AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") dated as of October 19, 2007,
between Tree Top Industries, Inc., a Nevada corporation ("Buyer"), and the
stockholders whose names are listed on Schedule A annexed hereto, all of the
stockholders (each individually a "Stockholder" and collectively the
"Stockholders") of Ludicrous, Inc., a Nevada corporation ("Company").
The Stockholders own an aggregate of 68,000,000 shares of voting common stock,
$.001 par value, of the Company, constituting all of the issued and outstanding
capital stock of the Company (the "Shares"). The Buyer desires to acquire all of
the Shares for voting common stock, par value $.001 per share, of the Buyer, in
an exchange that qualifies under Sections 354 and 368 of the Internal Revenue
Code of 1954, as amended.
This Agreement is being entered into for the purpose of implementing the
foregoing desires and sets forth the terms and conditions pursuant to which the
Stockholders are selling to the Buyer, and the Buyer is purchasing from the
Stockholders solely in exchange for voting common shares of the Buyer, all of
the issued and outstanding Shares of the Company.
In consideration of the mutual agreement contained herein, the parties agree as
follows:
I. SALE OF THE SHARES
1.01. SHARES BEING EXCHANGED. Subject to the terms and conditions of
this Agreement, at the Closing provided for in Section 2.01 hereof (the
"Closing"), being held simultaneously with the execution of this Agreement, each
Stockholder is selling, assigning and delivering to the Buyer the number of
Shares set forth in the column marked "Company Shares Owned" on Schedule A,
opposite the name of such Stockholder.
1.02. CONSIDERATION. Subject to the terms and conditions of this
Agreement, the Buyer is delivering at the Closing in full payment for the
aforesaid sale, assignment and delivery of the Shares, an aggregate of Sixty
Eight Million (68,000,000) Common Shares of the Buyer, par value $.001 per share
(the "Buyer's Shares"), each Stockholder receiving the number of Buyer's Shares
set forth opposite the name of such Stockholder in the column marked "Buyer's
Shares Allocated" on Schedule A.
II. CLOSING
2.01. TIME AND PLACE. The Closing of the transaction contemplated by
this Agreement is taking place at the offices of the Seller within 5 business
days after the execution of this Agreement, or at such other time and place as
determined by the mutual agreement of the Company and the Buyer.
2.02. DELIVERIES BY THE STOCKHOLDERS. At the Closing, the Stockholders
are delivering to the Buyer (unless previously delivered) the following:
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ACQUISITION AND REORGANIZATION PLAN PAGE 1 OF 10
2.02(a). Certificates representing the Shares, duly endorsed or
accompanied by stock powers duly executed in blank and otherwise in form
acceptable for transfer on the books of the Company.
2.02(b). The stock books, stock ledgers, minute books and corporate
seal of the Company (all other books and records of the Company being located in
the Company's corporate premises).
2.02(c). Certificate from appropriate authorities as to the good
standing of and payment of taxes by the Company.
2.02(d). The investment letters referred to in Section 8.01 hereof.
2.02(e). All other previously undelivered items required to be
delivered by the Stockholders to the Buyer at or prior to the Closing.
2.03. DELIVERIES BY THE BUYER. At the Closing, the Buyer is delivering
(unless previously delivered) the following:
2.03(a). To the Stockholders, (i) certificates representing 68,000,000
Buyer's Shares, in accordance with Section 1.02 hereof, and (ii) all other
previously undelivered items required to be delivered by the Buyer to the
Stockholders at or prior to Closing.
III. RELATED TRANSACTIONS
3.01. There are no other related transactions.
IV. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
The Stockholders hereby represent and warrant jointly and severally
(except that in the case of Sections 4.01 and 4.02 hereof the representations
and warranties contained therein are made severally by the Stockholders) to the
Buyer as follows:
4.01. TITLE TO THE SHARES. Each Stockholder owns, and is transferring
to the Buyer at the Closing, good, valid, and marketable title to the number of
Shares set forth opposite the name of such Stockholder in Section 1.01 hereof,
free and clear of all liens, claims, options, charges and encumbrances
whatsoever.
4.02. VALID AND BINDING AGREEMENTS. As to each Stockholder, this
Agreement constitutes the valid and binding agreement of such Stockholder,
enforceable in accordance with its terms.
