MERGER AGREEMENT AND PLAN
OF
REORGANIZATION
Dated as of November 15, 2001
By and Among
World Wide Yacht Deliveries, Inc.
Texxar Corp.
AGREEMENT AND PLAN OF REORGANIZATION.
This Agreement made as of the 15th day of November, 2001, by and among
World wide Yacht Deliveries, Inc., a Delaware Corporation ("World"), and Texxar
Corp., a Delaware corporation ("Texxar" or the "Company").
WHEREAS, World desires to acquire Texxar, and Texxar desires to be acquired
by World, through the merger of Texxar with and into World pursuant to the terms
hereinafter set forth (the "Merger") with World being the surviving corporation;
and
WHEREAS, World and Texxar each intend, for Federal income tax purposes,
that the Merger contemplated thereby constitutes a reorganization pursuant to
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code");
and
WHEREAS, the Board of Directors of World deems it advisable and in the best
interest of World that Texxar be merged with and into World upon the terms and
conditions hereinafter specified; and
WHEREAS, the Board of Directors of Texxar deems it advisable and in the
best interest of Texxar that Texxar be merged with and into World upon the terms
and conditions hereinafter specified; and
WHEREAS, World has an authorized capital stock consisting of 20,000,000
shares of common stock, $.001 par value per share (the "World Common Stock"), of
which 991,400 shares are currently issued and outstanding; and
WHEREAS, Texxar has an authorized capital stock consisting of 200 shares of
common stock, $.001 par value per share (the "Texxar Common Stock"), of which
shares 200 shares are currently issued and outstanding.
NOW, THEREFORE, in consideration of the agreements hereinafter contained,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound, the parties hereto
agree as follows:
ARTICLE I
THE TRANSACTION
1.1 The Merger. At the Effective Time (as defined in Section 8.1), Texxar
shall be merged with and into World. World shall be the Surviving
Corporation to the Merger (the "Surviving Corporation"), and World shall
continue, and be deemed to continue, for all purposes after the Merger.
The existence of Texxar shall cease at the Effective Time as a consequence
of the Merger.
1.2 Stockholder approval. This Agreement shall be submitted to the
stockholders of Texxar and world for approval as soon as practicable after
the execution of this Agreement. "Effective Date").
1.3 Surviving Corporation. Following the Merger, World shall continue to exist
under, and be governed by, the laws of the State of Delaware, and the
Certificate of Incorporation and the By-Laws of World will be the
constituent documents of the Surviving Corporation.
1.4 Directors and Officers. The director and officers of the Surviving
Corporation immediately following the Merger shall be as follows:
Name Positions
-------------- ----------------------------------
Aron Govil President, Chief Executive Officer
and Chairman
Vandana Govil Secretary
Such directors and officers shall continue to hold office until the next
annual meetings of the stockholders and directors of the Surviving Corporation
or until their successors shall have been duly elected and shall have qualified.
1.5 Plan of Merger. The method of effecting the Merger and the basis for
exchanging and converting the outstanding Texxar Common Stock into shares
of Common Stock of World, shall be as follows:
(a) Each issued and outstanding share of Texxar Common Stock shall, at
the Effective Time, by virtue of the Merger and without further
action, be deemed canceled and cease to exist and, upon presentation
for surrender of a certificate representing such share by each
stockholder of Texxar shall be converted into 110,000 shares of
World Common Stock, fully paid, nonassessable, free of all liens and
encumbrances, all of which shall be duly authorized, validly issued
in compliance with all applicable state and federal laws. World
shall issue to Company shareholders the aggregate of 22,000,000
shares of World Common stock (the `World Stock"), such shares
representing 95.7% of the total issued and outstanding shares of
capital stock of World, in the names and denominations as set forth
on Schedule 1.2 hereto. All such issued shares will be deemed
"restricted stock" as that term is defined in the regulations of the
Securities and Exchange Commission, promulgated under the Securities
Act of 1933, as amended.
1.6 Restrictions on Sale. Texxar shareholders represent and warrant that the
World Stock to be acquired by them pursuant to the terms of Section 1.2
hereof is being acquired for their own account, with no intention of
assigning any participation or interest therein, and without a view to the
distribution of any portion thereof, except in accordance with the
Securities Act of 1933, as amended (the "Act"). Texxar shareholders will
not sell, assign, transfer or encumber any of such shares unless (i) a
registration statement under the Act with respect thereto is in effect and
the prospectus included therein meets the requirements of Section 10 of
the Act, or (ii) a no-action letter is obtained from the staff of the
Securities and Exchange Commission (the "Commission") in respect of such
proposed sale, assignment, transfer or encumbering, or (iii) World has
received a written opinion of counsel reasonably satisfactory to it that,
after an investigation of the relevant facts, such counsel is of the
opinion that such proposed sale, assignment, transfer or encumbering does
not require registration under the Act.
Texxar shareholders understand that the World Stock is not being
registered under the Act and must be held indefinitely unless it is
subsequently registered thereunder or an exemption from such registration
is available. Texxar shareholders understand that the World Stock is not
being registered under the Act in part on the ground that the issuance
thereof is exempt under Section 4(2) of the Act as a transaction by an
issuer not involving any public offering; that World's reliance on such
exemption is predicated in part on the foregoing representation and
warranty of such Texxar shareholders and that in the view of the
Securities and Exchange Commission, the statutory basis for the exemption
claimed would not be present if, notwithstanding such representation and
warranty, such Texxar shareholders contemplate acquiring any of the World
Stock for sale upon the occurrence or non-occurrence of some predetermined
event.
