EXHIBIT 10.1
PLAN OF REORGANIZATION AND ACQUISITION
PLAN OF REORGANIZATION AND ACQUISITION
BY WHICH
THE CHILDREN'S INTERNET, INC.
(A CALIFORNIA CORPORATION)
SHALL ACQUIRE A MAJORITY INTEREST OF
DWC INSTALLATIONS, INC.
(A NEVADA CORPORATION)
This PLAN OF REORGANIZATION AND ACQUISITION ("Agreement") is made and dated this 3rd day of July, 2002 (the "Effective Date") by and between the above referenced corporations, and shall become effective on "the Closing Date" as defined herein.
A. THE PARTIES TO THIS AGREEMENT
1. The Children's Internet, Inc., a California corporation ("The Children's Internet").
2. DWC Installations, Inc., a Nevada corporation ("DWC").
3. The Children's Internet and DWC may be referred to collectively herein as the "Parties."
A. THE CAPITAL OF THE CHILDREN'S INTERNET AND DWC
1. The capital of The Children's Internet consists of 10,000 shares of common stock, no par value, authorized, of which 5,000 are issued and outstanding as of the date of this Agreement.
2. The capital of DWC consists of 75,000,000 shares of common stock, $0.001 par value, authorized, of which 1,121,000 shares are issued and outstanding as of the date of this Agreement, and 10,000,000 shares of preferred stock, $0.001 par value of which no shares are issued and outstanding as of the date of this Agreement
B. THE BACKGROUND FOR THE ACQUISITION
The Children's Internet desires to acquire 1,166,755 newly issued shares of DWC common stock (the "Shares") and the DWC wishes to sell the Shares to The Children's Internet.
III. CONDITIONS PRECEDENT TO REORGANIZATION
A. DIRECTOR APPROVAL
The Boards of Directors of the Parties respectively shall have determined that it is advisable and in the best interests of each of them and both of them to proceed with the acquisition by The Children's Internet of the Shares.
B. EFFECTIVE DATE
This Plan of Reorganization and Acquisition shall become effective on a date designated hereinafter as the "Closing Date"; provided that the following conditions precedent shall have been met, or waived in writing by the Parties:
1. DWC shall have furnished to The Children's Internet all corporate and financial information which is customary and reasonable, to conduct its respective due diligence, normal for this kind of transaction. If The Children's Internet determines that there is a reason not to complete this Plan of Reorganization and Acquisition as a result of their due diligence examination, then it must give written notice to DWC prior to the expiration of the due diligence examination period. The Due Diligence period, for purposes of this paragraph, shall expire when this Agreement is executed by all Parties.
2. All of the terms, covenants and conditions of this Plan of Reorganization and Acquisition to be complied with or performed by each Party for Closing shall have been complied with, performed or waived in writing.
3. The representations and warranties of the Parties, contained in this Plan of Reorganization and Acquisition, as herein contemplated, except as amended, altered or waived by the Parties in writing, shall be true and correct in all material respects at the Closing Date with the same force and effect as if such representations and warranties are made at and as of such time; and each Party shall provide the other with a corporate certificate, of a director of each Party, dated the Closing Date, to the effect, that all conditions precedent have been met, and that all representations and warranties of such Party are true and correct as of that date. The form and substance of each Party's certification shall be in form reasonably satisfactory to the other.
C. TERMINATION
This Plan of Reorganization and Acquisition may be terminated at any time prior to the Closing Date, whether before or after approval by the directors of the Parties: (i) by mutual consent of the Parties; or (ii) by any Party if any other Party is unable to meet the specific conditions precedent applicable to its performance within a reasonable time. In the event that termination of this Plan of Reorganization and Acquisition occurs, as provided above, this Plan of Reorganization and Acquisition shall forthwith become void and there shall be no liability on the part of any Party or its respective officers and directors.
A. REORGANIZATION AND ACQUISITION
The Children's Internet and DWC are hereby reorganized, such that DWC shall issue 1,166,755 shares of its common stock to The Children's Internet and DWC shall become a majority-owned subsidiary of The Children's Internet.
B. SURVIVING CORPORATION
Both The Children's Internet and DWC shall survive the Reorganization herein contemplated and shall continue to be governed by the laws of their respective jurisdiction. The resulting parent corporation is the entity responsible for the rights of dissenting shareholders, if any.
