AGREEMENT AND PLAN OF MERGER
BETWEEN
NEW DYNAMIC MARKETING, INC.
AND
NORTHWESTERN HOLDINGS, LLC
October 13, 2003
TABLE OF CONTENTS
1. Definitions
2. Basic Transaction
(a) The Merger
(b) The Closing
(c) Actions at the Closing
(d) Effect of Merger
(e) Procedure for Payment
3. Representations and Warranties of the Target
(a) Organization, Qualification, and Corporate Power
(b) Capitalization
(c) Authorization of Transaction
(d) Noncontravention
(e) Undisclosed Liabilities
4. Representations and Warranties of the Buyer
(a) Organization
(b) Capitalization
(c) Authorization of Transaction
(d) Noncontravention
5. Covenants
(a) General
(b) Exclusivity
6. Conditions to Obligation to Close
(a) Conditions to Obligation of the Buyer
(b) Conditions to Obligation of the Target
7. Termination
(a) Termination of Agreement
(b) Effect of Termination
8. Miscellaneous
(a) Survival
(b) No Third Party Beneficiaries
(c) Entire Agreement
(d) Succession and Assignment
(e) Counterparts
(f) Headings
(g) Governing Law
(h) Amendments and Waivers
(i) Severability
(k) Construction
Exhibit A-Articles of Merger
Exhibit B-Articles of Amendment for Convertible Preferred Stock
Disclosure Schedule
AGREEMENT AND PLAN OF MERGER
Agreement entered into as of October 13, 2003, by and between New Dynamic
Marketing, Inc., a Florida corporation (the "Buyer"), and Northwestern Holdings,
LLC, a Florida limited liability company (the "Target"). The Buyer and the
Target are referred to collectively herein as the "Parties".
This Agreement contemplates a tax-free merger of the Target with and into the
Buyer in a reorganization pursuant to Code 368(a)(1)(A). The Target members
will receive capital stock in the Buyer in exchange for their membership
interests in the Target.
Now, therefore, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the Parties agree as follows.
1. Definitions.
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"Buyer" has the meaning set forth in the preface above.
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"Certificate of Merger" has the meaning set forth in 2(c) below.
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"Closing" has the meaning set forth in 2(b) below.
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"Closing Date" has the meaning set forth in 2(b) below.
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"Disclosure Schedule" has the meaning set forth in 3 below.
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"Effective Time" has the meaning set forth in 2(d)(i) below.
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"Florida Corporation Statutes" means the General Corporation Statutes of
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the State of Florida.
"Knowledge" means actual knowledge after reasonable investigation.
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"Membership Interest" means an ownership interest in the limited liability
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company represented by the Target.
"Merger" has the meaning set forth in 2(a) below.
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"Ordinary Course of Business" means the ordinary course of business
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consistent with past custom and practice (including with respect to
quantity and frequency).
"Party" has the meaning set forth in the preface above.
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"Person" means an individual, a partnership, a corporation, an association,
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a joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental entity (or any department, agency, or political subdivision
thereof).
"Securities Act" means the Securities Act of 1933, as amended.
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"Surviving Corporation" has the meaning set forth in 2(a) below.
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"Target" has the meaning set forth in the preface above.
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2. Basic Transaction.
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(a) The Merger. On and subject to the terms and conditions of this
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Agreement, the Target will merge with and into the Buyer (the "Merger") at the
Effective Time. The Buyer shall be the corporation surviving the Merger (the
"Surviving Corporation").
(b) The Closing. The closing of the transactions contemplated by this
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Agreement (the "Closing") shall take place at the offices of the Buyer in
Oakland Park, Florida, commencing at 9:00 a.m. local time on the second business
day following the satisfaction or waiver of all conditions to the obligations of
the Parties to consummate the transactions contemplated hereby (other than
conditions with respect to actions the respective Parties will take at the
Closing itself) or such other date as the Parties may mutually determine (the
"Closing Date").
