. Except for compliance with federal and state securities
laws, no authorization, approval, consent or order of, or registration,
declaration, or filing with, any court or other governmental body is required
in connection with the execution and delivery by WordCruncher of this Plan and
the consummation by WordCruncher of the transactions contemplated hereby.
4.15 Compliance with Laws and Regulations. WordCruncher has complied
with all applicable statutes and regulations of any federal, state, or other
applicable jurisdiction or agency thereof, except to the extent that
noncompliance would not materially and adversely effect the business,
operations, properties, assets, or condition of WordCruncher or except to the
extent that noncompliance would not result in the occurrence of any material
liability, not otherwise disclosed to AHI.
4.16 Approval of Plan. The Board of Directors of WordCruncher have
authorized the execution and delivery of this Plan by WordCruncher and have
approved the Plan and the transactions contemplated hereby. WordCruncher has
full power, authority, and legal right to enter into this Plan and to
consummate the transactions contemplated hereby.
4.17 Information. The information concerning WordCruncher set forth in
this Plan, and the WordCruncher Schedules attached hereto, are complete and
accurate in all material respects and do not contain, or will not contain,
when delivered, any untrue statement or a material fact or omit to state a
material fact the omission of which would be misleading to AHI in connection
with this Plan.
4.18 WordCruncher Schedules. WordCruncher has delivered to AHI the
following items listed below, hereafter referred to as the "WordCruncher
Schedules", which is hereby incorporated by reference and made a part hereof.
A certification executed by a duly authorized officer of WordCruncher on or
about the date within the Plan is executed to certify that the WordCruncher
Schedules are true and correct.
(a) Copy of Articles of Incorporation and Bylaws;
(b) Financial Statements;
(c) Resolution of Board of Directors approving Plan;
(d) Consent of Shareholders approving Plan;
(e) A list of key employees, including current compensation, with
notation as to job description and whether or not such employee is subject to
written contract, and if subject to a contract or employment agreement a copy
of the same;
(f) A schedule showing the name and location of each bank or other
institution with which WordCruncher has an account and the names of the
authorized persons to draw thereon or having access thereto;
(g) A schedule setting forth the shareholders, together with the
number of shares owned beneficially or of record by each (also attached as
Exhibits B and C);
(h) A schedule setting forth all material contracts;
(i) Officers' Certificate as required by Section 7.2 of the Plan;
(j) Schedule of all debts, mortgages, security interests, pledges,
liens, encumbrances, claims and the like;
(k) Certificate of Good Standing
Section 5
Special Covenants
5.1 WordCruncher Information Incorporated in AHI's Reports.
WordCruncher represents and warrants to AHI that all the information furnished
under this Plan shall be true and correct in all material respects and that
there is no omission of any material fact required to make the information
stated not misleading. WordCruncher agrees to indemnify and hold AHI
harmless, including each of its Directors and Officers, and each person, if
any, who controls such party, under any applicable law from and against any
and all losses, claims, damages, expenses or liabilities to which any of them
may become subject under applicable law, or reimburse them for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such actions, whether or not resulting in liability, insofar as
such losses, claims, damages, expenses, liabilities or actions arise out of or
are based on any untrue statement, alleged untrue statement, or omission of a
material fact contained in such information delivered hereunder.
5.2 AHI Information Incorporated in WordCruncher's Reports. AHI
represents and warrants to WordCruncher that all the information furnished
under this Plan shall be true and correct in all material respects and that
there is no omission of any material fact required to make the information
stated not misleading. The current officers and directors of AHI agree to
indemnify and hold WordCruncher harmless, including each of its Directors and
Officers, and each person, if any, who controls such party, under any
applicable law from and against any and all losses, claims, damages, expenses
or liabilities to which any of them may become subject under applicable law,
or reimburse them for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such actions, whether or not
resulting in liability, insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of or are based on any untrue statement,
alleged untrue statement, or omission of a material fact contained in such
information delivered hereunder.
5.3 Special Covenants and Representations Regarding the Exchanged AHI
Stock. The consummation of this Plan and the transactions herein
contemplated, including the issuance of the AHI shares in exchange for one
hundred percent (100%) of the issued and outstanding shares of WordCruncher to
the Shareholders constitutes the offer and sale of securities under the
Securities Act and the applicable state statutes, which depend, inter alia, on
the circumstances under which the Shareholders acquire such securities. AHI
intends to rely on the exemption of the registration provision of Section 5 of
the Securities Act as provided for under Section 4.2 of the Securities Act of
1933, which states "transactions not involving a public offering", among
others. Each Shareholder upon submission of his WordCruncher Shares and the
receipt of the AHI shares exchanged therefor, shall execute and deliver to AHI
an Investment Letter to indicate, among other representations, that the
Shareholder is exchanging the WordCruncher Shares for AHI shares for
investment purposes and not with a view to the subsequent distribution
thereof. A proposed Investment Letter is attached hereto as Exhibit D and
incorporated herein by reference for the general use by the Shareholders, as
they may determine.