1.4 Restrictive Legend. Texxar shareholderss understand that in connection
with the shares issued pursuant to paragraph 1.2, above, World will have
an appropriate stop order placed on its stock records indicating the
existence of the terms of this Agreement, and that the certificates
representing the World common Stock shall bear a legend in substantially
the following form:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE SOLD, TRANSFERRED OR
ENCUMBERED ONLY PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO A NO-ACTION LETTER FROM
THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION OR PURSUANT TO AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
UNNECESSARY.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrant to World the following, each of which
shall be deemed material (and World, in executing, delivering and consummating
this Agreement, has relied and will rely upon the correctness and completeness
of each of such representations and warranties):
2.1 Valid Corporate Existence; Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware. The Company has the corporate power to carry on its
business as now conducted and to own its assets. The Company is not
qualified to conduct business in any other jurisdiction, there being no
jurisdiction in which failure to qualify would have a material adverse
effect on the Company, and its assets, properties or business, and there
has not been any claim by any other jurisdiction to the effect that the
Company is required to qualify or otherwise be authorized to do business
as a foreign corporation therein. A copy of the Company's Certificate of
Incorporation (certified by the appropriate official of the State of
Delaware) and By-Laws (certified by the Company's Secretary), as amended
to date, which will be delivered to World at or prior to the Closing, if
requested, are true and complete copies of those documents as now in
effect. The minute books of the Company contain accurate records of all
meetings of its Board of Directors, and stockholders since its
incorporation, and accurately reflect all transactions referred to
therein.
2.2 Capitalization. The authorized capital stock of the Company consists of
200 shares of Common Stock, .001 par value of which 200 shares of Common
Stock are issued and outstanding. All of such shares of Common Stock are
duly authorized and validly issued and outstanding, fully paid and
nonassessable. There are no subscriptions, options, warrants, rights or
calls or other commitments or agreements to which the Company is a party
or by which it is bound, calling for the issuance, transfer, sale or other
disposition of any class of securities of the Company There are no
outstanding securities of the Company convertible or exchangeable,
actually or contingently, into shares of Common Stock or any other
securities of the Company
2.3 Subsidiaries. The Company has no subsidiaries.
2.4 Consents. There are no consents of governmental and other regulatory
agencies, foreign or domestic, and of other parties required to be
received by or on the part of the Company, to enable them to enter into
and carry out this Agreement in all material respects.
2.5 Corporate Authority; Binding Nature of Agreement; Title to the Company
Stock, etc. The Company have the power to enter into this Agreement and to
carry out its, his or her obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
the Company and no other corporate proceedings on the part of the Company
are necessary to authorize the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby. This
Agreement constitutes the valid and binding obligation of each of the
Company and and is enforceable in accordance with its terms. Texxar
shareholders individually represent and warrant to World that he or she
is, and at the Closing will be the sole record and beneficial owners of
the respective shares of the Company Stock held by them, free and clear of
all liens, charges, encumbrances and claims. Texxar shareholders further
represent and warrant to World that he or she has, and at the Closing will
have, good and marketable title to his shares of the Company Stock and
subject to pertinent federal and state rules and regulations, pertaining
to the sale of unregistered securities, the absolute and unqualified right
to sell, transfer and deliver the Company Stock to World. The delivery of
the Company Stock to World at the Closing pursuant to the provisions of
this Agreement will transfer valid title thereto, free and clear of all
manner of liens, pledges, encumbrances, charges and claims.
2.6 Financial Statements, etc. The audited balance sheet for the twelve months
ended March 31, 1999, and Unaudited Balance sheet dated March 31, 2000 of
the Company, copies of which have been delivered to World, fairly present
the financial position of the Company as of said date, and, except as set
forth therein, were prepared in conformity with generally accepted
accounting principles consistently applied throughout the period covered
thereby.
2.7 Liabilities. As at March 31, 2000 (the "the Company Balance Sheet Date")
and as of the date hereof, the Company had no material debts, liabilities
or obligations, contingent or absolute, other than those debts,
liabilities and obligations reflected or reserved against in the Company's
Balance Sheet at the Company Balance Sheet Date, except those arising in
the ordinary and usual course of its business.
2.8 Actions Since the Company Balance Sheet Date. Except as otherwise
expressly provided or set forth in, or required by, this Agreement, since
the Company Balance Sheet Date, the Company has not: (i) issued or sold,
or agreed to issue or sell any of its capital stock or options, warrants,
rights or calls to purchase such stock, any securities convertible or
exchangeable into such capital stock or other corporate securities, or
effected any subdivision or other recapitalization affecting its capital
stock; (ii) incurred any material obligation or liability, absolute or
contingent, except those arising in the ordinary and usual course of its
business; (iii) discharged or satisfied any lien or encumbrance, except in
the ordinary and usual course of business, or paid or satisfied any
liability, absolute or contingent, other than liabilities as at the
Company Balance Sheet Date and current liabilities incurred since the
Company Balance Sheet Date in the ordinary and usual course of business;
(iv) made any wage or salary increases or granted any bonuses other than
wage and salary increases and bonuses granted in accordance with its
normal salary increase and bonus policies; (v) mortgaged, pledged or
subjected to any lien, pledge, charge or other encumbrance any of its
properties or assets, or permitted any of its property or assets to be
subjected to any lien or other encumbrance, except in the ordinary and
usual course of business; (vi) sold, assigned or transferred any of its
properties or assets, except in the ordinary and usual course of business;
(vii) entered into any transaction or course of conduct not in the
ordinary and usual course of business; (viii) waived any rights of
substantial value, or canceled, modified or waived any indebtedness for
borrowed money held by it, except in the ordinary and usual course of
business; (ix) declared, paid or set aside any dividends or other
distributions or payments on its capital stock, or redeemed or
repurchased, or agreed to redeem or repurchase, any shares of its capital
stock; (x) made any loans or advances to any person, or assumed,
guaranteed, endorsed or otherwise became responsible for the obligations
of any person; or (xi) incurred any indebtedness for borrowed money
(except for endorsement, for collection or deposit of negotiable
instruments received in the ordinary and usual course of business).