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ACQUISITION AND REORGANIZATION PLAN PAGE 2 OF 10
4.03. ORGANIZATION OF THE COMPANY.
4.03(a). The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada and has the corporate
power and authority to carry on business as presently conducted.
4.03(b). The copies of the Articles of Incorporation, and all
amendments thereto, of the Company, as certified by the Secretary of State of
Nevada and of the By-Laws, as amended to date, of the Company, as certified by
its Secretary, which have heretofore been delivered to the Buyer, are complete
and correct copies of the Articles of Incorporation and By-Laws of the Company
as amended and in effect on the date hereof. All Minutes of the Company are
contained in minute books of the Company heretofore furnished to the Buyer for
examination and being delivered to the Buyer at the Closing, and no minutes have
been included in such minute books since such examination by the Buyer that have
not also been furnished to the Buyer.
4.03(c). The Company is licensed or qualified to do business as a
foreign corporation in any jurisdiction in which it is required to be so
licensed or qualified.
4.04. CAPITALIZATION OF THE COMPANY.
4.04(a). The authorized capital stock of the Company consists solely of
500,000,000 shares of common stock, $.001 par value, of which 68,000,000 shares
are outstanding and 432,000,000 shares are held as treasury shares. All issued
shares of the Company are duly authorized, validly issued and outstanding, fully
paid, and non-assessable.
4.04(b). Except for the Shares, there are no shares of capital stock or
other securities of the Company outstanding; there are no options, warrants or
rights to purchase or acquire any securities of the Company.
4.05. SUBSIDIARIES AND AFFILIATES. Except for the securities identified
on the Balance Sheet (as defined in Section 4.08 hereof), the Company does not
own any capital stock or other securities of any corporation and has no direct
or indirect interest, and since its incorporation has had no such interest, in
any business other than the business presently directly conducted by it.
4.06. NO VIOLATION OF AGREEMENTS. Neither the execution nor delivery of
the Agreement, nor the consummation of the transactions contemplated hereby
violates or will violate, or conflicts with or will conflict with, or
constitutes a default under or will constitute a default under any documents
relating to the Company.
4.07. FINANCIAL STATEMENTS.
4.07(a). The Stockholders will deliver to the Buyer balance sheets
("Balance Sheets") of the Company as of September 30, 2007, and all of such
statements will be audited by Buyer's auditors and a Consolidated Financial
Statement prepared to file with the SEC.
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ACQUISITION AND REORGANIZATION PLAN PAGE 3 OF 10
4.07(b). The Company hereby agrees to furnish to Buyer year-end AUDITED
financial statements of the Company when completed by its auditors. The Company
hereby agrees to use an auditor selected or approved by the Buyer for such
statements. These year-end statements are due within forty-five (45) days
following the end of the fiscal year. The format of such reports will be
specified by the Buyer at the time of closing and may be subsequently changed by
the Buyer, from time to time, by giving the Company thirty (30) days notice of
such change.
4.07(c). The Company hereby agrees to furnish to Buyer quarterly
financial statements of the Company. These quarterly statements are due within
thirty (30) days following the end of a fiscal quarter. No quarterly financial
statement need be provided for the last quarter of the fiscal year. The format
of such reports will be specified by the Buyer at the time of closing and may be
subsequently changed by the Buyer, from time to time, by giving the Company
thirty (30) days notice of such change. The Company further agrees to provide
monthly updates to these financial statements. These monthly updates may be in
written, typed or printed form and will be provided within fifteen (15) days
following the end of the month. No monthly financial update need be provided for
the last month in a fiscal quarter. The Stockholders agree that the Company will
pay to the Buyer, in an amount and on a periodic basis to be determined in the
sole discretion of the Buyer, for as long as the Company is a subsidiary of the
Buyer, management fees and cost reimbursements for Buyer's general management
assistance to the Company, including but not limited to its assistance in
facilitating financial and other reports by the Company, and its compliance with
applicable securities laws, rules and regulations.
4.08. NO UNDISCLOSED LIABILITIES. Except as set forth on the Balance
Sheets, neither the Company or its Stockholders know of any basis for the
assertion of liabilities or against the Company not reflected on the Balance
Sheets.
4.09. ABSENCE OF CERTAIN CHANGES. Subject to the most recent Balance
Sheets, there have been no material adverse changes in the financial condition
of the Company.
