SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 13, 1996
JUNGLE STREET, INC.
(Exact name of registrant as specified in its charter)
Utah 0-27390 87-0368236
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation or
organization)
215 Yakima Street, Wenatchee, WA 98801
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number,
including area code: (509) 664-9004
1787 East Fort Union Blvd., #106, Salt Lake City, Utah 84121
(Former name or former address, if changed since last report)
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Items 1 and 2. Change in Control; Acquisition of Assets
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On August 30, 1996 (the "Effective Date"), Jungle Street, Inc., a Utah
corporation (the "Company"), effected a merger (the "Merger") between a
wholly-owned subsidiary, Jungle Street, Inc., a Washington corporation
("Subsidiary") and Televar Northwest, Inc., a Washington corporation
("Televar"). The Merger was effected pursuant to the terms of an Agreement
and Plan of Merger (the "Merger Agreement") among the Company, Televar and
Subsidiary. As a result of the Merger, the Company acquired a significant
amount of assets other than in the ordinary course of business.
The shareholders of Televar received 11,593,325 shares of Common Stock
of the Company in the Merger, resulting in the shareholders of Televar
owning an aggregate of 83% of the 13,968,625 shares of Company Common Stock
outstanding on the Effective Date. As a result of the Merger, Televar
became a wholly-owned subsidiary of the Company. The Televar capital stock
that was converted into Company Common Stock was coverted based on a
five-for-one conversion ratio, which was determined pursuant to arms-
length negotiations between the Company and the management of Televar.
On the Effective Date, the officers and directors of Televar became
the officers and directors of the Company and the Company's existing
officers and directors resigned. Prior to the Merger, no material
relationship existed between Televar and the Company or any of its
affiliates, directors, officers, or their associates.
Also in connection with the Merger, the Company issued an aggregate of
1,125,000 shares of Common Stock (approximately 8% of the outstanding
Common Stock on a post-merger basis) to certain consultants to the Company
as compensation for services rendered to the Company prior to the Merger
(the "Consultant's Shares"). On August 28, 1996, the Company filed with the
Securities and Exchange Commission a Form S-8 registration statement under
the Securities Act of 1933, as amended, registering the Consultant's Shares
for issuance to the consultants.
Televar is an Internet services provider based in the Pacific
Northwest. Televar provides Internet and business long distance services,
with plans to sell other integrated telecommunications services, including
local and cellular services. Televar's strategy is to
establish positions in rural markets through a network of value added
resellers and to gain market share in urban markets through acquisitions
and chain store distribution. Televar's main focus is to provide fast,
flat-rate access to the Internet on a community-by-community basis. Televar
offers dial-up access, dedicated access, and, where available, ISDN and
frame relay access. By offering competitive local service, local content
and local support for each of the communities in which it does business,
Televar intends to create strong brand loyalty in its base of subscribers
across geographic regions.
Televar was incorporated in Washington in 1984. From 1984 to February
1995, the company was primarily in the business of selling telephone
interconnection products and services. In February 1995, Televar sold the
telephone interconnect business and since that
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time has focused principally on the Internet access and business long
distance telephone business. During the period February 1995 to June 30,
1996, Televar's Internet subscriber base grew from approximately 100 to
4,800 individual subscribers. As of June 30, 1996, Televar offered Internet
access in 22 rural markets in Washington State.
As of June 30, 1996, Televar had 21 full time employees. Televar's
headquarters are located in approximately 3,800 feet of office space at 215
Yakima Street, Wenatchee, WA 98801.
Item 7. Financial Statements and Exhibits
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A. Financial Statements
--------------------
It is impracticable at this time for the Company to file the financial
statements of Televar required by Item 7(a), or the pro forma financial
information relating to Televar required by Item 7(b). The Company is
obtaining audited financial statements for Televar in accordance with Item
310 of Regulation S-B and is preparing appropriate pro forma financial
information. In accordance with Items 7(a)(4) and 7(b)(2), the Company
undertakes to file the required financial statements and pro forma
financial information for Televar by means of a Form 8-K/A as soon as
practicable, but no later than November 14, 1996.
B. Exhibits
--------
The following are filed as exhibits to this Current Report:
2.1 Agreement and Plan of Merger among Jungle Street, Inc., a
Utah corporation, Jungle Street, Inc., a Washington
corporation, and Televar Northwest, Inc., a Washington
corporation, dated August 29, 1996.
99.1 Press Release issued by the Company on September 3, 1996,
announcing the merger with Televar Northwest, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
JUNGLE STREET, INC.
By: MARK D. HAMILTON
----------------------------------------
Mark D. Hamilton
President
Dated: September 13, 1996
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EXHIBIT INDEX
Exhibit Sequential
Number Description Page
2.1 Agreement and Plan of Merger among Jungle Street, Inc., a
Utah corporation, Jungle Street, Inc., a Washington
corporation, and Televar Northwest, Inc., a Washington
corporation, dated August 29, 1996.*
EXHIBITS:
Exhibit A - Plan of Merger
Exhibit B - Compensation Agreement
Exhibit C - Jungle Street Financial Statements
Exhibit D - Televar Financial Statements
Exhibit E - Shareholder Investment Letter
Exhibit F - Jungle Street Officers' Certificate
Exhibit G - Televar Officers' Certificate
99.1 Press Release issued by the Company on September 3, 1996,
announcing the merger with Televar Northwest, Inc.