2.9 Adverse Developments. Since the Company Balance Sheet Date, there have
been no material adverse changes in the assets, properties, operations or
financial condition of the Company, and no event has occurred other than
in the ordinary and usual course of business which could be reasonably
expected to have a materially adverse effect upon the business of the
Company and Texxar shareholderss, after reasonable inquiry, do not know of
any development of a nature that is, or which could be reasonably expected
to have a materially adverse effect upon the respective business of the
Company or upon any of its assets, properties, operations or financial
condition, including, without limitation, the loss of any licenses or
permits, suppliers, customers or employees, which loss would be of a
materially adverse nature.
2.10 Taxes. A true and complete copy of the Federal income tax return on Form
1120 for the Company as filed with the Internal Revenue Service for the
fiscal year ending December 31, 2000, will be delivered to World if
requested. Said return was prepared in conformity with information
contained in the books and records of the Company and contains no untrue
statement of a material fact or omits to state any fact required to make
any such return not materially misleading. All taxes, including, without
limitation, income, property, sales, use, franchise, capital stock,
excise, added value, employees' income withholding, social security and
unemployment taxes imposed by the United States, any state or any foreign
country, or by any other taxing authority, which have or may become due or
payable by the Company and all interest and penalties thereon, whether
disputed or not, have been paid in full or adequately provided for by
reserves shown in its books of account; all deposits required by law to be
made by the Company or with respect to estimated income, franchise and
employees' withholding taxes have been duly made; and all tax returns,
including estimated tax returns, required to be filed have been duly
filed. No extension of time for the assessment of deficiencies for any
year is in effect. No deficiency is proposed or to the knowledge of the
Company and Texxar shareholderss, after reasonable inquiry, threatened
against the Company Except as set forth in Exhibit 2.10, the federal and
state income tax returns of the Company have not been audited.
2.11 Ownership of Assets; Trademarks, etc. Schedule 2.11 is a true and complete
list of all of all of the United States and foreign material patents,
patents pending, patent applications, trademarks, tradenames, service
marks and rights (the "Intellectual Property") used by Texxar in the
conduct of its business. Except as set forth in Exhibit 2.11, the Company
owns outright, and has good and marketable title to all of its assets,
properties and businesses (including all assets reflected in the Company
Balance Sheets, except as the same may have been disposed of in the
ordinary course of business since the Company Balance Sheet Date), free
and clear of all liens, mortgages, pledges, conditional sales agreements,
restrictions on transfer or other encumbrances or changes.
2.12 Insurance. Schedule 2.12 sets forth a list and brief description of all
polices of fire, liability and other forms of insurance held by the
Company. Such polices are valid, outstanding and enforceable policies, as
to which premiums have been paid currently, are with reputable insurers
believed by the Company, after reasonable inquiry, to be financially sound
and are consistent with the practices of similar concerns engaged in
substantially similar operations as are those currently conducted by the
Company. The Company, after reasonable inquiry, does not knows of any
state of acts, or the occurrence of any event which might reasonably (i)
form the basis for any claim against the Company not fully covered by
insurance for liability on account of any express or implied warranty or
tortious omission or commission, or (ii) result in material increase in
insurance premiums of the Company.
2.13 Litigation; Compliance with Law. There are no actions, suits, proceedings
or governmental investigations relating to the Company or its properties,
assets or business pending or, to the knowledge of the Company and after
reasonable inquiry, threatened, or any order, injunction, award or decree
outstanding, against the Company or against or relating to its properties,
assets or business; and neither the Company, nor after reasonable inquiry,
knows of any basis for any such actions, suits or proceedings within the
past two (2) years or any such governmental investigations, orders,
injunctions or decrees at any time in the past. To the best of the
Company's knowledge, as it relates to compliance with laws, it is not in
violation of any law, regulation, ordinance, order, injunction, decree,
award, or other requirement of any governmental body, court or arbitrator
relating to its properties, assets or business, the violation of which
would have a material adverse effect on the Company.
2.14 Real Property. Schedule 2.14 sets forth a list of all real property owned
by the Company. Except as set forth in Schedule 2.14, the Company has good
and marketable title in said property, free and clear of any lien.
2.15 Agreements and Obligations; Performance. Schedule 2.15 sets forth a list
of agreements to which the Company is a party. (the "Listed Agreements").
Other than the Listed Agreements, the Company is not party to, or bound by
any: (i) written or oral agreement or other contractual commitment,
understanding or obligation which involved aggregate payments or receipts
in excess of $25,000 (except for open purchase and sales orders in the
ordinary course of business); (ii) contract, arrangement, commitment or
understanding which involves aggregate payments or receipts in excess of
$25,000 that cannot be canceled on thirty (30) days or less notice without
penalty or premium or any continuing obligation or liability (except for
open purchase and sales orders in the ordinary course of business); (iii)
contractual obligation or contractual liability of any kind to; (iv)
contract, arrangement, commitment or understanding with its customers or
any officer, employee, stockholder, director, representative or agent
thereof for the repurchase of products, sharing of fees, the rebating of
charges to such customers, bribes, kickbacks from such customers or other
similar arrangements; (v) contract for the purchase or sale of any
materials, products or supplies which contain, or which commits or will
commit it for a fixed term; (vi) contract of employment with any officer
or employee not terminable at will without penalty or premium or any
continuing obligation or liability; (vii) deferred compensation, bonus or
incentive plan or agreement not cancelable at will without penalty or
premium or any continuing obligation or liability; (viii) management or
consulting agreement not terminable at will without penalty or premium or
any continuing obligation or liability; (ix) lease for real or personal
property (including borrowings thereon), license or royalty agreement; (x)
union or other collective bargaining agreement; (xi) agreement, commitment
or understanding relating to indebtedness for borrowed money; (xii)
contract which, by its terms, requires the consent of any party thereto to
the consummation of the transactions contemplated hereby; (xiii) contract
containing covenants limiting the freedom of the Company to engage or
compete in any line or business or with any person in any geographical
area; (xiv) contract or option relating to the acquisition or sale of any
business; (xv) voting trust agreement or similar stockholders' agreement;
(xvi) option for the purchase of any asset, tangible or intangible; or
(xvii) other contract, agreement, commitment or understanding which
materially affects any of its properties, assets or business, whether
directly or indirectly, or which was entered into other than in the
ordinary course of business. A true and correct copy of each of the
written Listed Agreements has been delivered to World. The Company has in
all material respects performed all obligations required to be performed
by it to date under all of the Listed Agreements, is not in default in any
material respect under any of the Listed Agreements and has received no
notice of any default or alleged default thereunder which has not
heretofore been cured or which notice has not heretofore been withdrawn.
