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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement")
is
dated August 2, 2007, and is by and between Transnational
Financial Network,
Inc., a California corporation (the "Company") and Carlington HK
Limited, Mr.
Bruce Baker, Mr. Baldwin Yung, Mr. Chris Chen, Mr. Boaz Yung,
Dr. Dicken Yung,
(collectively, the "Shareholders") Telava Networks, Inc., a
Nevada corporation
("Telava").
R E C I T A L S
WHEREAS, the Shareholders own the shares of capital stock of
Telava as
set forth in Schedule 1 attached hereto, constituting all of the
issued and
outstanding stock of Telava (the Telava Shares);
WHEREAS, the Company is a public company, required to file
reports
under Section 12(b) or 12(g) of the Securities Exchange Act of
1934 (the
"Exchange Act");
WHEREAS, the Board of Directors of the Company and Telava deem
it
advisable that the acquisition by the Company of Telava be
effected through an
exchange (the "Exchange") of Telava Shares pursuant to this
Agreement;
WHEREAS, the Company desires to acquire all of the outstanding
Telava
Shares for shares of common stock, no par value (the "Common
Stock") through the
acquisition of preferred stock of the Company that is
convertible into Common
Stock.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and
agreements
contained herein and in reliance upon the representations and
warranties
hereinafter set forth, the parties agree as follows:
I. EXCHANGE
1.01 Exchange. The Shareholders shall exchange all of their
Telava to
converted shares for a total of 1,353,134 shares of Company
Series A Convertible
Preferred Stock having the rights and privileges set forth on
the Designation
attached as Exhibit 1 herein (the "Preferred Stock") at the
Closing of this
Agreement. Immediately prior to Closing there shall be
15,034,824 shares of
Common Stock outstanding and 1,153,680 shares of Common Stock
reserved for
issuance. At the closing, the Company shall deliver to the
Shareholders the
number of shares of Preferred Stock convertible into Common
Stock with each
share of Preferred Stock convertible into 100 shares of Common
Stock. The number
of shares of Common Stock into which the Preferred Stock is
convertible shall
constitute ninety percent of the total determined by taking that
number of
shares plus the shares of the Company that are actually issued
and outstanding
or reserved for issuance.
1.02. Closing. The Closing of the transactions contemplated
by
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this Agreement (the "Closing") shall take place on or before
August 21, 2007
at the corporate offices of Telava.
1.03. Deliveries. Upon Closing, the parties are delivering
the
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following documents:
1.03(a). The items and documents set forth in Section 1.01.
1.03(b). The Company shall deliver the Designation as filed
with the California Secretary of State and the shares of
Preferred Stock described in Section 1.01, substantially in
the form set forth in Exhibit 1.03(b) hereof.
<PAGE>
1.03(c). The Company shall deliver the resignations of all
of
its current officers and directors, and board resolutions
electing Mr. Colin Tilley, Mr. Michael L. Corrigan, Dr.
Dicken Yung, Mrs. Ruth Brown, Mr. Rodger Spainhower, Mr.
Joseph Kristul, Mr. Baldwin Yung to the Board of Directors
of
the Company and Mr. Baldwin Yung as President/Chief
Executive
Officer, Mr. Ray Powers as Executive Vice President/Chief
Operating Officer, Mr. Chris Chen as Vice President, and Mr.
Rodger Spainhower as Secretary.
1.04. Filings. Immediately following the Closing, the Company
shall
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file the following documents:
1.04(a). A Current Report on Form 8-K with the U.S.
Securities and Exchange Commission, reporting the
transactions set forth in this Agreement.
II. REPRESENTATIONS AND WARRANTIES OF TELAVA
The Shareholders and Telava hereby represent and warrant jointly
and
severally (except that in the case of Sections 2.01 and 2.02
hereof the
representations and warranties contained therein are made
severally by the
Shareholders) to the Buyer as follows:
2.01 Title to the Shares. Each Shareholder 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 Shareholders in
Exhibit 2.01, free
and clear of all liens, claims, options, charges, and
encumbrances whatsoever.
