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EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
October 23, 1993
STAR ACQUISITIONS CORPORATION
ACQUISITION OF
SOUTHWESTERN WATER EXPLORATION CO.
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TABLE OF CONTENTS
Page
Recitals ................................................................. 1
Agreement ................................................................ 1
1. Plan of Reorganization .......................................... 1
2. Exchange of Shares .............................................. 1
3. Delivery of Shares .............................................. 2
4. Representations of Stockholders and Acquiree .................... 2
5. Representations of Acquiring Corporation ........................ 4
6. Closing Date .................................................... 7
7. Conditions Precedent to the Obligations of
Acquiree ........................................................ 7
8. Conditions Precedent to the obligations of
Acquiror......................................................... 8
9. Indemnification.................................................. 8
10. Nature and Survival of Representations........................... 9
11. Documents at Closing............................................. 10
12. Miscellaneous.................................................... 10
Signature Page ............................................................ 12
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AGREEMENT AND PLAN OF REORGANIZATION
THIS Agreement and Plan of Reorganization is entered into this 23rd day
of October, 1993, by and between STAR ACQUISITIONS CORPORATION, a Colorado
corporation, (hereinafter "Acquiror"); SOUTH WESTERN WATER EXPLORATION CO. , a
Colorado corporation, formerly known as AIFE, The American Institute of
Formation Evaluation Co.; (hereinafter referred to as "Acquiree"); and the
undersigned Stockholders of Acquiree, (hereinafter referred to as "Stock-
holders").
RECITALS
Stockholders of Acquiree own all of the issued and outstanding common
stock of Acquiree. Acquiror desires to acquire all of the issued and outstanding
stock of Acquiree, making Acquiree a wholly-owned subsidiary of Acquiror, and
Stockholders desire to make a tax-free exchange solely of their shares in
Acquiree for shares of Acquiror's common stock to be exchanged as set out herein
with said Stockholders.
NOW, THEREFORE, for the mutual consideration set out herein, the parties
agree as follows:
AGREEMENT
1. Plan of Reorganization. Stockholders of Acquiree are the
owners of all the issued and outstanding common stock of said Acquiree.
It is the intention of the parties hereto that all of the issued and
outstanding common stock of Acquiree shall be acquired by Acquiror in
exchange solely for Acquiror voting stock. It is the intention of the
parties hereto that this transaction qualify as a tax-free
reorganization under Section 351 of the Internal Revenue Code of 1986,
as amended, and related sections thereunder.
2. Exchange of Shares. Acquiror and Stockholders agree that all
of the issued and outstanding shares of common stock of Acquiree shall
be exchanged with Acquiror for a total of 4,500,000 shares of restricted
common stock of Acquiror. As of the Closing Date and prior to the
exchange of shares hereunder, there will be no more than 500,000 shares
of common stock in the Acquiror, after giving effect to a
one-for-twenty-five reverse split.
The Acquiror shares will, on the Closing Date, as hereafter
defined, be delivered to the Stockholders in exchange for their shares
in Acquiree. Stockholders
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represent and warrant that they will hold such shares of common stock of
Acquiror for investment purposes and not for further public distribution
and agree that the shares shall be appropriately restricted.
3. Delivery of Shares. On or before the Closing Date, Stockholders
will deliver certificates for the shares of Acquiree duly endorsed so as
to make Acquiror the sole holder thereof; free and clear of all claims
and encumbrances; and on such Closing Date, delivery of the Acquiror
shares, which will be appropriately restricted as to transfer, will be
made to the Stockholders as set forth herein. A list of the shares of
Acquiree, the owners thereof, and shares of Acquiror to be received by
said Stockholders is attached hereto as Exhibit "A" and by this
reference is incorporated herein.
4. Representations of Stockholders and Acquiree. The Stockholders
and Acquiree, hereby represent and warrant that, with respect to their
own shares and as to the Acquiree, effective this date and the Closing
Date, the representations listed below are true and correct. Said
representations are meant and intended by all parties to apply to the
Acquiree.
