Document:

Special Bonus Program for Key Management for the Second, Third and Fourth Quarters of 2002

EXHIBIT 10.12

Supplemental Agreement No. 9

to

Purchase Agreement No. 2061

between

The Boeing Company

and

Continental Airlines, Inc.

 

Relating to Boeing Model 777 Aircraft

 

THIS SUPPLEMENTAL AGREEMENT, entered into as of June 25, 2002, by and between THE BOEING COMPANY, a Delaware corporation with its principal office in Seattle, Washington, (Boeing) and Continental Airlines, Inc., a Delaware corporation with its principal office in Houston, Texas (Customer);

WHEREAS, the parties hereto entered into Purchase Agreement No. 2061 dated October 10, 1997, (the Purchase Agreement) relating to Boeing Model 777-200ER Aircraft, (the Aircraft); and

WHEREAS, Boeing and Customer have mutually agreed to the Rescheduling of certain Aircraft as described in Letter Agreement 6-1162-CHL-048 executed February 8, 2002 (Rescheduled Aircraft Agreement) and the effects of such changes upon the Purchase Agreement are incorporated herein; and

WHEREAS, Boeing and Customer have mutually agreed to revise the Engine Pricing and Escalation terms to reflect actual engine pricing methodology used with March 2002 and April 2002 Aircraft; and 

WHEREAS, Boeing and Customer have mutually agreed to revise the delivery positions for the 777-200ER Option Aircraft pursuant to the Rescheduled Aircraft Agreement; and

WHEREAS, Boeing and Customer have mutually agreed to amend the Purchase Agreement to incorporate the effect of these and certain other changes;

 

NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties agree to amend the Purchase Agreement as follows:

1.Table of Contents, Table and Exhibit:

1.1Remove and replace, in its entirety, the "Table of Contents", with the "Table of Contents" attached hereto, to reflect the changes made by this Supplemental Agreement No. 9.

1.2Remove and replace, in its entirety, "Table 2, Aircraft Delivery, Description, Price and Advance Payments" with revised Table 2 attached hereto, to reflect the engine price paid for March 2002 and April 2002 Aircraft.

1.3Remove and replace in its entirety, Supplemental Exhibit EE2, "Engine Escalation, Engine Warranty and Patent Indemnity" with revised Exhibit EE2 attached hereto, which incorporates the engine price escalation methodology used for March 2002 and April 2002 Aircraft.

 

2.Letter Agreements:

2.1Remove and replace, in its entirety, Letter Agreement 2061-1R5 "Option Aircraft", with the revised Letter Agreement 2061-1R6 attached hereto, to reflect [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].

2.2Add Letter Agreement 6-1162-CHL-048, "Rescheduled Aircraft Agreement" executed February 8, 2002 which describes the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].

 

The Purchase Agreement will be deemed to be supplemented to the extent herein provided as of the date hereof and as so supplemented will continue in full force and effect.

 

EXECUTED IN DUPLICATE as of the day and year first written above.

THE BOEING COMPANYContinental Airlines, Inc.

 

 

 

By:  /s/ Charles H. Leach By:  /s/ Gerald Laderman   

 

Its:  Attorney-In-Fact  Its: Senior Vice President -
     Finance and Treasurer

TABLE OF CONTENTS

 

ARTICLESRevised By:

1.Quantity, Model and DescriptionSA No. 7

2.Delivery ScheduleSA No. 7

3.PriceSA No. 7

4.PaymentSA No. 7

5.MiscellaneousSA No. 7

 

TABLE

1.Aircraft Information Table 1SA No. 5

2.Aircraft Information Table 2SA No. 9

EXHIBIT

A.Aircraft Configuration

B.Aircraft Delivery Requirements and Responsibilities

 

SUPPLEMENTAL EXHIBITS

BFE1.BFE Variables

CS1.Customer Support Variables

EE1.Engine Escalation/Engine Warranty and Patent Indemnity

EE2.Engine Escalation/Engine Warranty and Patent Indemnity   SA No. 9

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

 

TABLE OF CONTENTS

 

LETTER AGREEMENTSRevised By:

2061-1R6Option AircraftSA No. 9

2061-2Demonstration Flights

2061-3Installation of Cabin Systems Equipment

2061-4Spares Initial Provisioning

2061-5Flight Crew Training Spares

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

 

 

TABLE OF CONTENTS

 

CONFIDENTIAL LETTER AGREEMENTSRevised By:

