EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
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AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") among EXODUS
ACQUISITION CORPORATION, a Delaware corporation ("Exodus"), VHS NETWORKS, INC.,
a Florida corporation ("VHSN") and BAC Consulting Corporation, a California
corporation (the "Shareholders"), being the owners of record of all of the
issued and outstanding stock of Exodus.
Whereas, VHSN wishes to acquire and the Shareholders wish to transfer
all of the issued and outstanding securities of Exodus 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, Exodus, VHSN and the Shareholders adopt this plan of
reorganization and agree as follows:
1. EXCHANGE OF STOCK
1.1. NUMBER OF SHARES. Upon execution of this Agreement, the
Shareholders agree to transfer to VHSN 5,000,000 shares of common stock of
Exodus, no par value per share in an exchange for an aggregate of 500,000 shares
of voting common stock of VHSN.
1.2. EXCHANGE OF CERTIFICATES. Each holder of an outstanding
certificate or certificates theretofore representing shares of Exodus common
stock shall surrender such certificate(s) for cancellation to VHSN, and shall
receive in exchange a certificate or certificates representing the number of
full shares of VHSN common stock into which the shares of Exodus common stock
represented by the certificate or certificates so surrendered shall have been
converted. The transfer of Exodus shares by the Shareholders shall be effected
by the delivery to VHSN 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 VHSN common stock
shall not be issued, but in lieu thereof VHSN 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 VHSN may request in order more effectively to sell,
transfer, and assign the transferred stock to VHSN and to confirm VHSN's title
thereto.
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
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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.
3. UNEXCHANGED CERTIFICATES. Until surrendered, each outstanding
certificate that prior to the Closing represented Exodus 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 VHSN common
stock into which it was converted. No dividend or other distribution shall be
paid to the holders of certificates of Exodus common stock until presented for
exchange at which time any outstanding dividends or other distributions shall be
paid.
4. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders, individually and separately, represent and warrant as
follows:
4.1. TITLE TO SHARES. The Shareholders, and each of them, are
the owners, free and clear of any liens and encumbrances, of the number of
Exodus shares which are listed in the attached schedule and which they have
contracted to exchange.
4.2. LITIGATION.There is no litigation or proceeding pending,
or to any Shareholder's knowledge threatened, against or relating to shares of
Exodus held by the Shareholders.
5. REPRESENTATIONS AND WARRANTIES OF EXODUS AND BAC. Exodus and BAC
represent and warrant that:
5.1. CORPORATE ORGANIZATION AND GOOD STANDING. Exodus is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of California and is qualified to do business as a foreign
corporation in each jurisdiction, if any, in which its property or business
requires such qualification.
5.2. REPORTING COMPANY STATUS. Exodus has filed with the
Securities and Exchange Commission a registration statement on Form 10-SB which
became effective pursuant to the Securities Exchange Act of 1934 and is a
reporting company pursuant to Section12(g) thereunder.
5.3. REPORTING COMPANY FILINGS.Exodus has timely filed and is
current on all reports required to be filed by it pursuant to Section 13 of the
Securities Exchange Act of 1934.
5.4. CAPITALIZATION. Exodus's authorized capital stock
consists of 50,000,000 shares of Common Stock, no par value, of which 5,000,000
shares are issued and outstanding.
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5.5. ISSUED STOCK. All the outstanding shares of its Common
Stock are duly authorized and validly issued, fully paid and non-assessable.
5.6. 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 Exodus Common or Preferred Stock issued or committed to be
issued.
5.7. CORPORATE AUTHORITY. Exodus 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.
5.8. AUTHORIZATION. Execution of this Agreement has been duly
authorized and approved by Exodus 's board of directors.
5.9. SUBSIDIARIES. Except as set out by the schedule attached
hereto, Exodus has no subsidiaries.
5.10. FINANCIAL STATEMENTS. Exodus's financial statements
dated as of February 26, 2000 copies of which will have been delivered by Exodus
to VHSN prior to the Closing Date (the "Exodus Financial Statements"), fairly
present the financial condition of Exodus 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.
5.11. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected or reserved against in the Exodus Financial Statements, and except as
may be related to the demand by Exodus Communication Corporation, Exodus 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.
5.12. 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 Exodus since the date of the Exodus Financial
Statements.
5.13. LITIGATION. Except as set out by attached schedule,
there is not, to the knowledge of Exodus , any pending, threatened, or existing
litigation, bankruptcy, criminal, civil, or regulatory proceeding or
investigation, threatened or contemplated against Exodus or against any of its
officers.
5.14. CONTRACTS. Except as set forth in its Form 10-SB, Exodus
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.
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5.15. 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 Exodus is subject or by which Exodus is
bound.
