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
December 3, 1999
Date of Report
(Date of Earliest Event Reported)
AMERICAN CAREER CENTERS, INC.
(Exact Name of Registrant as Specified in its Charter)
2490 South 300 West
South Salt Lake City, Utah 84115
(Address of principal executive offices)
801/485-6200
Registrant's telephone number
TUNLAW INTERNATIONAL CORPORATION
1504 R Street, N.W.
Washington, D.C. 20009
Former name and former address
Nevada 0-22785 52-2031541
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification no.)
incorporation)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Agreement and Plan of Reorganization
(the "Agreement") effective December 3, 1999 American Career
Centers, Inc. ("ACCI" or the "Company"), a Nevada corporation,
acquired all the outstanding shares of common stock of Tunlaw
International Corporation ("Tunlaw"), a Nevada corporation, from
the shareholders thereof in exchange for an aggregate of
200,000 shares of common stock of ACCI (the "Acquisition"). As a
result, Tunlaw became a wholly-owned subsidiary of ACCI.
The Acquisition was adopted by the unanimous consent of the Board of
Directors of ACCI on December 3, 1999. The Acquisition is intended to
qualify as a reorganization within the meaning of Section 368(a)(1)(B)
of the Internal Revenue Code of 1986, as amended.
Prior to the Acquisition, ACCI had 5,549,000 shares of common
stock issued and outstanding and 5,749,000 shares issued and outstnaind
following the Acquisition. ACCI has an authorized capitalization of
120,000,000 shares, consisting of 100,000,000 shares of common stock,
$.0001 par value per share, and 20,000,000 shares of preferred stock,
$.0001 par value per share, of which no shares have been issued and
are outstanding.
Upon effectiveness of the Acquisition, pursuant to Rule
12g-3 of the General Rules and Regulations of the Securities and
Exchange Commission, ACCI became the successor issuer to Tunlaw for
reporting purposes under the Securities Exchange Act of 1934 and
elects to report under the Act effective December 3, 1999.
A copy of the Agreement is filed as an
exhibit to this Form 8-K and is incorporated in its entirety herein.
The foregoing description is modified by such reference.
(b) The following table contains information regarding the
shareholdings of ACCI's current directors and executive officers and
those persons or entities who beneficially own more than 5% of its
common stock (giving effect to the exercise of the warrants held by
each such person or entity):
Number of shares Percent of
of Common Stock Common Stock
Name Beneficially Owned Beneficially owned (1)
Ronald C. Mears 1,750,000 (2) 30.43%
Willliam G. Anthony 470,000 (3) 8.2%
Thomas D. Keene 380,000 (3) 6.6%
Combined Assets, Inc. 525,000 (4) 9.1%
InterAsset Management, Inc. 601,000 (4) 10.5%
T.A.S.S., Inc. 445,000 7.7%
All directors and 2,600,000 45.2%
executive officers as
a group (3 persons)
(1) Based upon 5,749,000 outstanding shares of common stock
(subsequent to the effectiveness of the Acquisition).
(2) 624,000 shares owned by Ronald Mears and 1,126,000 shares
that are held by corporations that could be deemed to be
controlled by Ronald Mears,
(3) Stock subject to a three year vesting period that began on
July 30, 1999.
(4) Ronald Mears effectively controls named corporation and may
be deemed a beneficial owner of the shares held by it.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the
Agreement was negotiated between Tunlaw and ACCI.
In evaluating ACCI, Tunlaw used criteria such as the value of the
assets of ACCI, ACCI's ability to compete in the training school market,
the increased use of the Internet as a sales market, ACCI's current
and anticipated business operations, and ACCI's business name and
reputation in the post-secondary education community. In evaluating
Tunlaw, ACCI placed a primary emphasis on Tunlaw's status as a
reporting company under the Section 12(g) of the Securities Exchange
Act of 1934, as amended, (the "Act") and Tunlaw's facilitation of
ACCI's becoming a reporting company under the Act.
(b) The Company intends to strengthen its market position by
providing an information technology opportunity for prospective
students and to continue its expansion into the post-secondary
education market in the United States. The Company intends to
achieve this goal by both enhancing growth at its existing campuses
and selectively acquiring additional accredited proprietary colleges
with complementary/new curricula and name recognition.
BUSINESS
COMPANY
American Career Centers, Inc. ("ACCI") was incorporated in
the State of Nevada on June 15, 1999, by Ronald Mears and William
Anthony, current directors of ACCI. ACCI was formed to act as a
holding company for a number of related career colleges and training
centers with a primary focus on giving students direct access to
information technology training in combination with preparing
students for entry level jobs through a career oriented educational
program. ACCI intends to provide career training in various fields
such as information technology, Internet web site design and
support, business administration, accounting, automotive training,
health and exercise sciences, medical and dental assisting,
paralegal, veterinary, clinical assisting and office administration.
In addition, the Company intends to expand its operations in the
adult retraining and online (Internet) learning markets.
The Company has two wholly owned subsidiaries, Alpha Computer
Solutions, Inc. ("Alpha"), an information technology training
company headquartered in Salt Lake City, Utah, formed in June, 1998,
and acquired by ACCI in June, 1999 and Tunlaw International Corporation
(which may be referred to on the Securities and Exchange Commission
Edgar filing base as Tunlaw Capital Corporation").
CURRENT OPERATIONS
The Company's current operations are currently limited to
those of its subsidiary's training center in Salt Lake City, Utah.
The expansion of the Company's operations will require additional
working capital.
Alpha provides several hundred computer software training
courses in an instructor led environment. Courses include Microsoft
and Novell certification programs as well as courses on various
aspects of Internet web design, support and implementation. Alpha
offers open and closed (corporate-based) classes, onsite classes for
corporations and governments clients, vocational rehabilitation and
job placement services, as well as miscellaneous consulting in the
information technology area.
PRODUCTS AND SERVICES
Manufacturers of widely-used software, such as Microsoft or
Corel, regularly release new versions of their software. With each
new release, additional training is required. Proper training and
more efficient use of all systems/applications software,
particularly new releases, allow companies to get the highest return
on their technology and personnel investments.
