AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Plan") is made
this 19th day of May, 2000, among LearnCom, Inc., a Nevada corporation ("LC
Nevada"); LearnCom, Inc., an Illinois corporation (hereinafter collectively
referred to as "LC Illinois") and its shareholders (hereinafter "Shareholders").
LC Nevada wishes to acquire one hundred percent (100%) of the
issued and outstanding stock of LC Illinois for and in exchange for stock of LC
Nevada, in a stock for stock transaction intending to qualify as a tax-free
exchange pursuant to ss. 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. Upon the execution hereof, the holders
of all the issued and outstanding stock of LC Illinois agree to assign,
transfer, and deliver to LC Nevada, free and clear of all liens, pledges,
encumbrances, charges, restrictions or known claims of any kind, nature or
description, all of their shares of LC Illinois stock, and LC Nevada agrees to
acquire such shares on the date thereof, or as soon as practicable thereafter,
by issuing and delivering in exchange therefore solely common shares of LC
Nevada's stock, par value $.001, in the aggregate of 500,000,000 shares, of the
then issued and outstanding shares of LC Nevada subject to the provisions of
this Plan. Subsequent to the date hereof, the Shareholders shall, upon the
surrender of the LC Illinois certificates representing their respective
beneficial and record ownership one hundred percent (100%) of the issued and
outstanding shares of LC Illinois to LC Nevada, as soon as practicable
hereafter, and further provided an exemption from the registration provisions of
Section 5 of the Securities Act of 1933 is available for the issuance thereof,
the Shareholders shall be entitled to receive a certificate(s) evidencing shares
of the exchanged LC Nevada stock as provided for herein. LC Nevada hereby
acknowledges that LC Illinois has 138,469 options outstanding. Upon completion
of this Plan, LC Nevada agrees to adopt the Option Plan of LC Illinois and to
issue the holders of such options comparable options to purchase shares of
common stock of LC Nevada.
1.2 Anti-Dilution. For all relevant purposes of this Plan, the
number of LC Nevada 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 LC Nevada
common stock, which may occur between the date of the execution of this Plan and
the date of the delivery of such shares.
1.3 Delivery of Certificates. The Shareholders shall transfer
to LC Nevada at the closing provided for in Section 2 (the "Closing") the shares
of common stock and stock options of LC Illinois listed opposite their
respective names on Exhibit A hereto (the "LC Illinois shares") in exchange for
shares of the
common stock and options of LC Nevada as outlined above in Section 1.1 hereof
(the "LC Nevada Stock"). All of such shares of LC Nevada stock shall be issued
at the closing to the Shareholders, in the numbers shown opposite their
respective names in Exhibit "A." The transfer of LC Illinois shares by the
Shareholders shall be effected by the delivery to LC Nevada 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 bank or other financial institution satisfactory to the transfer agent of LC
Nevada with all necessary transfer taxes and other revenue stamps affixed and
acquired at the Shareholders' expense.
1.4 Further Assurances. Subsequent to the execution hereof,
and from time to time thereafter, the Shareholders shall execute such additional
instruments and take such other action as LC Nevada may request in order to more
effectively sell, transfer and assign clear title and ownership in the LC
Illinois shares to LC Nevada.
Section 2
Closing
2.1 Closing. The Closing contemplated by Section 1.3 shall be
held on or before June 15, 2000 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 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 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.
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Section 3
Representations, Warranties and Covenants of LC Nevada
LC Nevada represents and warrants to, and covenants with, the
Shareholders and LC Illinois as follows:
3.1 Corporate Status. LC Nevada is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada. LC Nevada 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 LC Nevada 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 LC
Nevada's Articles of Incorporation or Bylaws. LC Nevada 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 LC Nevada
as of the date hereof consists of 2,000,000,000 common shares, par value $.001.
The common shares of LC Nevada 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 LC Nevada's
common stock or with regard to any options, warrants or other contractual rights
to acquire any of LC Nevada's authorized but unissued common shares. Immediately
prior to the Closing, LC Nevada shall have not more than 257,500,000 shares
issued and outstanding.
3.3 Financial Statements.
(a) LC Nevada hereby warrants and covenants to LC
Illinois that the audited financial statements for the years ended December 31,
1999 and 1998, and the unaudited financial statements for the period ended March
31, 2000, fairly and accurately represent the financial condition of LC Nevada
and that no material change has occurred in the financial condition of LC
Nevada.
(b) LC Nevada 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 LC Nevada as
submitted heretofore to LC Illinois for examination and review.
3.4 Conduct of Business. LC Nevada is a development stage
company and has not engaged in any operational activities prior to the date
hereof.