* In accordance with Item 601(b)(2), the attachments to Exhibit 2.1 have
been omitted from this filing.
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT and Plan of Merger ("Agreement") is made this 29th day
of August, 1996, by and between Jungle Street, Inc., a Utah corporation
("Jungle Street"); Jungle Street, Inc., a Washington corporation and a
wholly-owned subsidiary of Jungle Street ("Subsidiary"); and Televar
Northwest, Inc., a Washington corporation ("Televar").
W I T N E S S E T H :
WHEREAS, the Boards of Directors of Jungle Street and Televar have
approved the merger of Subsidiary and Televar in a forward triangular
merger pursuant to the provisions of Sections 368(a)(1) and 368(a)(2)(D) of
the Internal Revenue Code of 1986 and the applicable provisions of the
Washington Business Corporation Act ("WBCA") pursuant to which Televar
shareholders will receive shares of common stock of Jungle Street in
consideration of such merger; and
WHEREAS, Subsidiary will be the surviving corporation in the Merger,
as contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties, covenants and agreements of the parties
hereto, the parties agree as follows:
Section 1
Merger
------
1.1 Merger. At the Effective Time (as defined in Section 1.3 below) in
accordance with this Agreement and pursuant to the laws of the State of
Washington, Televar will merge with and into Subsidiary, with Subsidiary
being the "Surviving Corporation"; the separate existence of Televar shall
cease, and the name of the Surviving Corporation shall become "Televar,
Inc." ("Merger"). Until amended, modified or otherwise altered, the
Articles of Incorporation of Televar shall become the Articles of
Incorporation of the Surviving Corporation; and the Bylaws of Televar shall
become the Bylaws of the Surviving Corporation.
1.2 Effective Time. At or prior to Closing (as defined in Section 2),
Televar and Subsidiary shall execute a Plan of Merger in a form
substantially as attached hereto as Exhibit A ("Plan of Merger") and file
the Plan of Merger with the Secretary of State of the State of Washington.
The Merger shall become effective at the time of filing of the Plan of
Merger with the Secretary of State of the State of Washington ("Effective
Time").
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1.3 Share Conversion. Each share of common stock of Televar (the
"Televar Shares") issued and outstanding immediately prior to the Effective
Time shall, upon the Effective Time be converted into five (5) shares of
common stock of Jungle Street.
1.4 Consultant's Shares and Compensation. At Closing, Jungle Street
shall issue 1,125,000 shares of its common stock to certain consultants
pursuant to the compensation agreement attached as Exhibit B, such shares
to be the subject of a registration statement on Form S-8 to be filed under
the Securities Act of 1933 by Jungle Street after Closing. After Closing,
Jungle Street also will reserve for future issuance an additional 750,000
shares of its common stock to be issued as commission shares to Jenson
Services, Inc., along with the payment of a $50,000 fee, upon performance
to Televar's satisfaction of capital raising services resulting in net
proceeds to Jungle Street of at least $1 million pursuant to the services
agreement also attached as Exhibit B.
1.5 Survivor's Succession to Corporate Rights. Upon and after the
Effective Time, the Surviving Corporation shall possess all rights,
privileges, powers and franchises of a public as well as of a private
nature, and be subject to all of the restrictions, disabilities and duties
of Televar; and all rights, privileges, powers and franchises of Televar,
and all property, real, personal and mixed, and all debts due to Televar on
whatever account, as well for stock subscriptions all other things in
action or belonging to Televar shall be vested in the Surviving
Corporation; and all property, rights, privileges, powers and franchises,
and all and every other interest shall be thereafter the property of the
Surviving Corporation, and the title to any real estate vested by deed or
otherwise in Televar shall not revert or be in any way impaired by reason
of the Plan of Merger; but all rights of creditors and all liens upon any
property of Televar shall be preserved unimpaired, and all debts,
liabilities and duties of Televar shall thenceforth attach to the Surviving
Corporation and may be enforced against it to the same extent as if said
debts, liabilities and duties had been incurred or contracted by it.
1.6 Survivor's Succession to Corporate Acts, Plans, Contracts, etc.
All corporate acts, plans, policies, contracts, approvals and
authorizations of Televar and its shareholders, its Board of Directors,
committees elected or appointed by the Board of Directors, officers and
agents, which were valid and effective immediately prior to the Effective
Time, shall be taken for all purposes as the acts, plans, policies,
contracts, approvals and authorizations of the Surviving Corporation and
shall be as effective and binding thereon as the same were with respect to
Televar. The employees of Televar shall become the employees of the
Surviving Corporation and continue to be entitled to the same rights and
benefits which they enjoyed as employees of Televar.