5.4 Action Prior to Closing. Upon the execution hereof, until the
Closing date, and the completion of the consolidated audited financial
statement:
(a) WordCruncher and AHI will (i) perform all of its obligations
under material contracts, leases, insurance policies and/or documents relating
to its assets and business; (ii) use its best efforts to maintain and preserve
its business organization intact, to retain its key employees, and to maintain
its relationship with existing potential customers and clients; and (iii)
fully comply with and perform in all material respects all duties and
obligations imposed on it by all federal and state laws and all rules,
regulations, and orders imposed by all federal or state governmental
authorities.
(b) Neither WordCruncher nor AHI will (i) make any change in its
Articles of Incorporation or Bylaws except and unless as contemplated pursuant
to Section 3 of this Plan; (ii) enter into or amend any contract, agreement,
or other instrument of the types described in the parties' schedules, except
that a party may enter into or amend any contract or other instrument in the
ordinary course of business involving the sale of goods or services, provided
that such contract does not involve obligations in excess of $5,000.
Section 6
Conditions Precedent to Obligations of
WordCruncher and the Shareholders
All obligations of WordCruncher and the Shareholders under this Plan are
contingent upon the satisfaction, on or before the Closing date, except as
otherwise provided for herein, or waived or extended in writing by the parties
hereto, of the following conditions:
6.1 Accuracy of Representations. The representations and warranties
made by AHI in this Plan were true when made and shall be true as of the
Closing date (except for changes therein permitted by this Plan) with the same
force and effect as if such representations and warranties were made at and as
of the Closing date; and, AHI shall have performed and complied with all
aspects of this Agreement, unless waived or extended in writing by the parties
hereto. WordCruncher shall have been furnished with a certificate, signed by
a duly authorized executive officer of AHI and dated the Closing date, to the
foregoing effect.
6.2 Officers' Certificate. WordCruncher and the Shareholders shall have
been furnished with a certificate dated the Closing date and signed by a duly
authorized executive officer of AHI, to the effect that no litigation,
proceeding, investigation, claim, demand or inquiry is pending, or to the best
knowledge of AHI, threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Plan, or
which might result in any material adverse change in the assets, properties,
business, or operations of AHI, and that this Agreement has been complied with
in all material respects.
6.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the financial condition,
business or operations of AHI, nor shall any event have occurred which, with
lapse of time or the giving of notice or both, may cause or create any
material adverse change in the financial condition, business or operations of
AHI, except as otherwise disclosed to WordCruncher.
6.4 Opinion of Counsel of AHI. AHI shall furnish to WordCruncher and
the Shareholders an opinion dated as of the Closing date and in form and
substance satisfactory to WordCruncher and the Shareholders to the effect
that:
(a) AHI is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Nevada, and with all requisite
corporate power to perform its obligations under this Plan.
(b) The business of AHI, as presently conducted, including, upon
the consummation hereof, the ownership of all of the issued and outstanding
shares of WordCruncher, does not require it to register it to do business as a
foreign corporation on any jurisdiction other than under the jurisdiction of
its Articles of Incorporation or Bylaws and AHI has complied to the best of
its knowledge in all material respects with all the laws, regulations,
licensing requirements and orders applicable to its business activities and
has filed with the proper authorities, including the Department of Commerce,
Division of Corporations, and Secretary of State for the State of Nevada, all
statements and reports required to be filed.
(c) The authorized and outstanding capital stock of AHI as set
forth in Section 3.2 above, and all issued and outstanding shares have been
duly and validly authorized and issued and are fully paid and non-assessable.
(d) There are no material claims, suits or other legal proceedings
pending or threatened against AHI of any court or before or by any
governmental body which might materially effect the business of AHI or the
financial condition of AHI as a whole and no such claims, suits or legal
proceedings are contemplated by governmental authorities against AHI.
(e) To the best knowledge of such counsel, the consummation of the
transactions contemplated by this Plan will not violate or contravene the
provisions of the Certificate of Incorporation or Bylaws of AHI, or any
contract, agreement, indenture, mortgage, or order by which AHI is bound.
(f) This Plan constitutes a legal, valid and binding obligation of
AHI enforceable in accordance with its terms, subject to the effect of any
bankruptcy, insolvency, reorganization, moratorium, or similar law effecting
creditors' rights generally and general principles of equity (regardless of
whether such principles are considered in a proceeding in equity or law).
(g) The execution and delivery of this Plan and the consummation of
the transactions contemplated hereby have been ratified by a majority of the
Shareholders of AHI and have been duly authorized by its Board of Directors.