The Company intends to serve the segment of the population
seeking to acquire career-oriented education to become qualified and
marketable in the job market. To that end, the Company has added
information technology training for those seeking
careers in other fields as well as those individuals seeking careers
in the rapidly expanding computer industry.
MARKETING
The Company employs a variety of methods to attract
applicants to enroll in the Company's career training programs and
advance in their chosen career fields. Firstly, the Company employs
direct response advertising techniques which tend to generate leads
on candidates for its schools through television, direct mail,
newspaper, and yellow pages. The Company operates a Call Center at
its headquarters, staffed by a team of operators who receive
incoming lead calls generated by all television and newspaper media
sources. The Company's three advertising agencies are networked into
the Company's data base and are provided with real time information
on the effectiveness of individual commercials. The agencies consult
with the Company's advertising department to adjust schedules for
ads depending on the Company's needs and the effectiveness of
particular ads.
The Company is marketing its business in a number of key
cities throughout the United States. As it establishes a presence in
these markets, the Company intends to create a smaller permanent
facility in each city to accommodate a longer term program.
BUSINESS PLAN
An important part of the Company's growth plan includes
identifying and making acquisitions of other small information technology
training schools that are profitable operations and have good reputation
in their business community. The Company will require additional funds
and the ability to borrow funds to complete possible acquisitions.
The Company has targeted several post-secondary educational
training schools in Minnesota and Utah which it hopes to acquire and
to redesign their programs to exploit favorable demographic and
economic trends. These target educational institutions provide
diploma programs in healthcare and technology related fields. The
Company's geographic strategy is to build a competitive position in
growing local markets where the Company can take advantage of
operating efficiencies and benefit from demographic shifts. These
acquisitions are yet to be negotiated and the Company requires
additional working capital to complete any additional acquisitions.
There is no assurance that the Company will be able to successfully
complete any of the contemplated acquisitions. The Company has no
agreements to purchase any new businesses at this time.
The Company intends to expand its product offerings to
include other types of technology based education such as "distance
learning" that could compete with traditional public and private
education. The Company intends to offer accelerated degrees,
certifications and technology degrees that would enable a student to
enter the workforce more quickly in various high-tech fields.
TRADEMARKS AND PATENTS
The Company has no patents or trademarks.
PROPERTY
The Company's principal executive offices are at the
16,000 square foot Alpha Computer Solutions, Inc. training center
located at 2940 South 300 West, Salt Lake City, Utah 84115 and its
telephone number is (801) 485-6200. This stand alone building is a
leased facility. The lease term is five years and it will terminate
on August 14, 2003. The monthly rent starts at $8,766 and escalates
to $10,114 per month in the final year. In addition, there is a
common area maintenance fee of approximately $1,350 per month.
LITIGATION
There is no outstanding litigation in which the Company is
involved and the Company is unaware of any pending actions or claims
against it.
EMPLOYEES
The Company currently employs thirty five full time employees.
MARKET FOR THE COMPANY'S SECURITIES
There has been no public market for ACCI's securities to date.
ACCI has issued securities that are exempt from registration under
the Securities Act of 1933 pursuant to Rules 504 and Rule 506 of
Regulation D of the General Rules and Regulations of
the Securities and Exchange Commission.
MANAGEMENT
Name Age Title
Ronald C. Mears 61 Director
William G. Anthony 56 Director, President
Thomas D. Keene 41 Director, Secretary,
Treasurer
RONALD C. MEARS has been Chairman and Chief Executive
Officer of American Career Centers, Inc. since its acquisition of
Alpha Computer Solutions. Mr. Mears has served as Chairman and Chief
Executive Officer of Alpha Computer Solutions, Inc. since it was
founded in 1998. Mr. Mears was formerly Chief Executive Officer of
New Technology Services, Inc., a company he founded in May, 1997,
that provided network engineering education in several major markets
throughout the United States. From 1994 through 1996, Mr. Mears was
Vice President of Sales for New Horizons Computer Learning Centers
in Salt Lake City, Utah. Mr. Mears studied business at San Diego
State University, El Camino College, and Pierce College.
WILLIAM G. ANTHONY has been the President and a director of
American Career Centers, Inc. since its acquisition of Alpha
Computer Solutions, Inc. Mr. Anthony served as the President and a
Director of Alpha Computer Solutions, Inc., since it was founded in
1998. From 1997 to 1998, Mr. Anthony served as President of
InterWest Graphics, Inc. a large graphics organization in the
Intermountain West. From 1992 to 1996, Mr. Anthony served as
President and Chief Executive Officer of TimberWolf Multimedia, a
multimedia software development and marketing organization. From
1986 to 1991, Mr. Anthony also served as President and Chief
Executive Officer of Wasatch Education Systems, Inc., a publicly
traded company that developed and sold educational software to
elementary and high school school districts throughout the United
States. From 1979 to 1985, Mr. Anthony served as President and
Chief Operating Officer of Systems Associates, Inc., a publicly
traded company that developed and sold software for the healthcare
industry. Mr. Anthony received his Bachelor of Arts Degree in
Economics from the University of California in Los Angeles in 1972
and a Masters Degree in Operations Management from California State
University at Northridge in 1974.
THOMAS D. KEENE has been the Chief Financial Officer and a
director of American Career Centers, Inc. since it was founded in
June of 1999. He also has and currently serves as Chief Financial
Officer and a director of Alpha Computer Solutions, Inc. Mr. Keene
has served as an independent consultant in accounting,
administration, finance and business planning. Prior to the
formation of Alpha Computer Solutions, Inc., Mr. Keene did
consulting work for clients in Salt Lake City, Utah and Boise,
Idaho. From 1991 to 1994 Mr. Keene was Treasurer and Director of
Finance for Data-Cache Corporation. Prior to 1991, Mr. Keene worked
as an accountant for Morrison Knudsen Corporation and Albertsons,
Inc. Mr. Keene has a degree in Business from The College of Idaho
(now named Albertson College of Idaho) and has advanced education in
business, accounting and taxes from The College of Idaho and Boise
State University.