1.7 Survivor's Rights to Assets, Liabilities, Reserves, etc. The
assets, liabilities, reserves and accounts of Televar shall be recorded on
the books of the Surviving Corporation at the amounts at which they,
respectively, shall then be carried on the books of Televar, subject to
such adjustments or eliminations of intercompany items as may be
appropriate in giving effect to the Plan.
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1.8 Resignations of Present Directors and Executive Officers of
Surviving Corporation and Jungle Street and Designation of New Directors
and Executive Officers; Name Change. At the Effective Time, the present
directors and executive officers of Jungle Street and Subsidiary shall
resign and designate the directors and executive officers of Televar to
serve in their place and stead, until their next respective annual meetings
of shareholders and Board of Directors, and until their respective
successors shall be elected and qualified or until their respective prior
resignations or terminations. At the Effective Time, or as soon thereafter
as practicable, Jungle Street shall effect a 1-for-5 reverse split of its
capital stock, the name of Jungle Street shall be changed to "Televar
Holdings, Inc." and the name of Subsidiary shall be changed to "Televar,
Inc.".
1.9 Principal Office. The principal executive office of the Surviving
Corporation and Jungle Street shall be located at 215 Yakima Street,
Wenatchee, Washington 98801. Jungle Street shall also maintain a registered
office in the State of Washington at the same address.
1.10 Adoption. The Plan of Merger shall be adopted and approved by
Jungle Street as the sole shareholder of Subsidiary, and by Televar and the
Televar shareholders.
1.11 Dissenting Shares. Any issued and outstanding shares of Televar
held immediately prior to the Effective Time by a shareholder who has
properly perfected, or properly perfects, his or her appraisal rights under
the applicable provisions of the WBCA, and who has not waived or otherwise
lost such rights ("Dissenting Shares"), shall not be converted into or be
exchangeable for the right to receive the consideration specified in
Section 1.3, but the holders of Dissenting Shares shall be entitled to
payment of the fair value of such Dissenting Shares in accordance with the
provisions of RCW 23B.13.010.
1.12 Delivery of Certificates by the Televar Shareholders. The
transfer of the Televar Shares by the Televar shareholders shall be
effected by the delivery to Jungle Street or its transfer agent of
certificates representing the Televar Shares endorsed in blank or
accompanied by stock powers executed in blank, with all signatures
witnessed or guaranteed to the satisfaction of Jungle Street and with any
necessary transfer taxes and other revenue stamps affixed and acquired at
the expense of the Televar shareholders, and on receipt thereof to the
satisfaction of the Surviving Corporation, a stock certificate representing
shares in Jungle Street shall be issued and delivered to each Televar
shareholder; as a condition to the conversion of the Televar Shares, Jungle
Street and the Surviving Corporation shall require the Televar shareholders
to execute and deliver an Investment Letter as outlined in Section 4.11
hereof, acknowledging, among other things, that the shares of Jungle Street
to be received on conversion of the Televar Shares are restricted
securities that have not been registered with the Securities and Exchange
Commission or any state regulatory agency, and which must be so registered
prior to public sale by the Televar shareholders, unless an exemption from
such registration is available for any such sale.
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1.13 Further Assurances. At the Closing and from time to time
thereafter, the parties shall execute such additional instruments and take
such other action as may be reasonably required or necessary to carry out
the terms and provisions hereof.
Section 2
Closing
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The Closing of the Merger shall be held at the offices of Stoel Rives
LLP, 3600 One Union Square, Seattle, Washington 98101, not later than ten
days following the date of this Agreement, unless another place or time is
agreed upon in writing by the parties. The Closing may be accomplished by
wire, express mail or other courier service, conference telephone
communications or as otherwise agreed by the parties.
Section 3
Representations and Warranties of Jungle Street and Control Persons
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Jungle Street, Jenson Services, Inc., Duane S. Jenson and Jeffrey D.
Jenson, jointly and severally (collectively, "Jenson"), represent and
warrant to, and covenant with, Televar as follows:
3.1 Corporate Status. Jungle Street is a corporation duly organized,
validly existing and in good standing under the laws of the State of Utah
and is licensed or qualified as a foreign corporation in all states in
which the nature of its business or the character or ownership of its
properties makes such licensing or qualification necessary. Jungle Street
is a publicly held company, having lawfully offered and sold a portion of
its securities to residents of the State of Utah in 1980 pursuant to an
Application for Registration of Securities filed with the Utah Securities
Division. Jungle Street filed a Registration Statement on Form 10-SB with
the Securities and Exchange Commission on December 12, 1995, covering its
common stock. The Registration Statement became effective under the
Securities Exchange Act of 1934 ("1934 Act") on February 13, 1996. Jungle
Street has, since the effective date of such 1934 Act registration, timely
filed all reports required to be filed by it with the Securities and
Exchange Commission, copies of which have been delivered to Televar, and
which reports are true and correct in every material respect; the common
stock of Jungle Street is currently listed on the OTC Bulletin Board of the
National Association of Securities Dealers, Inc. (the "NASD").
