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EXHIBIT 10.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, executed this 7th day of
January, 2000, by and between Enter Tech Corporation, a Nevada corporation
("ETC"), Shopping Mall Online, Inc., a Washington Corporation ("SMI"), and
Robert Pratt a resident of the State of Washington ("Stockholders").
WITNESSETH
WHEREAS, Stockholders are the owner of all of the issued and
outstanding stock of SMI, which consists of One Hundred Thousand (100,000)
shares of common stock, .01 par value in the name of Robert Pratt and,
WHEREAS, ETC desires to acquire eighty (80) percent of the issued and
outstanding stock of SMI from the Stockholders solely in exchange for a certain
number of shares of its own common stock, and,
WHEREAS, Stockholders desires to exchange (80) percent of their shares
of SMI in accordance herewith,
NOW THEREFORE, in consideration of the mutual promises herein contained
and for other good and valuable consideration, the parties hereto agree as
follows:
1. Plan of Reorganization: The parties hereto intend that this
Agreement and Plan of Reorganization shall qualify as a tax free reorganization
and exchange of shares pursuant to applicable provisions of the Internal Revenue
Code of 1954, as amended, and the Rules and Regulations promulgated thereunder.
2. Exchange of Shares Pratt: ETC and the Stockholder Robert Pratt agree
that eighty (80) percent of the One Hundred Thousand (100,000) shares of common
voting stock, .01 Par value shall be transferred to ETC in exchange for the
issuance by ETC to Stockholder of a certain number of shares of ETC's common
voting stock, par value $0.001 per share. The number of ETC shares to be issued
to Stockholder shall be determined by the following:
(a) The value of the Shares being exchanged from the Stockholder
is $2,000,000. The SMI shares to be exchanged shall be delivered to ETC,
properly endorsed for transfer, on the Closing Date as the same is hereinafter
defined.
(b) Also on the closing date, the ETC common shares equal to Two
Million Four Hundred Thousand (2,400,000) shall be delivered to the Stockholder
at the value of one ($1) dollars per share in such denominations, amounts and
names as may be requested by the Stockholder within a reasonable time prior
thereto.
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(c) The common shares being exchanged by ETC will be restricted
shares of common stock and will be restricted under rule 144 for a period of
three years. Should the Company merge with another company and exchange ETC
stock the Stockholder will exchange for free trading shares.
(d) If for any reason the common stock is not trading for one ($1)
dollars bid at the time the restrictive legend is removed, ETC will issue
additional free trading shares to make up the difference in the bid to a one
($1) dollar per share value.
(e) Should for any reason ETC shareholders vote to merge or
exchange its stock with another public company all shares transferred through
this Agreement will be treated with equal rights to any shares of other
restricted common stock being exchanged.
(f) The Voting rights in SMI will remain in the names of the
Stockholders until the restrictive legend is removed from the ETC stock being
transferred for the assets of SMI.
4. Default Provisions: If for any reason ETC should be declared
insolvent, or file bankruptcy protection from the date hereof, through the term
the restrictive legend or the legend has qualified to be removed from the shares
issued to the Stockholders, SMI will have the option at its full discretion to
notify ETC by certified mail of the United States Post Office and demand a full
recision of this Agreement by returning an equal amount of stock to ETC that was
exchanged for the eighty (80) percent of SMI. This right of recision will
automatically cancel any and all shares transferred to ETC from SMI and will
automatically cancel any and all shares transferred to SMI from ETC.
5. Management: The management of SMI will remain the same as currently
employed at the discretion of Robert Pratt Stockholder. A management contract
will be issued along with a full stock option plan to the existing management at
the closing hereof.
6. Representations and Warranties of SMI and the Stockholders: SMI and
the Stockholder hereby represent and warrant as follows:
(a) As of the Closing Date, the Stockholder will be the sole owner
of the SMI shares appearing of record in their name, eighty (80) percent of all
such shares will be free and clear of any and all claims, liens and encumbrances
of any kind whatsoever; and they will have the unqualified right to transfer
such shares to ETC.
(b) The shares of SMI constitute duly and validly issued shares
which are and have been fully paid and are nonassessable.
(c) There exist no substantial or material liabilities, either
fixed or contingent, other than contracts or obligations in the 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 SMI as reflected in such financial
statements.
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(d) The Stockholder and SMI hereby indemnify and hold harmless ETC
against any and all liability, including tax liability, arising out of
differences between the actual financial condition of SMI and that represented
on the financial statements described above.
(e) Since November 1, 1999, there have not been, and prior to the
closing date will not be any material changes in the financial condition of SMI,
except changes arising in the ordinary course of business.