6-1161-GOC-087Aircraft Performance Guarantees

6-1162-GOC-088Promotion Support

6-1162-GOC-089R1Special MattersSA No. 3

6-1162-GOC-172Additional MattersSA No. 1

6-1162-CHL-048Rescheduled Aircraft AgreementSA No. 9

 

 

 

 

SUPPLEMENTAL AGREEMENTSDated as of:

Supplemental Agreement No. 1December 18, 1997

Supplemental Agreement No. 2July 30, 1998

Supplemental Agreement No. 3September 25, 1998

Supplemental Agreement No. 4February 3, 1999

Supplemental Agreement No. 5March 26, 1999

Supplemental Agreement No. 6May 14, 1999

Supplemental Agreement No. 7October 31, 2000

Supplemental Agreement No. 8June 29, 2001

Supplemental Agreement No. 9June 25, 2002

Table 2

to Purchase Agreement 2061

Aircraft Delivery, Description, Price and Advance Payments

 

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

ENGINE ESCALATION,

ENGINE WARRANTY AND PATENT INDEMNITY

between

THE BOEING COMPANY

and

CONTINENTAL AIRLINES, INC.

 

Supplemental Exhibit EE2 to Purchase Agreement Number 2061

ENGINE ESCALATION,

ENGINE WARRANTY AND PATENT INDEMNITY

relating to

BOEING MODEL 777-200ER AIRCRAFT

 

 

1.ENGINE ESCALATION.

(a)The Aircraft Basic Price of each Aircraft set forth in Table 2 of the Purchase Agreement includes an aggregate price for GE90 engines and all accessories, equipment and parts provided by the engine manufacturer.  The adjustment in Engine Price applicable to each Aircraft (Engine Price Adjustment) will be determined at the time of Aircraft delivery in accordance with the following formula:

D3 =D1 + D2

Where:

D1 and D2 are calculated pursuant to the formulas described respectively in subsections 1 (b) and 1 (c) below; and

The Engine Price Adjustment (D1 + D2) will not be made if it would result in a decrease in the Engine Price.

(b)D1 =((P  x  ( CPI  )) - P

      CPIb-1
Where:

D1 =Engine Price Adjustment (per Aircraft) through November 2001.

P  =Engine Base Price (per Aircraft), as set forth in Table 2 of the Purchase Agreement.

CPIb-1 =The Composite Price Index which is a value determined using the Bureau of Labor Statistics, U.S. Department of Labor actual data in accordance with the formula below. The Index values utilized in the formula will be the numbers shown in the actual data for the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] month prior to the month of scheduled Aircraft delivery or the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] month prior to the Base Year Dollars month set forth in Table 2.

 

CPI =L + M1 + M2 +M3  (rounded to the nearest hundredth)

L  =A value determined using the U.S. Department of Labor, Bureau of Labor Statistics [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] published as Final prior to June 1, 2001. This value will be equal to the quotient, rounded to the nearest thousandth, of the value associated with a November 2001 Aircraft Delivery Month divided by the value associated with the base Year Dollar month in [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] multiplied by 100, then by [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]% and rounded to the nearest hundredth. 

M1  =The Industrial Commodities Index, which will be rounded to the nearest hundredth, will be equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]% of the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] associated with a November 2001 delivery month. 

M2  =The Metals and Metals Products Index, which will be rounded to the nearest hundredth, will be equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]% of the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] associated with a November 2001 delivery month. 

M3  =The Fuel Index, which will be rounded to the nearest hundredth, will be equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]% of the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] associated with a November 2001 delivery month

(c)D2  =((Rp-1  x ( CPI-2  )) - Rp-1

        CPIb-2
Where:

D2  =Engine Price Adjustment (per Aircraft) from November 2001 through the month of scheduled Aircraft delivery.

Rp-1  =P + D1

CPIb-2 =[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], which is the November 2001 Base Index resulting from the process described below.

CPI-2 =L-2 + M1-2 + M2-2 + M3-2  (rounded to the nearest hundredth)

L-2  =A value from the U.S. Department of Labor, Bureau of Labor Statistics [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], associated with the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] month prior to the month of scheduled Aircraft delivery, multiplied by [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]% and rounded to the nearest hundredth.

M1-2  =The Industrial Commodities Index, which will be rounded to the nearest hundredth, will be equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]% of the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] associated with the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] month prior to the month of scheduled Aircraft delivery.