(c) Actions at the Closing. At the Closing, (i) the Target will deliver to
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the Buyer the various certificates, instruments, and documents referred to in
6(a) below, (ii) the Buyer will deliver to the Target the various certificates,
instruments, and documents referred to in 6(b) below, and (iii) the Buyer and
the Target will file with the Secretary of State of the State of Florida
Articles of Merger in the form attached hereto as Exhibit A (the "Articles of
Merger").
(d) Effect of Merger.
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(i) General. The Merger shall become effective at the time (the "Effective
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Time") the Buyer and the Target file the Certificate of Merger with the
Secretary of State of the State of Florida. The Merger shall have the effect set
forth in the Florida Corporation Statutes. The Surviving Corporation may, at any
time after the Effective Time, take any action (including executing and
delivering any document) in the name and on behalf of either the Buyer or the
Target in order to carry out and effectuate the transactions contemplated by
this Agreement.
(ii) Certificate of Incorporation. The Certificate of Incorporation of the
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Buyer in effect at and as of the Effective Time will remain the Certificate of
Incorporation of the Surviving Corporation without any modification or amendment
in the Merger.
(iii) Bylaws. The Bylaws of the Buyer in effect at and as of the Effective
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Time will remain the Bylaws of the Surviving Corporation without any
modification or amendment in the Merger.
(iv) Directors and Officers. The directors and officers of the Buyer in
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office at and as of the Effective Time will remain the directors and officers of
the Surviving Corporation (retaining their respective positions and terms of
office).
(v) Conversion of Target Membership Interests. At and as of the Effective
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Time, (A) the (a) 33% Membership Interest of Xxxxx Xxxxxxx shall be converted
into the right to receive 2,000,000 shares of common stock of Buyer and 115,500
shares of a new issue of convertible preferred stock of Buyer having those terms
and provisions set forth in Exhibit B hereto (the "Convertible Preferred
Stock"), and (b) the 67% Membership Interest of Xxx Xxxxxxxxx shall be converted
into the right to receive 4,000,000 shares of common stock of Buyer and 234,500
shares of Convertible Preferred Stock of Buyer, and (B) each Dissenting Share
shall be converted into the right to receive payment from the Surviving
Corporation with respect thereto in accordance with the provisions of the
Florida Corporation Statutes.
(vi) Buyer Shares. Each share of common stock of Buyer issued and
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outstanding at and as of the Effective Time will remain issued and outstanding.
(e) Procedure for Payment.
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(i) Immediately after the Effective Time, the Buyer will furnish to Xxxxxxx
and Xxxxxxxxx a stock certificate representing the number of shares to which
each of them are entitled, together with such legends thereon as may be required
under the Securities Act, against delivery of a copy of a written consent signed
by both of them approving and voting in favor of the Merger.
(ii) The Buyer shall pay all charges and expenses of the delivering the
shares of common stock and Convertible Preferred Stock to Xxxxxxx and Xxxxxxxxx.
3. Representations and Warranties of the Target. The Target represents and
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warrants to the Buyer that the statements contained in this 3 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this 3), except as set
forth in the disclosure schedule accompanying this Agreement and initialed by
the Parties (the "Disclosure Schedule"). The Disclosure Schedule will be
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arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this 3.
(a) Organization, Qualification, and Corporate Power. The Target is a
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limited liability company duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its organization. The Target is duly
authorized to conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required. The Target has full
corporate power and authority to carry on the businesses in which it is engaged
and to own and use the properties owned and used by it.
(b) Capitalization. The entire authorized Membership Interests of the
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Target consists of a 67% Membership Interest owned by Xxxxxxxxx and a 33%
Membership Interest owned by Xxxxxxx. All of the issued and outstanding Target
Membership Interests have been duly authorized and are validly issued, fully
paid, and nonassessable. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require the Target to
issue, sell, or otherwise cause to become outstanding any of its Membership
Interest.
(c) Authorization of Transaction. The Target has full power and authority
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(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder; provided, however, that the
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Target cannot consummate the Merger unless and until it receives the requisite
vote of approval from its two holders of the Membership Interests. This
Agreement constitutes the valid and legally binding obligation of the Target,
enforceable in accordance with its terms and conditions.