EXECUTIVE COMPENSATION
William G. Anthony, as President, receives $70,000 per
annum. He has no form of other compensation from the Company.
Thomas D. Keene, as Chief Financial Officer, receives
$50,000 per annum. He has no form of other compensation from the
company.
Ronald C. Mears, as Chairman, receives $100,000 per annum.
He has no form of other compensation from the Company.
RELATED TRANSACTIONS
Ronald C. Mears sold certain assets to the Company in
exchange for 624,000 shares of common stock of the Company. These
assets included computers, computer networks, software to operate
the network, course materials, furniture and fixtures required to
construct classroom facilities, and customer lists.
RISK FACTORS
LIMITED OPERATING HISTORY. The Company has operations only
through its wholly-owned subsidiary, Alpha Computer Solutions, which
it acquired in July, 1999, and which commenced operations in June,
1998. The Company has only a limited history of operations. The
Company's operations are subject to the risks and competition
inherent in the establishment of a relatively new business
enterprise in a competitive filed of post-secondary education. There
can be no assurance that future operations will be profitable.
Revenues and profits, if any, will depend upon various factors,
including market acceptance of its concepts, market awareness, its
ability to expand its network of participating educational
institutions, reliability and acceptance of the Internet,
dependability of its advertising and recruiting network, and general
economic conditions. There is no assurance that the Company will
achieve its expansion goals and the failure to achieve such goals
would have an adverse impact on it.
HISTORY OF LOSSES. The Company has experienced losses.
Based on unaudited statement of operations for the twelve month
period ended June 30, 1999, the Company experienced an operating
loss of $827,714. There is no assurance that the Company will not
continue to experience losses and the Company will need to seek
alternative sources of financing to meet its proposed business plan.
The Company may offer its debt or equity securities or seek funds
through borrowing or the use of other financial instruments. The
Company does not currently have any commitments or arrangements for
such financing and such financing may not be available on terms
satisfactory to the Company. The Company would be required to
curtail its business acquisition strategy if it were unable to
locate such financing or to raise funds through an offering of its
securities.
ADVERSE ECONOMIC CONDITIONS OR A CHANGE IN GENERAL MARKET
PATTERNS. A weak economic environment could adversely affect the
Company sales and student recruitment. General economic conditions
impact post-secondary education market companies, and demand for
their services may decline at any time, especially during
recessionary periods. Many factors beyond the Company's control may
decrease overall demand for computer training including, among other
things, decrease in the costs of higher education, increase in the
overall unemployment rate, market surplus of prospective labor with
substantially similar or same training skills, additional government
regulation and certification in the field of post-secondary
education. There can be no assurance that the general market demand
for post-secondary education in computer and related fields will
remain the same or will increase in the future.
RELIANCE ON FUTURE ACQUISITIONS STRATEGY. The Company
expects to rely on acquisitions as a primary component of its growth
strategy. There is no assurance that the Company will continue to
be able to identify educational institutions or training centers
that provide suitable acquisition opportunities or that the Company
will be able to acquire any such companies on favorable terms.
Further, there is no assurance that the acquired companies will be
able to successfully integrate into the Company's existing
infrastructure or to operate profitably. Acquisitions involve a
number of special risks including the diversion of management's
attention, assimilation of the personnel and operations of the
acquired companies, possible loss of key employees. No assurance is
given as to the Company's ability to obtain adequate funding to
complete any contemplated acquisition or that such acquisition will
succeed in enhancing the Company's business and will not ultimately
have an adverse effect on the Company's business and operations.
MANAGEMENT AND AFFILIATES OWN ENOUGH SHARES TO CONTROL
SHAREHOLDER VOTE. The Company's executive officers and directors
beneficially own approximately 45.2% of the outstanding common stock
of the Company. As a result, these executive officers are able to
exert significant control over business matters and affairs
requiring stockholder approval, including the election of directors
and the approval of material corporate matters such as change of
control transactions. The effects of such control could be to delay
or prevent a change of control of the Company unless the terms are
approved by such stockholders.
LACK OF CONTINUED DEVELOPMENT OF E-COMMERCE MARKET. The use
of the Internet and World Wide Web for commercial purposes is
expanding dramatically. There is no assurance, however, that as
increased commerce takes place on the Internet that unforeseen
overloads, lack of sufficient hardware, telephone availability or
other problems may not develop. In addition, consumer use of the
Internet for purchases, banking, and other commercial uses may
decline for any number of reasons such as security problems,
overload difficulties, shopping trends, or slow Internet access.
These difficulties may undermine Company's expansion plans into
"distant" and "online" learning. There is no assurance that the
Company will be able to successfully overcome these difficulties and
maintain its competitive pricing and services.
LOSS OF THE COMPANY KEY EMPLOYEES MAY ADVERSELY AFFECT
GROWTH OBJECTIVES. The Company's success in achieving its growth
objectives depends upon the efforts of William G. Anthony, President
of the Company and Thomas D. Keene, Chief Financial Officer. The
Company believes that their experience and industry-wide contacts
will significantly benefit the Company. The loss of the services of
either of these individuals may have a material adverse effect on
our business, financial condition and results of operations. The
Company does not maintain key-man life insurance on any of its
executives. There is no assurance that the Company will be able to
maintain and achieve its growth objectives should it lose either or
both of these individuals' services.
THE COMPANY HAS NOT BEEN AUDITED BY INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS. Although the Company is required to file audited
financial statements no later than 60 days from the date that this
report is required to be filed, no such audited financial statements
have been prepared or are available for inspection as of the date
hereof. Consequently, there can be no assurance that any
representations as to the financial condition or assets of the
Company are as stated herein.