Neither the Company, after reasonable inquiry, knows of any material
default under any of the Listed Agreements by any other party thereto or
by any other person, firm or corporation bound thereunder.
2.16 Condition of Assets. Except for normal breakdowns and servicing
requirements, all machinery and equipment regularly used by the Company in
the conduct of its business are in good operating condition and repair,
ordinary wear and tear excepted.
2.17 Accounts Receivable. To the knowledge of the Company and, after reasonable
inquiry, all of the accounts receivable reflected in the books of account
of the Company in the ordinary course of its business (net of reserves for
bad debts, if any) are from the sale of services or goods, and neither the
Company after reasonable inquiry, knows or has reason to know, of any
valid defense or right of set-off to the rights of the Company to collect
such accounts receivable in the full amounts shown on such books of
account. The inventories of the Company are and will be substantially in
usable and saleable condition.
2.18 Permits and Licenses. The Company and the, to the best of their knowledge,
believe that the Company has all permits, licenses, orders and approvals
of all federal, state, local and foreign governmental or regulatory bodies
required of it to carry on its business as presently conducted; all such
other permits, licenses, orders, franchises and approvals are in full
force and effect, and, after reasonable inquiry, no suspension or
cancellation of any of such other permits, licenses, etc. is threatened;
and the Company is in compliance in all material respects with all
requirements, standards and procedures of the federal, state, local and
foreign governmental bodies which have issued such permits, licenses,
orders, franchises and approvals.
2.19 Banking Arrangements. Schedule 2.19 sets forth the name of each bank in or
with which the Company has an account, credit line or safety deposit box,
and a brief description of each such account, credit line or safety
deposit box, including the names of all persons currently authorized to
draw thereon or having access thereto; and the names of all persons, if
any, now holding powers of attorney from the Company and a summary
statement of the terms thereof.
2.20 Interest in Assets. Neither nor any affiliate thereof owns any property or
rights, tangible or intangible, used in or related, directly or
indirectly, to the business of the Company
2.21 Salary Information. Schedule 2.21 contains a list of the names and current
salary rates of and bonus commitments to all present officers of the
Company, and the names and current annual salary rates of all other
persons employed by the Company whose annual salaries exceed $50,000.
2.22 Employee Benefit Plans. the Company does not maintain or make any employer
contributions under any "pension" or "welfare" benefit plans, as such term
is defined by the Employee Retirement Income Security Act of 1974, as
amended.
2.23 No Breach. Neither the execution and delivery of this Agreement nor
compliance by the Company with any of the provisions hereof, nor the
consummation of the transactions contemplated hereby, will:
(a) violate or conflict with any provision of the Certificate of
Incorporation or By-laws of the Company;
(b) violate or, alone or with notice or the passage of time, result in
the material breach or termination of, or otherwise give any
contracting party the right to terminate, or declare a default
under, the terms of any agreement or other document or undertaking,
oral or written to which the Company or any of is a party or by
which any of them or any of their respective properties or assets
may be bound (except for such violations, conflicts, breaches or
defaults as to which required waivers or consents by other parties
have been, or will, prior to the Closing, be obtained);
(c) result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company
pursuant to the terms of any such agreement or instrument;
(d) violate any judgement, order, injunction, decree or award against,
or binding upon, the Company, or upon their respective properties or
assets; or
(e) violate any law or regulation of any jurisdiction relating to the
Company, its securities, assets or properties.
2.24 Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on directly with World and by the
Company and Texxar shareholders, without the intervention of any broker,
finder, investment banker or other third party. The Company has not
engaged, consented to, or authorized any broker, finder, investment banker
or other third party to act on its behalf, directly or indirectly, as a
broker or finder in connection with the transactions contemplated by this
Agreement, and the Company and agree to indemnify World against, and to
hold it harmless from any claim for brokerage or similar commissions or
other compensation which may be made against World by any third party in
connection with any of the transactions contemplated hereby which claim is
based upon any action by the Company.
2.25 Untrue or Omitted Facts. No representation, warranty or statement by the
Company in this Agreement contains any untrue statement of a material
fact, or omits or will omit to state a fact necessary in order to make
such representations, warranties or statements not materially misleading.
Without limitation of the foregoing, there is no fact known to the
Company, after reasonable inquiry, that has had, or which may be
reasonably expected to have, a materially adverse effect on the Company or
any of its assets, properties, operations or businesses that has not been
disclosed in writing to World.
ARTICLE III
REPRESENTATION AND WARRANTIES OF WORLD
World makes the following representations and warranties to the Company
and, each of which shall be deemed material (and the Company and Texxar
shareholders, in executing, delivering and consummating this Agreement, have
relied and will rely upon the correctness and completeness of each of such
representations and warranties):
3.1 Valid Corporate Existence; Qualification. World is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. World has the corporate power to carry on its business
as now conducted and to own its assets. World is not qualified to conduct
business as a foreign corporation in any jurisdiction, there being no
jurisdiction in which failure to qualify would have a material adverse
effect on World and its assets, properties or business, and there has not
been any claim by any jurisdiction to the effect World is required to
qualify or otherwise be authorized to do business as a foreign corporation
therein. The copies of the Certificate of Incorporation (as certified by
the Secretary of the State of Delaware) and By-Laws (as certified by the
Secretary of World, as the case may be) of World, as amended to date,
which will be delivered to World at or prior to the Closing, if requested,
are true and complete copies of those documents as now in effect.