C. SURVIVING ARTICLES OF INCORPORATION
The Articles of Incorporation of both The Children's Internet and DWC shall remain in full force and effect, unchanged.
D. SURVIVING BYLAWS
The Bylaws of both The Children's Internet and DWC shall remain in full force and effect, unchanged.
E. CONSIDERATION
As consideration for the 1,166,755 Shares, The Children's Internet will pay $150,000 to DWC as follows: As DWC is already in receipt of a $50,000 deposit paid by The Children's Internet, The Children's Internet shall pay the remaining $100,000 to DWC in readily available funds at the Closing.
Also at the Closing, DWC shall issue and deliver a stock certificate to The Children's Internet for the 1,166,755 Shares.
F. OTHER CONDITIONS OF ACQUISITIONS
1. DWC shall own all of the assets it currently owns except as may be sold or transferred in the ordinary course of business;
G. FURTHER ASSURANCE, GOOD FAITH AND FAIR DEALING
The Directors of each Party shall and will execute and deliver any and all necessary documents, acknowledgments and assurances and do all things proper to confirm or acknowledge any and all rights, titles and interests created or confirmed herein; and all Parties covenant hereby to deal fairly and in good faith with each other and each others shareholders.
V. GENERAL MUTUAL REPRESENTATIONS AND WARRANTIES
The purpose and general import of the Mutual Representations and Warranties are that each Party has made appropriate full disclosure to the others, that no material information has been withheld, and that the information exchanged is accurate, true and correct.
A. ORGANIZATION AND QUALIFICATION
Each Party warrants and represents that it is duly organized and in good standing, and is duly qualified to conduct any business it may be conducting, as required by law or local ordinance.
B. CORPORATE AUTHORITY
Each Party warrants and represents that it has corporate authority, under the laws of its jurisdiction and its constituent documents, to do each and every element of performance to which it has agreed, and which is reasonably necessary, appropriate and lawful, to carry out this Agreement in good faith.
C. OWNERSHIP OF ASSETS AND PROPERTY
DWC warrants and represents that it has lawful title and ownership of its property as reported to The Children's Internet, and as disclosed in its financial statements.
D. ABSENCE OF CERTAIN CHANGES OR EVENTS
DWC warrants and represents that there are no material changes of circumstances or events which have not been fully disclosed to The Children's Internet, and which, if different than previously disclosed in writing, have been disclosed in writing as currently as is reasonably practicable.
E. ABSENCE OF UNDISCLOSED LIABILITIES
Each Party warrants and represents specifically that it has, and has no reason to anticipate having, any material liabilities which have not been disclosed to the other, in the financial statements or otherwise in writing.
F. LEGAL PROCEEDINGS
Each Party warrants and represents that there are no legal proceedings, administrative or regulatory proceeding, pending or suspected, which have not been fully disclosed in writing to the other.
G. NO BREACH OF OTHER AGREEMENTS
Each Party warrants and represents that this Agreement, and the faithful performance of this Agreement, will not cause any breach of any other existing agreement, or any covenant, consent decree, or undertaking by either, not disclosed to the other.
H. CAPITAL STOCK
Each Party warrants and represents that the issued and outstanding shares and all shares of capital stock of each Party, is as detailed herein, that all such shares are in fact issued and outstanding, duly and validly issued, were issued as and are fully paid and non-assessable shares, and that, other than as represented in writing, there are no other securities, options, warrants or rights outstanding, to acquire further shares of such Party, except as has been disclosed to the other Party.
I. BROKERS' OR FINDER'S FEES
Other than as described herein, each Party warrants and represents that it is aware of no claims for brokers' fees, or finders' fees, or other commissions or fees, by any person not disclosed to the other, which would become, if valid, an obligation of either Party.
DWC shall, and from and after the Closing Date, indemnify, defend and hold harmless The Children's Internet and each person who becomes an officer or director of DWC subsequent to the Closing (the "Indemnified Parties") against all losses, claims, damages, costs, expenses (including reasonable attorneys' fees and expenses), liabilities or judgments or amounts that are paid in settlement with the approval of the indemnifying party of or in connection with any threatened or actual claim, action, suit, proceeding or investigation based on or arising out of any matter existing or occurring at or prior to the Closing Date ("Indemnified Liabilities"), in each case, to the full extent a corporation is permitted under Nevada Revised Statutes to indemnify directors or officers.
