PLAN OF MERGER FOR
AGTSPORTS, INC. AND AGTSPORTS, INC.
THIS PLAN OF MERGER ("Plan") is entered into on August 29, 2003 by
AGTSports, Inc. ("Acquired Corporation"), a corporation incorporated under the
laws of Colorado and AGTSports, Inc. ("Surviving Corporation"), a corporation
incorporated under the laws of Nevada.
ARTICLE 1
PLAN OF MERGER
ADOPTION OF PLAN
1.01. A plan of merger of Acquired Corporation and Surviving Corporation
under the provisions of Article 7-111-104 of the Colorado Corporations and
Associations Statute, Nevada Revised Statutes Section NRS 92A.110 and Section
368(a)(1)(A) of the Internal Revenue Code is adopted as follows:
(a) On the effective date of the merger as set forth in Article 1.02 of the
Plan of Merger, Acquired Corporation will be merged into Surviving Corporation,
to do business and be governed by the laws of Nevada.
(b) Surviving Corporation's name will be: AGTSports, Inc.
(c) When this Plan becomes effective, the existence of Acquired Corporation
as a distinct entity will cease. At that time, Surviving Corporation will
succeed to all the rights, title, and interests to all property owned by
Acquired Corporation, without reversion or impairment, without any further act,
and without any transfer or assignment having occurred, but subject to any
existing liens or other encumbrances on the property. Surviving Corporation also
will be subject to all the debts and obligations of Acquired Corporation as the
primary obligor, except as otherwise provided by law or contract, and only
Surviving Corporation will be liable for the debt or obligation.
(d) Surviving Corporation will carry on business with the assets of the
parties to the merger, as these corporations existed immediately prior to the
merger.
(e) The shareholders of Acquired Corporation will surrender all of their
shares or other securities in the manner set forth in this Plan.
(f) In exchange for the shares of Acquired Corporation surrendered by its
shareholders, Surviving Corporation will issue and transfer to those
shareholders, on the basis set forth in this Plan, shares of its common stock or
other securities.
(g) Prior to the Plan, Surviving Corporation is a wholly owned subsidiary
of Acquired Corporation.
EFFECTIVE DATE
1.02. The effective date of the merger ("Effective Date"), will be the
date when a certificate of merger is issued by the secretary of state of Nevada.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
ACQUIRED CORPORATION
2.01. As a material inducement to Surviving Corporation to execute this
Plan and perform its obligations under this Plan, Acquired Corporation
represents and warrants to Surviving Corporation as follows:
(a) Acquired Corporation is a corporation duly organized, validly existing,
and in good standing under the laws of Colorado, with corporate power and
authority to own, lease, and operate property and carry on its business as it is
now being conducted. A copy of the certificate of incorporation and the bylaws
of Acquired Corporation, including all amendments, effective as of the date of
this Plan, have been delivered to Surviving Corporation, and are complete and
correct.
(b) Acquired Corporation has an authorized capitalization of 55,000,000
shares, consisting on the date of this Plan of 50,000,000 shares of common
stock, $.001 par value per share, of which 49,848,919 shares are validly issued,
outstanding, and fully paid, and 5,000,000 shares of preferred stock, $.001 par
value per share, of which 1,998,395 shares have been issued.
(c) Acquired Corporation has furnished Surviving Corporation with Acquired
Corporation's audited balance sheet as of September 30, 2002 and the related
audited statement of income for the year ended September 30, 2002 as well as the
unaudited financial statements for the three and six months ending March 31,
2003. The financial statements referred to in this subparagraph (c):
(i) Are in accordance with the books and records of Acquired
Corporation;
(ii) Fairly represent the financial condition of the Acquired
Corporation as of the described dates and the results of its operations as
of and for the periods specified; and
(iii) Contain and reflect, (A) reserves for all liabilities, and costs
in excess of expected receipts and (B) all discounts and refunds in respect
of service and products already rendered or sold that are reasonably
anticipated and based on events or circumstances in existence or likely to
occur in the future with respect to any of Acquired Corporation's contracts
or commitments.
(iv) Specifically, but not by way of limitation, the Balance Sheet all
of the debts, liabilities, and obligations of any nature, whether absolute,
accrued, or contingent, of Acquired Corporation at the Balance Sheet Date,
including appropriate reserves for all taxes due at such date but not yet
payable.
(d) All required federal, state, and local tax returns of Acquired
Corporation have been accurately prepared and timely filed, and Acquired
Corporation has paid all federal, state, and local taxes required to be paid
with respect to the periods covered by such returns. Acquired Corporation has
not been delinquent in the payment of any tax, assessment, or governmental
charge. Acquired Corporation has never had any tax deficiency proposed or
assessed against it. Neither the federal income tax returns nor state franchise
tax returns of the Acquired Corporation have ever been audited by governmental
authorities.