M2-2  =  The  Metals and Metals Products Index, which will be rounded to the nearest hundredth, will be equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]% of the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] associated with the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] month prior to the month of scheduled Aircraft delivery. 

M3-2  =The Fuel Index, which will be rounded to the nearest hundredth, will be equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]% of the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] associated with the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] month prior to the month of scheduled Aircraft delivery.

 

(d)The values of the Employment Cost Index Wages & Salaries and Producer Price indices used to determine D2  will be those published by the Bureau of Labor Statistics, U.S. Department of Labor as of a date 30 days prior to the first day of the of the scheduled Aircraft delivery month to Customer.  As the Employment Cost Index values are only released on a quarterly basis, the value released for the month of March will be used for the months of January and February; the value for June used for April and May; the value for September used for July and August; and the value for December used for October and November.  Such values will be considered final and no Engine Price Adjustment will be made after Aircraft delivery for any subsequent changes in published index values.

(e)[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

NOTE:The factor (CPI divided by the base year index) by which the Engine Base Price is to be multiplied or the factor (CPI-2  divided by CPIb-2) by which the rebase price (Rp-1)  is to be multiplied, will be expressed as a decimal and rounded to the nearest thousandth.  Any rounding of a number, as required under this Supplemental Exhibit EE2 with respect to escalation of the Engine price, will be accomplished as follows:  if the first digit of the portion to be dropped from the number to be rounded is five or greater, the preceding digit will be raised to the next higher number.

2.ENGINE WARRANTY AND PRODUCT SUPPORT PLAN.

Boeing has obtained from GE the right to extend to Customer the provisions of GE's warranty as set forth below (herein referred to as the "Warranty"); subject, however, to Customer's acceptance of the conditions set forth herein.  Accordingly, Boeing hereby extends to Customer and Customer hereby accepts the provisions of GE's Warranty as hereinafter set forth, and such Warranty shall apply to all GE90 type Engines (including all Modules and Parts thereof) installed in the Aircraft at the time of delivery or purchased from Boeing by Customer for support of the Aircraft except that, if Customer and GE have executed, or hereafter execute, a General Terms Agreement covering the Engines, then the terms of that Agreement shall be substituted for and supersede the provisions of paragraphs 1 through 11 below and paragraphs 1 through 11 below shall be of no force or effect and neither Boeing nor GE shall have any obligation arising therefrom.  In consideration for Boeing's extension of the GE Warranty to Customer, Customer hereby releases and discharges Boeing from any and all claims, obligations and liabilities whatsoever arising out of the purchase or use of such GE90 type Engines and Customer hereby waives, releases and renounces all its rights in all such claims, obligations and liabilities [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].  In addition, Customer hereby releases and discharges GE from any and all claims, obligations and liabilities whatsoever arising out of the purchase or use of such GE90 type Engines except as otherwise expressly assumed by GE in such GE Warranty or General Terms Agreement between Customer and GE and Customer hereby waives, releases and renounces all its rights in all such claims, obligations and liabilities.

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

GE90 Warranty Parts List*

	
*Warranty Parts List may change
	 	 	 	 

June 25, 2002

2061-1R6

 

 

Continental Airlines, Inc.

1600 Smith Street

Houston, TX 77002

 

Subject:Option Aircraft

Reference:Purchase Agreement No. 2061 (the Purchase Agreement) between The Boeing Company (Boeing) and Continental Airlines, Inc. (Customer) relating to Model 777-200ER aircraft (the Aircraft)

 

Ladies and Gentlemen:

This Letter Agreement amends and supplements the Purchase Agreement.  All terms used but not defined in this Letter Agreement have the same meaning as in the Purchase Agreement.  This Letter Agreement supersedes and replaces in its entirety Letter Agreement 2061-1R5 dated June 29, 2001.

Boeing agrees to manufacture and sell to Customer additional Model 777-200ER aircraft as Option Aircraft.  The delivery months, number of aircraft, Advance Payment Base Price per aircraft and advance payment schedule are listed in the Attachment to this Letter Agreement (the Attachment).

1.Aircraft Description and Changes

1.1 Aircraft Description:  The Option Aircraft are described by the Detail Specification listed in the Attachment.

1.2Changes:  The Detail Specification will be revised to include:

(i) Changes applicable to the basic Model 777 aircraft which are developed by Boeing between the date of the Detail Specification and the signing of the definitive agreement to purchase the Option Aircraft;

(ii) Changes required to obtain required regulatory certificates; and

	Changes mutually agreed upon.