(d) Noncontravention. Neither the execution and the delivery of this
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Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which any of the Target and its Subsidiaries is
subject or any provision of the charter or operating agreement of the Target or
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument or other arrangement to which any of the Target is a party
or by which it is bound or to which any of its assets is subject (or result in
the imposition of any Security Interest upon any of its assets). The Target
does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement.
(e) Undisclosed Liabilities. The Target does not have any liability
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(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due), including any liability for taxes, except for
(i) liabilities set forth on the face of the balance sheet delivered to the
Buyer and (ii) liabilities which have arisen in the Ordinary Course of Business
(none of which results from, arises out of, relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law).
4. Representations and Warranties of the Buyer. The Buyer represents and
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warrants to the Target that the statements contained in this 4 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this 4), except as set
forth in the Disclosure Schedule. The Disclosure Schedule will be arranged in
paragraphs corresponding to the numbered and lettered paragraphs contained in
this 4.
(a) Organization. The Buyer is a corporation duly organized, validly
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existing, and in good standing under the laws of the jurisdiction of its
incorporation.
(b) Capitalization. The entire authorized capital stock of the Buyer
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consists of 50,000,000 shares of common stock, of which 11,404,000 shares are
issued and outstanding, and 10,000,000 shares of preferred stock, of which no
shares are issued and outstanding. All of the shares of common stock and
Convertible Preferred Stock to be issued in the Merger have been duly authorized
and, upon consummation of the Merger, will be validly issued, fully paid, and
nonassessable.
(c) Authorization of Transaction. The Buyer has full power and authority
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(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder; provided, however, that the
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Buyer cannot consummate the Merger unless and until it receives the approval by
written consent of the sole director of Buyer. This Agreement constitutes the
valid and legally binding obligation of the Buyer, enforceable in accordance
with its terms and conditions.
(d) Noncontravention. To the Knowledge of any director or officer of the
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Buyer, neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which the Buyer is subject or any provision of the charter or bylaws of
the Buyer or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument or other arrangement to which
the Buyer is a party or by which it is bound or to which any of its assets is
subject, except where the violation, conflict, breach, default, acceleration,
termination, modification, cancellation, or failure to give notice would not
have a material adverse effect on the ability of the Parties to consummate the
transactions contemplated by this Agreement. To the knowledge of the Buyer, the
Buyer does not need to make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
Parties to consummate the transactions contemplated by this Agreement, except
where the failure to give notice, to file, or to obtain any authorization,
consent, or approval would not have a material adverse effect on the ability of
the Parties to consummate the transactions contemplated by this Agreement.
5. Covenants. The Parties agree as follows with respect to the period from
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and after the execution of this Agreement.
(a) General. Each of the Parties will use its best efforts to take all
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action and to do all things necessary in order to consummate and make effective
the transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in 6 below).
(i) Regulatory Matters and Approvals. Each of the Parties will give any
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notices to, make any filings with, and use its best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in 3 and 4 above; provided the
Target will provide the Buyer, with whatever information and assistance in
connection with the foregoing filings that the filing Party may request. The
Buyer will take all actions that may be necessary, if any, under state
securities laws in connection with the offering and issuance of the shares to
Xxxxxxx and Xxxxxxxxx.
(ii) Florida Corporation Statutes. The Buyer's Board of Directors will take
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action by written consent as soon as practicable in order that the Board may
approve and adopt this Agreement and the Merger in accordance with the Florida
Corporation Statutes. The Buyer will cause Xxxxxxx and Xxxxxxxxx to execute and
deliver an action by written consent as soon as practicable approving and
adopting this Agreement and the Merger.