(e) Acquired Corporation has the following securities outstanding:
49,848,919 shares of common stock and 1,998,395 shares of convertible preferred
stock, of which 1,498,395 Series 2000A shares can be converted to common stock.
500,000 shares of Series 2003A preferred stock are not convertible.
(f) Since the Balance Sheet Date, there has not been any material adverse
change in the financial condition, business, and assets or other properties of
the Acquired Corporation that alters or impairs its ability to conduct its
business, including labor difficulties, market conditions, or any other event of
any character.
(g) To its knowledge, no actions, suits, or other legal proceedings are
pending or threatened against Acquired Corporation before or by any federal,
state, or municipal court, department, board, bureau, or agency.
SURVIVING CORPORATION
2.02. As a material inducement to Acquired Corporation to execute and
perform its obligations under this plan, Surviving Corporation represents and
warrants to Acquired Corporation as follows:
(a) Surviving Corporation is a corporation duly organized, validly
existing, and in good standing under the laws of Nevada, with corporate power
and authority to own property and carry on its business as it is now being
conducted.
(b) Surviving Corporation has an authorized capitalization on the date of
this Plan of 55,000,000 shares, consisting on the date of this Plan of
50,000,000 shares of common stock, $.001 par value per share, of which one share
is validly issued, outstanding, and fully paid, and 5,000,000 shares of
preferred stock, $.001 par value per share, of which no shares have been issued.
As of the date of this Plan, one share of the common stock is validly
issued and outstanding, fully paid, and nonassessable.
SECURITIES LAW
2.03. The parties to the merger warrant to arrange mutually for and manage
all necessary procedures under the requirements of federal, Nevada and Colorado
securities laws and the related supervisory commissions to ensure that this Plan
is properly processed to comply with all federal and state registration
requirements, or to take full advantage of any lawful and applicable exemptions
from registration.
ARTICLE 3
TERMS, CONDITIONS, AND PROCEDURES PRIOR TO EFFECTIVE DATE
NO SUBMISSION TO SHAREHOLDERS AND FILING
3.01. This Plan was approved by the majority shareholders of the Acquired
Corporation, and no shareholder approval was required by the Surviving
Corporation.
CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRED CORPORATION
3.02. Except as expressly waived in writing by Acquired Corporation, all
of the obligations of Acquired Corporation are subject to Surviving
Corporation's satisfaction of each of the following conditions on or before the
Effective Date:
(a) The representations and warranties made by Surviving Corporation to
Acquired Corporation in Article 2 of this Plan will be deemed to have been
repeated on the Effective Date and will on that date be true and correct in all
material respects. If Surviving Corporation discovers any material error,
misstatement, or omission in those representations and warranties on or before
the Effective Date, it must report that discovery immediately to Acquired
Corporation and must either correct the error, misstatement, or omission or
obtain a written waiver from Acquired Corporation.
(b) Surviving Corporation must have performed and complied with all
applicable covenants and conditions required by this Plan on or before the
Effective Date.
(c) Surviving Corporation must have performed and complied with all
applicable agreements and conditions in this Plan prior to or on the Effective
Date.
(d) No action or proceeding by any governmental body or agency must have
been threatened, asserted, or instituted to restrain or prohibit the carrying
out of the transactions contemplated by this Plan.
(f) All corporate and other proceedings and actions taken in connection
with the transactions contemplated and all certificates, opinions, agreements,
instruments, and documents must be satisfactory in form and substance to counsel
for the Acquired Corporation.
CONDITIONS PRECEDENT TO OBLIGATIONS OF SURVIVING CORPORATION
3.03. Except as waived in writing by Surviving Corporation, all of the
obligations of Surviving Corporation under this Plan are subject to fulfillment
of each of the following conditions on or before the Effective Date,:
(a) The representations and warranties of Acquired Corporation in this Plan
and in any document delivered under this Plan are deemed to have been repeated
in full on the Effective Date and must on that date be true and correct in all
material respects. If Acquired Corporation discovers any material error,
misstatement, or omission in those representations and warranties on or before
the Effective Date, it must report that discovery immediately to Surviving
Corporation and must either correct the error, misstatement, or omission or
obtain a written waiver from Surviving Corporation.
(b) Acquired Corporation must have performed and complied with all
applicable covenants and conditions in this Plan on or before the Effective
Date.
