Exhibit 10.3
PLAN AND AGREEMENT OF REORGANIZATION
AMONG
MACH ONE CORPORATION
AND
CERES ORGANIC HARVEST, INC.
AND
CERTAIN SHAREHOLDERS
OF
CERES ORGANIC HARVEST, INC.
February 2, 2009
TABLE OF CONTENTS
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PLAN AND
AGREEMENT OF REORGANIZATION
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3
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PLAN OF
REORGANIZATION
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3
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TAX
CONSEQUENCES
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3
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AGREEMENT
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3
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Section 1 -
Transfer of Shares
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3
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Section 2 -
Issuance of Exchange Securities to CERES Shareholders
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4
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Section 3 - Other
Matters
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4
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Section 4 -
Closing
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4
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Section 5 -
Representations and Warranties by CERES and Certain
Shareholders
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6
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Section 6 -
Representations and Warranties by MACH ONE
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9
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Section 7 - Access
and Information
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12
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Section 8 -
Covenants of CERES and Certain Shareholders
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13
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Section 9 -
Covenants of MACH ONE
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14
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Section 10 -
Additional Covenants of the Parties
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15
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Section 11 -
Survival of Representations, Warranties and Covenants
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16
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Section 12 -
Conditions Precedent to Obligations of Parties
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16
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Section 13 -
Termination, Amendment, Waiver
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19
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Section 14 -
Miscellaneous
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20
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EXHIBIT
LIST
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24
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SCHEDULE
LIST
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24
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PLAN AND AGREEMENT OF REORGANIZATION
This
Plan and Agreement of Reorganization (“Agreement”) is
entered into on this 2nd day of February, 2009 by and between MACH
ONE CORPORATION, a Nevada corporation (“MACH ONE”), and
CERES ORGANIC HARVEST, INC., a Michigan corporation
(“CERES”), and those persons listed in Exhibit A
hereto, being all of the shareholders of CERES who own individually
at least ten percent (10%) of the outstanding stock of CERES and
together hold over fifty percent (50%) of the outstanding stock of
CERES as of the date this Agreement is executed.
PLAN OF REORGANIZATION
The
transaction contemplated by this Agreement (“the Exchange
Transaction”) is intended to be an exchange of stock
reorganization. MACH ONE will acquire up to 100% of CERES’
issued and outstanding common stock, (no par value) in exchange for
up to 8,000,000 shares of MACH ONE common stock (the “Mach
Common Stock”) and up to 8,000,000 shares of MACH ONE
Convertible Preferred Stock (the “Mach Preferred
Stock”) (collectively the Mach Common and Preferred Stock
shall be referred to as the “Exchange Securities”). The
rights, preferences, and restrictions of the Mach Preferred Stock
are set forth in a Certificate of Designation to be filed with the
Nevada Secretary of State, a copy of which is attached hereto as
Exhibit B. The Exchange Transaction will result in CERES becoming a
wholly-owned subsidiary of MACH ONE.
TAX CONSEQUENCES
It
is intended by the parties hereto that the Exchange Transaction
shall constitute a reorganization within the meaning of Section
368(a)(1)(B) of the Internal Revenue code of 1986, as amended (the
“Code”). The parties hereto adopt this Agreement as a
“plan of reorganization” within the meaning of Sections
1.368-2(g) and 1.368-3(b) of the United States Income Tax
Regulations.
AGREEMENT
Section 1
Transfer of Shares
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1.1
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All
shareholders of CERES (the “Shareholders” or the
“CERES Shareholders”), as of the date of Closing as
such term is defined in Section 4 herein (the
“Closing” or the “Closing Date”), shall
transfer, assign, convey and deliver to MACH ONE on the Closing
Date, certificates representing one hundred percent (100%) of the
CERES capital stock (“Ceres Stock”) or such lesser
percentage as shall be acceptable to MACH ONE, but in no event less
than ninety percent (90%) of the Ceres Stock. To the extent that
less than 100% of the Ceres Stock is acquired, the amount of the
Exchange Securities issuable to those CERES Shareholders who
elected to participate in the Exchange Transaction shall decrease
proportionately. The transfer of the Ceres Stock shall be made free
and clear of all liens, mortgages, pledges, encumbrances or
charges, whether disclosed or undisclosed, except as the CERES
Shareholders and MACH ONE shall have otherwise agreed in
writing.