3.2 Consents. No consents of governmental and other regulatory agencies,
foreign or domestic, and of other third parties is required to be received
by or on the part of World to enable it to enter into and carry out this
Agreement in all material respects. World has full corporate power and
authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby. The delivery of this Agreement and the consummation of the
transaction contemplated hereby have been duly and validly approved by the
Board of Directors of World. No other corporate proceedings on the part of
World are necessary to approve this Agreement. Neither the execution and
delivery of this Agreement will violate any provision of the Certificate
of Incorporation or Bylaws of World, or violate any statue, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to World.
3.3 Capitalization. The authorized capital stock of World consists of
20,000,000 shares of Common Stock, no par value, of which 991,400 shares
of Common Stock are issued and outstanding. The schedule 1.5 hereof sets
forth the shareholders names, addresses and the number of shares owned by
each shareholder. All of such shares of Common Stock are duly authorized
and validly issued and outstanding, fully paid and nonassessable. . They
are free of all liens and encumbrances and were issued in compliance with
all applicable state and federal laws concerning the issuance of
securities. There are no subscriptions, options, warrants, rights or calls
or other commitments or agreements to which World is a party or by which
it is bound, calling for the issuance, transfer, sale or other disposition
of any class of securities of World. There are no outstanding securities
of World convertible or exchangeable, actually or contingently, into
shares of Common Stock or any other securities of World. World has not
declared, authorized, paid or promised to pay any dividends or made any
distribution upon or with respect to any class of its capital stock.
3.4 Corporate Authority; Binding Nature of Agreement; etc. World has the
corporate power to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of World prior to the Closing. No
other corporate proceedings on the part of World are necessary to
authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement
constitutes the valid and binding obligation of each of World and is
enforceable in accordance with its terms.
3.5 Taxes. A true and complete copy of the Federal income tax return on Form
1120 for the World as filed with the Internal Revenue Service for the
latest fiscal year ended , will be delivered to Seller. Said return was
prepared in conformity with information contained in the books and records
of the Company and contains no untrue statement of a material fact or
omits to state any fact required to make any such return not materially
misleading. All taxes, including, without limitation, income, property,
sales, use, franchise, capital stock, excise, added value, employees'
income withholding, social security and unemployment taxes imposed by the
United States, any state or any foreign country, or by any other taxing
authority, which have or may become due or payable by the World and all
interest and penalties thereon, whether disputed or not, have been paid in
full or adequately provided for by reserves shown in its books of account;
all deposits required by law to be made by the Company or with respect to
estimated income, franchise and employees' withholding taxes have been
duly made; and all tax returns, including estimated tax returns, required
to be filed have been duly filed. No extension of time for the assessment
of deficiencies for any year is in effect. No deficiency is proposed or to
the knowledge of the Company and Sellers, after reasonable inquiry,
threatened against the World Except as set forth in Exhibit 3.10, the
federal and state income tax returns of the Company have not been audited.
3.6 Agreements. There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees ro
which World is a party or to its knowledge by which it is bound which may
involve obligations (contingent or otherwise) of any payments of any kind.
There are no obligations of World to its officers, directors,
stockholders, present or past employees, or agents of any salaries for
services rendered, payroll taxes, benefits, reimbursement of expenses
incurred on behalf of World.
3.7 No Breach. Neither the execution and delivery of this Agreement nor
compliance by World with any of the provisions hereof nor the consummation
of the transactions contemplated hereby, will:
(a) violate or conflict with any provision of the Articles of
Incorporation or By-laws of World;
(b) violate or, alone or with notice or the passage of time, result in
the material breach or termination of, or otherwise give any
contracting party the right to terminate, or declare a default
under, the terms of any agreement or other document or undertaking,
oral or written to which World or any of World stockholders is a
party or by which any of them or any of their respective properties
or assets may be bound (except for such violations, conflicts,
breaches or defaults as to which required waivers or consents by
other parties have been, or will, prior to the Closing, be
obtained);
(c) result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of World pursuant
to the terms of any such agreement or instrument;
(d) violate any judgement, order, injunction, decree or award against,
or binding upon, World or upon their respective properties or
assets; or
(e) violate any law or regulation of any jurisdiction relating to World,
its securities, assets or properties.
3.8 Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on directly by World with the
Company and Texxar shareholders, without the intervention of any broker,
finder, investment banker or other third party. World has not engaged,
consented to, or authorized any broker, finder, investment banker or other
third party to act on its behalf, directly or indirectly, as a broker or
finder in connection with the merger and the transactions contemplated by
this Agreement, and World agrees to indemnify and to hold harmless the
Company from and against any claim for brokerage or similar commission or
other compensation which may be made against the Company by any third
party in connection with any of the transactions contemplated hereby,
which claim is based upon any action by World.
3.9 Untrue or Omitted Facts. To the knowledge of World, after reasonable
inquiry, no representation, warranty or statement by World in this
Agreement or in any filings made with the United States Securities and
Exchange Commission contains any untrue statement of a material fact, or
omits or will omit to state a fact necessary in order to make such
representations, warranties or statements not materially misleading.
Nothing has come to the attention of World that would indicate that any
filings with the SEC were not timely made as of their respective filing
dates. Without limitation of the foregoing, there is no fact known to
World, after reasonable inquiry, that has occurred since World's last
filing with the SEC that had, or which may be reasonably expected to have,
a materially adverse effect on World or any of its assets, properties,
operations or businesses and that has not been disclosed in writing to the
Company. Neither this Agreement, nor any other document, certificate or
written statement prepared by World and furnished to Sellers in connection
herewith, contain any untrue statement of material fact or omits to state
a material fact known to World necessary in order to make the statements
contained herein and therein not misleading as of the date thereof or
hereof. There is no fact known to World which adversely affects the
business or financial condition or operation of World which has not been
set forth in this Agreement.