4.10. TAX RETURNS. The Company has duly filed all tax reports and
returns required to be filed by it and has duly paid all taxes and other charges
due or claimed to be due from it by federal, state or local taxing authorities.
4.11. TITLE TO PROPERTIES. Except as otherwise reflected on the Balance
Sheet, the Company has good, valid and marketable title to all its properties
and assets, real, personal, and mixed, tangible and intangible, including,
without limitation, the properties and assets reflected in the Balance Sheet.
4.12. FIXED ASSETS. Schedule 1 lists the fixed assets of the Company.
Furthermore, the Company warrants all such property to be in good condition or
sound working order with no known defects. Furthermore, neither the Company nor
any Stockholder has received any notification that there is any violation of any
building, zoning, or other law, ordinance or regulation in respect of such
property and to the best of their knowledge, no such violation exists.
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ACQUISITION AND REORGANIZATION PLAN PAGE 4 OF 10
4.13. LEASES. Schedule 2 lists any and all leases the Company is a
party thereto. The Company asserts each said lease is valid, binding and
enforceable in accordance with its terms, and is in full force and effect.
4.14. PATENTS, TRADEMARKS, TRADE NAMES, ETC. Schedule 3 lists any and
all patents, trademarks, trade names, etc. owned by, under license to or used by
the Company.
4.15. LITIGATION. The Company has no actions, proceedings, or
investigations pending or, to the best knowledge and belief of the Company and
the Stockholders, threatened by or against the Company.
4.16. INSURANCE. The policies of fire, liability, workmen's
compensation and product liability are in effect with respect to the Company and
its operations. Schedule 4 lists all insurance policies currently in effect,
including amounts, carriers, local agents, etc.
4.17. BANK ACCOUNTS. The Company bank account(s) are listed in Schedule
5 including bank, bank branch, account number(s) and current balance(s).
4.18. CONTRACTS AND COMMITMENTS. Except as specifically identified in
the Balance Sheet, the Company has no contracts, commitments, arrangements or
understandings that are material to its business, operations, financial
condition or prospects, other than the lease(s) identified in 4.13 above.
4.19. CUSTOMERS AND SUPPLIERS. At the Closing, the Stockholders are
delivering to the Buyer a list of the names and addresses of the Company's three
largest customers and suppliers that accounted for more than ten percent (10%)
of the Company's sales or purchases, respectively, during the past two (2) month
period. The Company has not lost any customer or supplier whose name appears on
such list.
4.20. COMPLIANCE WITH APPLICABLE LAW. The Company has duly complied, in
respect of its operations, real property, machinery and equipment, all other
property, practices, and all other aspects of its business, with all applicable
laws (whether statutory or otherwise), rules, regulations, ordinances,
judgments, and decrees of all governmental authorities (federal, state, local or
other laws), including, but not limited to, the Federal Occupational Safety and
Health Act and all Laws relating to environmental protection and conservation.
Neither the Company nor any Stockholder has received any notification of any
asserted present or past failure to comply.
4.21. DISCLOSURE. All facts material to all assets, business,
operations, financial condition, and prospects of the Company are reflected in
the Balance Sheet, or have been disclosed herein, or have been disclosed to the
Buyer in writing. No representation or warranty by the Stockholders contained in
this Agreement and no statement contained in any certificate, schedule, list or
other writing furnished to the Buyer pursuant to the provisions hereof, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein not misleading.
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ACQUISITION AND REORGANIZATION PLAN PAGE 5 OF 10
V. REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants as follows:
5.01. ORGANIZATION OF THE BUYER. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Nevada and
has the corporate power and authority to carry on its business as presently
conducted and to enter into and perform this Agreement.
5.02. AUTHORIZATION. The execution and delivery of this Agreement by
the Buyer and the consummation by the Buyer of the transactions contemplated
hereby have been duly authorized by the Buyer's Board of Directors or Executive
Committee, no approval thereof by the Buyer's stockholders being required by
law, and the Buyer is delivering at the Closing a complete and correct copy,
certified by its Secretary or Assistant Secretary, of the relevant resolutions
adopted at the meeting or meetings at which such authorization took place.
5.03. VALID AND BINDING AGREEMENT. This Agreement constitutes a valid
and binding agreement of the Buyer, enforceable in accordance with its terms.
