Merger Agreement W/ All American Aquisition

MERGER AGREEMENT


THIS MERGER AGREEMENT (the "Agreement") is entered into on March 25, 2002, between ALL AMERICAN ACQUISITION ASSOCIATES, INC., a Florida corporation ("AAAA"), SAFE TECHNOLOGIES INTERNATIONAL, INC., a Delaware corporation ("Safe Tech") and CONNECT.AD OF SOUTH FLORIDA, INC., a Florida corporation ("Subsidiary") which is currently a wholly owned subsidiary of Safe Tech.


The Boards of Directors of Subsidiary and AAAA believe that the merger of AAAA with and into Subsidiary would be advantageous and beneficial and in the best interests of AAAA and Subsidiary and their respective shareholders.


It is the intention of the parties hereto that: (i) AAAA shall be merged with and into Subsidiary (the "Merger"), (ii) effective as of Closing, each outstanding share of the common stock of AAAA will be converted into shares of common stock of the Subsidiary (the "Merger Stock") such that after the Merger the present shareholders of AAAA will own 92% of the outstanding stock of the merged entity, and the present shareholders of Subsidiary will own 8% of the outstanding stock of the merged entity; (iii) the issuance of the Merger Stock will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), or under applicable state securities laws, pursuant to exemptions from such registration; and (iv) the Merger shall qualify as a tax-free reorganization under Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the "Code").


THEREFORE, in consideration of the mutual covenants and agreements set forth herein and intending to be legally bound, the parties hereto agree as follows:


1. RECITALS AND DEFINITIONS.


(a) The foregoing RECITALS are true and correct, and are incorporated herein and made a part hereof.


(b) For purposes of this Agreement, the terms set forth below shall have the following meanings:


AAAA FINANCIAL STATEMENTS means the unaudited Balance Sheet of AAAA on March 25, 2002.


SUBSIDIARY FINANCIAL STATEMENTS means the unaudited financial
statements of Subsidiary as of and for the periods ended December 31,
2001 and March 31, 2002. In addition, Subsidiary will supply as soon as
practical after Closing audited financial statements of Subsidiary as
of and for the period ended December 31, 2001.


CLOSING means the consummation of the transaction of events set forth
in Section 11 hereof.


CLOSING DATE means the day on which the Closing is held as set forth in
Section 7 hereof and the time that Articles of Merger are filed in
accordance with the laws of the State of Delaware.


MERGER means the merger of AAAA with and into Subsidiary which will
result in the conversion of each outstanding share of the common stock
of AAAA into shares of the Merger Stock.


2. THE MERGER.


(a) Subsidiary and AAAA agree that on the Closing Date AAAA shall be merged with and into Subsidiary, which shall be the surviving corporation. Pursuant to the Merger, each share of common stock of AAAA issued and outstanding immediately prior to the Closing shall, without any action on the part of the holder thereof, be converted into shares of common stock of the Subsidiary (the "Merger Stock") such that the converted shares of AAAA after the Merger total 460,000,000, representing 92% of the outstanding stock of the Subsidiary after the Merger. No other consideration shall be payable to the AAAA stockholders in connection with the Merger. The issuance of the Merger Stock will not be registered pursuant to the Securities Act or applicable state securities laws, but will be issued in reliance upon exemptions from such registration.


(b) From and after the Closing, the Articles of Incorporation and Bylaws of Subsidiary as in effect immediately prior to the Closing shall be the Articles of Incorporation and Bylaws of the surviving corporation, until further amended.


3. REPRESENTATIONS AND WARRANTIES OF SUBSIDIARY AND SAFE TECH. As a material inducement to AAAA to enter into this Agreement and consummate the transactions contemplated hereby, Subsidiary and Safe Tech make the following representations and warranties to AAAA. The representations and warranties are true and correct in all material respects at this date, and will be true and correct in all material respects on the Closing Date as though made on and as of such date.


(a) DUE ORGANIZATION. Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida. Subsidiary has the corporate power to own its property and to carry on its business as now presently conducted. Subsidiary is qualified to do business and in good standing in each state where the properties owned, leased or operated, or the business conducted, by it require such qualification.


(b) CAPITALIZATION. The authorized capitalization of Subsidiary consists of 100 shares of $1.00 par value common stock of which 100 shares are currently issued and outstanding. All issued and outstanding shares are duly authorized, validly issued, fully


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paid and non-assessable, and have been issued in compliance with applicable federal and state securities laws and regulations. Except for the foregoing, there are no outstanding or presently authorized securities, warrants, preemptive rights, subscription rights or options to issue any of Subsidiary's securities. Prior to Closing, Subsidiary shall amend its Articles of Incorporation to authorize 999,000,000 shares of common stock, $.001 par value, and will complete a 400,000 to 1 stock split.


(c) SHARES OF MERGER STOCK; NATURE OF TRANSACTIONS. The Merger Stock will be validly and legally issued, free and clear of all liens, encumbrances, transfer fees and preemptive rights, and will be fully paid and non-assessable. When consummated, the transactions provided in this Agreement, including the issuance and delivery of the Merger Stock, will constitute a tax-free reorganization under Section 368(a)(1)(A) of the Code and will be in compliance with all applicable State and Federal Securities laws.