 

 

 

 

 

2.Price

2.1The pricing elements of the Option Aircraft are listed in the Attachment.

2.2Price Adjustments.

2.2.1Optional Features.  The Optional Features Prices for the Option Aircraft will be adjusted to Boeing's current prices as of the date of execution of the definitive agreement for the Option Aircraft.

2.2.2Escalation Adjustments.  The Airframe Price and the Optional Features Prices for Option Aircraft delivering before June, 2007, will be escalated on the same basis as the Aircraft.

The engine manufacturer's current escalation provisions, are not listed in this Purchase Agreement.  The engine escalation provisions will be revised to reflect the engine manufacturer's current escalation provisions at signing of the definitive agreement for the Option Aircraft.

2.2.3Base Price Adjustments.  The Airframe Price and the Engine Price of the Option Aircraft delivering before June, 2007, will be adjusted to Boeing's and the engine manufacturer's then current prices as of the date of execution of the definitive agreement for the Option Aircraft.

2.2.4Prices for Long Lead Time Aircraft.  Boeing and the engine manufacturer have not established prices and escalation provisions for Model 777-200ER aircraft and engines for delivery from June, 2007 and thereafter.  When prices and the pricing bases are established for the Model 777-200ER aircraft delivering from June, 2007 and thereafter, the information listed in the Attachment will be appropriately amended.

3.Payment.

3.1Customer has paid a deposit to Boeing in the amount shown in the Attachment opposite the caption "Non-Refundable Deposit per Aircraft" for each Option Aircraft (the Option Deposit), prior to the date of this Letter Agreement.  If Customer exercises an option, the Option Deposit will be credited against the first advance payment due.  If Customer does not exercise an option, Boeing will retain the Option Deposit for that Option Aircraft.

3.2Following option exercise, advance payments in the amounts and at the times listed in the Attachment in the columns under the caption "Advance Payment Per Aircraft" will be payable for the Option Aircraft.  

The remainder of the Aircraft Price for the Option Aircraft will be paid at the time of delivery.

4.Option Exercise.

Customer may exercise an option by giving written notice to Boeing on or before the date   [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] months prior to the first business day of the applicable delivery month listed in the Attachment (Option Exercise Date).

	Contract Terms.

Boeing and Customer will use their best efforts to reach a definitive agreement for the purchase of an Option Aircraft if Customer execises its option to acquire such Option Aircraft, including the terms and conditions contained in this Letter Agreement, in the Purchase Agreement, and other terms and conditions as may be agreed upon to add the Option Aircraft to the Purchase Agreement as an Aircraft.  If the parties have not entered into a definitive agreement within 30 days following option exercise, either party may terminate the purchase of such Option Aircraft by giving written notice to the other within 5 days. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

Very truly yours,

THE BOEING COMPANY

 

By      /s/ Charles H. Leach      

Its           Attorney-In-Fact           

 

ACCEPTED AND AGREED TO this

Date:        June 25            , 2002

Continental Airlines, Inc.

 

By     /s/ Gerald Laderman       

Its           Senior Vice President - Finance and Treasurer               

Attachment

 

Attachment to

Letter Agreement 2061-1R6 Option Aircraft Delivery,

Description, Price and Advance Payments

 

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]QuickLinks
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EXHIBIT 10.1
  
    PLAN OF REORGANIZATION AND ACQUISITION    
  

 
 

PLAN OF REORGANIZATION AND ACQUISITION
  BY WHICH
  THE CHILDREN'S INTERNET, INC.
  (A CALIFORNIA CORPORATION)
  SHALL ACQUIRE A MAJORITY INTEREST OF
  DWC INSTALLATIONS, INC.
  (A NEVADA
CORPORATION)    
  

        This PLAN OF REORGANIZATION AND ACQUISITION ("Agreement") is made and dated this 3rd day of July, 2002 (the "Effective Date") by and between the
above referenced corporations, and shall become effective on "the Closing Date" as defined herein. 

 
 

I.    THE INTERESTED PARTIES    
  

A.    THE PARTIES TO THIS AGREEMENT  

        1.    The
Children's Internet, Inc., a California corporation ("The Children's Internet"). 

        2.    DWC
Installations, Inc., a Nevada corporation ("DWC"). 

        3.    The
Children's Internet and DWC may be referred to collectively herein as the "Parties." 

 
 

II.    RECITALS    
  

A.    THE CAPITAL OF THE CHILDREN'S INTERNET AND DWC  

        1.    The
capital of The Children's Internet consists of 10,000 shares of common stock, no par value, authorized, of which 5,000 are issued and outstanding as of the date of
this Agreement. 