LC Nevada 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 LC Illinois, enter into any material
commitments except in the ordinary course of business.
LC Nevada will conduct itself in the following manner pending
the Closing:
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(a) Certificate of Incorporation and Bylaws. No
change will be made in the Articles of Incorporation or Bylaws of LC Nevada.
(b) Capitalization, etc. LC Nevada 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. LC Nevada has no options,
warrants or stock appreciation rights related to the authorized but unissued LC
Nevada common stock. There are no existing options, warrants, calls, or
commitments of any character relating to the authorized and unissued LC Nevada
common stock, except options, warrants, calls, or commitments, if any, to which
LC Nevada is not a party and by which it is not bound.
3.6 Title to Property. LC Nevada 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 LC Nevada, and the
properties and assets of LC Nevada are subject to no mortgage, pledge, lien or
encumbrance, unless as otherwise disclosed in its financial statements.
3.7 Litigation. There are no material actions, suits, or
proceedings, pending, or, to the best knowledge of LC Nevada, threatened by or
against or effecting LC Nevada at law or in equity, or before any governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of any
kind; LC Nevada 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.
3.8 Books and Records. From the date hereof, and for any
reasonable period subsequent thereto, LC Nevada and its present management will
(i) give to the Shareholders and LC Illinois, 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 LC Illinois, or their duly authorized representatives, may
inspect them; and (ii) furnish such information concerning the properties and
affairs of LC Nevada as the Shareholders and LC Illinois, or their duly
authorized representatives, may reasonably request. Any such request to inspect
LC Nevada's books shall be directed to LC Nevada's counsel, ▇▇▇▇▇ Shy, at the
address set forth herein under Section 10.4 Notices.
3.9 Confidentiality. Until the Closing (and thereafter if
there is no Closing), LC Nevada and its representatives will keep confidential
any information which they obtain from the Shareholders or from LC Illinois
concerning its properties, assets and the proposed business operations of LC
Illinois. 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 June 15, 2000 or otherwise
waived or extended in writing to a date mutually agreeable to the parties
hereto, LC Nevada will return to LC Illinois all written matter with regard to
LC Illinois obtained in connection with the negotiations or consummation of this
Plan.
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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 LC Nevada 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 LC Nevada.
3.11 Corporate Authority. LC Nevada 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 LC Illinois, 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 Undisclosed or Contingent Liabilities. LC Nevada has no
undisclosed or contingent liabilities which have not been disclosed to LC
Illinois in writing or in this Plan or in any Exhibit attached hereto.
3.13 Information. The information concerning LC Nevada set
forth in this Plan, and the LC Nevada's 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 LC Illinois in
connection with this Plan.
3.14 Title and Related Matters. LC Nevada 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 LC Nevada
balance sheets, free and clear of any and all liens and encumbrances.
3.15 Contracts or Agreements. LC Nevada is not bound by any
material contracts, agreements or obligations which it has not already disclosed
to LC Illinois in writing or in this Plan or in any Exhibit attached hereto.
3.16 Governmental Authorizations. LC Nevada 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.
3.17 Compliance with Laws and Regulations. LC Nevada 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 LC Nevada or except to the
extent that noncompliance would not result in the occurrence of any material
liability, not otherwise disclosed in writing to LC Illinois.
3.18 Approval of Plan. LC Nevada hereby warrants and
represents that the Board of Directors of LC Nevada consented in writing to the
authorization to execute this Plan. Shareholder approval of the Plan by the
stockholders of LC Nevada is not required pursuant to NRS 92A.130 1(b).
3.19 Investment Intent. LC Nevada is acquiring the LC
Illinois shares to be transferred to it under this Plan for investment purposes
and not with a view to the sale or distribution thereof.
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3.20 Unregistered Shares and Access to Information. LC Nevada
understands that the offer and sale of the LC Illinois 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 or state securities law administrator has reviewed
or approved any disclosure or other material concerning LC Illinois or the LC
Illinois shares. LC Nevada has been provided with and reviewed all information
concerning LC Illinois, the LC Illinois 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 LC Illinois shares. LC Nevada has
made an investigation as to the merits and risks of its acquisition of the LC
Illinois Shares and has had the opportunity to ask questions of, and has
received satisfactory answers from, the officers and directors of LC Illinois
concerning LC Illinois, the LC Illinois 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 LC Illinois shares.
3.21 Obligations. LC Nevada is not aware of any outstanding
obligations to any of its employees or consultants as of the Closing.