(c) No action or proceeding by any governmental body or agency will have
been threatened, asserted, or instituted to restrain or prohibit the completion
of the transactions contemplated by this Plan.
INTERIM CONDUCT OF BUSINESS; LIMITATIONS
3.04. (a) Except as limited by this paragraph 3.04, pending consummation
of the merger, each of the parties to the merger will carry on its business in
substantially the same manner as prior to the date of this Plan and will use its
best efforts to maintain its business organization intact, to retain its present
employees, and to maintain its good will in relationships with suppliers and
others transacting business with the entity.
(b) Except with the prior consent in writing of Surviving Corporation,
pending consummation of the merger, Acquired Corporation will not enter into any
transaction other than those involved in carrying on its ordinary course of
business.
EXPENSES
3.05. (a) If the merger set forth in this Plan is consummated, Surviving
Corporation will pay all costs and expenses of the merger.
(b) If the merger set forth in this Plan is not consummated, each party to
this Plan will pay its own costs and expenses incident to the contemplated
merger.
ARTICLE 4
MANNER AND BASIS OF CONVERTING SHARES
MANNER OF CONVERTING SHARES
4.01. The holders of shares of Acquired Corporation may surrender their
securities voluntarily to the Company's transfer agent, Corporate Stock
Transfer, Inc. promptly after the Effective Date, in exchange for securities of
Surviving Corporation to which they are entitled under this Article 4.
BASIS OF CONVERTING SHARES
4.02. (a) The shareholders of Acquired Corporation will be entitled to
receive one (1) share of common stock of Surviving Corporation, each of $.001
par value, to be distributed on the basis of one (1) share for each share of
common stock of Acquired Corporation, and Series 2000A preferred shareholders
shall receive one (1) share of preferred stock of Surviving Corporation, each of
$.001 par value to be distributed on the basis of one (1) share of preferred
stock for each share of Series 2000A preferred stock of Acquired Corporation and
Series 2003A preferred shareholders shall receive one (1) share of preferred
stock for each share of Series 2003A preferred of Acquired Corporation.
CAPITAL STRUCTURE OF SURVIVING CORPORATION
4.03. (a) There is currently one outstanding share of common stock of
Surviving Corporation.
(b) After the Effective Date, Surviving Corporation will have a total of
55,000,000 shares of authorized stock, which are divided into 50,000,000 shares
of common stock which are of a par value of $.001 per share and 5,000,000 shares
of preferred stock which are of a par value of $.001 per share. After the
Effective Date, Surviving Corporation will have 49,848,920 shares of common
stock issued and outstanding and 1,998,395 shares of preferred stock issued and
outstanding.
ARTICLE 5
DIRECTORS AND OFFICERS
DIRECTORS AND OFFICERS OF SURVIVING CORPORATION
5.01. The present board of directors of Acquired Corporation will serve as
the board of directors of Surviving Corporation until the next annual meeting or
until their successors have been elected and qualified.
5.02. All persons who on the Effective Date are executive or administrative
officers of Acquired Corporation will become officers of Surviving Corporation
until its board of directors determines otherwise. Surviving Corporation's board
of directors may elect or appoint additional officers as it deems necessary.
ARTICLE 6
ARTICLES OF INCORPORATION AND BYLAWS
ARTICLES OF INCORPORATION OF SURVIVING CORPORATION
6.01. (a) Article Four of Surviving Corporation's articles of
incorporation, is amended to read as follows: The aggregate number of shares
which the corporation shall have the authority to issue is Fifty-Five Million
(55,000,000), of which Fifty Million 50,000,000 shall be common stock of $.001
par value, and Five Million (5,000,000) shall be preferred stock of $.001 par
value. No shareholder shall have a preemptive right to acquire any shares or
securities of any class whether now or hereafter authorized, which may at any
time be issued, sold or offered for sale by the corporation.
Shares of Preferred Stock of the Corporation may be issued from time to
time in one or more series, each of which shall have such distinctive
designation or title as shall be determined by the Board of Directors of the
Corporation prior to the issuance of any shares thereof. Preferred Stock shall
have such voting powers, full or limited, or no voting powers, and such
preferences and relative, participating, optional or other special rights and
such qualifications, limitations or restrictions thereof, as shall be stated in
such resolution or resolutions providing for the issue of such class or series
of Preferred Stock as may be adopted from time to time by the Board of Directors
prior to the issuance of any shares thereof. The number of authorized shares of
Preferred Stock may be increased or decreased (but not below the number of
shares thereof then outstanding) by the affirmative vote of the holders of a
majority of the voting power of all the then outstanding shares of the capital
stock of the corporation entitled to vote generally in the election of the
directors (the "Voting Stock"), voting together as a single class, without a
separate vote of the holders of the Preferred Stock, or any series thereof,
unless a vote of any such holders is required pursuant to any Preferred Stock
Designation.