ARTICLE IV
POST CLOSING EVENTS
4.1 World and the Shareholders hereby agree that on the closing of this
transaction, (i) the existing directors and officers of the World shall
all resign at closing, (ii) the directors and officers of Texxar shall
become the directors and officers of the World until their respective
successors are duly elected or appointed and qualified, (iii) Aron Govil,
current President, Chief Executive Officer and Chairman of Texxar shall be
the President, Chief Executive Officer and Chairman of the World until
such time as a annual meeting of the shareholders of World can be held,
and (iv) World will change its name to Texxar.
4.2 Piggyback Registration Rights. Annexed as Schedule 4.2 is a list of
certain current shareholders of World. If at any time or from time to time
following the closing of this Agreement as set forth below, World shall
determine to register any of its securities, either for its own account or
the account of a security holder or holders other than a registration
relating solely to employee benefit plans, or a registration relating
solely to employee benefit plans, then World shall:
(1) Promptly give written notice of such proposed Registration to all of
the shareholders listed on Schedule 4.2, which shall offer such
holders the right to request inclusion of any of the shares held by
said shareholders in the proposed Registration.;
(2) Each of the shareholders listed on Schedule 4.2 shall have ten (10)
days or such longer period as shall be set forth in the notice from
the receipt of the notice to deliver to World a written request
specifying the number of shares each such shareholder intends to
sell;
(3) If the registration of which the World gives notice is for a
registered public offering involving an underwriting, World shall so
advise each shareholder listed on Schedule 4.2 as a part of the
written notice given pursuant to Section 4.2(b). In such event, the
right of the shareholder to registration pursuant to this Agreement
shall be conditioned upon such shareholder's participation in such
underwriting and the inclusion of their securities on the same terms
and conditions as the shares of common stock, if any, otherwise
being sold through underwriters under such registration.
4.3 Demand Registration Rights. If the shareholders listed on Schedule 4.2
have not been offered the opportunity to have their shares registered
pursuant to paragraph 4.2, above, within six (6) months of the closing of
this Agreement, then World, if requested by such shareholders listed on
Schedule 4.2 as represent a majority of the shares listed on said schedule
to effect the registration of said shares, shall promptly give written
notice of such proposed Registration to all of the shareholders listed on
Schedule 4.2, and thereupon World shall promptly use its best efforts to
effect the Registration of the shares listed on Schedule 4.2 on SEC Form
S-1, Form SB-1, Form S-2, Form SB-2 or Form S-3, whichever is applicable,
provided, however, that:
(a) World shall not be required to file and cause to become effective
more that one Registration Statement pursuant to this provision;
(b) World may include in such Registration requested pursuant to this
provision, any authorized but unissued shares of World common stock
for sale by World, or any issued and outstanding shares of World
common stock for sale by others, provided that the inclusion of any
of these shares shall not effect the ability of the shareholders
listed on Schedule 4.2 from registering the entire amount of their
shares.
4.4 Registration Procedures. In the case of each registration pursuant to
paragraphs 4.2 and 4.3 above, World will:
(a) Prepare and file with the Securities and Exchange Commission a
registration statement with respect to such securities on Form S-1,
Form SB-1, Form S-2, Form SB-2 or Form S-3, whichever is applicable,
and use its best efforts to cause such registration statement to
become and remain effective for at least one hundred eighty (180)
days or until the distribution described in the registration
statement has been completed.
(b) Furnish to the shareholders listed on Schedule 4.2 participating in
such registration and to the underwriters of the securities being
registered such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such other
documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities;
(c) Use its best efforts to register and qualify the securities covered
by the registration statement under such other securities or Blue
Sky laws of such jurisdictions as shall be reasonably requested by
the shareholders listed on Schedule 4.2 participating in such
registration, provided that World shall not be required in
connection therewith or as a condition thereto to qualify to do
business or to file a general consent to services of process in any
such states or jurisdictions;
(d) In the event of any underwritten public offering, enter into and
perform all its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter of such
offering. Each shareholders listed on Schedule 4.2 participating in
such underwriting shall also enter into and perform its obligations
under such an agreement.
4.5 Expenses. All expenses incurred in connection with World's performance of
or compliance with the terms of paragraphs 4.2, 4.3 and 4.4 of this
Agreement shall be borne by World.
ARTICLE V
PRE-CLOSING COVENANTS
5.1 The Company Covenants. The Company, hereby covenants that, from and after
the date hereof and until the Closing or earlier termination of this
Agreement (the "Pre-Closing Period"):
(a) Access. The Company shall afford to the officers, attorneys,
accountants and other authorized representatives of World free and
full access, during regular business hours and upon reasonable
notice, to all of its books, records, personnel and properties so
that World, at its own expense, may have full opportunity to make
such review, examination and investigation as World may desire of
the Company's business and affairs. The Company will cause its
employees, accountants and attorneys to cooperate fully with said
review, examination and investigation and to make full disclosure to
World of all material facts affecting its financial condition and
business operations.
(b) Liabilities. The Company shall not incur any obligation or
liability, absolute or contingent, except for those incurred in the
ordinary and usual course of its business.
(c) Preservation of Business. The Company will use its best efforts to
preserve its business organization intact, to keep available the
services of its present officers, employees and consultants and to
preserve its good will.
(d) No Breach. The Company will (i) use its best efforts to assure that
all of its representations and warranties contained herein are true
in all material respects as of the closing as if repeated at and as
of such time, and that no material breach or default shall occur
with respect to any of its covenants, representations or warranties
contained herein that has not been cured by the Closing; (ii) not
voluntarily take any action or do anything which will cause a breach
of or default respecting such covenants, representations or
warranties; and (iii) promptly notify World of any event or fact
which represents or is likely to cause such a breach or default.