COMPETITION FROM LARGER AND MORE ESTABLISHED COMPANIES MAY
HAMPER MARKETABILITY. The competition in the post-secondary
education industry is intense. Large and highly fragmented, this
industry hosts a number of well-established competitors, including
national, regional and local companies possessing greater financial,
marketing, personnel and other resources than the Company. There is
no assurance that the Company will be able to market or sell its
products if faced with direct product and services competition from
these larger and more established career training educational
institutions.
FAILURE TO ATTRACT QUALIFIED PERSONNEL. A change in labor
market conditions that either further reduces the availability of
employees or increases significantly the cost of labor could have a
material adverse effect on the Company's business, financial
condition and results of operations. The Company's business is
dependent upon its ability to attract and retain highly qualified
faculty, school presidents, administrators and corporate management.
There is no assurance that the Company will be able to employ a
sufficient number of qualified training personnel in order to
achieve its growth objectives.
ABSENCE OF PUBLIC MARKET. There is currently no trading
market for the common stock of the Company and there is no assurance
that a trading market for the common stock will develop. When and if
the Company's common stock obtains a trading market, the market
price of the common stock will be subject to fluctuations in
response to variety of factors, including quarterly variations in
the Company's operating results, announcements of acquisitions by
the Company or its competitors, new regulations or interpretations
of regulations applicable to the Company's targeted schools, changes
in accounting treatments or principles and changes in earnings
estimates by securities analysts, as well as general political,
economic and market conditions. The market price for the common
stock may also be affected by the Company's ability to meet or
exceed analysts' earnings expectations, and any failure to meet such
expectations, even in minor, could have a material adverse effect on
the market price of the common stock. In addition, the stock market
has, from time to time, experienced significant price and volume
fluctuations which could adversely affect the market price of the
common stock without regard to the financial performance of the
Company.
ISSUANCE OF FUTURE SHARES MAY DILUTE INVESTORS SHARE VALUE.
The Certificate of Incorporation as amended of the Company
authorizes the issuance of 120,000,000 shares of common stock and no
shares of preferred stock. The future issuance of all or part of
the remaining authorized common stock may result in substantial
dilution in the percentage of the Company's common stock held by the
its then existing shareholders. Moreover, any common stock issued
in the future may be valued on an arbitrary basis by the Company.
The issuance of the Company's shares for future services or
acquisitions or other corporate actions may have the effect of
diluting the value of the shares held by investors, and might have
an adverse effect on any trading market, should a trading market
develop for the Company's common stock.
PENNY STOCK REGULATION. Upon commencement of trading in the
Company's stock, if any, of which there can be no assurance, the
Company's common stock may be deemed a penny stock. Penny stocks
generally are equity securities with a price of less than $5.00 per
share other than securities registered on certain national
securities exchanges or quoted on the Nasdaq Stock Market, provided
that current price and volume information with respect to
transactions in such securities is provided by the exchange or
system. The Company's securities may be subject to "penny stock
rules" that impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally those with
assets in excess of $1,000,000 or annual income exceeding $200,000
or $300,000 together with their spouse). For transactions covered by
these rules, the broker-dealer must make a special suitability
determination for the purchase of such securities and have received
the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny
stock, unless exempt, the "penny stock rules" require the delivery,
prior to the transaction, of a disclosure schedule prescribed by the
Commission relating to the penny stock market. The broker-dealer
also must disclose the commissions payable to both the broker-dealer
and the registered representative and current quotations for the
securities. Finally, monthly statements must be sent disclosing
recent price information on the limited market in penny stocks.
Consequently, the "penny stock rules" may restrict the ability of
broker-dealers to sell the Company's securities. The foregoing
required penny stock restrictions will not apply to the Company's
securities if such securities maintain a market price of $5.00 or
greater. There can be no assurance that the price of the Company's
securities will reach or maintain such a level.
COMPUTER SYSTEMS REDESIGNED FOR YEAR 2000. Many existing
computer programs use only two digits to identify a year in such
program's date field. These programs were designed and developed
without consideration of the impact of the change in the century for
which four digits will be required to accurately report the date.
If not corrected, many computer applications could fail or create
erroneous results by or following the year 2000 (the "Year 2000
problem"). Many of the computer programs containing such date
language problems have been corrected by the companies or
governments operating such programs. The Company's operations are
dependent upon the properly functioning computer equipment which may
fail because of such Year 2000 problems owned by the Company as well
as well as those operated by others, including the Internet. The
Company does not know what steps, if any, have been taken by any of
its suppliers in regard to the Year 2000 problems. The Company's
operations will be severally curtailed if one or more of its
business partners were to suffer Year 2000 problems. Furthermore, it
is impossible to predict if the basic utilities serving the Company
will continue uninterrupted.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer Election.
Pursuant to Rule 12g-3(a) of the General Rules and
Regulations of the Securities and Exchange Commission, upon
effectiveness of the Acquisition, the Company became the
successor issuer to Tunlaw International Corporation for reporting
purposes under the Securities Exchange Act of 1934 and elects to
report under the Act effective December 3, 1999.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Not applicable.
ITEM 7. FINANCIAL STATEMENTS
No financials are filed herewith. The Registrant is required
to file financial statements by amendment hereto no later than 60
days after the date that this Current Report on Form 8-K must be
filed.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
EXHIBITS
2.1. Agreement and Plan of Reorganization thereto
between American Career Centers, Inc. and Tunlaw
International Corporation.
*3.1. Articles of Incorporation of American Career Centers, Inc.,
as amended.
*3.2. By-Laws of American Career Centers, Inc., as amended.
*27.1. Financial Date schedule.
_____
*To be filed by amendment
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Current Report on Form 8-K
to be signed on its behalf by the undersigned hereunto duly authorized.
AMERICAN CAREER CENTERS, INC.
By William G. Anthony
President
Date: December 9, 1999
AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") among
TUNLAW INTERNATIONAL CORPORATION, a Delaware corporation ("Tunlaw"),
AMERICAN CAREER CENTERS, INC., a Nevada corporation ("ACCI") and
the persons listed in Exhibit A hereof (collectively the
"Shareholders"), being the owners of record of all of the issued and
outstanding stock of Tunlaw.