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3
Section 2
Issuance of Exchange Securities to CERES Shareholders
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2.1
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As
consideration for the transfer, assignment, conveyance and delivery
of the Ceres Stock hereunder, MACH ONE shall, at the Closing issue
to the CERES Shareholders, pro rata in accordance with each
Shareholder’s percentage ownership of CERES immediately prior
to the Closing, Exchange Securities consisting of up to 8,000,000
shares of Mach Common Stock and up to 8,000,000 Mach Preferred
Stock. The parties intend that the Exchange Securities being issued
will be used to acquire all outstanding Ceres Stock. To the extent
that less than 100% of the Ceres Stock is acquired, the amount of
Exchange Securities issuable to those CERES Shareholders who have
elected to participate in the exchange described in this Agreement
shall decrease proportionately.
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2.2
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None of the
Exchange Securities issued to the CERES Shareholders hereunder
shall, at the time of Closing, be registered under federal
securities laws but, rather, shall be issued pursuant to an
exemption thereunder and be considered “restricted
securities”within the meaning of Rule 144 promulgated
under the Securities Act of 1933, as amended (the
“Act”). All of such securities shall bear a legend
worded substantially as follows:
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“The
securities represented by this promissory note have not been
registered under the Securities Act of 1933 (the “Act”)
and are ‘restricted securities’ as that term is defined
in Rule 144 under the Act. Neither Mach Common Stock, the Mach
Preferred Stock or the shares issuable upon conversion of the Mach
Preferred Stock may be offered for sale, sold or otherwise
transferred except pursuant to an exemption from registration under
the Act, the availability of which is to be established to the
reasonable satisfaction of the Company.”
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The transfer
agent of MACH ONE shall annotate its records to reflect the
restrictions on transfer embodied in the legend set forth above.
There shall be no requirement that MACH ONE register the Exchange
Securities or the shares subject to conversion under the
Act.
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Section 3
Other Matters
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3.1
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Appointment
of New Director. At the
Closing the then existing directors of MACH ONE shall take those
steps necessary to expand the current Board of Directors to six (6)
directors and immediately nominate and elect to the Board of
Directors of MACH ONE, Brittin Eustis.
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Section 4
Closing
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4.1
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Closing of
Transaction . Subject to
the fulfillment or waiver of the conditions precedent set forth in
Section 12 hereof, the Closing shall take place on the Closing
Date at the offices of MACH ONE in West Bend, Wisconsin at
10:00 A.M., local time, or at such other time on the Closing
Date as CERES and MACH ONE may mutually agree in
writing.
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4
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4.2
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Closing
Date . The Closing Date
of the Exchange shall take place on a date chosen by mutual
agreement of CERES and MACH ONE within forty-five (45) days from
the date of this Agreement, or such later date upon which CERES and
MACH ONE may mutually agree in writing, or as extended pursuant to
subsection 13.1(b) below.
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4.3
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Deliveries
at Closing.
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(a)
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CERES shall
deliver or cause to be delivered to MACH ONE at Closing:
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(1)
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certificates
representing all shares, or an amount of shares acceptable to MACH
ONE, of the Ceres Stock as described in Section 1, each
endorsed in blank by the registered owner;
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(2)
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an agreement
from each CERES Shareholder surrendering his or her shares agreeing
to a restriction on the transfer of the Exchange Securities as
described in Section 2 hereof;
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(3)
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a copy of a
consent of CERES’ board of directors authorizing CERES to
take the necessary steps toward Closing the transaction described
by this Agreement in the form set forth in
Exhibit C;
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(4)
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a copy of a
Certificate of Good Standing for CERES issued not more than ten
(10) days prior to Closing by the state of Michigan;
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(5)
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Articles of
Incorporation and Bylaws of CERES certified as of the Closing Date
by the President and Secretary of CERES;
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(6)
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an opinion of
Richard Keller, Esq., counsel to CERES, dated as of the Closing
Date, in a form deemed acceptable by MACH ONE and its
counsel;
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(7)
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such other
documents, instruments or certificates as shall be reasonably
requested by MACH ONE or its counsel.
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(b)
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MACH ONE shall
deliver or cause to be delivered to CERES at Closing:
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(1)
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a copy of a
consent of MACH ONE’s board of directors authorizing MACH ONE
to take the necessary steps toward Closing the transaction
described by this Agreement in the form set forth in
Exhibit D;
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(2)
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a copy of a
Certificate of Good Standing for MACH ONE issued not more than ten
(10) days prior to Closing by the Secretary of State of
Nevada;
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(3)
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stock
certificate(s) representing the Exchange Securities to be newly
issued by MACH ONE under this Agreement, which certificates shall
be in the names of the appropriate CERES Shareholders, each in the
appropriate denomination as described in Section 2;
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(4)
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an opinion of
William B. Barnett, Esq., special counsel to MACH ONE, dated as of
the Closing Date, in a form deemed acceptable by CERES and its
counsel, and
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5
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(5)
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such other
documents, instruments or certificates as shall be reasonably
requested by CERES or its counsel.