(h) AHI has not, nor will it undertake any action, the result of
which would endanger the tax-free nature of the Plan.
6.5 Good Standing. WordCruncher shall have received a Certificate of
Good Standing from the State of Nevada, dated within ninety (90) days prior to
Closing, but in no event later than ten days subsequent to the execution
hereof certifying that AHI is in good standing as a corporation in the State
of Nevada.
6.6 Other Items. WordCruncher and the Shareholders shall have received
such further documents, certifications or instruments relating to the
transactions contemplated hereby as WordCruncher and the Shareholders may
reasonably request.
Section 7
Conditions Precedent to Obligations of AHI
All obligations of AHI under this Plan are subject, at its option, to the
fulfillment, before the Closing, of each of the following conditions:
7.1 Accuracy of Representations. The representations and warranties
made by WordCruncher and the Shareholders under this Plan were true when made
and shall be true as of the Closing date (except for changes therein permitted
by this Plan) with the same force and effect as if such representations and
warranties were made at and as of the Closing date; and, WordCruncher shall
have performed and complied with all aspects of this Agreement, unless waived
or extended in writing by the parties hereto. AHI shall have been furnished
with a certificate, signed by a duly authorized executive officer of
WordCruncher and dated the Closing date, to the foregoing effect.
7.2 Officers' Certificate. AHI shall have been furnished with a
certificate dated the Closing date and signed by a duly authorized executive
officer of WordCruncher, to the effect that no litigation, proceeding,
investigation, claim, deed, or inquiry is pending, or to the best knowledge of
WordCruncher, threatened, which might result in an action to enjoin or prevent
the consummation of the transactions contemplated by this Plan, or which might
result in any material adverse change in the assets, properties, business, or
operations of WordCruncher, and that this Agreement has been complied with in
all material respects.
7.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the financial condition,
business or operations of WordCruncher, nor shall any event have occurred
which, with lapse of time or the giving of notice or both, may cause or create
any material adverse change in the financial condition, business or operations
of WordCruncher, except as otherwise disclosed to AHI.
7.4 Dissenters' Rights Waived. Shareholders representing at least one
hundred percent (100%) of the issued and outstanding shares of WordCruncher,
and each of them, have agreed and hereby waive any dissenters' rights, if any,
under the laws of the State of Utah in regards to any objection to this Plan
as outlined herein and otherwise consent to and agree and authorize the
execution and consummation of the within Plan in accordance to the terms and
conditions of this Plan by the management of WordCruncher.
7.5 Other Items. AHI shall have received such further documents,
certifications or instruments relating to the transactions contemplated hereby
as AHI may reasonably request.
7.6 Execution of Investment Letter. The Shareholders shall have
executed and delivered copies of Exhibit D to AHI.
Section 8
Termination
8.1 Termination by WordCruncher or the Shareholders. This Plan may be
terminated at any time prior to the Closing date by action of WordCruncher or
the Shareholders, if AHI shall fail to comply in any material respect with any
of the covenants or agreements contained in this Plan, or if any of its
representations and warranties contained herein shall be inaccurate in any
material respect.
8.2 Termination by AHI. This Plan may be terminated at any time prior
to the Closing date by action of AHI if WordCruncher shall fail to comply in
any material respect with any of the covenants or agreements contained in this
Plan, or if any of its representations or warranties contained herein shall be
inaccurate in any material respect.
8.3 Termination by Mutual Consent
(a) This Plan may be terminated at any time prior to the Closing
date by mutual consent of AHI, expressed by action of its Board of Directors,
WordCruncher or the Shareholders.
(b) If this Plan is terminated pursuant to Section 8, this Plan
shall be of no further force and effect and no obligation, right or liability
shall arise hereunder. Each party shall bare its own costs in connection
herewith.
Section 9
Shareholders' Representative
The Shareholders hereby irrevocably designate and appoint Xxxxxxx X.
Xxxx, as their agent and attorney in fact (the "Shareholders' Representative")
with full power and authority until the Closing to execute, deliver and
receive on their behalf all notices, requests and other communications
hereunder; to fix and alter on their behalf the date, time and place of the
Closing; to waive, amend or modify any provisions of this Plan and to take
such other action on their behalf in connection with this Plan, the Closing
and the transactions contemplated hereby as such agent deems appropriate;
provided, however, that no such waiver, amendment or modification may be made
if it would decrease the number of shares to be issued to the Shareholders
under Section 1 hereof or increase the extent of their obligation to AHI
hereunder, unless agreed in writing by the Shareholders.
Section 10
General Provisions
10.1 Further Assurances. At any time, and from time to time, after the
Closing date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of the Plan.