(e) No Negotiations. For so long as this Agreement shall remain in
effect, neither the Company nor any of its officers or directors nor
any of their respective affiliates, employees, agents or
representatives shall enter into or conduct negotiations, or enter
into any agreement or understanding, for the sale or possible sale
of any of the Company's securities or business or all or
substantially all of its assets with anyone other than World.
5.2 World Covenants. World, hereby covenants that, during the Pre-Closing
Period:
(a) Access. World shall afford to the officers, attorneys, accountants
and other authorized representatives of the Company free and full
access, during regular business hours and upon reasonable notice, to
all of its books, records, personnel and properties so that any of
such persons, at their own expense, may have full opportunity to
make such review, examination and investigation as any of them may
desire of the business and affairs of World. World will cause its
employees, accountants and attorneys to cooperate fully with said
review, examination and investigation and to make full disclosure to
each of the Company and Texxar shareholders of all material facts
affecting their respective financial conditions and business
operations.
(b) Conduct of Business. World shall conduct its business only in the
ordinary and usual course and make no material change in any of its
business practices and policies without the prior written consent of
the Company, which shall not be unreasonably withheld or delayed.
(c) No Breach. World will (i) use its best efforts to assure that all of
its representations and warranties contained herein are true in all
material respects as of the closing as if repeated at and as of such
time, and that no material breach or default shall occur with
respect to any of its covenants, representations or warranties
contained herein that has not been cured by the Closing; (ii) not
voluntarily take any action or do anything which will cause a breach
of or default respecting such covenants, representations or
warranties; and (iii) promptly notify World of any event or fact
which represents or is likely to cause such a breach or default.
5.3 Legal Fees. The Company, Texxar shareholders and World shall each bear
their own costs and expenses if this transaction is abandoned at any time.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATION
OF WORLD TO CLOSE
The obligation of World to enter into and complete the Closing is subject
to the fulfillment, prior to or on the Closing Date, of each of the following
conditions, any one or more of which may be waived by World (except when the
fulfillment of such condition is a requirement of law).
6.1 Representations and Warranties. All representations and warranties of the
Company contained in this Agreement and in any written statement (except
financial statements), exhibit, certificate, schedule or other document
delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be true and correct in all material respects as
at the Closing Date, as if made at the Closing and as of the Closing Date.
6.2 Covenants. The Company shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to
be performed or complied with by each of them prior to or at the Closing.
6.3 No Actions. No action, suit, proceeding or investigation shall have been
instituted, and be continuing before a court or before or by a
governmental body or agency, or shall have been threatened and be
unresolved, to restrain or to prevent or to obtain damages in respect of,
the carrying out of the transactions contemplated hereby, or which might
materially affect the right of World to own the Company Stock or to
operate or control the assets, properties and business of the Company
after the Closing Date, or which might have a materially adverse effect
thereon.
6.4 Consents; Licenses and Permits. The Company, World, shall have each
obtained all consents, licenses and permits of third parties necessary for
the performance by each of them of all of their respective obligations
under this Agreement.
6.5 Certificate. World shall have received a certificate dated the Closing
Date, signed by the President and Secretary of the Company as to the
satisfaction of the conditions contained in Sections 6.1 and 6.2.
6.6 Additional Documents. The Company and World shall have delivered all such
other certificates and documents as World or its counsel may have
reasonably requested, including a certificate of the secretary of World
certifying resolutions of the Board of Directors and majority stockholders
authorizing the execution, delivery and performance of this Agreement..
6.7 Approval of Counsel. All actions, proceedings, instruments and documents
required to carry out this Agreement, or incidental thereto, and all other
related legal matters shall have been approved as to the form and
substance by counsel to World, which approval shall not be unreasonably
withheld or delayed.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE COMPANY AND TEXXAR SHAREHOLDERSS TO CLOSE
The obligation of the Company to enter into and complete the Closing is
subject to the fulfillment, prior to or on the closing Date, of each of the
following conditions, any one or more of which may be waived by the Company
(except when the fulfillment of such condition is a requirement of law).
7.1 Representations and Warranties. All representations and warranties of
World and contained in this Agreement and in any written statement,
schedule or other document delivered pursuant hereto or in connection with
the transactions contemplated hereby shall be true and correct in all
material respects as at the Closing Date, as if made at the Closing and as
of the Closing Date.
7.2 Covenants. World shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to
be performed or complied with by each of them prior to or at the Closing.
7.3 No Actions. No action, suit, proceeding, or investigation shall have been
instituted, and be continuing, before a court or before or by a
governmental body or agency, or have been threatened, and be unresolved,
by any governmental body or agency to restrain or prevent, or obtain
damages in respect of, the carrying out of the transactions contemplated
hereby.
7.4 Certificate. the Company and shall have received a certificate dated the
Closing Date, signed by the President and Secretary of World as to the
satisfaction of the conditions contained in Sections 7.1 and 7.2.
7.5 Additional Documents. World shall have delivered all such certified
resolutions, certificates and documents with respect to World as the
Company, Texxar shareholders or their counsel may have reasonably
requested, including a certificate of the secretary of the Company
certifying resolutions of the Board of Directors authorizing the
execution, delivery and performance of this Agreement.
7.6 Approval of Counsel. All actions, proceedings, instruments and documents
required to carry out this Agreement or incidental thereto, and all other
related legal matters, shall have been approved as to form and substance
by counsel to the Company, which approval shall not be unreasonably
withheld or delayed.
ARTICLE VIII
CLOSING
8.1 Location. The Closing provided for herein shall take place at the offices
of NexGen Ventures, 53 West 36th Street, New York, New York 10016, at
10:00 a.m. on November 1, 2001, or at such other time and place as may be
mutually agreed to by the parties hereto. Such date is referred to in this
Agreement as the "Closing Date."