        2.    The
capital of DWC consists of 75,000,000 shares of common stock, $0.001 par value, authorized, of which 1,121,000 shares are issued and outstanding as of the date of
this Agreement, and 10,000,000 shares of preferred stock, $0.001 par value of which no shares are issued and outstanding as of the date of this Agreement 

B.    THE BACKGROUND FOR THE ACQUISITION  

        The Children's Internet desires to acquire 1,166,755 newly issued shares of DWC common stock (the "Shares") and the DWC wishes to sell the Shares to The
Children's Internet. 

 
 

III.    CONDITIONS PRECEDENT TO REORGANIZATION    
  

A.    DIRECTOR APPROVAL  

        The Boards of Directors of the Parties respectively shall have determined that it is advisable and in the best interests of each of them and both of them to
proceed with the acquisition by The Children's Internet of the Shares. 

B.    EFFECTIVE DATE  

        This Plan of Reorganization and Acquisition shall become effective on a date designated hereinafter as the "Closing Date"; provided that the following conditions
precedent shall have been met, or waived in writing by the Parties: 

        1.    DWC
shall have furnished to The Children's Internet all corporate and financial information which is customary and reasonable, to conduct its respective due diligence,
normal for this kind of transaction. If The Children's Internet determines that there is a reason not to complete this Plan of Reorganization and Acquisition as a result of their due diligence
examination, then it must give written notice to DWC prior to the expiration of the due diligence examination period. The Due Diligence period, for purposes of this paragraph, shall expire when this
Agreement is executed by all Parties. 

        2.    All
of the terms, covenants and conditions of this Plan of Reorganization and Acquisition to be complied with or performed by each Party for Closing shall have been
complied with, performed or waived in writing. 

        3.    The
representations and warranties of the Parties, contained in this Plan of Reorganization and Acquisition, as herein contemplated, except as amended, altered or waived
by the Parties in writing, shall be true and correct in all material respects at the Closing Date with the same force and effect as if such representations and warranties are made at and as of such
time; and each Party shall provide the other with a corporate certificate, of a director of each Party, dated the Closing Date, to the effect, that all conditions precedent have been met, and that all
representations and warranties of such Party are true and correct as of that date. The form and substance of each Party's certification shall be in form reasonably satisfactory to the other. 

C.    TERMINATION  

        This Plan of Reorganization and Acquisition may be terminated at any time prior to the Closing Date, whether before or after approval by the directors of the
Parties: (i) by mutual consent of the Parties; or (ii) by any Party if any other Party is unable to meet the specific conditions precedent applicable to its performance within a
reasonable time. In the event that termination of this Plan of Reorganization and Acquisition occurs, as provided above, this Plan of Reorganization and Acquisition shall forthwith become void and
there shall be no liability on the part of any Party or its respective officers and directors. 

 
 

IV.    PLAN OF ACQUISITION    
  

A.    REORGANIZATION AND ACQUISITION  

        The Children's Internet and DWC are hereby reorganized, such that DWC shall issue 1,166,755 shares of its common stock to The Children's Internet and DWC shall
become a majority-owned subsidiary of The Children's Internet. 

B.    SURVIVING CORPORATION  

        Both The Children's Internet and DWC shall survive the Reorganization herein contemplated and shall continue to be governed by the laws of their respective
jurisdiction. The resulting parent corporation is the entity responsible for the rights of dissenting shareholders, if any. 

C.    SURVIVING ARTICLES OF INCORPORATION  

        The Articles of Incorporation of both The Children's Internet and DWC shall remain in full force and effect, unchanged. 

D.    SURVIVING BYLAWS  

        The Bylaws of both The Children's Internet and DWC shall remain in full force and effect, unchanged. 

E.    CONSIDERATION  

        As consideration for the 1,166,755 Shares, The Children's Internet will pay $150,000 to DWC as follows: As DWC is already in receipt of a $50,000 deposit paid by
The Children's Internet, The Children's Internet shall pay the remaining $100,000 to DWC in readily available funds at the Closing. 

        Also
at the Closing, DWC shall issue and deliver a stock certificate to The Children's Internet for the 1,166,755 Shares. 