There are not outstanding options, warrants, or rights to
purchase of acquire
any of the Shares of the respective Shareholders or any of the
capital stock of
the Company.
2.02 Valid and Binding Agreements. As to each Shareholder,
the
Agreement constitutes the valid and binding agreement of such
Shareholder,
enforceable in accordance with its terms, and as to each
Shareholder, neither
the execution and delivery of this Agreement nor the
consummation by such
Shareholder of the transactions contemplated hereby (a) violates
or will violate
any statute or law or any rule, regulation, or order of any
court or
governmental authority, or (b) violates or will violate, or
conflicts with or
will conflict with, or constitutes a default under or will
constitute a default
under, any contract, commitment, agreement, understanding,
arrangement, or
restriction of any kind to which such Shareholder is a party or
by which such
Shareholder is bound.
2.03. Organization. Telava is a corporation duly organized,
validly
existing and in good standing under the laws of the State of
Nevada; Telava has
the corporate power and authority to carry on its business as
presently
conducted; and Telava is qualified to do business in all
jurisdictions where the
failure to be so qualified would have a material adverse effect
on its business.
2.04. Capitalization.
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2.04(a). The authorized capital stock and the issued and
outstanding shares of Telava is as set forth on Exhibit 2.02(a).
All of
the issued and outstanding shares of Telava are duly
authorized,
validly issued, fully paid and nonassessable.
2.04(b). Except as set forth in Exhibit 2.04(b) there are no
outstanding options, warrants, or rights to purchase any
securities of
Telava.
<PAGE>
2.05. Subsidiaries and Investments. Telava does not own any
capital
stock or have any interest in any corporation, partnership or
other form of
business organization, except as described in Exhibit 2.03
hereto.
2.06. Financial Statements. The audited financial statements of
Telava
as of and for the two years ended December 31, 2006, including
the audited
balance sheet as of December 31, 2006 and the related audited
statement of
operations, cash flows and changes in stockholders' equity for
the two years
then ended, and the unaudited balance sheet as of March 31, 2007
and the related
statement of operations and cash flows for the quarter ended
March 31, 2007 and
2006 present fairly the financial position and results of
operations of Telava,
on a consistent basis.
2.07. No Undisclosed Liabilities. To the best knowledge of
Telava,
other than as described in Exhibit 2.05 attached hereto, Telava
is not subject
to any material liability or obligation of any nature, whether
absolute,
accrued, contingent, or otherwise and whether due or to become
due, which is not
reflected or reserved against in the Financial Statements,
except those incurred
in the normal course of business.
2.08. Absence of Material Changes. Since March 31, 2007, except
as
described in any Exhibit attached hereto or as required or
permitted under this
Agreement, there has not been:
2.08(a). any material adverse change in the condition
(financial or otherwise) of the properties, assets, liabilities
or
business of Telava, except changes in the ordinary course of
business
which, individually and in the aggregate, have not been
materially
adverse;
2.08(b). any redemption, purchase or other acquisition of
any
shares of the capital stock of Telava, or any issuance of any
shares of
capital stock or the granting, issuance or exercise of any
rights,
warrants, options or commitments by Telava relating to their
authorized
or issued capital stock; or
2.08(c). any change or amendment to the Articles of
Incorporation of Telava.
2.09. Litigation. Except as set forth in Exhibit 2.09 attached
hereto,
to the best knowledge of Telava there is no litigation,
proceeding or
investigation pending or threatened against Telava affecting any
of its
properties or assets against any officer, director, or
stockholder of Telava
that might result, either in any case or in the aggregate, in
any material
adverse change in the business, operations, affairs or condition
of Telava or
its properties or assets, or that might call into question the
validity of this
Agreement, or any action taken or to be taken pursuant
hereto.
2.10. Title To Assets. Telava has good and marketable title to
all of
its assets and properties now carried on its books including
those reflected in
the balance sheets contained in the Financial Statements, free
and clear of all
liens, claims, charges, security interests or other
encumbrances, except as
described in Exhibit 2.08 attached hereto or any other
Exhibit.