8.2 Items to be Delivered by the Company. At the Closing, the Company will
deliver or cause to be delivered to World:
(a) Certificates representing the Company Stock in accordance with
Section 1.1 hereof, accompanied by all instruments and documents as
in the opinion of World's counsel shall be necessary to effect the
transfer of and to vest title in and to the Company Stock in World,
free and clear of all liens, pledges, encumbrances, charges and
claims thereon;
(b) The certificates required by Section 7.5; and
(c) Such other certified resolutions, documents and certificates as are
required to be delivered by the Company and Texxar shareholders
pursuant to the provisions of the Agreement.
8.3 Items to be Delivered by World. At the Closing, World will deliver or
cause to be delivered to Texxar shareholders such certified resolutions,
documents and stock certificates as are required to be delivered by World
pursuant to the provisions of this Agreement.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS
9.1 Survival. The parties hereto agree that their respective representations,
warranties, covenants and agreements contained in this Agreement,
including the rights provided for in Article IV, shall survive the Closing
for a term of twenty-four (24) months with the exception of those
regarding taxes set forth in Sections 2.10 and 3.10 which shall survive
until the expiration of the respective periods within which such taxes may
be assessed.
9.2 Rights Without Prejudice. The rights of the parties under this Article IX
are without prejudice to any other rights or remedies that it may have by
reason of this Agreement or as otherwise provided by law.
ARTICLE X
TERMINATION AND WAIVER
10.1 Termination. Anything herein or elsewhere to the contrary notwithstanding,
this Agreement may be terminated and the transactions provided for herein
abandoned at any time prior to the Closing Date:
(a) By mutual consent of the Board of Directors of World and the
Company;
(b) By World if any of the conditions set forth in Article VI hereof
shall not have been fulfilled on or prior to January 31, 2002, or
shall become incapable of fulfillment, and shall not have been
waived;
(c) By the Company or the Shareholders if any of the conditions set
forth in Article VII hereof shall not have been fulfilled on or
prior to January 31, 2002, or shall become incapable of fulfillment,
and shall not have been waived.
In the event that this Agreement is terminated as described above, this
Agreement shall be void and of no force and effect, without any liability or
obligation on the part of any of the parties hereto.
10.2 Waiver. Any condition to the performance of the Company, or World, which
legally may be waived on or prior to the Closing Date, may be waived at
any time by the party entitled to the benefit thereof by action taken or
authorized by an instrument in writing executed by the relevant party or
parties. The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the right of
such party as a later time to enforce the same. No waiver by any party of
the breach of any term, covenant, representation or warranty contained in
this Agreement as a condition to such party's obligations hereunder shall
release or affect any liability resulting from such breach, and no waiver
of any nature, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be or construed as a further or continuing
waiver of any such condition or of any breach of any other term, covenant,
representation or warranty of this Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 Expenses. Each of the parties hereto shall bear his or its own expenses in
connection herewith.
11.2 Confidential Information. Each party agrees that such party and its
representatives will hold in strict confidence all information and
documents received from the other parties and, if the transactions herein
contemplated shall not be consummated, each party will continue to hold
such information and documents in strict confidence and will return to
such other parties all such documents (including the exhibits attached to
this Agreement) then in such receiving party's possession without
retaining copies thereof; provided, however, that each party's obligations
under the Section 11.2 to maintain such confidentiality shall not apply to
any information or documents that are in the public domain at the time
furnished by the others or that become in the public domain thereafter
through any means other than as a result of any act of the receiving party
or of its agents, officers, directors or stockholders which constitutes a
breach of this Agreement, or that are required by applicable law to be
disclosed. The parties agree that the remedy at law for any breach of this
Section 11.2 will be inadequate and a non-breaching party will be entitled
to injunctive relief to compel the breaching party to perform or refrain
from action required or prohibited hereunder.
11.3 Modification, Termination or Waiver. This Agreement may be amended,
modified, superseded or terminated, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived, but only
by a written instrument executed by the party waiving compliance. The
failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right of such party at a
later time to enforce the same.
11.4 Publicity. The parties agree that no publicity, release or other public
announcement concerning the transactions contemplated by this Agreement
shall be issued by either party without the advance approval of both the
form and substance of the same by the other party and its counsel, which
approval, in the case of any publicity, release or other public
announcement required by applicable law, shall not be unreasonably
withheld or delayed.
11.5 Notices. Any notice or other communication required or which may be given
hereunder shall be in writing and either be delivered personally or be
mailed, certified or registered mail, postage prepaid, and shall be deemed
given when so delivered personally, or if mailed, two days after the date
of mailing, as follows:
If to World, to:
53 West 36 Street
Suite 606
New York, New York 10018
and if to the Company and/or the Shareholders, to:
Texxar, Inc.
19 Engineers Lane
Farmingdale, NY 11735
The parties may change the persons and addresses to which the notices or
other communications are to be sent by giving written notice of any such change
in the manner provided herein for giving notice.
11.6 Binding Effect and Assignment. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties hereto;
provided, however, that no assignment of any rights or delegation of any
obligations provided for herein may be made by any party without the
express written consent of the other parties.
11.7 Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof.
11.8 Exhibits. All exhibits annexed hereto and the documents and instruments
referred to herein or required to be delivered simultaneously herewith or
at the Closing are expressly made a part of this Agreement as fully as
though completely set forth herein, and all references to this Agreement
herein or in any of such exhibits, documents, or instruments shall be
deemed to refer to and include all such exhibits, documents and
instruments.
11.9 Governing Law. This Agreement shall be governed by, and construed in
accordance with the laws of the State of New York applicable to agreements
made and to be performed entirely within that State, excluding the choice
of law rules thereof.
11.10 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but which together shall
constitute one and the same instrument.
11.11 Section Headings. The section headings contained in this Agreement are
inserted for conveniences of reference only and shall not affect the
meaning or interpretation of this Agreement.
WITNESS the execution of this Agreement as of the date first above written.
WORLD WIDE YACHT DELIVERIES , INC.
By: /s/Guy Cohen
TEXXAR CORP.
By: /s/ Aron Govil