5.04. NO VIOLATION. Neither the execution and delivery of this
Agreement nor the consummation by the Buyer of the transactions contemplated
hereby violates or conflicts with the certificate of incorporation or by-laws of
the Buyer or any agreement or other restriction of any kind to which the Buyer
is a party or by which it is bound.
5.05. NO PREEMPTIVE RIGHTS. The stockholders of the Buyer are not by
virtue of their ownership of the Buyer's common shares entitled to any
preemptive rights or subscription privileges with respect to the Buyer's Shares
to be issued hereunder.
5.06. AVAILABILITY OF REPORTS. The Buyer has made available to each
Stockholder its Annual Report (10K) for the fiscal year ending December 31, 2006
and its Quarterly Reports (10Q) for the fiscal quarters ending March 31, 2007
and June 30, 2007.
5.07. VALIDITY OF THE BUYER'S SHARES. All of the Buyer's Shares being
delivered hereunder are duly authorized, validly issued, and outstanding, fully
paid and nonassessable, and are eligible (subject to official notice of issuance
and compliance with Rule 144 of the Securities Act of 1933, as amended) for
trading on the OTC Bulletin Board.
VI. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; SET-OFF
6.01. SURVIVAL OF REPRESENTATIONS. All representations, warranties, and
agreements made by any party in this Agreement or pursuant hereto shall survive
the Closing hereunder and any investigation at any time made by or on behalf of
any party hereto.
6.02. STATEMENTS AS REPRESENTATIONS. All statements contained in any
certificate, schedule, list, document, or other writing delivered pursuant
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ACQUISITION AND REORGANIZATION PLAN PAGE 6 OF 10
hereto or in connection with the transactions contemplated hereby shall be
deemed representations and warranties within the meaning of Section 6.01 hereof.
VII. PROVISIONS REGARDING BUYER'S SHARES
7.01. REPRESENTATIONS BY THE STOCKHOLDERS. Each Stockholder represents
and warrants to the Buyer that it is his present intention to acquire the
Buyer's Shares for investment and not with a view to the distribution or resale
thereof, and is confirming such intention to the Buyer by letter simultaneously
with the execution hereof.
7.02. AGREEMENTS BY THE STOCKHOLDERS. Each Stockholder agrees that he
will not offer, sell, transfer, assign, mortgage, pledge or otherwise dispose of
or encumber any of the Buyer's Shares delivered to him pursuant to this
Agreement (a) if such action would prevent the Buyer from accounting for the
acquisition of the Shares as a "pooling of interests" and (b) unless (i) in the
opinion of counsel to the Buyer or in the opinion of the Division of Corporate
Finance (the "Division") of the Securities and Exchange Commission (the
"Commission") expressed in a "no-action" letter (which letter and the request
therefor shall be in form and substance satisfactory to counsel for the Buyer)
registration of such shares under the Act, and the rules and regulations of the
Commission thereunder, as then in effect, is not required in connection with
such transaction; (ii) sale of the Buyer's Shares is permissible under Rule 144
of the Commission under the Act, in which event the Stockholder shall furnish
the Buyer with an opinion of counsel (which counsel shall be reasonably
satisfactory to counsel for the Buyer and which opinion shall be in form and
substance reasonably satisfactory to the Buyer) the effect that the sale of the
Buyer's Shares proposed to be sold is permissible under Rule 144, provided that
the Buyer agrees to make such representations as may be reasonably requested by
such counsel and that the Buyer can then accurately make concerning the Buyer's
qualifications under Rule 144(c); or (iii) a registration statement under the
Act is then in effect with respect to such shares and the purchaser or
transferee has been furnished with a prospectus meeting the requirements of
Section 10 of the Act.
7.03. LEGEND, ETC. Each Stockholder agrees that the Buyer may endorse
on any certificate for the Buyer's Shares to be delivered to or on behalf of the
Stockholder pursuant to this Agreement an appropriate legend referring to the
provisions of Sections 8.01 and 8.02 hereof, and that the Buyer may instruct its
transfer agents not to transfer any such shares unless advised by the Buyer that
such provisions have been complied with.
7.04. VOTING TRUST. Each Stockholder acknowledges and agrees that a
person designated by the Buyer in writing prior to the Closing will have voting
power over, and the right to vote, all of the Shares owned by the Stockholder on
any matter for which there is a shareholder vote or consent by the Buyer, for a
period of two years after the Closing or until the Shares owned by the
Stockholder are sold in accordance with Rule 144 of the Act, whichever occurs
first.