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4.4
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Filings;
Cooperation.
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(a)
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Prior to the
Closing, the parties shall proceed with due diligence and in good
faith to make such filings and take such other actions as may be
necessary to satisfy the conditions precedent set forth in
Section 12 below.
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(b)
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On and after
the Closing Date, MACH ONE, CERES and the Shareholders set forth in
Exhibit A shall, on request and without further consideration,
cooperate with one another by furnishing or using their best
efforts to cause others to furnish any additional information
and/or executing and delivering or using their best efforts to
cause others to execute and deliver any additional documents and/or
instruments, and doing or using their best efforts to cause others
to do any and all such other things as may be reasonably required
by the parties or their counsel to consummate or otherwise
implement the transactions contemplated by this
Agreement.
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Section 5
Representations and Warranties by CERES and Certain
Shareholders
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5.1
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Subject to the
schedule of exceptions, attached hereto and incorporated herein by
this reference, (which schedules shall be acceptable to MACH ONE),
CERES and those Shareholders listed on Exhibit A represent and
warrant to MACH ONE as follows:
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(a)
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Organization
and Good Standing of CERES . The Articles of Incorporation of CERES and all
Amendments thereto as presently in effect, certified by the State
of Michigan, and the Bylaws of CERES as presently in effect,
certified by the President and Secretary of CERES, have been
delivered to MACH ONE and are complete and correct and since the
date of such delivery, there has been no amendment, modification or
other change thereto, except as set forth in Schedule
5.1(a).
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(b)
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Capitalization . CERES’ authorized capital stock consists
of 10,000 shares of common stock, $1.00 par value, of which 10,000
shares are currently, and will be issued and outstanding as of the
Closing Date and held of record by six (6) persons. All of such
outstanding shares are validly issued, fully paid and
non-assessable. There are no options and warrants for Ceres Stock.
All securities issued by CERES as of the date of this Agreement
have been issued in compliance with all applicable state and
federal laws. Except as set forth in Schedule 5.1(b), no other
equity securities or debt obligations of CERES are authorized,
issued or outstanding.
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(c)
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Subsidiaries . Other than Organic Grain and Milling, Inc., a
North Dakota corporation, CERES has no other subsidiaries and no
other investments, directly or indirectly, or other financial
interest in any other corporation or business organization, joint
venture or partnership of any kind whatsoever.
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(d)
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Financial
Statements . CERES will
deliver to MACH ONE, prior to Closing, a copy of CERES’
unaudited financial statements for the years ended December 31,
2008 and 2007, which will be true and complete and will have been
prepared in conformity with generally accepted accounting
principles. Other than changes in the usual and ordinary conduct of
the business since December 31, 2008, there have been and, at the
Closing Date, there will be no material adverse changes in such
financial statements.
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(e)
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Absence of
Undisclosed Liabilities .
Other than as set forth in Schedule 5.1 (e) or except as incurred
in the ordinary course of business, CERES has no liabilities which
are not adequately reflected or reserved against in the CERES
Financial Statements or otherwise reflected in this Agreement and
CERES shall not have as of the Closing Date, any liabilities
(secured or unsecured and whether accrued, absolute, direct,
indirect or otherwise) which were incurred after December 31, 2008,
and would be individually or in the aggregate, material to the
results of operations or financial condition of CERES as of the
Closing Date.
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(f)
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Litigation . Except as disclosed in Schedule 5.1(f),
there are no outstanding orders, judgments, injunctions, awards or
decrees of any court, governmental or regulatory body or
arbitration tribunal against CERES or its properties. Except as
disclosed in Schedule 5.1(f), there are no actions, suits or
proceedings pending, or, to the knowledge of CERES, threatened
against or affecting CERES or its affiliated companies, any of its
officers or directors relating to their positions as such, or any
of its properties, at law or in equity, or before or by any
federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, in connection with the business, operations or affairs of
CERES or its affiliated company which might result in any material
adverse change in the operations or financial condition of CERES,
or which might prevent or materially impede the consummation of the
transactions under this Agreement.
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(g)
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Compliance
with Laws . To the best
of its knowledge, the operations and affairs of CERES do not
violate any law, ordinance, rule or regulation currently in effect,
or any order, writ, injunction or decree of any court or
governmental agency, the violation of which would substantially and
adversely affect the business, financial conditions or operations
of CERES.