3.22 LC Nevada Schedules. LC Nevada has delivered to LC
Illinois the following items listed below, hereafter referred to as the "LC
Nevada Schedules", which is hereby incorporated by reference and made a part
hereof. A certification executed by a duly authorized officer of LC Nevada on or
about the date within the Plan is executed to certify that the LC Nevada
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) Officers' Certificate as required under Section
6.2 of the Plan;
(f) Opinion of counsel as required under Section 6.4
of the Plan;
(g) Certificate of Good Standing;
Section 4
Representations, Warranties and Covenants of LC Illinois
LC Illinois represents and warrants to, and covenants with,
the Shareholders and LC Nevada as follows:
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4.1 Corporate Status. LC Illinois is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Illinois. LC Illinois 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 in which LC Illinois is not so qualified. Included in the LC
Illinois 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 LC
Illinois's Articles of Incorporation or Bylaws. LC Illinois 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 LC
Illinois as of the date hereof consists of 30,000,000 common shares and 100,000
preferred shares. As of the date hereof, all common shares of LC Illinois issued
and outstanding are fully paid, non-assessable shares.
4.3 Options, Warrants and Rights. LC Illinois has options
outstanding to purchase an aggregate of 138,469 shares of its authorized but
unissued common stock. Schedule J of the LC Illinois Schedules is a chart which
details the expiration dates and strike prices.
4.4 Conduct of Business. LC Illinois will use its best efforts
to maintain and preserve its business organization, employee relationships and
goodwill intact, and will not, prior to the closing, without the prior written
consent of LC Nevada, enter into any material commitments except in the ordinary
course of business.
LC Illinois agrees that LC Illinois 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 LC
Illinois.
(b) Capitalization, etc. LC Illinois 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.
4.5 Title to Property. LC Illinois 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 LC Illinois, and the
properties and assets of LC Illinois are subject to no mortgage, pledge, lien or
encumbrance, unless as otherwise disclosed in its financial statements.
4.6 Litigation. There are no material actions, suits, or
proceedings, pending, or, to the best knowledge of LC Illinois, threatened by or
against or effecting LC Illinois at law or in equity, or before any governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of any
kind; LC Illinois
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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.
4.7 Books and Records. From the date hereof, and for any
reasonable period subsequent thereto, LC Illinois and its present management
will (i) give to LC Nevada, 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 LC Nevada, or their duly
authorized representatives, may inspect them; and (ii) furnish such information
concerning the properties and affairs of LC Illinois as the Shareholders and LC
Illinois, or their duly authorized representatives, may reasonably request. Any
such request to inspect LC Illinois's books shall be directed to LC Illinois'
representative, at the address set forth herein under Section 10.4 Notices.
4.8 Confidentiality. Until the Closing (and thereafter if
there is no Closing), LC Illinois and its representatives will keep confidential
any information which they obtain from the Shareholders or from LC Illinois
concerning the properties, assets and the proposed business operations of LC
Illinois. 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 June 15, 2000 or otherwise
waived or extended in writing to a date mutually agreeable to the parties
hereto, LC Illinois will return to LC Nevada all written matter with regard to
LC Nevada obtained in connection with the negotiations or consummation of this
Plan.
4.9 Unregistered Shares and Access to Information. LC Illinois
and the Shareholders understand that the offer and sale of LC Nevada shares to
be exchanged for the LC Illinois 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 or state securities law administrator has reviewed or approved any
disclosure or other material facts concerning LC Nevada or LC Nevada stock. LC
Illinois and the Shareholders have been provided with and reviewed all
information concerning LC Nevada and LC Nevada shares, to be exchanged for the
LC Illinois shares as they have considered necessary or appropriate as prudent
and knowledgeable investors to enable them to make informed investment decisions
concerning the LC Nevada shares, to be exchanged for the LC Illinois shares. LC
Illinois and the Shareholders have made an investigation as to the merits and
risks of their acquisition of the LC Nevada shares, to be exchanged for the LC
Illinois shares and have had the opportunity to ask questions of, and have
received satisfactory answers from, the officers and directors of LC Nevada
concerning LC Nevada shares to be exchanged for the LC Illinois 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 LC Nevada shares to be exchanged
for the LC Illinois 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 LC Illinois of whatever class or series, which
the Shareholders have contracted to exchange.
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4.11 Contracts.
(a) Set forth in the LC Illinois Schedules are
copies or descriptions of all material contracts which written or oral, all
agreements, franchises, licenses, or other commitments to which LC Illinois is a
party or by which LC Illinois or its properties are bound.
(b) Except as may be set forth in the LC Illinois
Schedules, LC Illinois is not a party to any contract, agreement, corporate
restriction, or subject to any judgment, order, writ, injunction, decree, or
award, which may materially and adversely effect the business, operations,
properties, assets, or conditions of LC Illinois.