F.    OTHER CONDITIONS OF ACQUISITIONS  

        1.    DWC
shall own all of the assets it currently owns except as may be sold or transferred in the ordinary course of business; 

G.    FURTHER ASSURANCE, GOOD FAITH AND FAIR DEALING  

        The Directors of each Party shall and will execute and deliver any and all necessary documents, acknowledgments and assurances and do all things proper to confirm
or acknowledge any and all rights, titles and interests created or confirmed herein; and all Parties covenant hereby to deal fairly and in good faith with each other and each others shareholders. 

 
 

V.    GENERAL MUTUAL REPRESENTATIONS AND WARRANTIES    
  

        The purpose and general import of the Mutual Representations and Warranties are that each Party has made appropriate full disclosure to the others, that no
material information has been withheld, and that the information exchanged is accurate, true and correct. 

A.    ORGANIZATION AND QUALIFICATION  

        Each Party warrants and represents that it is duly organized and in good standing, and is duly qualified to conduct any business it may be conducting, as required
by law or local ordinance. 

B.    CORPORATE AUTHORITY  

        Each Party warrants and represents that it has corporate authority, under the laws of its jurisdiction and its constituent documents, to do each and every element
of performance to which it has agreed, and which is reasonably necessary, appropriate and lawful, to carry out this Agreement in good faith. 

C.    OWNERSHIP OF ASSETS AND PROPERTY  

        DWC warrants and represents that it has lawful title and ownership of its property as reported to The Children's Internet, and as disclosed in its financial
statements. 

D.    ABSENCE OF CERTAIN CHANGES OR EVENTS  

        DWC warrants and represents that there are no material changes of circumstances or events which have not been fully disclosed to The Children's Internet, and
which, if different than previously disclosed in writing, have been disclosed in writing as currently as is reasonably practicable. 

E.    ABSENCE OF UNDISCLOSED LIABILITIES  

        Each Party warrants and represents specifically that it has, and has no reason to anticipate having, any material liabilities which have not been disclosed to the
other, in the financial statements or otherwise in writing. 

F.    LEGAL PROCEEDINGS  

        Each Party warrants and represents that there are no legal proceedings, administrative or regulatory proceeding, pending or suspected, which have not been fully
disclosed in writing to the other. 

G.    NO BREACH OF OTHER AGREEMENTS  

        Each Party warrants and represents that this Agreement, and the faithful performance of this Agreement, will not cause any breach of any other existing agreement,
or any covenant, consent decree, or undertaking by either, not disclosed to the other. 

H.    CAPITAL STOCK  

        Each Party warrants and represents that the issued and outstanding shares and all shares of capital stock of each Party, is as detailed herein, that all such
shares are in fact issued and outstanding, duly and validly issued, were issued as and are fully paid and non-assessable shares, and that, other than as represented in writing, there are
no other securities, options, warrants or rights outstanding, to acquire further shares of such Party, except as has been disclosed to the other Party. 

I.    BROKERS' OR FINDER'S FEES  

        Other than as described herein, each Party warrants and represents that it is aware of no claims for brokers' fees, or finders' fees, or other commissions or
fees, by any person not disclosed to the other, which would become, if valid, an obligation of either Party. 

 
 

VI.    INDEMNIFICATION    
  

        DWC shall, and from and after the Closing Date, indemnify, defend and hold harmless The Children's Internet and each person who becomes an officer or director of
DWC subsequent to the Closing (the "Indemnified Parties") against all losses, claims, damages, costs, expenses (including reasonable attorneys' fees and expenses), liabilities or judgments or amounts
that are paid in settlement with the
approval of the indemnifying party of or in connection with any threatened or actual claim, action, suit, proceeding or investigation based on or arising out of any matter existing or occurring at or
prior to the Closing Date ("Indemnified Liabilities"), in each case, to the full extent a corporation is permitted under Nevada Revised Statutes to indemnify directors or officers. 