3.2 Capitalization. The authorized capital stock of Jungle Street
consists of 50,000,000 shares of common stock, having a par value of $0.001
per share, of which 1,250,300 shares are issued and outstanding, fully paid
and non-assessable, and have been issued and sold by Jungle Street in
compliance in all material respects with applicable federal and state
securities laws. There are no outstanding options, warrants or calls
pursuant to
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which any person has the right to purchase any authorized and unissued
capital stock of Jungle Street. The authorized capital stock of Subsidiary
consists of 10,000,000 shares of common stock, $.0001 par value per share,
of which 1,000 shares are issued and outstanding, fully paid and
non-assessable. There are no outstanding options, warrants or calls
pursuant to which any person has the right to purchase any authorized and
unissued capital stock of Subsidiary.
3.3 Financial Statements. The audited financial statements of Jungle
Street, consisting of the audited balance sheets, statements of income and
statements of cash flows for the fiscal years ended August 31, 1995 and
1994, attached hereto as Exhibit C and incorporated herein by reference
("Financial Statements"), are correct and complete and fairly present the
financial condition of Jungle Street at such dates and for the periods
involved; such statements were prepared in accordance with generally
accepted accounting principles consistently applied, and no material change
has occurred in the matters disclosed therein. The Financial Statements do
not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading.
3.4 Undisclosed Liabilities. Jungle Street and Subsidiary have no
liabilities of any nature except to the extent reflected or reserved
against in the Financial Statements, whether accrued, absolute, contingent
or otherwise, including, without limitation, tax liabilities and interest
due.
3.5 Interim Changes. Since the date of the Financial Statements, there
have been no (1) changes in financial condition, assets, liabilities or
business of Jungle Street which, in the aggregate, have been materially
adverse to Jungle Street; (2) damages, destruction or losses of or to
property of Jungle Street, payments of any dividend or other distribution
in respect of any class of stock of Jungle Street, or any direct or
indirect redemption, purchase or other acquisition of any class of any such
stock; or (3) increases paid or agreed to in the compensation, retirement
benefits or other commitments to employees.
3.6 Title to Property. Jungle Street has good and marketable title to
all properties and assets, real and personal, reflected in the Financial
Statements, and the properties and assets of Jungle Street are subject to
no mortgage, pledge, lien or encumbrance.
3.7 Litigation. There is no litigation or proceeding pending, or to
the knowledge of Jenson, threatened, against or relating to Jungle Street,
its properties or business. Further, no officer, director or person who may
be deemed to be an affiliate of Jungle Street is party to any material
legal proceeding which could have an adverse effect on Jungle Street
(financial or otherwise), and none is party to any action or proceeding
wherein any has an interest adverse to Jungle Street.
3.8 Books and Records. From the date of this Agreement to the Closing,
Jungle Street will (1) give to Televar and its representatives full access
during normal business hours to all of its offices, books, records,
contracts and other corporate documents and
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properties so that Televar may inspect and audit them; and (2) furnish such
information concerning the properties and affairs of Jungle Street as
Televar may reasonably request. The minute books of Jungle Street provided
to Televar contain the records of all actions taken by the Board of
Directors and the shareholders of Jungle Street since the formation of
Jungle Street in 1980.
3.9 Tax Returns. Jungle Street has filed all federal, state, local and
foreign income tax returns required under applicable law to be filed.
Jungle Street has paid all taxes required to be paid on account of the
operations or acts of Jungle Street in respect of all fiscal periods to
date. No deficiencies for any taxes have been asserted in writing or
assessed against Jungle Street which remain unpaid; and Jungle Street is
not currently being audited by any federal, state or local tax authority,
nor has Jungle Street received any notices from such authorities that
Jungle Street will be subject to an audit.
3.10 Confidentiality. Jungle Street and its representatives will keep
confidential any information which they obtain from Televar concerning the
properties, assets and business of Televar. If the transactions
contemplated by this Agreement are not consummated by October 31, 1996,
Jungle Street will return to Televar all information with respect to
Televar obtained by Jungle Street in connection with the negotiation or
consummation of the transactions provided for in this Agreement.
3.11 Corporate Authority. Jungle Street has full corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to Televar at Closing a certified copy of
resolutions of its Board of Directors authorizing execution of this
Agreement by its officers and performance thereunder.
3.12 Due Authorization. The execution of this Agreement and
performance by Jungle Street of its obligations hereunder have been duly
authorized by all requisite corporate action on the part of Jungle Street,
and this Agreement constitutes a valid and binding obligation of Jungle
Street and performance hereunder will not violate any provision of the
Articles of Incorporation, Bylaws, agreements, mortgages or other
commitments of Jungle Street or laws, judgments, decrees or orders
applicable to Jungle Street.
3.13 Real Property. Jungle Street owns no real property nor has any
leasehold or other interest in any real property. To the extent Jungle
Street has in the past had any such interest in real property, whether fee
title, leasehold or otherwise, such real property was undeveloped, vacant
land, upon or immediately adjacent to which no commercial or residential
development occurred prior to or during the time in which Jungle Street
held such interest.