Whereas, ACCI wishes to acquire and the Shareholders wish to
transfer all of the issued and outstanding securities of Tunlaw in a
transaction intended to qualify as a reorganization within the
meaning of Section 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended.
Now, therefore, Tunlaw, ACCI and the Shareholders adopt this
plan of reorganization and agree as follows:
1. EXCHANGE OF STOCK
1.1. NUMBER OF SHARES. The Shareholders agree to transfer
to ACCI at the Closing (defined below) the number of shares of
common stock of Tunlaw, $.0001 par value per share, shown opposite
their names in Exhibit A, in exchange pro rata for an aggregate of
200,000 shares of voting common stock of ACCI, $0.0001 par value per
share.
1.2. EXCHANGE OF CERTIFICATES. Each holder of an
outstanding certificate or certificates theretofore representing
shares of Tunlaw common stock shall surrender such certificate(s)
for cancellation to ACCI, and shall receive in exchange a
certificate or certificates representing the number of full shares
of ACCI common stock into which the shares of Tunlaw common stock
represented by the certificate or certificates so surrendered shall
have been converted. The transfer of Tunlaw shares by the
Shareholders shall be effected by the delivery to ACCI at the
Closing of certificates representing the transferred shares endorsed
in blank or accompanied by stock powers executed in blank.
1.3. FRACTIONAL SHARES. Fractional shares of ACCI common
stock shall not be issued, but in lieu thereof ACCI shall round up
fractional shares to the next highest whole number.
1.4. FURTHER ASSURANCES. At the Closing and from time to
time thereafter, the Shareholders shall execute such additional
instruments and take such other action as ACCI may request in order
more effectively to sell, transfer, and assign the transferred stock
to ACCI and to confirm ACCI's title thereto.
2. RATIO OF EXCHANGE. The securities of Tunlaw owned by
the Shareholders, and the relative securities of ACCI for which
they will be exchanged, are set out opposite their names in Exhibit A.
3. CLOSING.
3.1. TIME AND PLACE. The Closing contemplated herein
shall be held as soon as possible at the offices of Cassidy &
Associates at 1504 R Street, NW, Washington, D.C. unless another
place or time is agreed upon in writing by the parties without
requiring the meeting of the parties hereof. All proceedings to be
taken and all documents to be executed at the Closing shall be
deemed to have been taken, delivered and executed simultaneously,
and no proceeding shall be deemed taken nor documents deemed
executed or delivered until all have been taken, delivered and
executed. The date of Closing may be accelerated or extended by
agreement of the parties.
3.2. FORM OF DOCUMENTS. Any copy, facsimile
telecommunication or other reliable reproduction of the writing or
transmission required by this Agreement or any signature required
thereon may be used in lieu of an original writing or transmission
or signature for any and all purposes for which the original could
be used, provided that such copy, facsimile telecommunication or
other reproduction shall be a complete reproduction of the entire
original writing or transmission or original signature.
4. UNEXCHANGED CERTIFICATES. Until surrendered, each
outstanding certificate that prior to the Closing represented Tunlaw
common stock shall be deemed for all purposes, other than the
payment of dividends or other distributions, to evidence ownership
of the number of shares of ACCI common stock into which it was
converted. No dividend or other distribution shall be paid to the
holders of certificates of Tunlaw common stock until presented for
exchange at which time any outstanding dividends or other
distributions shall be paid.
5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders, individually and separately, represent and
warrant as follows:
5.1. TITLE TO SHARES. The Shareholders, and each of them,
are the owners, free and clear of any liens and encumbrances, of the
number of Tunlaw shares which are listed in the attached schedule
and which they have contracted to exchange.
5.2. LITIGATION. There is no litigation or proceeding
pending, or to any Shareholder's knowledge threatened, against or
relating to shares of Tunlaw held by the Shareholders.
6. REPRESENTATIONS AND WARRANTIES OF TUNLAW. Tunlaw
represents and warrants that:
6.1. CORPORATE ORGANIZATION AND GOOD STANDING. Tunlaw is
a corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware and is qualified to do
business as a foreign corporation in each jurisdiction, if any, in
which its property or business requires such qualification.
6.2. REPORTING COMPANY STATUS. Tunlaw has filed with the
Securities and
Exchange Commission a registration statement on Form 10-SC which
became effective pursuant to the Securities Exchange Act of 1934 and
is a reporting company pursuant to Section12(g) thereunder.
6.3. REPORTING COMPANY FILINGS. Tunlaw has timely filed
and is current on all
reports required to be filed by it pursuant to Section13 of the
Securities Exchange Act of 1934.
6.4. CAPITALIZATION. Tunlaw's authorized capital stock
consists of 50,000,000 shares
of Common Stock, $.0001 par value, of which 5,000,000 shares are
issued and outstanding, and 10,000,000 shares of Preferred Stock, of
which no shares are issued or outstanding.
6.5. ISSUED STOCK. All the outstanding shares of its
Common Stock are duly
authorized and validly issued, fully paid and non-assessable.
6.6. STOCK RIGHTS. Except as set out by schedule attached
hereto, there are no
stock grants, options, rights, warrants or other rights to purchase
or obtain Tunlaw Common or Preferred Stock issued or committed to be
issued.
6.7. CORPORATE AUTHORITY. Tunlaw has all requisite
corporate power and authority
to own, operate and lease its properties, to carry on its business
as it is now being conducted and to execute, deliver, perform and
conclude the transactions contemplated by this Agreement and all
other agreements and instruments related to this agreement.
6.8. AUTHORIZATION. Execution of this agreement has been
duly authorized and
approved by Tunlaw's board of directors.
6.9. SUBSIDIARIES. Except as set out by the schedule
attached hereto, Tunlaw has no subsidiaries.
6.10. FINANCIAL STATEMENTS. Tunlaw's financial statements
dated as of
December 31st, 1998 copies of which will have been delivered by
Tunlaw to ACCI prior to the Closing Date (the "Tunlaw Financial
Statements"), fairly present the financial condition of Tunlaw as of
the date therein and the results of its operations for the periods
then ended in conformity with generally accepted accounting
principles consistently applied.