(f) SMI is not involved in any pending litigation or governmental
or regulatory investigation or proceeding, or otherwise disclosed in writing to
ETC, and, to the best knowledge of SMI and the Stockholder, no litigation,
investigation or proceeding is threatened against SMI.
(g) As of the Closing Date, SMI will be in good standing as a
Washington Corporation.
(h) SMI maintains no employment contracts, or material contracts
of any kind, with any person or entity, and has no existing or projected union
contracts or affiliations.
7. Representations and Warranties of ETC: ETC represents and warrants
as follows:
(a) As of the closing date and at the time of delivery, the ETC
shares to be delivered to the Stockholder will constitute the valid and legally
issued shares of ETC, fully paid and nonassessable, and will be legally
equivalent in all respects to the common stock of ETC issued and outstanding as
of the date hereof.
(b) The officers of ETC are duly authorized to execute this
agreement.
(c) ETC's financial statements dated September 30, 1999, is a true
and complete statement, as of that date, of its financial position. There are no
substantial or material liabilities, either fixed or contingent, not reflected
in such financial statement other than contracts or obligations in the 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 ETC as reflected in such financial
statement. ETC would provide to SMI a quarterly financial statement for as long
as the Stockholders hold ETC stock.
(d) Since November 1, 1999, there has been no changes in the
financial position of ETC, except this acquisition that ETC had made.
(e) ETC is not involved in any pending litigation or governmental
or regulatory investigation or proceeding not reflected in such financial
statement or otherwise disclosed in writing to the Stockholders.
(f) As of the closing date, ETC will be in good standing as a
Nevada corporation, and will be duly registered as a foreign corporation
authorized to do business in the State of Colorado.
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(g) The shares of SMI are being acquired by ETC for is own
account, for investment and not with a view towards distribution.
(h) ETC will not under any circumstances encumber, pledge or
hypothesize the assets of SMI in any way for the term that the Stockholders ETC
shares are restricted.
(i) SMI will assign one person at the direction of Robert Pratt to
the board of directors of ETC.
(j) ETC hereby indemnify and hold harmless SMI against any and all
liability, including tax liability, arising out of differences between the
actual financial condition of ETC and that represented on the current financial
statement attached.
8. The Closing and the Closing Date: The closing shall occur at such
location and time in or about Loveland, Colorado as shall be mutually agreeable
to the parties hereto. The closing date shall be January 7, 2000, or such
earlier date as may be mutually agreed upon by the parties, provided all
conditions of the closing have been satisfied by such earlier date.
9. Conditions of Closing: All representations and warranties herein
made or described shall survive the closing. The closing hereof is expressly
made conditional upon the following:
(a) ETC and SMI shall have obtained all necessary approvals of
shareholders and of the respective Boards of Directors of ETC and SMI.
(b) ETC and SMI shall have complied with those provisions of
Colorado law regarding the issuance of shares, and with regard to the transfer
of previously issued shares.
(c) ETC and SMI shall have indicated in writing, each to the
other, that they have examined the financial and legal conditions of the other
party, and that the same is satisfactory as of the closing date hereof.
10. Construction: This agreement has been executed in the State of
Colorado and shall be construed pursuant to the laws thereof.
11. Notices: Any notice which any of the parties hereto may desire to
serve upon any of the other parties hereto shall be in writing and shall be
conclusively deemed to have been received by the party to whom addressed if
mailed, postage prepaid, United States Registered Mail, to the following
Addresses:
ETC Enter Tech Corporation
430 E. 6th St.
Loveland, CO 80537
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Stockholders: Robert Pratt
501 Judson St.
Lynden, WA 98264
SMI Shopping Mall, Inc.
501 Judson St.
Lynden, WA 98264
12. Modification and Assignment: This Agreement may not be amended,
modified or assigned, in whole or in part, except by an instrument in writing
executed by all of the parties hereto.
13. Successors in Interest: This agreement shall be binding upon and
inure to the benefit of the heirs, successors, representatives and assigns of
the parties hereto.
14. Counterparts: This agreement may be executed in multiple
counterparts, each of which shall be deemed a duplicate original.
15. Integrations: This Agreement represents the sole agreement of the
parties with respect to the subject matter hereof, and all other agreements,
written or oral, are hereby revoked.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and date first hereinbefore set forth.
ENTER TECH CORPORATION
By: /s/ Sam Lindsey
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Sam Lindsey, President
SHOPPING MALL, INC.
By: /s/ Robert Pratt
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Robert Pratt, President
STOCKHOLDER
By: /s/ Robert Pratt
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Robert Pratt, Stockholder