3.14 Environmental Matters. To the best knowledge of Jenson, neither
Jungle Street nor any business or property owned by it has caused or
permitted the use, generation, manufacture, refinement, transportation,
treatment, storage or handling of any Hazardous Materials, except in
compliance with all applicable Hazardous Materials Regulations and
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there has been no release of any Hazardous Materials on- or off-site of any
real property leased or owned now, or in the past, by Jungle Street. In
addition, to the best knowledge of Jenson, there are no substances or
conditions which may support a claim or cause of action against Jungle
Street or any of its current or former officers, directors, agents or
employees, whether by a governmental agency or body, private party or
individual, under any Hazardous Materials Regulations. "Hazardous
Materials" means any oil or petrochemical products, PCB's, asbestos, urea
formaldehyde, flammable explosives, radioactive materials, solid or
hazardous wastes, chemicals, toxic substances or related materials,
including, without limitation, any substances defined as or included in the
definition of "hazardous substances," "Hazardous wastes," "hazardous
materials," or "toxic substances" under any applicable federal or state
laws or regulations. "Hazardous Materials Regulations" means any
Regulations governing the use, generation, handling, storage, treatment,
disposal or release of Hazardous Materials, including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act,
the Resource Conservation and Recovery Act and the Federal Water Pollution
Control Act.
3.15 Information; Access. No information furnished by Jungle Street,
Jenson or its agents to Televar in connection with this Agreement
(including the Financial Statements and all information in the exhibits and
schedules hereto) is false or misleading in any material respect. In
connection with such information and this Agreement, neither Jenson nor
Jungle Street has made any untrue statement of a material fact or omitted
to state or will omit to state a material fact necessary in order to make
the statements made or information delivered, in the light of the
circumstances under which they were made or not made, misleading. Jungle
Street and Subsidiary acknowledge that they have been delivered copies of
what has been represented to be documentation containing all material
information respecting Televar and its present business operations,
management and other factors; that they have had a reasonable opportunity
to review such documentation and discuss it, to the extent desired, with
their legal counsel, directors and executive officers; that they have had,
to the extent desired, the opportunity to ask questions of and receive
responses from the directors and executive officers of Televar, and with
the legal and accounting firms of Televar, with respect to such
documentation; and that to the extent requested, all questions raised have
been answered to their complete satisfaction.
Section 4
Representations, Warranties and Covenants of Televar
----------------------------------------------------
Televar represents and warrants to, and covenants with, Jungle Street
and Subsidiary, as follows:
4.1 Corporate Status. Televar is a corporation duly organized, validly
existing and in good standing under the laws of the State of Washington and
is licensed or qualified as a foreign corporation in all states in which
the nature of its business or the character or
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ownership of its properties makes such licensing or qualification material
to the operation of its business.
4.2 Capitalization. The authorized capital stock of Televar consists
of 10 million shares of common stock with a par value of $.0001 per share,
2,318,665 shares of which are issued and outstanding, fully paid and
non-assessable. Other than certain agreements with founders and pursuant to
option grants made under Televar's Employee Stock Option Plan, there are no
outstanding options, warrants or calls pursuant to which any person has the
right to purchase any authorized and unissued capital stock of Televar.
4.3 Financial Statements. The unaudited financial statements of
Televar furnished to Jungle Street, consisting of a balance sheet for the
year ended June 30, 1996, and a profit and loss statement for the period
from July 1, 1995 through June 30, 1996, attached hereto as Exhibit D and
incorporated herein by reference (the "Financial Statements"), are correct
and fairly present the financial condition of Televar at such dates and for
the periods involved; the Financial Statements were prepared in accordance
with generally accepted accounting principles consistently applied, and no
material change has occurred in the matters disclosed therein. The
Financial Statements do not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein
not misleading.
4.4 Undisclosed Liabilities. Televar has no material liabilities of
any nature except to the extent reflected or reserved against in the
Financial Statements, whether accrued, absolute, contingent or otherwise,
including, without limitation, tax liabilities and interest due or to
become due.
4.5 Interim Changes. Since the date of the Financial Statements, there
have been no (1) changes in the financial condition, assets, liabilities or
business of Televar which, in the aggregate, have been materially adverse;
(2) damages, destruction or loss of or to the property of Televar, payment
of any dividend or other distribution in respect of the capital stock of
Televar, or any direct or indirect redemption, purchase or other
acquisition of any such stock; or (3) increases paid or agreed to in the
compensation, retirement benefits or other commitments to employees other
than to executive officers.
4.6 Title to Property. Televar has good and marketable title to all
properties and assets, real and personal, proprietary or otherwise,
reflected in the Financial Statements and the properties and assets of
Televar are subject to no mortgage, pledge, lien or encumbrance, except for
liens shown therein, with respect to which no default exists.
4.7 Litigation. There is no material litigation or proceeding pending,
or to the knowledge of Televar, threatened, against or relating to Televar,
its properties or business. Further, no officer, director or person who may
be deemed to be an affiliate of Televar is party to any material legal
proceeding which could have an adverse effect on Televar
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(financial or otherwise), and none is party to any action or proceeding
wherein any has an interest adverse to Televar.