6.11. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the
extent reflected or
reserved against in the Tunlaw Financial Statements, Tunlaw did not
have at that date any liabilities or obligations (secured,
unsecured, contingent, or otherwise) of a nature customarily
reflected in a corporate balance sheet prepared in accordance with
generally accepted accounting principles.
6.12. NO MATERIAL CHANGES. Except as set out by attached
schedule, there has been
no material adverse change in the business, properties, or financial
condition of Tunlaw since the date of the Tunlaw Financial Statements.
6.13. LITIGATION. Except as set out by attached schedule,
there is not, to the knowledge
of Tunlaw , any pending, threatened, or existing litigation,
bankruptcy, criminal, civil, or regulatory proceeding or
investigation, threatened or contemplated against Tunlaw or against
any of its officers.
6.14. CONTRACTS. Except as set out by attached schedule,
Tunlaw is not a party to
any material contract not in the ordinary course of business that is
to be performed in whole or in part at or after the date of this
agreement.
6.15. TITLE. Except as set out by attached schedule,
Tunlaw has good and marketable
title to all the real property and good and valid title to all other
property included in the Tunlaw Financial Statements. Except as set
out in the balance sheet thereof, the properties of Tunlaw are not
subject to any mortgage, encumbrance, or lien of any kind except
minor encumbrances that do not materially interfere with the use of
the property in the conduct of the business of Tunlaw .
6.16. TAX RETURNS. Except as set out by attached schedule,
all required tax returns
for federal, state, county, municipal, local, foreign and other
taxes and assessments have been properly prepared and filed by
Tunlaw for all years for which such returns are due unless an
extension for filing any such return has been filed. Any and all
federal, state, county, municipal, local, foreign and other taxes
and assessments, including any and all interest, penalties and
additions imposed with respect to such amounts have been paid or
provided for. The provisions for federal and state taxes reflected
in the Tunlaw Financial Statements are adequate to cover any such
taxes that may be assessed against Tunlaw in respect of its business
and its operations during the periods covered by the Tunlaw
Financial Statements and all prior periods.
6.17. NO VIOLATION. The Closing will not constitute or
result in a breach or default
under any provision of any charter, bylaw, indenture, mortgage,
lease, or agreement, or any order, judgment, decree, law, or
regulation to which any property of Tunlaw is subject or by which
Tunlaw is bound.
7. REPRESENTATIONS AND WARRANTIES OF ACCI. ACCI
represents and warrants that:
7.1. CORPORATE ORGANIZATION AND GOOD STANDING. ACCI is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Nevada and is qualified to do
business as a foreign corporation in each jurisdiction, if any, in
which its property or business requires such qualification.
7.2. CAPITALIZATION. ACCI's authorized capital stock
consists of 120,000,000 shares consisting of 100,000,000 shares of
Common Stock, $.0001 par value, of which 5,549,000 shares have been
issued and are outstanding, and 20,000,000 shares of Preferred
Stock, $.0001 par value per share of which no shares have been
issued and outstanding.
7.3. ISSUED STOCK. All the outstanding shares of its
Common Stock are duly authorized and validly issued, fully paid and
non-assessable.
7.4. STOCK RIGHTS. Except as set out by attached
schedule, there are no stock grants, options, rights, warrants or
other rights to purchase or obtain ACCI Common or Preferred Stock
issued or committed to be issued.
7.5. CORPORATE AUTHORITY. ACCI has all requisite
corporate power and authority to own, operate and lease its
properties, to carry on its business as it is now being conducted
and to execute, deliver, perform and conclude the transactions
contemplated by this Agreement and all other agreements and
instruments related to this agreement.
7.6. AUTHORIZATION. Execution of this agreement has been
duly authorized and approved by ACCI's board of directors.
7.7. SUBSIDIARIES. Except as set out in schedule attached
hereto, ACCI has no subsidiaries.
7.8. FINANCIAL STATEMENTS. ACCI's financial statements
which will have been delivered by ACCI
to Tunlaw prior to the Closing Date (the "ACCI Financial
Statements"), fairly present the financial condition of ACCI as of
the date therein and the results of its operations for the periods
then ended in conformity with generally accepted accounting
principles consistently applied.
7.9. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the
extent reflected or reserved against in the ACCI Financial
Statements, ACCI did not have at that date any liabilities or
obligations (secured, unsecured, contingent, or otherwise) of a
nature customarily reflected in a corporate balance sheet prepared
in accordance with generally accepted accounting principles.
7.10. NO MATERIAL CHANGES. Except as set out by attached
schedule, there has been no material adverse change in the business,
properties, or financial condition of ACCI since the date of the
ACCI Financial Statements.
7.11. LITIGATION. Except as set out by attached schedule,
there is not, to the knowledge of ACCI, any pending, threatened, or
existing litigation, bankruptcy, criminal, civil, or regulatory
proceeding or investigation, threatened or contemplated against ACCI
or against any of its officers.
7.12. CONTRACTS. Except as set out by attached schedule,
ACCI is not a party to any material contract not in the ordinary
course of business that is to be performed in whole or in part at or
after the date of this agreement.
7.13. TITLE. Except as set out by attached schedule, ACCI
has good and marketable title to all the real property and good and
valid title to all other property included in the ACCI Financial
Statements. Except as set out in the balance sheet thereof, the
properties of ACCI are not subject to any mortgage, encumbrance, or
lien of any kind except minor encumbrances that do not materially
interfere with the use of the property in the conduct of the
business of ACCI.
7.14. TAX RETURNS. Except as set out by attached schedule,
all required tax returns for federal, state, county, municipal,
local, foreign and other taxes and assessments have been properly
prepared and filed by ACCI for all years for which such returns are
due unless an extension for filing any such return has been filed.