(iii) Operation of Business. The Target will not engage in any practice,
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take any action, or enter into any transaction outside the Ordinary Course of
Business
(b) Exclusivity. The Target will not solicit, initiate, or encourage the
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submission of any proposal or offer from any Person relating to the acquisition
of all or substantially all of the Membership Interest or assets of the Target
(including any acquisition structured as a merger, consolidation, or share
exchange). The Target shall notify the Buyer immediately if any Person makes any
proposal, offer, inquiry, or contact with respect to any of the foregoing.
6. Conditions to Obligation to Close.
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(a) Conditions to Obligation of the Buyer. The obligation of the Buyer to
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consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) this Agreement and the Merger shall have received the approval of
Xxxxxxx and Xxxxxxxxx in the form of an executed written consent;
(ii) the representations and warranties set forth in 3 above shall be true
and correct in all material respects at and as of the Closing Date;
(iii) the Target shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iv) the Target shall have delivered to the Buyer a certificate to the
effect that each of the conditions specified above in 6(a)(i)-(iii) is
satisfied in all respects;
(v) The Parties shall have received all other authorizations, consents,
and approvals of governments and governmental agencies referred to in 3 and 4
above;
(vi) all actions to be taken by the Target in connection with consummation
of the transactions contemplated hereby and all certificates, instruments, and
other documents required to effect the transactions contemplated hereby will be
satisfactory in form and substance to the Buyer.
The Buyer may waive any condition specified in this 6(a) if it executes a
writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Target. The obligation of the Target to
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consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) this Agreement and the Merger shall have been approved by the written
consent of a majority of Board of Directors of Buyer;
(ii) the representations and warranties set forth in 4 above shall be true
and correct in all material respects at and as of the Closing Date;
(iii) the Buyer shall have performed and complied with all of its covenants
hereunder in all material respects through the Closing;
(iv) the Buyer shall have delivered to the Target a certificate to the
effect that each of the conditions specified above in 6(b)(i)-(iii) is
satisfied in all respects;
(v) this Agreement and the Merger shall have received the approval of
Xxxxxxx and Xxxxxxxxx in the form of an executed written consent;
(vi) The Parties shall have received all other authorizations, consents,
and approvals of governments and governmental agencies referred to in 3 and 4
above;
(xii) all actions to be taken by the Buyer in connection with consummation
of the transactions contemplated hereby and all certificates, instruments, and
other documents required to effect the transactions contemplated hereby will be
satisfactory in form and substance to the Target.
The Target may waive any condition specified in this 6(b) if it executes a
writing so stating at or prior to the Closing.
7. Termination.
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(a) Termination of Agreement. Either of the Parties may terminate this
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Agreement with the prior authorization of its board of directors or Manager, as
the case may be, by mutual written consent at any time prior to the Effective
Time.
(b) Effect of Termination. If any Party terminates this Agreement pursuant
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to 7(a) above, all rights and obligations of the Parties hereunder shall
terminate without any liability of any Party to any other Party.
8. Miscellaneous.
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(a) Survival. None of the representations, warranties, and covenants of the
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Parties will survive the Effective Time.
(b) No Third Party Beneficiaries. This Agreement shall not confer any
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rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
Entire Agreement. This Agreement constitutes the entire agreement between
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the Parties and supersedes any prior understandings, agreements, or
representations by or between the Parties, written or oral, to the extent they
related in any way to the subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding upon and
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inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party.
(f) Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original but all of which
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together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement are inserted
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for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(i) Governing Law. This Agreement shall be governed by and construed in
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accordance with the domestic laws of the State of Florida without giving effect
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to any choice or conflict of law provision or rule (whether of the State of
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Florida or any other jurisdiction) that would cause the application of the laws
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of any jurisdiction other than the State of Florida.
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(j) Amendments and Waivers. The Parties may mutually amend any provision of
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this Agreement at any time prior to the Effective Time with the prior
authorization of their respective boards of directors.
(k) Severability. Any term or provision of this Agreement that is invalid
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or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as
of the date first above written.
NEW DYNAMIC MARKETING, INC.
By: /s/Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Title: President and CEO
NORTHWESTERN HOLDINGS, LLC
By: /s/Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Title: Manager