4.8 Books and Records. From the date of this Agreement to the Closing,
Televar will provide to Jungle Street and its representatives full access
during normal business hours to all of its offices, books, records,
contracts and other corporate documents and properties so that Jungle
Street may inspect and audit them; and will furnish such information
concerning the properties and affairs of Televar as Jungle Street may
reasonably request.
4.9 Tax Returns. Televar has filed all federal and state income or
franchise tax returns required to be filed or has received currently
effective extensions of the required filing dates.
4.10 Confidentiality. Televar and its respective representatives will
keep confidential any information which they obtain from Jungle Street
concerning its properties, assets and business. If the transactions
contemplated by this Agreement are not consummated by October 31, 1996,
Televar will return to Jungle Street all information with respect to Jungle
Street obtained by them in connection with the negotiation or consummation
of this Agreement.
4.11 Investment Intent. Televar will ask its shareholders to execute
and deliver to Jungle Street at Closing an Investment Letter in the form
attached hereto as Exhibit G and incorporated herein by reference,
acknowledging the unregistered and restricted nature of the securities of
Jungle Street being received in the Merger, and receipt of certain material
information regarding Jungle Street.
4.12 Corporate Authority. Televar has full corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to Jungle Street or its representatives at the
Closing a certified copy of resolutions of its Board of Directors
authorizing execution of this Agreement by its officers and performance
thereunder.
4.13 Due Authorization. The execution of this Agreement and
performance by Televar of its obligations hereunder have been duly
authorized by all requisite corporate action on the part of Televar, and
this Agreement constitutes a valid and binding obligation of Televar and
performance hereunder will not violate any provision of the Articles of
Incorporation, Bylaws, agreements, mortgages or other commitments of
Televar.
4.14 Environmental Matters. Televar has no knowledge of any assertion
by any governmental agency or other regulatory authority of any
environmental lien or action, or of any cause for any such lien or action.
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4.15 Access to Information Regarding Jungle Street. Televar
acknowledges that it has received copies of what has been represented by
Jenson to be documentation containing all material information respecting
Jungle Street and its present and contemplated business operations,
management and other factors, all in the form of annual and quarterly
reports filed by Jungle Street with the Securities and Exchange Commission;
that it has had a reasonable opportunity to review such documentation and
discuss it, to the extent desired, with legal counsel, directors and
executive officers; that it has had, to the extent desired, the opportunity
to ask questions of and receive responses from the directors and executive
officers of Jungle Street, and with the legal and accounting firms of
Jungle Street, with respect to such documentation.
Section 5
Conduct of Televar Pending the Closing
--------------------------------------
Except as otherwise provided herein, Televar agrees that Televar will
conduct itself in the following manner pending the Closing:
5.1 Certificate of Incorporation and Bylaws. No change will be made in
the Certificate of Incorporation or Bylaws of Televar.
5.2 Capitalization, etc. Televar will not make any change in its
authorized or issued shares of any class, declare or pay any dividend or
other distribution, or issue, encumber, purchase or otherwise acquire any
of its shares of any class.
5.3 Conduct of Business. Televar will use its best efforts to maintain
and preserve its business organization, employee relationships and good
will intact, and will not, without the written consent of Jungle Street,
enter into any material commitments except in the ordinary course of
business.
Section 6
Conduct of Jungle Street Pending the Closing
--------------------------------------------
Except as otherwise provided herein, Jungle Street and Subsidiary
agree that Jungle Street and Subsidiary will conduct business in the
following manner pending the Closing:
6.1 Certificate of Incorporation and Bylaws. No change will be made in
the Certificate of Incorporation or Bylaws of Jungle Street or Subsidiary.
6.2 Capitalization, etc. Neither Jungle Street nor Subsidiary will
make any change in its authorized or issued shares, declare or pay any
dividend or other distribution, or issue, encumber, purchase or otherwise
acquire any of its shares of any class.
10
<PAGE>
6.3 Conduct of Business. Jungle Street and Subsidiary will use their
best efforts to maintain and preserve their business organization, employee
relationships and good will intact, and will not, without the written
consent of Televar, enter into any material commitments except in the
ordinary course of business.
Section 7
Conditions Precedent to Obligations of Televar
----------------------------------------------
All obligations of Televar under this Agreement are subject, at its
option, to the fulfillment, before or at the Closing, of each of the
following conditions:
7.1 Representations and Warranties True at Closing. The
representations and warranties of Jenson contained in this Agreement shall
be deemed to have been made again at and as of the Closing and shall then
be true in all material respects and shall survive the Closing.
7.2 Due Performance. Jungle Street and Subsidiary shall have performed
and complied with all the terms and conditions required by this Agreement
to be performed or complied with by them before the Closing.
7.3 Officers' Certificate. Televar shall have been furnished with a
certificate signed by the President and Secretary of Jungle Street, in the
form attached hereto as Exhibit F and incorporated herein by reference,
dated as of the Closing, certifying (1) to the effects set out in Sections
6.1 and 6.2; and (2) that since the date of the Financial Statements, there
has been no material adverse change in the financial condition, business or
properties of Jungle Street.