Without limiting the foregoing, in the event any such claim, action, suit, proceeding or investigation is brought against any Indemnified Parties (whether arising before or after the Closing Date), (i) the Indemnified Parties may retain counsel satisfactory to them and DWC shall pay all fees and expenses of such counsel for the Indemnified Parties promptly as statements therefore are received; and (ii) DWC shall use all reasonable efforts to assist in the vigorous defense of any such matter,providedthat DWC shall not be liable for any settlement effected without its prior written consent. Any Indemnified Party wishing to claim indemnification under this section, upon learning of any such claim, action, suit, proceeding or investigation, shall notify DWC (but the failure so to notify shall not relieve a party from any liability which it may have under this section except to the extent such failure prejudices such party), and shall deliver to DWC the undertaking contemplated by the applicable sections of the Nevada Revised Statutes. The Indemnified Parties as a group may retain only one law firm to represent them with respect to each such matter unless there is, under applicable standards of professional conduct, a conflict on any significant issue between the positions of any two or more Indemnified Parties. The Parties agree that all rights to indemnification, including provisions relating to advances of expenses incurred in defense of any action or suit, existing in favor of the Indemnified Parties with respect to matters occurring through the Closing Date shall continue in full force and effect for a period of not less than seven years from the Closing Date;provided,however, that all rights to indemnification in respect of any Indemnified Liabilities asserted or made within such period shall continue until the disposition of such Indemnified Liabilities.
The provisions of this section are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party, his or her heirs and his or her personal representatives and shall be binding upon all successors and assigns of DWC.
VII. DEFAULT, AMENDMENT AND WAIVER
A. DEFAULT
Upon a breach or default under this Agreement by any of the Parties (following the cure period provided herein), the non-defaulting party shall have all rights and remedies given hereunder or now or hereafter existing at law or in equity or by statute or otherwise. Notwithstanding the foregoing, in the event of a breach or default by any Party hereto in the observance or in the timely performance of any
of its obligations hereunder which is not waived by the non-defaulting Party, such defaulting Party shall have the right to cure such default within 15 days after receipt of notice in writing of such breach or default.
B. WAIVER AND AMENDMENT
Any term, provision, covenant, representation, warranty, or condition of this Agreement may be waived, but only by a written instrument signed by the Party entitled to the benefits thereof. The failure or delay of any party at any time or times to require performance of any provision hereof or to exercise its rights with respect to any provision hereof shall in no manner operate as a waiver of or affect such party's right at a later time to enforce the same. No waiver by any Party of any condition, or of the breach of any term, provision, covenant, representation, or warranty contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or waiver of any other condition or of the breach of any other term, provision, covenant, representation, or warranty. No modification or amendment of this Agreement shall be valid and binding unless it be in writing and signed by all Parties hereto.
A. EXPENSES
Whether or not the transactions contemplated hereby are consummated, each of the Parties hereto shall bear all taxes of any nature (including, without limitation, income, franchise, transfer, and sales taxes) and all fees and expenses relating to or arising from its compliance with the various provisions of this Agreement and such Party's covenants to be performed hereunder, and except as otherwise specifically provided for herein, each of the Parties hereto agrees to pay all of its own expenses (including, without limitation, attorneys and accountants' fees, and printing expenses) incurred in connection with this Agreement, the transactions contemplated hereby, the negotiations leading to the same and the preparations made for carrying the same into effect, and all such taxes, fees, and expenses of the Parties hereto shall be paid prior to Closing.