(a) The listed Stockholders on Exhibit "A" are the sole owners of all
of the issued and outstanding shares of common stock of Acquiree;
such shares are free from claims, liens, or other encumbrances; and
Stockholders have the unqualified right to transfer and dispose of
such shares.
(b) The shares constitute validly issued shares of Acquiree fully-paid
and nonassessable.
(c) The audited year-end financial statements as of the last fiscal
year, with unaudited statements for the most recent fiscal quarter,
which have been delivered to Acquiror are complete, accurate and
fairly present the financial condition of Acquiree as of the date
thereof and the results of its operations for the periods covered
except as otherwise disclosed to Acquiree. There are no
liabilities, either fixed or contingent, not reflected in such
financial statements other than contracts or obligations in the
ordinary and usual course of business; and no such contracts or
obligations in the usual course of business constitute liens or
other liabilities which, if disclosed, would alter substantially
the financial condition of such Acquiree as reflected in such
financial statements. These financial statements have been prepared
in accordance with generally accepted accounting principles
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consistently applied, except as otherwise stated therein.
(d) Prior to the Closing Date there will not be any negative material
changes in the financial position of Acquiree, except changes
arising in the ordinary course of business, which changes will in
no event adversely affect the financial position of said Acquiree.
(e) To the best of Acquiree's knowledge, information and belief, it is
not involved in any pending litigation or governmental
investigation or proceeding not reflected in such financial
statement, or otherwise disclosed in writing to Acquiror and, to
the best knowledge of Acquiree and Stockholders, no litigation,
claims, assessments, or governmental investigation or proceeding is
threatened against Acquiree, its principal stockholders or
properties.
(f) As of the Closing Date, Acquiree will be in good standing in its
state of incorporation, and will be in good standing and in the
process of becoming duly qualified to do business in each state
where required to be so qualified.
(g) Acquiree has complied with all state, federal and local laws in
connection with its formation, issuance of securities,
organization, capitalization and operations, and to the best of
Acquiree's knowledge, information and belief, no contingent
liabilities have been threatened or claims made, and no basis for
the same exists with respect to said operations, formation or
capitalization, including claims for violation of any state or
federal securities laws.
(h) Acquiree has filed all governmental, tax or related returns and
reports due or required to be filed and has paid all taxes or
assessments which have become due as of Closing.
(i) Except as disclosed on any Exhibit, Acquiree has not breached any
agreement to which it is a party.
(j) Acquiree has no subsidiary corporations.
(k) The corporate financial records, minute books, and other documents
and records of Acquiree are to be available to present management
of Acquiror prior to the Closing Date and turned over to new
management in their entirety at Closing.
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(l) The execution of this Agreement will not violate or breach any
agreement, contract, or commitment to which Acquiree or
Stockholders are a party and has been duly authorized by all
appropriate and necessary action.
(m) The authorized capitalization of Acquiree is as set forth in the
most recent audited March 31, 1992 balance sheet of Acquiree.
Acquiree has one class of capital stock, common, and all
outstanding shares have been duly authorized, validly issued and
are fully paid and nonassessable with no personal liability
attaching to the ownership thereof. There are no outstanding
convertible securities, warrants, options or commitments of any
nature which may cause authorized but unissued shares to be issued
to any person.
(n) At the date of this Agreement Stockholders have, and at the Closing
Date they will have to the best of their knowledge, disclosed all
events, conditions and facts materially affecting the business and
prospects of Acquiree. Stockholders have not now and will not have,
at the Closing Date, with held knowledge of any such events,
conditions, and facts which they know, or have reasonable grounds
to know, may materially affect the business and prospects of
Acquiree.
(o) To the best knowledge of Stockholders and Acquiree their products,
materials and brochures do not infringe the patent or copyright
rights of any other person or entity.
5. Representations of Acquiring Corporation. Acquiror hereby
represents and warrants as follows:
(a) As of the Closing Date, the Acquiror shares to be delivered to the
Stockholders will constitute valid and legally issued shares of
Acquiror, fully-paid and nonassessable, and will be legally
equivalent in all respects to the common stock of Acquiror issued
and outstanding as of the date thereof.