7.4 Opinion of Counsel of Jungle Street. Televar shall have received
an opinion of counsel for Jungle Street, dated as of the Closing, to the
effect that (1) the representations of Sections 3.1, 3.2, 3.7, 3.11, 3.12
and 3.13 are true and correct; (2) except as specified in the opinion,
counsel knows of no inaccuracy in the representations in 3.5, 3.6, 3.7 or
3.14; (3) the shares of Jungle Street to be issued to the Televar
shareholders under this Plan will, when so issued, be validly issued, fully
paid and non-assessable.
Section 8
Conditions Precedent to Obligations of Jungle Street
----------------------------------------------------
All obligations of Jungle Street and Jungle Street Subsidiary under
this Agreement are subject, at their option, to the fulfillment, before or
at the Closing, of each of the following conditions:
11
<PAGE>
8.1 Representations and Warranties True at Closing. The
representations and warranties of Televar contained in this Agreement shall
be deemed to have been made again at and as of the Closing and shall then
be true in all material respects and shall survive the Closing.
8.2 Due Performance. Televar shall have performed and complied with
all the terms and conditions required by this Agreement to be performed or
complied with by it before the Closing.
8.3 Officers' and Shareholders' Certificate. Jungle Street shall have
been furnished with a certificate signed by the President and Secretary of
Televar, attached hereto as Exhibit G and incorporated herein by reference,
dated as of the Closing, certifying (1) to the effects set out in Sections
5.1 and 5.2; and (2) that since the date of its Financial Statements, there
has been no material adverse change in the financial condition, business or
properties of Televar.
8.4 Opinion of Counsel of Televar. Jungle Street shall have received
an opinion of counsel for Televar, dated as of the Closing, addressing
corporate existence of Televar and its corporate authority to enter into
this Agreement and to perform the transactions provided for herein.
8.5 Books and Records. Televar shall have made available all books and
records of Televar, including minute books and stock transfer records;
provided, however, only to the extent requested in writing by Jungle Street
at Closing.
Section 9
Termination
-----------
Prior to Closing, this Agreement may be terminated (1) by mutual
consent in writing; (2) by Jungle Street or Televar if there has been a
material misrepresentation or material breach of any warranty or covenant
by the other party; or (3) by Jungle Street or Televar if the Closing shall
not have taken place, unless adjourned to a later date by mutual consent in
writing, by the date fixed in Section 2.
Section 10
Survival and Indemnity
----------------------
10.1 Survival of Representations, Warranties, Covenants and
Agreements. The representations, warranties, covenants and agreements
contained herein shall survive the Closing without regard to any action
taken pursuant to this Agreement, including without limitation, any
investigation made by the party asserting any breach thereof.
12
<PAGE>
10.2 Indemnity from Jenson. Jenson Services, Inc., Duane S. Jenson and
Jeffrey D. Jenson, jointly and severally, agree to indemnify and hold
Televar harmless against and in respect of:
(a) Any damage, liability, deficiency, loss, cost, expense or
claim arising out of or resulting from (i) any defect in
title, (ii) any misrepresentation or omission by Jenson,
Jungle Street or Subsidiary herein or in any exhibit hereto,
(iii) any materially misleading information furnished by
Jenson, Jungle Street or Subsidiary herein or in any exhibit
hereto, (iv) any breach by Jenson, Jungle Street or
Subsidiary of any representation, warranty or covenant
herein or in any exhibit hereto, or (v) any debt or other
obligation of Jungle Street or Subsidiary existing at or
prior to the Closing or arising thereafter in connection
with events occurring prior to the Closing (to the extent
only that such debt or obligation is attributable to such
events prior to the Closing); and
(b) All reasonable costs and expenses (including reasonable
attorneys' fees) incurred by Televar in connection with any
action, suit, proceeding, demand, assessment or judgment
incident to any of the matters indemnified against in this
Section 10.2.
10.3 Indemnity from Televar and Televar Shareholders. Televar agrees
to indemnify and hold Jenson, Jungle Street and the Subsidiary harmless
from and against and in respect of:
(a) Any damage, liability, deficiency, loss, cost, expense or
claim arising out of or resulting from (i) the breach of any
representation, warranty or covenant by Televar herein or in
any exhibit hereto (ii) any misrepresentation or omission by
Televar herein or in any exhibit hereto or (iii) any
materially misleading information furnished by Televar
herein or in any exhibit hereto; and
(b) All reasonable costs and expenses (including reasonable
attorneys' fees) incurred by Jenson, Jungle Street and
Subsidiary in connection with any action, suit, proceeding,
demand, assessment, or judgment incident to any of the
matters indemnified against in this Section 10.3.
10.4 Not Exclusive Remedy. Any right of indemnity of any party
pursuant to this Section 10 shall be in addition to and shall not operate
as a limitation on any other right to indemnity of such party pursuant to
this Agreement, any other document or instrument executed in connection
with the consummation of the transaction contemplated hereby, or otherwise.
13
<PAGE>
Section 11
General Provisions
------------------
11.1 Further Assurances. At any time, and from time to time, after the
Closing, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry
out the intent and purposes of this Agreement.