        Without
limiting the foregoing, in the event any such claim, action, suit, proceeding or investigation is brought against any Indemnified Parties (whether arising before or after the
Closing Date), (i) the Indemnified Parties may retain counsel satisfactory to them and DWC shall pay all fees and expenses of such counsel for the Indemnified Parties promptly as statements
therefore are received; and (ii) DWC shall use all reasonable efforts to assist in the vigorous defense of any such matter, provided that DWC
shall not be liable for any settlement effected without its prior written consent. Any Indemnified Party wishing to claim indemnification under this section, upon learning of any such claim, action,
suit, proceeding or investigation, shall notify DWC (but the failure so to notify shall not relieve a party from any liability which it may have under this section except to the extent such failure
prejudices such party), and shall deliver to DWC the undertaking contemplated by the applicable sections of the Nevada Revised Statutes. The Indemnified Parties as a group may retain only one law firm
to represent them with respect to each such matter unless there is, under applicable standards of professional conduct, a conflict on any significant issue between the positions of any two or more
Indemnified Parties. The Parties agree that all rights to indemnification, including provisions relating to advances of expenses incurred in defense of any action or suit, existing in favor of the
Indemnified Parties with respect to matters occurring through the Closing Date shall continue in full force and effect for a period of not less than seven years from the Closing Date;  provided,
however, that all rights to indemnification in respect of any Indemnified Liabilities asserted
or made within such period shall continue until the disposition of such Indemnified Liabilities. 

        The
provisions of this section are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party, his or her heirs and his or her personal representatives and
shall be binding upon all successors and assigns of DWC. 

 
 

VII.    DEFAULT, AMENDMENT AND WAIVER    
  

A.    DEFAULT  

        Upon a breach or default under this Agreement by any of the Parties (following the cure period provided herein), the non-defaulting party shall have
all rights and remedies given hereunder or now or hereafter existing at law or in equity or by statute or otherwise. Notwithstanding the foregoing, in the event of a breach or default by any Party
hereto in the observance or in the timely performance of any 

of its obligations hereunder which is not waived by the non-defaulting Party, such defaulting Party shall have the right to cure such default within 15 days after receipt of notice
in writing of such breach or default. 

B.    WAIVER AND AMENDMENT  

        Any term, provision, covenant, representation, warranty, or condition of this Agreement may be waived, but only by a written instrument signed by the Party
entitled to the benefits thereof. The failure or delay of any party at any time or times to require performance of any provision hereof or to exercise its rights with respect to any provision hereof
shall in no manner operate as a waiver of or affect such party's right at a later time to enforce the same. No waiver by any Party of any condition, or of the breach of any term, provision, covenant,
representation, or warranty contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or waiver of
any other condition or of the breach of any other term, provision, covenant, representation, or warranty. No modification or amendment of this Agreement shall be valid and binding unless it be in
writing and signed by all Parties hereto. 

 
 

VIII.    MISCELLANEOUS    
  

A.    EXPENSES  

        Whether or not the transactions contemplated hereby are consummated, each of the Parties hereto shall bear all taxes of any nature (including, without limitation,
income, franchise, transfer, and sales taxes) and all fees and expenses relating to or arising from its compliance with the various provisions of this Agreement and such Party's covenants to be
performed hereunder, and except as otherwise specifically provided for herein, each of the Parties hereto agrees to pay all of its own expenses (including, without limitation, attorneys and
accountants' fees, and printing expenses) incurred in connection with this Agreement, the transactions contemplated hereby, the negotiations leading to the same and the preparations made for carrying
the same into effect, and all such taxes, fees, and expenses of the Parties hereto shall be paid prior to Closing. 

B.    NOTICES  

        Any notice, request, instruction, or other document required by the terms of this Agreement, or deemed by any of the Parties hereto to be desirable, to be given
to any other party hereto shall be in
writing and shall be given by facsimile, personal delivery, overnight delivery, or mailed by registered or certified mail, postage prepaid, with return receipt requested, to the following addresses: 

	TO THE CHILDREN'S INTERNET:	 	The Children's Internet, Inc.

Attn: Sholeh Hamedani, President

2401 Crow Canyon Rd., Suite 201,

San Ramon CA 94583
	

TO DWC:	
 	

DWC Corporation

Attn: Alan Schram, President

15303 Ventura Blvd., Suite 1510

Sherman Oaks, CA 91403
	

WITH COPY TO:	
 	

Oswald & Yap

Attn: Lynne Bolduc, Esq.

16148 Sand Canyon Avenue

Irvine, CA 92618

        The
persons and addresses set forth above may be changed from time to time by a notice sent as aforesaid. If notice is given by facsimile, personal delivery, or overnight delivery in
accordance with the provisions of this Section, said notice shall be conclusively deemed given at the time of such delivery. If 

notice is given by mail in accordance with the provisions of this Section, such notice shall be conclusively deemed given seven days after deposit thereof in the United States mail. 