(c) Except as set forth in the LC Illinois
Schedules, LC Illinois is not a party to any material oral or written (i)
contract for employment of any officer which is not terminable on 30 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
$10,000; or (iv) waiver of any right of any value which in the aggregate is
extraordinary or material concerning the assets or properties scheduled by LC
Illinois, except for adequate value and pursuant to contract. LC Illinois has
not entered into any material transaction which is not listed in the LC Illinois
Schedules or reflected in the LC Illinois financial statements.
4.12 Material Contract Defaults. LC Illinois 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 LC Illinois, and there is no event of default or event
which, with notice or 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 LC Illinois 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 LC Illinois 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 LC Illinois.
4.14 Governmental Authorizations. LC Illinois is in good
standing in the State of Illinois. 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 LC Illinois of this
Plan and the consummation by LC Illinois of the transactions contemplated
hereby.
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4.15 Compliance with Laws and Regulations. LC Illinois 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 LC Illinois or except to the
extent that noncompliance would not result in the occurrence of any material
liability, not otherwise disclosed to LC Nevada.
4.16 Approval of Plan. The Board of Directors of LC Illinois
have authorized the execution and delivery of this Plan by LC Illinois and have
approved the Plan and the transactions contemplated hereby. LC Illinois 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 LC Illinois set
forth in this Plan, and the LC Illinois 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 LC Nevada in
connection with this Plan.
4.18 LC Illinois Schedules. LC Illinois has delivered to LC
Nevada the following items listed below, hereafter referred to as the "LC
Illinois Schedules", which is hereby incorporated by reference and made a part
hereof. A certification executed by a duly authorized officer of LC Illinois on
or about the date within the Plan is executed to certify that the LC Illinois
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) Unanimous Consent In Lieu of Special Meeting
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 LC Illinois 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 Exhibit A);
(h) Schedule of all material contracts;
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(i) Schedule of all debts, mortgages, security
interests, pledges, liens, encumbrances, claims and the like;
(j) Share Option Plan and Schedule;
(k) Officers' Certificate as required by Section
7.2 of the Plan;
(l) Certificate of Good Standing.
Section 5
Special Covenants
5.1 LC Illinois Information Incorporated in LC Nevada's
Reports. LC Illinois represents and warrants to LC Nevada 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. LC Illinois agrees to indemnify and hold LC
Nevada 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 LC Nevada Information Incorporated in LC Illinois's
Reports. LC Nevada represents and warrants to LC Illinois 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 LC
Nevada agree to indemnify and hold LC Illinois 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 LC Nevada Stock. The consummation of this Plan and the transactions
herein contemplated, including the issuance of the LC Nevada shares in exchange
for one hundred percent (100%) of the issued and outstanding shares of LC
Illinois 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. LC
Nevada 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
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involving a public offering", among others. Each Shareholder upon submission of
his LC Illinois shares and the receipt of the LC Nevada shares exchanged
therefor, shall execute and deliver to LC Nevada a letter of investment intent
to indicate, among other representations, that the Shareholder is exchanging the
LC Illinois shares for LC Nevada shares for investment purposes and not with a
view to the subsequent distribution thereof. A proposed Investment Letter is
attached hereto as Exhibit B 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,
(a) LC Illinois and LC Nevada 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 LC Illinois nor LC Nevada 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
$10,000.
Section 6
Conditions Precedent to Obligations of
LC Illinois and the Shareholders
All obligations of LC Illinois and the Shareholders under this
Plan are subject to 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 LC Nevada 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, LC Nevada shall have performed and complied
with all aspects of this Plan, unless waived or extended in writing by the
parties hereto. LC Illinois shall have been furnished with a certificate, signed
by a duly authorized executive officer of LC Nevada and dated the Closing date,
to the foregoing effect.
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6.2 Officers' Certificate. LC Illinois and the Shareholders
shall have been furnished with a certificate dated the Closing date and signed
by a duly authorized executive officer of LC Nevada, to the effect that no
litigation, proceeding, investigation, claim, demand or inquiry is pending, or
to the best knowledge of LC Nevada, 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 LC Nevada, and that this Plan 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 LC Nevada, 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 LC Nevada, except as otherwise disclosed to LC Illinois.
6.4 Opinion of Counsel of LC Nevada. LC Nevada shall furnish
to LC Illinois and the Shareholders an opinion dated as of the Closing date and
in form and substance satisfactory to LC Illinois and the Shareholders to the
effect that:
(a) LC Nevada 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 LC Nevada, as presently
conducted, including, upon the consummation hereof, the ownership of all of the
issued and outstanding shares of LC Illinois, 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 LC Nevada has
complied 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
LC Nevada is 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 LC Nevada of any court or before
or by any governmental body which might materially effect the business of LC
Nevada or the financial condition of LC Nevada as a whole and no such claims,
suits or legal proceedings are contemplated by governmental authorities against
LC Nevada.