11.2 Waiver. Any failure on the part of any party hereto to comply
with any of their respective obligations, agreements or conditions
hereunder may be waived in writing by the party to whom such compliance is
owed.
11.3 Brokers. Each party represents to the other parties hereunder
that no broker or finder has acted for it/him/ in connection with this
Agreement, and agrees to indemnify and hold harmless the other parties
against any fee, loss or expense arising out of claims by brokers or
finders employed or alleged to have been employed by it/him/.
11.4 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given if delivered in person or
sent by prepaid first-class registered or certified mail, return receipt
requested, as follows:
If to Jungle Street or Jenson: Jeffrey D. Jenson
1787 East Ft. Union Blvd., #106
Salt Lake City, Utah 84121
With a copy to: Leonard W. Burningham, Esq.
455 East 500 South, Suite 205
Salt Lake City, Utah 84111
If to Televar: Televar Holdings, Inc.
215 Yakima Street
Wenatchee, Washington 98801
Attn: Charles D. DeJong, Chairman
and CEO
Fax: (509) 662-0712
With a copy to: Ronald J. Lone
Stoel Rives LLP
600 University Street, Suite 3600
Seattle, Washington 98101
Fax: (206) 386-7500
14
<PAGE>
11.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any other agreement,
representation, or communication, whether oral or written, between the
parties hereto relating to the transactions contemplated herein or the
subject matter hereof.
11.6 Headings. The section and subsection headings in this Agreement
are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.7 Governing Law; Venue. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Washington. Each party hereby irrevocably consents to the jurisdiction and
venue of the courts of the State of Washington, Chelan County, the United
States District Court for the Eastern District of Washington, and all
applicable appellate courts, in connection with any action to interpret or
enforce, or otherwise arising out of or relating to this Agreement.
11.8 Assignment. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns; provided
however, that any assignment by any party of any rights under this
Agreement without the prior written consent of the other parties shall be
void.
11.9 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
11.10 Default. In the event of a dispute with respect to the
interpretation of or a party's performance under this Agreement, the
prevailing party in such dispute shall be entitled to recover from the
non-prevailing party the prevailing party's reasonable attorneys' fees and
costs.
IN WITNESS WHEREOF, the parties have executed this Agreement and Plan
of Merger effective the day and year first above written.
JUNGLE STREET, INC., a Utah corporation
By DON C. MORRISON
------------------------------------------
Don C. Morrison, President
JUNGLE STREET, INC., a Washington
corporation
By DON C. MORRISON
------------------------------------------
Don C. Morrison, President
15
<PAGE>
TELEVAR NORTHWEST, INC.
By MARK HAMILTON
------------------------------------------
Mark Hamilton, President
JENSON SERVICES, INC.
By
------------------------------------------
Its
------------------------------------
DUANE S. JENSON
--------------------------------------------
Duane S. Jenson
JEFFREY D. JENSON
--------------------------------------------
Jeffrey D. Jenson
16
<PAGE>
INDEX TO EXHIBITS
Exhibit A Plan of Merger
Exhibit B Compensation Agreement
Exhibit C Jungle Street Financial Statements
Exhibit D Televar Financial Statements
Exhibit E Televar Shareholder Investment Letter
Exhibit F Jungle Street Officers' Certificate
Exhibit G Televar Officers' Certificate
17
NEWS RELEASE
Jungle Street, Inc., a Utah corporation ("Jungle Street"), OTC
Bulletin Board Symbol, "JUNS", announced today the closing of an Agreement
and Plan of Merger (the "Agreement") pursuant to which Televar Northwest,
Inc., a Washington corporation ("Televar"), became a wholly-owned
subsidiary of Jungle Street.
Pursuant to the Agreement, 11,593,325 "unregistered" and "restricted"
shares of Jungle Street's common stock are to be issued to the stockholders
of Televar in a merger between Televar and a wholly-owned subsidiary of
Jungle Street. One of Jungle Street's principal stockholders delivered
447,120 shares of common stock of Jungle Street for cancellation
immediately prior to the closing; and 1,125,000 shares are to be issued to
certain consultants pursuant to a written compensation agreement and an S-8
Registration Statement filed with the Securities and Exchange Commission on
August 28, 1996. With the 1,696,120 outstanding pre-Agreement shares of
Jungle Street being reduced by 447,120, and the issuance of the shares to
the stockholders of Televar and these consultants, there will be 13,968,325
post-Agreement outstanding shares of Jungle Street.
Televar was organized in 1984, and is engaged in the business of
providing Internet access and long distance telephone service.
Jungle Street's current directors and executive officers have
resigned, in seriatim, and the directors and executive officers of Televar
have been designated and elected to serve in their stead until the next
respective annual meetings of the stockholders and Board of Directors of
Jungle Street.
The new principal executive offices of Jungle Street are located at
215 Yakima Street, Wenatchee, Washington 98801, and its new telephone
number is 509-664-9004.
September 3, 1996
cc: Dow Wire Service Fax No. 212-416-4008
Bloomberg Financial Markets Fax No. 609-279-5976
Reuters Fax No. 212-859-1717