Any and all federal, state, county, municipal, local, foreign and
other taxes and assessments, including any and all interest,
penalties and additions imposed with respect to such amounts have
been paid or provided for. The provisions for federal and state
taxes reflected in the ACCI Financial Statements are adequate to
cover any such taxes that may be assessed against ACCI in respect of
its business and its operations during the periods covered by the
ACCI Financial Statements and all prior periods.
7.15. NO VIOLATION. The Closing will not constitute or
result in a breach or default under any provision of any charter,
bylaw, indenture, mortgage, lease, or agreement, or any order,
judgment, decree, law, or regulation to which any property of ACCI
is subject or by which ACCI is bound.
8. CONDUCT PENDING THE CLOSING
Tunlaw , ACCI and the Shareholders covenant that between the
date of this Agreement and the Closing as to each of them:
8.1. No change will be made in the charter documents,
by-laws, or other corporate documents of Tunlaw.
8.2. Tunlaw will use its best efforts to maintain and
preserve its business organization, employee relationships, and
goodwill intact, and will not enter into any material commitment
except in the ordinary course of business.
8.3. No change will be made in the charter documents,
by-laws, or other corporate documents of ACCI.
8.4. ACCI will use its best efforts to maintain and
preserve its business organization, employee relationships, and
goodwill intact, and will not enter into any material commitment
except in the ordinary course of business.
8.5. None of the Shareholders will sell, transfer, assign,
hypothecate, lien, or otherwise dispose or encumber the Tunlaw
shares of common stock owned by them.
9. CONDITIONS PRECEDENT TO OBLIGATION OF THE SHAREHOLDERS
The Shareholder's obligation to consummate this exchange
shall be subject to fulfillment on or before the Closing of each of
the following conditions, unless waived in writing by the
Shareholders as appropriate:
9.1. ACCI'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of ACCI set forth herein shall be
true and correct at the Closing as though made at and as of that
date, except as affected by transactions contemplated hereby.
9.2. ACCI'S COVENANTS. ACCI shall have performed all
covenants required by this Agreement to be performed by it on or
before the Closing.
9.3. BOARD OF DIRECTOR APPROVAL. This Agreement shall
have been approved by the Board of Directors of ACCI.
9.4. SUPPORTING DOCUMENTS OF ACCI. ACCI shall have
delivered to the Shareholders supporting documents in form and
substance reasonably satisfactory to the Shareholders, to the effect
that:
(a) A good standing certificate from the jurisdiction of
ACCI's organization stating that ACCI is a corporation duly
organized, validly existing, and in good standing;
(b) Secretary's certificate stating that ACCI's
authorized capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board of
directors of ACCI authorizing the execution of this Agreement and
the consummation hereof;
(d) Secretary's certificate of incumbency of the officers
and directors of ACCI;
(e) ACCI's Financial Statements; and
(f) Any document as may be specified herein or required
to satisfy the conditions, representations and warranties enumerated
elsewhere herein.
10. CONDITIONS PRECEDENT TO OBLIGATION OF ACCI
ACCI's obligation to consummate this exchange shall be
subject to fulfillment on or before the Closing of each of the
following conditions, unless waived in writing by ACCI:
10.1. SHAREHOLDERS' REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Shareholders set forth herein
shall be true and correct at the Closing as though made at and as of
that date, except as affected by transactions contemplated hereby.
10.2. SHAREHOLDERS' COVENANTS. The Shareholders shall have
performed all covenants required by this Agreement to be performed
by them on or before the Closing.
10.3. TUNLAW'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Tunlaw set forth herein shall be
true and correct at the Closing as though made at and as of that
date, except as affected by transactions contemplated hereby.
10.4. TUNLAW'S COVENANTS. Tunlaw shall have performed all
covenants required by this Agreement to be performed by them on or
before the Closing.
10.5. BOARD OF DIRECTOR APPROVAL. This Agreement shall
have been approved by the Board of Directors of Tunlaw.
10.6. SUPPORTING DOCUMENTS OF TUNLAW. Tunlaw shall have
delivered to the Shareholders supporting documents in form and
substance reasonably satisfactory to the Shareholders, to the effect
that:
(a) A good standing certificate from the jurisdiction of
Tunlaw's organization stating that Tunlaw is a corporation duly
organized, validly existing, and in good standing;
(b) Secretary's certificate stating that Tunlaw's
authorized capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board of
directors of Tunlaw authorizing the execution of this Agreement and
the consummation hereof;
(d) Secretary's certificate of incumbency of the officers
and directors of Tunlaw;
(e) Tunlaw's Financial Statements; and
(f) Any document as may be specified herein or required
to satisfy the conditions, representations and warranties enumerated
elsewhere herein.
11. SHAREHOLDER REPRESENTATIVE. The Shareholders hereby
irrevocably designate and appoint Cassidy & Associates, 1504 R
Street, N.W. Washington, District of Columbia 20009, as their agent
and attorney in fact (the "Shareholders' Representative") with full
power and authority until the Closing to execute, deliver, and
receive on their behalf all notices, requests, and other
communications hereunder; to fix and alter on their behalf the date,
time, and place of the Closing; to waive, amend, or modify any
provisions of this Agreement, and to take such other action on their
behalf in connection with this Agreement, the Closing, and the
transactions contemplated hereby as such agent or agents deem
appropriate; provided, however, that no such waiver, amendment, or
modification may be made if it would decrease the number of shares
to be issued to the Shareholders hereunder or increase the extent of
their obligation to indemnify Reorganization hereunder.
12. TERMINATION. This Agreement may be terminated (1) by
mutual consent in writing; (2) by any of the Shareholders, ACCI or
Tunlaw if there has been a material misrepresentation or material
breach of any warranty or covenant by any other party; or (3) by any
of the Shareholders, ACCIor Tunlaw if the Closing shall not have
taken place within 15 days following execution of this Agreement,
unless adjourned to a later date by mutual consent in writing.
13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties
of the Shareholders, ACCIand Tunlaw set out herein shall survive the
Closing.