(b) Except as amended in subsection (a), Surviving Corporation's articles
of incorporation will continue in full force until further amended as provided
in the articles or as provided by law.
SURVIVING CORPORATION'S BYLAWS
6.02. Surviving Corporation's bylaws, as existing on the Effective Date,
will continue in full force until altered, amended, or repealed as provided in
the bylaws or as provided by law.
ARTICLE 7
SURVIVAL OF WARRANTIES AND INDEMNIFICATION
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
7.01. All statements contained in any memorandum, certificate, letter,
document, or other instrument delivered by or on behalf of Acquired Corporation,
Surviving Corporation, or the shareholders of any party to the plan of merger
will be deemed representations and warranties made by such parties,
respectively, to each other under this Plan. The representations and warranties
of the parties and the shareholders will survive for a period of three years
following the Effective Date and will survive despite any inspections,
examinations, or audits made on behalf of the parties and the shareholders.
INDEMNIFICATION
7.02. On or before the Effective Date, Acquired Corporation will obtain
from its shareholders an agreement to indemnify and hold harmless Surviving
Corporation against all damages, as defined in this paragraph 7.02. Damages, as
used in this paragraph, includes any claim, action, demand, loss, cost, expense,
liability, penalty, and other damage, including but not limited to, counsel fees
and other costs and expenses incurred in attempting to avoid damages or in
enforcing this indemnity agreement, resulting to Surviving Corporation from:
(a) Any inaccurate representation made by or on behalf of the Acquired
Corporation or its shareholders in or under this Plan;
(b) Breach of any of the warranties in or under this Plan made by or on
behalf of Acquired Corporation or its shareholders;
(c) Breach or default in the performance by Acquired Corporation of any
applicable obligations specified in this Plan; or
(d) Breach or default in the performance by Acquired Corporation's
shareholders of any of the applicable obligations specified in the agreement
delivered by them to Surviving Corporation under this Plan.
The shareholders will reimburse Surviving Corporation on a pro rata basis
according to the number of shares owned by each for any payment made or loss
suffered by Surviving Corporation at any time after the Effective Date, based on
the judgment of any court of competent jurisdiction or under a bona fide
compromise or settlement of claims, demands, or actions, regarding any damages
described in this paragraph. Shareholders must discharge their obligations to
Surviving Corporation by the payment of cash on demand. The shareholders will
have the opportunity to defend any claim, action, or demand asserted against
Surviving Corporation for which Surviving Corporation claims indemnity against
the shareholders, provided that: (i) the defense is conducted by counsel
reasonably approved by Surviving Corporation; (ii) the defense is expressly
assumed in writing within ten (10) days after written notice of the claim,
action, or demand is given to the shareholders; and (iii) Surviving
Corporation's counsel may participate at all times and in all proceedings,
formal and informal, relating to the defense, compromise, and settlement of the
claim, action, or demand, at the expense of Surviving Corporation.
ARTICLE 8
ABANDONMENT
CIRCUMSTANCES ALLOWING TERMINATION AND ABANDONMENT
8.01. This Plan may be terminated and the merger may be abandoned at any
time before the Effective Date, even after the articles of merger have been
filed with the Nevada secretary of state.
(a) The board of directors of any party to the merger may abandon this Plan
before the articles of merger are filed with the Nevada secretary of state.
(b) To abandon this Plan after the articles of merger have been filed with
the Nevada secretary of state, an officer or authorized representative must file
a statement with the secretary of state executed on behalf of each party to the
merger declaring that the Plan has been abandoned in accordance with the terms
of this Plan and Section 92A.175 of the Nevada Revised Statutes. The statement
must be filed before the effective date of the merger.
(c) Regardless of whether the articles of merger have been filed with the
Nevada secretary of state, this Plan may be abandoned under the following
conditions:
(i) The number of shareholders dissenting from the merger is so large
that the merger is deemed inadvisable or undesirable in the opinion of the
board of directors of either party to the merger.
(ii) Any material litigation or proceeding has been instituted or
threatened against another party to the merger or any of its assets, that
renders the merger inadvisable or undesirable in the opinion of the board
of directors of either party to the merger.
(iii) Any legislation has been enacted that, in the opinion of the
board of directors of either party to the merger, renders the merger
inadvisable or undesirable.
(iv) After the date of execution of this Plan there has been, in the
opinion of the board of directors of either party to the merger, any
materially adverse change in the business or condition, financial or
otherwise, of another party to the merger.