B. NOTICES
Any notice, request, instruction, or other document required by the terms of this Agreement, or deemed by any of the Parties hereto to be desirable, to be given to any other party hereto shall be in writing and shall be given by facsimile, personal delivery, overnight delivery, or mailed by registered or certified mail, postage prepaid, with return receipt requested, to the following addresses:
| TO THE CHILDREN'S INTERNET: | The Children's Internet, Inc. Attn: Sholeh Hamedani, President 2401 Crow Canyon Rd., Suite 201, San Ramon CA 94583 | |
TO DWC: | DWC Corporation Attn: Alan Schram, President 15303 Ventura Blvd., Suite 1510 Sherman Oaks, CA 91403 | |
WITH COPY TO: | Oswald & Yap Attn: Lynne Bolduc, Esq. 16148 Sand Canyon Avenue Irvine, CA 92618 |
The persons and addresses set forth above may be changed from time to time by a notice sent as aforesaid. If notice is given by facsimile, personal delivery, or overnight delivery in accordance with the provisions of this Section, said notice shall be conclusively deemed given at the time of such delivery. If
notice is given by mail in accordance with the provisions of this Section, such notice shall be conclusively deemed given seven days after deposit thereof in the United States mail.
C. ENTIRE AGREEMENT
This Agreement, together with any schedules and exhibits hereto, sets forth the entire agreement and understanding of the Parties hereto with respect to the transactions contemplated hereby, and supersedes all prior agreements, arrangements and understandings related to the subject matter hereof. No understanding, promise, inducement, statement of intention, representation, warranty, covenant, or condition, written or oral, express or implied, whether by statute or otherwise, has been made by any party hereto which is not embodied in this Agreement, or in the schedules or exhibits hereto or the written statements, certificates, or other documents delivered pursuant hereto or in connection with the transactions contemplated hereby, and no party hereto shall be bound by or liable for any alleged understanding, promise, inducement, statement, representation, warranty, covenant, or condition not so set forth.
D. SURVIVIAL OF REPRESENTATIONS
All statements of fact (including financial statements) contained in the schedules, the exhibits, the certificates, or any other instrument delivered by or on behalf of the Parties hereto, or in connection with the transactions contemplated hereby, shall be deemed representations and warranties by the respective Party hereunder. All representations, warranties, agreements, and covenants hereunder shall survive the Closing and remain effective regardless of any investigation or audit at any time made by or on behalf of the Parties or of any information a party may have in respect hereto. Consummation of the transactions contemplated hereby shall not be deemed or construed to be a waiver of any right or remedy possessed by any party hereto, notwithstanding that such party knew or should have known at the time of Closing that such right or remedy existed.
E. INCORPORATION BY REFERENCE
The schedules, exhibits, and all documents (including, without limitation, all financial statements) delivered as part hereof or incident hereto are incorporated as a part of this Agreement by reference.
F. REMEDIES CUMULATIVE
No remedy herein conferred upon the Parties is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise.
G. EXECUTION OF ADDITIONAL DOCUMENTS
Each Party hereto shall make, execute, acknowledge, and deliver such other instruments and documents, and take all such other actions as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby.
H. GOVERNING LAW
This Agreement has been negotiated and executed in the State of California and shall be construed and enforced in accordance with the laws of such state.
I. FORUM
Each of the Parties hereto agrees that any action or suit which may be brought by any party hereto against any other party hereto in connection with this Agreement or the transactions contemplated hereby may be brought only in a federal or state court in Orange County, California.
J. PROFESSIONAL FEES
In the event any Party hereto shall commence legal proceedings against the other to enforce the terms hereof, or to declare rights hereunder, as the result of a breach of any covenant or condition of this Agreement, the prevailing party in any such proceeding shall be entitled to recover from the losing party its costs of suit, including reasonable attorneys' fees, accountants' fees, and experts' fees.
K. BINDING EFFECT AND ASSIGNMENT
This Agreement shall inure to the benefit of and be binding upon the Parties hereto and their respective heirs, executors, administrators, legal representatives, and assigns.
L. COUNTERPARTS; FACSIMILE SIGNATURES
This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The Parties agree that facsimile signatures of this Agreement shall be deemed a valid and binding execution of this Agreement.
This PLAN OF REORGANIZATION AND ACQUISITION is executed on behalf of each Party by its duly authorized representatives, and attested to, pursuant to the laws of its respective place of incorporation and in accordance with its constituent documents.
| THE CHILDREN'S INTERNET, INC., a California corporation | ||
/s/ Sholeh Hamedani | ||
| BY: Sholeh Hamedani | ||
| ITS: President | ||
DWC INSTALLATIONS, INC. a Nevada corporation | ||
/s/ Alan Schram | ||
| BY: Alan Schram | ||
| ITS: President |