14. ARBITRATION
14.1. SCOPE. The parties hereby agree that any and all
claims (except only for requests for injunctive or other equitable
relief) whether existing now, in the past or in the future as to
which the parties or any affiliates may be adverse parties, and
whether arising out of this agreement or from any other cause, will
be resolved by arbitration before the American Arbitration
Association within the District of Columbia.
14.2. CONSENT TO JURISDICTION, SITUS AND JUDGEMENT. The
parties hereby irrevocably consent to the jurisdiction of the
American Arbitration Association and the situs of the arbitration
(and any requests for injunctive or other equitable relief) within
the District of Columbia. Any award in arbitration may be entered
in any domestic or foreign court having jurisdiction over the
enforcement of such awards.
14.3. APPLICABLE LAW. The law applicable to the
arbitration and this agreement shall be that of the State of
Delaware, determined without regard to its provisions which would
otherwise apply to a question of conflict of laws.
14.4. DISCLOSURE AND DISCOVERY. The arbitrator may, in its
discretion, allow the parties to make reasonable disclosure and
discovery in regard to any matters which are the subject of the
arbitration and to compel compliance with such disclosure and
discovery order. The arbitrator may order the parties to comply
with all or any of the disclosure and discovery provisions of the
Federal Rules of Civil Procedure, as they then exist, as may be
modified by the arbitrator consistent with the desire to simplify
the conduct and minimize the expense of the arbitration.
14.5. RULES OF LAW. Regardless of any practices of
arbitration to the contrary, the arbitrator will apply the rules of
contract and other law of the jurisdiction whose law applies to the
arbitration so that the decision of the arbitrator will be, as much
as possible, the same as if the dispute had been determined by a
court of competent jurisdiction.
14.6. FINALITY AND FEES. Any award or decision by the
American Arbitration Association shall be final, binding and
non-appealable except as to errors of law or the failure of the
arbitrator to adhere to the arbitration provisions contained in this
agreement. Each party to the arbitration shall pay its own costs
and counsel fees except as specifically provided otherwise in this
agreement.
14.7. MEASURE OF DAMAGES. In any adverse action, the
parties shall restrict themselves to claims for compensatory damages
and\or securities issued or to be issued and no claims shall be made
by any party or affiliate for lost profits, punitive or multiple
damages.
14.8. COVENANT NOT TO SUE. The parties covenant that under
no conditions will any party or any affiliate file any action
against the other (except only requests for injunctive or other
equitable relief) in any forum other than before the American
Arbitration Association, and the parties agree that any such action,
if filed, shall be dismissed upon application and shall be referred
for arbitration hereunder with costs and attorney's fees to the
prevailing party.
14.9. INTENTION. It is the intention of the parties and
their affiliates that all disputes of any nature between them,
whenever arising, whether in regard to this agreement or any other
matter, from whatever cause, based on whatever law, rule or
regulation, whether statutory or common law, and however
characterized, be decided by arbitration as provided herein and that
no party or affiliate be required to litigate in any other forum any
disputes or other matters except for requests for injunctive or
equitable relief. This agreement shall be interpreted in
conformance with this stated intent of the parties and their
affiliates.
14.10. SURVIVAL. The provisions for arbitration contained
herein shall survive the termination of this agreement for any reason.
15. GENERAL PROVISIONS.
15.1. FURTHER ASSURANCES. From time to time, each party
will execute such additional instruments and take such actions as
may be reasonably required to carry out the intent and purposes of
this agreement.
15.2. WAIVER. Any failure on the part of either party
hereto to comply with any of its obligations, agreements, or
conditions hereunder may be waived in writing by the party to whom
such compliance is owed.
15.3. BROKERS. Each party agrees to indemnify and hold
harmless the other party against any fee, loss, or expense arising
out of claims by brokers or finders employed or alleged to have been
employed by the indemnifying party.
15.4. 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 certified
mail, return receipt requested, or recognized commercial courier
service, as follows:
If to Tunlaw, to:
Tunlaw International Corporation
1504 R Street, N.W.
Washington, District of Columbia 20009
If to ACCI, to:
American Career Centers, Inc.
2490 South 300 West
South Salt Lake City, Utah 84115
If to the Shareholders, to:
Cassidy & Associates
1504 R Street, N.W.
Washington, District of Columbia 20009
15.5. GOVERNING LAW. This agreement shall be governed by
and construed and enforced in accordance with the laws of the State
of Delaware.
15.6. 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
either party of its rights under this agreement without the written
consent of the other party shall be void.
15.7. 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. Signatures sent by facsimile transmission
shall be deemed to be evidence of the original execution thereof.
15.8. EXCHANGE AGENT AND CLOSING DATE. The Exchange Agent
shall be the law firm of Cassidy & Associates, Washington, D.C. The
Closing shall take place upon the fulfillment by each party of all
the conditions of Closing required herein, but not later than 15
days following execution of this agreement unless extended by mutual
consent of the parties.
15.9. REVIEW OF AGREEMENT. Each party acknowledges that it
has had time to review this agreement and, as desired, consult with
counsel. In the interpretation of this agreement, no adverse
presumption shall be made against any party on the basis that it has
prepared, or participated in the preparation of, this agreement.
15.10. SCHEDULES. All schedules attached hereto, if any,
shall be acknowledged by each party by signature or initials thereon
and shall be dated.
15.11. EFFECTIVE DATE. This effective date of this
agreement shall be December 3, 1999.
SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION
AMONG TUNLAW, ACCI AND THE SHAREHOLDERS OF TUNLAW
IN WITNESS WHEREOF, the parties have executed this agreement.
TUNLAW INTERNATIONAL CORPORATION
By___________________________________
AMERICAN CAREER CENTERS, INC.
By___________________________________
William G. Anthony, President
THE SHAREHOLDERS OF TUNLAW
INTERNATIONAL CORPORATION:
TPG CAPITAL CORPORATION:
By__________________________________
James M. Cassidy, President
Exhibit A
Number Number of
of Tunlaw ACCI
Shares Shares Shareholder
5,000,000 200,000 TPG Capital Corporation 1504 R St. NW,
Washington DC 20009