(b) The officers of Acquiror are duly authorized to execute this
Agreement and have taken all actions required by law and
agreements, charters, and bylaws, to properly and legally execute
this Agreement.
(c) Acquiror has delivered to Acquiree current audited financial
statements for the fiscal year ended
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December 31, 1988 and at Closing shall deliver all of its financial
records, which shall be true, complete and accurate; there are and
shall be no substantial liabilities, either fixed or contingent,
not reflected in such financial statements and records or to which
the Acquiree has not been made aware. Said financial statements
fairly and accurately reflect the financial condition of the
Acquiror as of the date thereof and the results of operations for
the period reflected therein. Such statements shall have been
prepared in accordance with generally accepted accounting
principles, consistently applied, except as otherwise stated
therein.
(d) Since the date of the financial statements there will have been,
but as of the Closing Date there will not be, any material changes
in the financial position of Acquiror, except changes arising in
the ordinary course of business, which changes will in no event
adversely affect the financial condition of the Company.
(e) Acquiror is not involved in any pending litigation, claims, or
governmental investigation or proceeding not reflected in such
financial statements or otherwise disclosed in writing to the
Stockholders and there are no lawsuits, claims, assessments,
investigations, or similar matters, to the best knowledge of
management, threatened or contemplated against Acquiror, its
management or properties.
(f) As of the Closing Date and date hereof Acquiror is duly organized,
validly existing and in good standing under the laws of the State
of Colorado; it has the corporate power to own its property and to
carry on its business as now being conducted and is duly qualified
to do business in any jurisdiction where so required.
(g) Acquiror has filed all federal, state, county and local income,
excise, property and other tax returns, forms, or reports, which
are due or required to be filed by it prior to the date hereof and
has paid or made adequate provision for the payment of all taxes,
fees, or assessments which have or may become due pursuant to such
returns or pursuant to any assessments received.
(h) Acquiror has not breached, nor is there any pending or threatened
claims or any legal basis for a claim that Acquiror has breached,
any of the terms or
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conditions of any agreements, contracts or commitments to which it
is a party or is bound and the execution and performance hereof
will not violate any provisions of applicable law of any agreement
to which Acquiror is subject.
(i) The present capitalization of Acquiror comprises authorized common
stock of 150,000,000 shares, $0.001 par value, of which 500,000
shares will be issued and outstanding as of the Closing Date
hereof, after taking into account a one-for-twenty-five reverse
split. Acquiror also has 50,000,000 preferred shares, $0.001 par
value. As of the date hereof, no preferred shares are issued or
outstanding. All outstanding shares have been duly authorized,
validly issued, and fully paid and there are no outstanding or
presently authorized securities, warrants, options or related
commitments of any nature not reflected in the current financial
statements of Acquiror or otherwise known to Acquiree.
(j) Acquiror has no subsidiary corporation.
(k) The shares of restricted common stock of Acquiror to be issued to
Stockholders at Closing will be validly issued, nonassessable and
fully-paid under Colorado corporation law and will be issued in a
non-public offering and exempted transaction under federal and
state securities laws.
(1). The authorized capitalization of Acquiror is as set forth in the
most current balance sheet of Acquiror. There is only one class of
capital stock and there are no outstanding convertible securities,
warrants, options or commitments of any nature which may cause
authorized but unissued shares to be issued to any person.
(m) At the date of this Agreement Acquiror has, and at the Closing Date
it will have, disclosed all events, conditions and facts materially
affecting the business and prospects of Acquiror. Acquiror has not
now and will not have, at the Closing Date, withheld disclosure of
any such events, conditions, and facts which it, through management
has knowledge of, or has reasonable grounds to know, may materially
affect the business and prospects of Acquiror.
(n) The corporate financial records, minute books, and other documents
and records of Acquiror are to be
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available to present management of Acquiree prior to the Closing
Date and turned over to new management in their entirety at
Closing or as soon there after as practicable.