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ACQUISITION AND REORGANIZATION PLAN PAGE 7 OF 10
VIII. MISCELLANEOUS
8.01. FURTHER ASSURANCES. From time to time, at the Buyer's request and
without further consideration, each Stockholder will execute and deliver to the
Buyer such documents and take such action as the Buyer may reasonably request in
order to consummate more effectively the transactions contemplated hereby and to
vest in the Buyer good, valid and marketable title to the Shares.
8.02. PARTIES IN INTEREST. Except as otherwise expressly provided
herein, all the terms and provisions of this agreement shall be binding upon,
shall inure to the benefit of, and shall be enforceable by the respective heirs,
beneficiaries, personal and legal representatives, successors, and assigns of
the parties hereto.
8.03. ENTIRE AGREEMENT. This Agreement, including the exhibits,
schedules, lists and other documents and writings referred to herein or
delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to this subject matter.
8.04. HEADINGS, ETC. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretations of this Agreement.
8.05. NOTICE. All notice, request, demands and other communications
hereunder ("Notices") shall be in writing and shall be deemed to have been duly
given if delivered or mailed (registered or certified mail, postage prepaid,
return receipt requested) as follows:
If to the Stockholders of the Company:
To the address(es) set forth on Schedule A.
If to the Buyer:
Tree Top Industries, Inc. (TTII)
c/o Richardson & Associates
233 Wilshire Boulevard, Suite 820
Santa Monica, California 90401
or such other address(es) as any party may have furnished to the others in
writing in accordance herewith, except that Notices of change of address(es)
shall only be effective upon receipt. All Notices shall be deemed received on
the date of delivery or, if mailed, on the date appearing on the return receipt
therefore.
8.06. COUNTERPARTS. This agreement may be executed simultaneously in
several counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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ACQUISITION AND REORGANIZATION PLAN PAGE 8 OF 10
8.07. This Agreement shall be governed by and construed pursuant to the
laws of the State of Nevada.
8.08. James Black and Mike Davis will be appointed as CTO and COO of
the Buyer, respectively, and the Company will appoint two (2) directors to the
Buyer Board of Directors at time of Closing. The Buyer will appoint two (2)
directors to the Company Board of Directors at the time of Closing.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the attached list of Stockholders of the Company (Schedule A) and by a duly
authorized officer of the Buyer and Company on the date first written.
For the Buyer: For the Company:
TREE TOP INDUSTRIES, INC. LUDICROUS, INC.
By: /s/ David I. Reichman By: /s/ Trisha Woods
- ------------------------------------- --------------------------------
David I. Reichman, CEO Trisha Woods, President
Stockholders
/s/ Joe Davis /s/ C.B. Davis
- ------------------------------ --------------------------------
Joe Davis C.B. Davis
/s/ W.L. Davis /s/ M.R. Davis
- ------------------------------ --------------------------------
W.L. Davis M.R. Davis
/s/ Justine Reichman /s/ Steven Hoefflin IRA
- ------------------------------ RBC Dain Rauscher Custodian
Justine Reichman --------------------------------
Steven Hoefflin IRA
RBC Dain Rauscher Custodian
/s/ L.G. Davis /s/ Steven M. Hoefflin Trust
- ------------------------------ UA Dated 8/20/1980
L.G. Davis --------------------------------
Steven M. Hoefflin Trust
UA Dated 8/20/1980
/s/ James Black /s/ Paul Brownstein
- ------------------------------ --------------------------------
James Black Paul Brownstein Trust
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ACQUISITION AND REORGANIZATION PLAN PAGE 9 OF 10
Stockholders (cont'd)
/s/ Trisha Woods /s/ Russ Regan & Kent Jacobs, JT
- ------------------------------ --------------------------------
Trisha Woods Russ Regan & Kent Jacobs, JT
/s/ Jeff Frost /s/ David Alvarado
- ------------------------------ --------------------------------
Jeff Frost David Alvarado
/s/ S.M. Davis /s/ Elijah Black
- ------------------------------ --------------------------------
S.M. Davis Elijah Black
/s/ H.D. Davis /s/ Heaven L. Needham
- ------------------------------ --------------------------------
H.D. Davis Heaven L. Needham
/s/ Clive Davis /s/ Rudy Durand
- ------------------------------ --------------------------------
Clive Davis Rudy Durand
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