(d) SUBSIDIARY FINANCIAL STATEMENTS. Schedule 3(d) contains the Subsidiary Financial Statements. The Subsidiary Financial Statements and financial information contained therein present fairly the financial condition of Subsidiary for the periods covered (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material to Subsidiary, taken as a whole, in amount or effect). The Subsidiary Financial Statements have been prepared in accordance with generally accepted accounting principles, consistently applied. The books and records of Subsidiary, financial and other, are in all material respects complete and correct and have been maintained in accordance with good business and accounting practices. Prior to closing, any amounts shown in the Subsidiary Financial Statements as receivables from connect.ad, Inc., or connect.ad Services, Inc., will be written off.


(e) UNDISCLOSED LIABILITIES. Subsidiary does not have any liabilities or obligations of any nature, fixed or contingent, matured or unmatured, that are not shown or otherwise provided for in the Subsidiary Financial Statements, except for liabilities and obligations arising subsequent to the date of the Subsidiary Financial Statements in the ordinary course of business, none of which individually or in the aggregate will be materially adverse to the business or financial condition of Subsidiary. There are no material loss contingencies (as such term is used in Statement of Financial Accounting Standards No. 5 of the Financial Accounting Standards Board) of Subsidiary that are not be adequately provided for in the Subsidiary Financial Statements.


(f) MATERIAL ADVERSE CHANGE. Since the date of the most recent Subsidiary Financial Statements, the business of Subsidiary has been operated in the ordinary course and there has not been:


(i) Any material adverse change in the business, condition (financial or otherwise), results of operations, prospects, properties, assets, liabilities, earnings or net worth of Subsidiary for such period or at any time during such period.


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(ii) Any material damage, destruction or loss (whether or not covered by insurance) affecting Subsidiary or its assets, properties or businesses.


(iii) Any declaration, setting aside or payment of any dividend or other distribution in respect of any shares of the capital stock of Subsidiary, or any direct or indirect redemption, purchase or other acquisition of any such stock or any agreement to do so, other than the formation and spin off of The Second Subsidiary Group, Inc., to the stockholders of Subsidiary.


(iv) Any issuance or sale by Subsidiary, or agreement by Subsidiary to sell or pledge any of its securities, except as set forth in this Agrement. No irrevocable proxies been given with respect to any securities of Subsidiary.


(v) Any statute, rule, regulation or order adopted by any governmental body, agency or authority (including orders of regulatory authorities with jurisdiction over Subsidiary) that materially and adversely affects Subsidiary or its business or financial condition.


(vi) Any material increase in the rate of compensation or in bonus or commission payments payable or to become payable to any of the salaried employees of Subsidiary; provided, however, that this subsection shall not restrict or limit Subsidiary in any way from hiring additional personnel who are required for their operations.


(vii) Any other events or conditions of any character that may reasonably be expected to have a materially adverse effect on Subsidiary or its business or financial condition.


(g) LITIGATION. There are no actions, suits, claims, investigations or legal, administrative or arbitration proceedings pending or, to the knowledge of Subsidiary, threatened against Subsidiary, whether at law or in equity, or before or by any federal, state, municipal, local, foreign or other governmental department, commission, board, bureau, agency or instrumentality, nor does Subsidiary know of any basis for any such action, suit, claim, investigation or proceeding.


(h) COMPLIANCE: GOVERNMENTAL AUTHORIZATIONS. Subsidiary has complied in all material respects with all federal, state, local or foreign laws, ordinances, regulations and orders applicable to its business, including without limitation, federal and state securities, banking collection and consumer protection laws and regulations that, if not complied with, would materially and adversely affect its businesses. Subsidiary has all federal, state, local and foreign governmental licenses and permits necessary for the conduct of its business. Such licenses and permits are in full force and effect. Subsidiary knows of no violations of any such licenses or permits. No proceedings are pending or threatened to revoke or limit the use of such licenses or permits.


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(i) TAX MATTERS. Subsidiary has, or at the time of the Closing hereunder will have, filed all federal, state and local tax or related returns and reports due or required to be filed, which reports will accurately reflect in all material respects the amount of taxes due. Subsidiary has paid all amounts or taxes or assessments that would be delinquent if not paid as of the date of this Agreement, and will have paid such required amounts as of the Closing Date. There are no tax liens with respect to any properties owned by Subsidiary.


(j) DUE AUTHORIZATION. This Agreement has been duly authorized, executed and delivered by Subsidiary and constitutes a valid and binding agreement of Subsidiary enforceable in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, moratorium, and other similar laws relating to, limiting or affecting the enforcement of creditors rights generally or by the application of equitable principles. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, nor compliance with any of the provisions hereof, will violate any order, writ, injunction or decree of any court or governmental authority, or violate or conflict with in any material respect or constitute a default under (or give rise to any right of termination, cancellation or acceleration under) any provisions of Subsidiary's Articles of Incorporation or Bylaws, the terms or conditions or provisions of any note, bond, lease, mortgage, obligation, agreement, understanding, arrangement or restriction of any kind to which Subsidiary is a party or by which Subsidiary or its properties may be bound, or violates any statute, law, rule or regulation applicable to Subsidiary. No consent or approval by any governmental authority is required in connection with the execution and delivery by Subsidiary of this Agreement or the consummation of the transactions contemplated hereby.


(k) FULL DISCLOSURE. Subsidiary has not, and will not have at the Closing Date, withheld disclosure of any events, conditions, and facts of which it may have knowledge and that may materially and adversely affect the business or prospects of Subsidiary.


(l) BROKERAGE FEES. Subsidiary has not incurred, and will not incur, any liability for brokerage or finder's fees or similar charges in connection with this Agre ...