10.2 Payments of Costs and Fees. AHI and WordCruncher shall each bear
their own costs and expenses, including any legal and accounting fees in
connection with the negotiation, execution and consummation of the Plan.
10.3 Press Release and Shareholders' Communications. On the date of
Closing, or as soon thereafter as practicable, WordCruncher and the
Shareholders shall cause to have promptly prepared and disseminated a news
release concerning the execution and consummation of the Plan, such press
release and communication to be released promptly and within the time required
by the laws, rules and regulations as promulgated by the United States
Securities and Exchange Commission, and concomitant therewith to cause to be
prepared a full and complete letter to AHI's shareholders which shall contain
information required by Regulation 240.14f-1 as promulgated under Section
14(f) as mandated under the Securities and Exchange Act of 1934, as amended.
10.4 Notices. All notices and other communications required or
permitted hereunder shall be sufficiently given if personally delivered, sent
by registered mail, or certified mail, return receipt requested, postage
prepaid, or by facsimile transmission addressed to the following parties
hereto or at such other addresses as follows:
If to AHI: Altmount Holdings, Inc.
000 Xxxx 000 Xxxxx, # 000
Xxxx Xxxx Xxxx, Xxxx 00000
With a copy to: Xxxxxx X. Xxxxxxx, Esq.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
If to WordCruncher: WordCruncher Publishing Technologies, Inc.
00 Xxxx Xxxxxx Xxxxx Xxxx
Xxxxxx, Xxxx 00000
or at such other addresses as shall be furnished in writing by any party in
the manner for giving notices hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered, mailed, sent
by facsimile transmission, or telegraphed.
10.5 Entire Agreement. This Plan represents the entire agreement
between the parties relating to the subject matter hereof, including any
previous letters of intent, understandings, or agreements between AHI,
WordCruncher and the Shareholders with respect to the subject matter hereof,
all of which are hereby merged into this Plan, which alone fully and
completely expresses the agreement of the parties relating to the subject
matter hereof. Excepting the foregoing agreement, there are no other courses
of dealing, understandings, agreements, representations, or warranties,
written or oral, except as set forth herein.
10.6 Governing Law. This Plan shall be governed by and construed and
enforced in accordance with the laws of the State of Nevada. except to the
extent preempted by federal law, in which event (and to that extent only)
federal law shall govern.
10.7 Tax Treatment. The transaction contemplated by this Plan is
intended to qualify as a "tax-free" reorganization under the provisions of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
WordCruncher and AHI acknowledge, however, that each are being represented by
their own tax advisors in connection with this transaction, and neither has
made any representations or warranties to the other with respect to treatment
of such transaction or any part or effect thereof under applicable tax laws,
regulations or interpretations; and no attorney's opinion or tax revenue
ruling has been obtained with respect to the tax consequences of the
transactions contemplated by the within Plan.
10.8 Attorney Fees. In the event that any party prevails in any action
or suit to enforce this Plan, or secure relief from any default hereunder or
breach hereof, the nonprevailing party or parties shall reimburse the
prevailing party or parties for all costs, including reasonable attorney fees,
incurred in connection therewith.
10.9 Amendment of Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law or in equity, and may be enforced concurrently or separately, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, therefore, or
thereafter occurring or existing. Any time prior to the expiration of thirty
(30) days from the date hereof, this Plan may be amended by a writing signed
by all parties hereto, with respect to any of the terms contained herein, and
any term or condition of this Plan may be waived or the time for performance
thereof may be extended by a writing signed by the party or parties for whose
benefit the provision is intended.
10.10 Counterparts. This Plan may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be
an original, and all of which together shall constitute one and the same
instruments.
10.11 Headings. The section and subsection headings in this Plan are
inserted for convenience only and shall not effect in any way the meaning or
interpretation of the Plan.
10.12 Parties in Interest. Except as may be otherwise expressly
provided herein, all terms and provisions of this Plan shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
beneficiaries, personal and legal representatives, and assigns.
IN WITNESS WHEREOF, the parties have executed this Plan and Agreement of
Reorganization effective the day and year first set forth above.
ALTMOUNT HOLDINGS, INC.
Attest:
/s/ Xxxxxxxxx Xxxxx By: /s/ Xxxx X. Xxxxxx
------------------- -------------------
Its President
WORDCRUNCHER PUBLISHING
TECHNOLOGIES, INC.
Attest:
/s/ Xxxxxxx X. Xxxx By: /s/ M. Xxxxxx Xxxx
------------------- ----------------------
Its President
SHAREHOLDERS:
Attest:
/s/ Xxxxxxx X. Xxxx By: /s/ M. Xxxxxx Xxxx
------------------- ------------------
Attest:
/s/ Xxxxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxxx
------------------- ---------------------
Attest:
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxx
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