2.11. Transactions with Affiliates, Directors and Shareholders.
Except
as set forth in Exhibit 2.09 attached hereto, there are and have
been no
contracts, agreements, arrangements or other transactions
between Telava, and
any officer, director, or stockholder of Telava, or any
corporation or other
entity controlled by the Shareholders, a member of the
Shareholders' families,
or any affiliate of the Shareholders.
<PAGE>
2.12. No Conflict. The execution and delivery of this Agreement
and the
consummation of the transactions contemplated hereby will not
conflict with or
result in a breach of any term or provision of, or constitute a
default under,
the Articles of Incorporation or Bylaws of Telava, or any
agreement, contract or
instrument to which Telava is a party or by which it or any of
its assets are
bound.
2.13. Disclosure. To the actual knowledge of Telava, neither
this
Agreement, the Financial Statements nor any other agreement,
document,
certificate or written or oral statement furnished to the
Company by or on
behalf of Telava in connection with the transactions
contemplated hereby,
contains any untrue statement of a material fact or when taken
as a whole omits
to state a material fact necessary in order to make the
statements contained
herein or therein not misleading.
2.14. Authority. Telava has full power and authority to enter
into this
Agreement and to carry out the transactions contemplated herein.
The execution
and delivery of this Agreement and the consummation of the
transactions
contemplated hereby, have been duly authorized and approved by
the Board of
Directors of Telava and no other corporate proceedings on the
part of Telava are
necessary to authorize this Agreement and the transactions
contemplated hereby.
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Telava as follows,
as of
the date of this Agreement and as of the Closing:
3.01. Organization.
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3.01(a). The Company is a corporation duly organized,
validly
existing, and in good standing under the laws of the State
of
California; has the corporate power and authority to carry on
its
business as presently conducted; and is qualified to do business
in all
jurisdictions where the failure to be so qualified would have
a
material adverse effect on the business of the Company.
3.01(b). The copies of the Certificate of Incorporation, of
the Company, as certified by the Secretary of State of
California, and
the Bylaws of the Company are complete and correct copies of
the
Certificate of Incorporation and the Bylaws of the Company as
amended
and in effect on the date hereof. All minutes of meetings and
actions
in writing without a meeting of the Board of Directors and
shareholders
of the Company are contained in the minute book of the Company
and no
minutes or actions in writing without a meeting have been
included in
such minute book since such delivery to Telava that have not
also been
delivered to Telava.
3.02. Capitalization of the Company. The authorized capital
stock of
the Company consists of 20,000,000 shares of Common Stock, no
par value per
share, of which 15,034,824 shares will be outstanding at
Closing, and 2,000,000
shares of preferred stock, none of which is outstanding. All
outstanding shares
are duly authorized, validly issued, fully paid and
non-assessable.
3.03. Subsidiaries and Investments. The Company does not own
any
capital stock or have any interest in any corporation,
partnership, or other
form of business organization.
3.04. Authority. The Company has full power and authority to
enter into
this Agreement and to carry out the transactions contemplated
herein. The
execution and delivery of this Agreement, the consummation of
the transactions
contemplated hereby, and the issuance of the Company Shares in
accordance with
<PAGE>
the terms hereof, have been duly authorized and approved by the
Board of
Directors of the Company and no other corporate proceedings on
the part of
Company are necessary to authorize this Agreement, the
transactions contemplated
hereby and the issuance of the Company Shares in accordance with
the terms
hereof.
3.05. No Undisclosed Liabilities. Other than as described in
Exhibit
3.05 attached hereto, the Company is not subject to any material
liability or
obligation of any nature, whether absolute, accrued, contingent,
or otherwise
and whether due or to become due.
3.06. Litigation. There is no litigation, proceeding or
investigation
pending or to the knowledge of the Company, threatened against
the Company
affecting any of its properties or assets, or, to the knowledge
of the Company,
against any officer, director, or stockholder of the Company
that might result,
either in any case or in the aggregate, in any material adverse
change in the
business, operations, affairs or condition of the Company o
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