(o) Acquiror is a public company and represents that it has no existing
or threatened liabilities, claims, lawsuits, or basis for the same
with respect to its original stock issuance to its founders, its
recent public offering or any dealings with its Stockholders, the
public, brokers, the U.S. Securities and Exchange Commission, state
agencies or other persons. This includes matters relating to state
or federal securities laws as well as general common law or state
corporation law principles.
6. Closing Date. The Closing Date herein referred to shall be upon such
date as the parties hereto may mutually agree upon but is expected to be
on or about October 23, 1993. This Agreement is executed by the parties
as of the date hereof subject only to ratification by Acquiror
shareholders. As of the said ratification, the Stockholders will be
deemed to have accepted delivery of the certificates of stock to be
issued in their respective names, and in connection therewith will make
delivery of their stock in Acquiree to Acquiror. Certain exhibits, etc.
may be delivered subsequent to the Closing Date upon the mutual
agreement of the parties hereto.
7. Conditions Precedent to the Obligations of Acquiree. All obligations of
Acquiree and Stockholders under this Agreement are subject to the
fulfillment, prior to or as of the Closing Date, of each of the
following conditions:
(a) The representations and warranties by or on behalf of Acquiror
contained in this Agreement or in any certificate or document
delivered to Acquiree pursuant to the provisions hereof shall be
true in all material respects at and as of the time of Closing as
though such representations and warranties were made at and as of
such time.
(b) Acquiror shall have performed and complied with all covenants,
agreements, and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing on the
Closing Date.
(c) The present Directors of Acquiror will cause the appointment of all
of Acquiree's nominees to the Board of Directors of Acquiror as
directed by
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Acquiree and will have arranged for the resignation of the existing
officers and directors of Acquiror.
(d) The Directors of Acquiror and a majority of the stockholders of
Acquiror shall have approved this transaction and such other
reasonable matters as requested by Acquiree as pertaining to this
transaction.
(e) All instruments and documents delivered to Stockholders pursuant
to the provisions hereof shall be reasonably satisfactory to
Stockholders.
8. Conditions Precedent to the Obligations of Acquiror. All obligations of
the Acquiror under this Agreement are subject fulfillment, prior to or
at the Closing on the Closing Date, of each of the following conditions:
(a) The representations and warranties by Acquiree and Stockholders
contained in this Agreement or in any certificate or document
delivered to Acquiror pursuant to the provisions hereof shall be
true at and as of the time of Closing as though such
representations and warranties were made at and as of such time.
(b) Acquiree and Stockholders shall have performed and complied with
all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by it prior to or at the
Closing; including the delivery of all of the outstanding stock of
Acquiree.
(c) Stockholders shall deliver to Acquiror a letter commonly known as
an "investment letter" agreeing that the shares of stock in
Acquiror are being acquired for investment purposes, and not with a
view to resale.
(d) Stockholders hereby state that the materials, including, current
financial statements, prepared and delivered by Acquiror to
stockholders, have been read and understood by Stockholders, that
they are familiar with the business of Acquiror, that they are
familiar with the business of Acquiror, that they are acquiring the
Acquiror shares under Section 4(2), commonly known as the private
offering exemption of the Securities Act of 1933, under Regulation
D of said Act, and that the shares are restricted and may not be
resold, except in reliance on an exemption under the Act, and that
the
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Stockholders will thereby be taking control of Acquiror.
9. Indemnification. Within the period provided in paragraph 10
herein and in accordance with the terms of that paragraph, each party to
this Agreement, shall indemnify and hold harmless each other party at
all times after the date of this Agreement against and in respect of any
liability, damage or deficiency, all actions, suits, proceedings,
demands, assessments, judgments, costs and expenses including attorney's
fees incident to any of the foregoing, resulting from any
misrepresentations, breach of covenant or warranty or non-fulfillment of
any agreement on the part of such party under this Agreement or from any
misrepresentation in or omission from any certificate furnished or to be
furnished to a party hereunder. Subject to the terms of this Agreement,
the defaulting party shall reimburse the other party or parties on
demand, for any reasonable payment made by said parties at any time
after the Closing, in respect of any liability or claim to which the
foregoing indemnity relates, if such payment is made after reasonable
notice to the other party to defend or satisfy the same and such party
failed to defend or satisfy the same.