(d) At the election of Surviving Corporation's board of directors if,
without the prior consent in writing of Surviving Corporation, Acquired
Corporation has entered into any transaction other than those involved in the
ordinary course of business.
NOTICE OF AND LIABILITY ON TERMINATION OF PLAN
8.02. If an election is made to abandon this Plan under paragraph 8.01:
(a) An officer or authorized representative of the party whose board of
directors has made the election must give immediate written notice of the
election to the other party to the merger.
(b) When notice has been properly effected as provided in subparagraph (a),
and when an appropriate statement has been filed with the secretary of state as
provided in section 8.01(b), this Plan will terminate and the proposed merger
will be abandoned. Except for payment of its own costs and expenses incident to
this Plan, there will be no liability on the part of either party to the merger
as a result of the abandonment.
ARTICLE 9
ENFORCEMENT AND INTERPRETATION
FURTHER ASSURANCES AND ASSIGNMENTS
9.01. Acquired Corporation agrees that when requested by Surviving
Corporation or by its successors or assigns, Acquired Corporation will execute
and deliver or cause to be executed and delivered all deeds and other
instruments necessary to consummate the transaction that is the subject of this
Plan. Acquired Corporation also agrees to take or cause to be taken any further
actions, assignments, or assurances that are necessary to vest, perfect, and
conform title of Surviving Corporation to all the property, rights, privileges,
powers, and franchises referred to in Article 1 of this Plan, and otherwise
necessary to carry out the intent and purposes of this Plan.
NOTICES
9.02. Any notice or other communication required or permitted by this
Plan, with the exception of the filing of a statement of abandonment under
paragraph 8.01(b), will be deemed to be given when deposited in the United
States mails for transmittal by certified or registered mail, postage prepaid,
or when deposited with a public telegraph company for transmittal, charges
prepaid, addressed:
(a) In the case of Acquired Corporation, to: AGTSports, Inc., 7255 E.
Quincy Avenue, Suite 550, Denver, CO 80237 or to any other person or address
that Acquired Corporation may designate in writing on proper notice to Surviving
Corporation.
(b) In the case of Surviving Corporation, to: AGTSports, Inc., 7255 E.
Quincy Avenue, Suite 550, Denver, CO 80237 or to any other person or address
that Surviving Corporation may designate in writing on proper notice to Acquired
Corporation.
ENTIRE AGREEMENT AND COUNTERPARTS
9.03. This instrument and any exhibits attached to and incorporated into
the instrument contain the entire agreement between the parties with respect to
the transaction contemplated by this Plan. It may be executed in any number of
counterparts; however, all counterparts taken together will constitute one
original.
CONTROLLING LAW
9.04. The validity, interpretation, and performance of this Plan is
controlled by and construed under the laws of Nevada, the state in which this
Plan is being executed.
IN WITNESS WHEREOF, (i) the Surviving Corporation has caused this Plan to be
signed by the President of the Acquired Corporation and attested by the
Secretary of the Acquired Corporation pursuant to authorization contained in a
resolution adopted by the Directors of the Acquired Corporation approving this
Plan and (ii) the Acquired Corporation has caused this Plan to be signed by the
President of the Acquired Corporation and attested by the Secretary of the
Acquired Corporation pursuant to authorization contained in a resolution adopted
by the Directors of the Acquired Corporation approving this Plan.
AGTSPORTS, INC., a Nevada corporation
ATTEST: By /s/ Cory J. Coppage
------------------------------------
Cory J. Coppage, President
By /s/ Cory J. Coppage
------------------------------------
Cory J. Coppage, Secretary
AGTSPORTS, INC., a Colorado corporation
ATTEST: By /s/ Cory J. Coppage
------------------------------------
Cory J. Coppage, President
By /s/ Cory J. Coppage
------------------------------------
Cory J. Coppage, Secretary
The undersigned, Cory J. Coppage, as Secretary of AGTSports, Inc., a Nevada
corporation, hereby certifies that the foregoing Merger was duly approved by the
affirmative vote of the Directors and Sole Shareholder.
WITNESS my hand this 29th day of August, 2003.
By /s/ Cory J. Coppage
------------------------------------
Cory J. Coppage, Secretary
The undersigned, Cory J. Coppage, as Secretary of AGTSports, Inc., a
Colorado corporation, hereby certifies that the foregoing Merger was duly
adopted by the unanimous consent of the directors and majority shareholders of
AGTSports, Inc.
WITNESS my hand this 29th day of August, 2003
By /s/ Cory J. Coppage
------------------------------------
Cory J. Coppage, Secretary