(e) The consummation of the transactions contemplated
by this Plan will not violate or contravene the provisions of the Certificate of
Incorporation or Bylaws of LC Nevada, or to the best knowledge of such counsel,
any contract, agreement, indenture, mortgage, or order by which LC Nevada is
bound.
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(f) This Plan constitutes a legal, valid and binding
obligation of LC Nevada 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 LC Nevada and have been duly authorized by its
Board of Directors.
(h) LC Nevada 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. LC Illinois shall have received a
Certificate of Good Standing from the State of Nevada, dated within sixty (60)
days prior to Closing, but in no event later than ten days subsequent to the
execution hereof certifying that LC Nevada is in good standing as a corporation
in the State of Nevada.
6.6 Other Items. LC Illinois and the Shareholders shall have
received such further documents, certifications or instruments relating to the
transactions contemplated hereby as LC Illinois and the Shareholders may
reasonably request.
Section 7
Conditions Precedent to Obligations of LC Nevada
All obligations of LC Nevada 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 LC Illinois 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, LC
Nevada shall have performed and complied with all aspects of this Agreement,
unless waived or extended in writing by the parties hereto. LC Nevada shall have
been furnished with a certificate, signed by a duly authorized executive officer
of LC Illinois and dated the Closing date, to the foregoing effect.
7.2 Officers' Certificate. LC Nevada shall have been furnished
with a certificate dated the Closing date and signed by a duly authorized
executive officer of LC Illinois, to the effect that no litigation, proceeding,
investigation, claim, deed, or inquiry is pending, or to the best knowledge of
LC Illinois, 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 LC Illinois, and that this Plan has been complied with in all
material respects.
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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 LC Nevada, 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 LC Illinois, except as otherwise disclosed to LC Nevada.
7.4 Dissenters' Rights Waived. Shareholders representing at
one hundred percent (100%) of the issued and outstanding shares of LC Illinois,
and each of them, have agreed and hereby waive any dissenters' rights, if any,
under the laws of the State of Illinois 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 LC Illinois.
7.5 Other Items. LC Nevada shall have received such further
documents, certifications or instruments relating to the transactions
contemplated hereby as LC Nevada may reasonably request.
7.6 Execution of Investment Letter. The Shareholders shall
have executed and delivered investment letters substantially in the form of
Exhibit B to LC Nevada.
Section 8
Termination
8.1 Termination by LC Illinois or the Shareholders. This Plan
may be terminated at any time prior to the Closing date by action of LC Illinois
or the Shareholders, if LC Nevada 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 LC Nevada. This Plan may be terminated at
any time prior to the Closing date by action of LC Nevada if LC Illinois 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 LC Nevada, expressed by action of its
Board of Directors, LC Illinois 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.
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Section 9
Shareholders' Representative
The Shareholders hereby irrevocably designate and appoint
▇▇▇▇▇ ▇▇▇▇▇▇ 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 LC Nevada 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. LC Nevada and LC Illinois
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, LC Illinois 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 LC Nevada'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:
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If to LC Nevada: LearnCom, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇ Shy
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
If to LC Illinois: LearnCom, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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 LC Nevada,
LC Illinois 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. LC
Illinois and LC Nevada 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
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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.
LEARNCOM, INC., a Nevada corporation
Attest:
____________________ By: ___________________________
Its President
LEARNCOM, INC., an Illinois corporation
Attest:
_____________________ By: ___________________________
Its President
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SHAREHOLDERS:
By___________________________
▇▇▇▇▇ ▇▇▇▇▇▇
By___________________________
By___________________________
▇▇▇▇▇ ▇▇▇▇▇▇
FRONT PORCH DIGITAL, INC.
By___________________________
Its__________________________
▇▇▇▇▇▇ LEARNCOM LP
By___________________________
Its__________________________
▇▇▇▇▇▇ WINGSNET LP
By___________________________
Its__________________________
▇▇▇▇▇▇ VIDEO INVESTORS LP
By___________________________
Its__________________________
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THE ▇▇▇▇▇▇ GROUP, INC.
By____________________________
Its____________________________
_______________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
_______________________________
_______________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
_______________________________
▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Solely for the purpose of Section 5.2 the following officers
and directors of LC Nevada hereby execute the Plan.
_______________________________
ARIIKA ▇▇▇▇▇
_______________________________
▇▇▇▇▇ ▇▇▇▇▇