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(h)
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Absence of
Certain Changes . Except
as set forth in Schedule 5.1(h), or otherwise disclosed in
writing to MACH ONE, since December 31, 2008,
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(1)
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CERES has not
entered into any material transaction except in the ordinary course
of business;
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(2)
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there has been
no change in the condition except in the ordinary course of
business (financial or otherwise), business, property, prospects,
assets or liabilities of Ceres as shown on the CERES Financial
Statement, other than changes that both individually and in the
aggregate do not have a consequence that is materially adverse to
such condition, business, property, prospects, assets or
liabilities;
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(3)
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there has been
no damage to, destruction of or loss of any of the properties or
assets of CERES (whether or not covered by insurance) materially
and adversely affecting the condition (financial or otherwise),
business, property, prospects, assets or liabilities of
CERES;
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(4)
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CERES has not
declared, or paid any dividend or made any distribution on its
capital stock, redeemed, purchased or otherwise acquired any of its
capital stock, granted any options to purchase shares of its stock,
or issued any shares of its capital stock except as described in
Schedule 5.1(h);
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(5)
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there has been
no material change, except in the ordinary course of business, in
the contingent obligations of CERES by way of guaranty,
endorsement, indemnity, warranty or otherwise; and
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(6)
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there has been
no other event or condition of any character, which might
reasonably be expected either to result in a material and adverse
change in the condition (financial or otherwise), business,
property, prospects, assets or liabilities of CERES or to impair
materially the ability of CERES to conduct the business now being
conducted.
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(i)
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Employees . There are, except as disclosed in
Schedule 5.1(i), no collective bargaining, bonus, profit
sharing, compensation, or other plans, agreements or arrangements
between CERES and any of its directors, officers or employees and
there is no employment, consulting, severance or indemnification
arrangements, agreements or understandings between CERES on the one
hand, and any current or former directors, officers or employees of
CERES on the other hand.
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(j)
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Assets . All of the assets reflected on the December
31, 2008 CERES Financial Statements or acquired and held as of the
Closing Date, will be owned by CERES on the Closing Date. Except as
set forth in Schedule 5.1(j), CERES owns outright and has good
and marketable title, or holds valid and enforceable leases, to all
of such assets.
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(k)
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Tax
Matters . Other than as
set forth in Schedule 5.1 (k), all federal, foreign, state and
local tax returns, reports and information statements required to
be filed by or with respect to the activities of CERES have been
timely filed. Such returns, reports and information statements are
true and correct in all material respects insofar as they relate to
the activities of Ceres. On the date of this Agreement, CERES is
not delinquent in the payment of any such tax or assessment, and no
deficiencies for any amount of such tax have been proposed or
assessed.
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(l)
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Continuation
of Key Management . To
the best knowledge of CERES, all key management personnel of CERES
intend to continue their employment with CERES after the Closing.
For purposes of this subsection 5.1(l), “key management
personnel” shall include Brittin Eustis, Dean Chapla and Troy
DeSmet.
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(m)
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Books and
Records . The books and
records of CERES are complete and correct, are maintained in
accordance with good business practice and accurately present and
reflect, in all material respects, all of the transactions therein
described, and there have been no transactions involving CERES
which properly should have been set forth therein and which have
not been accurately so set forth.
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(n)
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Authority to
Execute Agreement . The
Board of Directors of CERES, pursuant to the power and authority
legally vested in it, has duly authorized the execution and
delivery by CERES of this Agreement, and has duly authorized each
of the transactions hereby contemplated. CERES has the power and
authority to execute and deliver this Agreement, to consummate the
transactions hereby contemplated and to take all other actions
required to be taken by it pursuant to the provisions hereof. CERES
has taken all actions required by law, its Articles of
Incorporation, as amended, or otherwise to authorize the execution
and delivery of this Agreement. This Agreement is valid and binding
upon CERES and those Shareholders listed in Exhibit A hereto
in accordance with its terms.
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(o)
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Contracts . Other than as set forth in Schedule 5.1 (o),
and except for commitments to pay for legal and accounting services
relating to the Exchange Transaction, CERES is not a party to any
written or oral commitment for capital expenditures except as
contemplated by this Agreement. CERES is not a party to, nor is its
property bound by any written or oral, express or implied,
agreement, contract or other contractual obligation including,
without limitation, any real or personal property leases, any
employment agreements, any consulting agreements any personal
services agreements or any other agreements that require CERES to
pay any money or deliver any assets or services. CERES has in all
material respects performed all obligations required to be
performed by it to date and is not in default in any material
respect under any agreements or other documents to which it was a
party.