10. Nature and Survival of Representations. All representations,
warranties and covenants made by any party in this Agreement shall
survive the Closing hereunder and the consummation of the transactions
contemplated hereby for two years from the date hereof. All of the
parties hereto are executing and carrying out the provisions of this
Agreement in reliance solely on the representations, warranties and
covenants and agreements contained in this Agreement or at the Closing
of the transactions herein provided for and not upon any investigation
upon which it might have made or any representations, warranty,
agreement, promise or information, written or oral, made by the other
party or any other person other than as specifically set forth herein.
11. Documents at Closing. Between the date hereof and the date
of ratification by the shareholders of Acquiror, the following
transactions shall occur, all of such transactions being deemed to occur
simultaneously:
(a) Stockholders will deliver, or cause to be delivered, to Acquiror
the following:
(1) stock certificates for the stock of Acquiree being tendered
hereunder, duly endorsed in blank,
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(2) all corporate records of Acquiree, including without
limitation corporate minute books (which shall contain copies of
the Articles of Incorporation and Bylaws, as amended to the
Closing), stock books, stock transfer books, corporate seals,
and such other corporate books and records as may reasonably
requested for review by Acquiror and its counsel;
(3) a certificate executed by at lease one Principal Stockholder
to the effect that all representations and warranties made by
Acquiree under this Agreement are true and correct as of the
Closing, the same as though originally given to Acquiror on said
date;
(4) such other instruments, documents and certificates, if any,
as are required to be delivered pursuant to the provisions of
this Agreement or which may be reasonably requested in
furtherance of the provisions of this Agreement;
(b) Acquiror will deliver or cause to be delivered to Stockholders and
Acquiree:
(1) stock certificates for Common Stock to be issued as a part
of the exchange as listed on Exhibit "A";
(2) a certificate of the President and Secretary of Acquiror to
the effect that all representations and warranties of Acquiror
made under this Agreement are reaffirmed on the Closing Date,
the same as though originally given to Stockholders on said
date;
(3) certified copies of resolutions by Acquiror's Board of
Directors and Stockholders authorizing this transaction;
(4) such other instruments and documents as are required to be
delivered pursuant to the provisions of this Agreement.
12. Miscellaneous.
(a) Further Assurances. At any time, and from time to time, after the
effective 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
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transferred hereunder or otherwise to carry out the intent and
purposes of this Agreement.
(b) Waiver. Any failure on the part of any party hereto to comply with
any of its obligations, agreements or conditions hereunder may be
waived in writing by the party to whom such compliance is owed.
(c) Brokers. Neither party has employed any brokers or finders with
regard to this Agreement unless otherwise described in writing to
all parties hereto.
(d) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in
person or sent by prepaid first class registered or certified mail,
return receipt requested.
(e) Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
(g) Governing Law. This Agreement was negotiated and is being
contracted for in the State of Colorado, and shall be governed by
the laws of the State of Colorado, and the securities being issued
herein are being issued and delivered in the State of Colorado in
accordance with the isolated transaction and non-public offering
exemption.
(h) Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective
heirs, administrators, executors, successors and assigns.
(i) Entire Agreement. This Agreement is the entire agreement of the
parties covering everything agreed upon or understood in the
transaction. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any
kind of condition or inducements to the execution hereof.
(j) Time. Time is of the essence.
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(k) Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full
force and effect.
(1) Default Costs. In the event any party hereto has to resort to legal
action to enforce any of the terms hereof, such party shall be
entitled to collect attorneys fees and other costs from the party
in default.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
STAR ACQUISITIONS CORPORATION
By: /s/ XXXXXXXXX X. XXXXXXX
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President
SOUTHWESTERN WATER EXPLORATION CO.
By: /s/ [SIG]
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Chairman
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