C.    ENTIRE AGREEMENT  

        This Agreement, together with any schedules and exhibits hereto, sets forth the entire agreement and understanding of the Parties hereto with respect to the
transactions contemplated hereby, and supersedes all prior agreements, arrangements and understandings related to the subject matter hereof. No understanding, promise, inducement, statement of
intention, representation, warranty, covenant, or condition, written or oral, express or implied, whether by statute or otherwise, has been made by any party hereto which is not embodied in this
Agreement, or in the schedules or exhibits hereto or the written statements, certificates, or other documents delivered pursuant hereto or in connection with the transactions contemplated hereby, and
no party hereto shall be bound by or liable for any alleged
understanding, promise, inducement, statement, representation, warranty, covenant, or condition not so set forth. 

D.    SURVIVIAL OF REPRESENTATIONS  

        All statements of fact (including financial statements) contained in the schedules, the exhibits, the certificates, or any other instrument delivered by or on
behalf of the Parties hereto, or in connection with the transactions contemplated hereby, shall be deemed representations and warranties by the respective Party hereunder. All representations,
warranties, agreements, and covenants hereunder shall survive the Closing and remain effective regardless of any investigation or audit at any time made by or on behalf of the Parties or of any
information a party may have in respect hereto. Consummation of the transactions contemplated hereby shall not be deemed or construed to be a waiver of any right or remedy possessed by any party
hereto, notwithstanding that such party knew or should have known at the time of Closing that such right or remedy existed. 

E.    INCORPORATION BY REFERENCE  

        The schedules, exhibits, and all documents (including, without limitation, all financial statements) delivered as part hereof or incident hereto are incorporated
as a part of this Agreement by reference. 

F.    REMEDIES CUMULATIVE  

        No remedy herein conferred upon the Parties is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise. 

G.    EXECUTION OF ADDITIONAL DOCUMENTS  

        Each Party hereto shall make, execute, acknowledge, and deliver such other instruments and documents, and take all such other actions as may be reasonably
required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby. 

H.    GOVERNING LAW  

        This Agreement has been negotiated and executed in the State of California and shall be construed and enforced in accordance with the laws of such state. 

I.    FORUM  

        Each of the Parties hereto agrees that any action or suit which may be brought by any party hereto against any other party hereto in connection with this
Agreement or the transactions contemplated hereby may be brought only in a federal or state court in Orange County, California. 

J.    PROFESSIONAL FEES  

        In the event any Party hereto shall commence legal proceedings against the other to enforce the terms hereof, or to declare rights hereunder, as the result of a
breach of any covenant or condition of this Agreement, the prevailing party in any such proceeding shall be entitled to recover from the losing party its costs of suit, including reasonable attorneys'
fees, accountants' fees, and experts' fees. 

K.    BINDING EFFECT AND ASSIGNMENT  

        This Agreement shall inure to the benefit of and be binding upon the Parties hereto and their respective heirs, executors, administrators, legal representatives,
and assigns. 

L.    COUNTERPARTS; FACSIMILE SIGNATURES  

        This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The Parties agree that facsimile signatures of this Agreement shall be deemed a valid and binding execution of this Agreement. 

        This
PLAN OF REORGANIZATION AND ACQUISITION is executed on behalf of each Party by its duly authorized representatives, and attested to, pursuant to the laws of its respective place of
incorporation and in accordance with its constituent documents. 

	THE CHILDREN'S INTERNET, INC.,

a California corporation	 	 
	

/s/ Sholeh Hamedani
	
 	

 
	BY:  Sholeh Hamedani	 	 
	ITS:  President	 	 
	
DWC INSTALLATIONS, INC.

a Nevada corporation	
 	

 
	

/s/ Alan Schram
	
 	

 
	BY:  Alan Schram	 	 
	ITS:  President	 	 

QuickLinks

EXHIBIT 10.1 PLAN OF REORGANIZATION AND ACQUISITION

PLAN OF REORGANIZATION AND ACQUISITION BY WHICH THE CHILDREN'S INTERNET, INC. (A CALIFORNIA CORPORATION) SHALL ACQUIRE A MAJORITY INTEREST OF DWC INSTALLATIONS, INC. (A NEVADA CORPORATION)

I. THE INTERESTED PARTIES

II. RECITALS

III. CONDITIONS PRECEDENT TO REORGANIZATION

IV. PLAN OF ACQUISITION

V. GENERAL MUTUAL REPRESENTATIONS AND WARRANTIES

VI. INDEMNIFICATION

VII. DEFAULT, AMENDMENT AND WAIVER

VIII. MISCELLANEOUS

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