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(p)
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Finder’s Fees . CERES is not, and on the Closing Date will not
be liable or obligated to pay any finder’s, agent’s or
broker’s fee arising out of or in connection with this
Agreement or the transactions contemplated by this
Agreement.
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5.2
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Disclosure . At the date of this Agreement, CERES and those
Shareholders listed in Exhibit A have, and at the Closing Date
they will have, disclosed all events, conditions and facts
materially affecting the business and prospects of CERES. CERES and
such Shareholders have not now and will not have at the Closing
Date, withheld knowledge of any such events, conditions or facts
which they know, or have reasonable grounds to know, may materially
affect CERES’ business and prospects.
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Section 6
Representations and Warranties by MACH ONE
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6.1
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Subject to the
schedule of exceptions, attached hereto and incorporated herein by
this reference, (which schedules shall be acceptable to CERES),
MACH ONE represents and warrants to CERES and those Shareholders
listed in Exhibit A as follows:
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(a)
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Organization
and Good Standing . MACH
ONE is currently a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada and has full
corporate power and authority to own or lease its properties and to
carry on its business as now being conducted and as proposed to be
conducted. MACH ONE is qualified to conduct business as a foreign
corporation in no other jurisdiction, and the failure to so qualify
in any other jurisdiction does not materially, adversely affect the
ability of MACH ONE to carry on its business as most recently
conducted. The Articles of Incorporation of MACH ONE and all
amendments thereto as presently in effect, certified by the
Secretary of State of Nevada, and the Bylaws of MACH ONE as
presently in effect, certified by the President and Secretary of
MACH ONE, have been delivered to CERES and are complete and correct
and since the date of such delivery, there has been no amendment,
modification or other change thereto.
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(b)
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Capitalization . MACH ONE’s authorized capital stock
consists of 250,000,000 consisting of (i) 239, 000,000 shares of
$.001 par value Common stock, of which 106,800,000 shares are
issued and outstanding and held of record by approximately 330
shareholders and (ii) 10,500,000 shares of $0.05 par value
Preferred Stock, of which 1,000,000 shares of Series A Convertible
Preferred Stock are issued and outstanding and held of record by
one shareholder. Except as set forth in Schedule 6.1(b), no
other equity securities or debt obligations of MACH ONE are
authorized, issued or outstanding and as of the Closing, there will
be no other outstanding options, warrants, agreements, contracts,
calls, commitments or demands of any character, preemptive or
otherwise, other than this Agreement, relating to any of the Mach
Common Stock, and there will be no outstanding security of any kind
convertible into Mach Common Stock. The shares of Mach Common Stock
are free and clear of all liens, charges, claims, pledges,
restrictions and encumbrances whatsoever of any kind or nature that
would inhibit prevent or otherwise interfere with the transactions
contemplated hereby. All of the outstanding Mach Common Stock is
validly issued, fully paid and nonassessable and there are no
voting trust agreements or other contracts, agreements or
arrangements restricting or affecting voting or dividend rights or
transferability with respect to the outstanding shares of Mach
Common Stock.
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(c)
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Issuance of
Exchange Securities . All
of the Mach Common Stock and the Mach Preferred Stock to be issued
to CERES Shareholders pursuant to this Agreement, when issued and
delivered as provided herein, will be duly authorized, validly
issued, and will be free and clear of all liens, charges, claims,
pledges, restrictions and encumbrances whatsoever of any kind or
nature, except those restrictions imposed by State or Federal
corporate and securities regulations.
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(d)
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No
Violation. Neither the
execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby nor compliance by MACH ONE
with any of the provisions hereof will:
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(1)
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violate or
conflict with, or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, any of the terms,
conditions or provisions of the Articles of Incorporation or Bylaws
of MACH ONE or any note, bond, mortgage, indenture, deed of trust,
license, agreement or other instrument to which MACH ONE is a
party, or by which it or its properties or assets may be bound or
affected; or
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(2)
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violate any
order, writ, injunction or decree, or any statute, rule, permit, or
regulation applicable to MACH ONE or any of its properties or
assets.
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(e)
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Subsidiaries . Except as set forth in Schedule 6.1(e), MACH
ONE has no subsidiaries and no investments, directly or indirectly,
or other financial interest in any other corporation or business
organization, joint venture or partnership of any kind
whatsoever.
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10
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(f)
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Financial
Statements . MACH ONE
will deliver to CERES prior to Closing, copies of all of MACH
One&rsqu
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