6. REPRESENTATIONS AND WARRANTIES OF VHSN.
VHSN represents and warrants that:
6.1. CORPORATE ORGANIZATION AND GOOD STANDING. VHSN is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida 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. CAPITALIZATION. VHSN's authorized capital stock consists
of 100,000,000 shares of Common Stock, $.001 par value per share, of which
19,035,268 shares have been issued and are outstanding, and 25,000,000 shares of
Preferred Stock, $.001 par value per share of which no shares have been issued
and outstanding.
6.3. ISSUED STOCK. All the outstanding shares of its Common
Stock are duly authorized and validly issued, fully paid and non-assessable.
6.4. STOCK RIGHTS. Except as set out by attached schedule,
there are no stock grants, options, rights, warrants or other rights to purchase
or obtain VHSN Common or Preferred Stock issued or committed to be issued.
6.5. CORPORATE AUTHORITY. VHSN 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.
6.6. AUTHORIZATION. Execution of this Agreement has been duly
authorized and approved by VHSN's board of directors.
6.7. FINANCIAL STATEMENTS. VHSN's financial statements dated
as of March 31, 2000, copies of which will have been delivered by VHSN to Exodus
prior to the Closing Date (the "VHSN Financial Statements"), fairly present the
financial condition of VHSN 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.
6.8. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected or reserved against in the VHSN Financial Statements, VHSN did not
have at that date any liabilities or obligations (secured, unsecured,
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Plan of Acquisition, Reorganization, etc. corporate balance sheet prepared in
accordance with generally accepted accounting principles.
6.9. 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 VHSN since the date of the VHSN Financial Statements.
6.10. LITIGATION. Except as set out by attached schedule,
there is not, to the knowledge of VHSN, any pending, threatened, or existing
litigation, bankruptcy, criminal, civil, or regulatory proceeding or
investigation, threatened or contemplated against VHSN or against any of its
officers.
6.11. CONTRACTS. Except as set out by attached schedule, VHSN
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.
6.12. TITLE. Except as set out by attached schedule, VHSN has
good and marketable title to all the real property and good and valid title to
all other property included in the VHSN Financial Statements. Except as set out
in the balance sheet thereof, the properties of VHSN 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 VHSN.
6.13. 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 VHSN 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 VHSN
Financial Statements are adequate to cover any such taxes that may be assessed
against VHSN in respect of its business and its operations during the periods
covered by the VHSN Financial Statements and all prior periods.
6.14. 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 VHSN is subject or by which VHSN is bound.
7. NONE.
8. CONDUCT PENDING THE CLOSING
Exodus, VHSN and the Shareholders covenant that between the
date of this Agreement and the Closing as to each of them:
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8.1. No change will be made in the charter documents, by-laws,
or other corporate documents of Exodus .
8.2. Exodus 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 VHSN.
8.4. VHSN 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 Exodus 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. VHSN'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of VHSN 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. VHSN'S COVENANTS. VHSN 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 VHSN.
10. CONDITIONS PRECEDENT TO OBLIGATION OF VHSN
VHSN'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 VHSN:
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.
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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. EXODUS'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Exodus 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. EXODUS' COVENANTS. Exodus 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 Exodus .
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Shareholders, VHSN and Exodus set out herein shall survive the
Closing for a period of 12 months.
12. ARBITRATION
12.1. 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 State of California.
12.2. 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 State of California. Any award
in arbitration may be entered in any domestic or foreign court having
jurisdiction over the enforcement of such awards.
12.3. APPLICABLE LAW. The law applicable to the arbitration
and this agreement shall be that of the State of California, determined without
regard to its provisions which would otherwise apply to a question of conflict
of laws.
12.4. 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.
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12.5. 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.
12.6. 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.
12.7. 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.
12.8. COVENANT NOT TO XXX. 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.
12.9. 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.
12.10. SURVIVAL. The provisions for arbitration contained
herein shall survive the termination of this Agreement for any reason.
13. GENERAL PROVISIONS.
13.1. 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.
13.2. 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.
13.3. 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.
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13.4. 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 Exodus, to: Exodus Acquisition Corporation
00000 XxxXxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
If to VHSN, to: VHS Network, Inc.
0000 Xxxxxx Xxxx, Xxxx 00-00
Xxxxxxxxxxx, Xxxxxxx, Xxxxxx
If to the Shareholders, to: BAC Consulting Corporation
00000 XxxXxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
13.5. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California.
13.6. 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.
13.7. 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.
13.8. EXCHANGE AGENT AND CLOSING DATE. The Exchange Agent
shall be the law firm of Xxxx & Xxxxx, LLP, 00000 XxxXxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxxxx. 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.
13.9. 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.
13.10. SCHEDULES. All schedules attached hereto, if any, shall
be acknowledged by each party by signature or initials thereon and shall be
dated.
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13.11. EFFECTIVE DATE. This effective date of this Agreement
shall be May 5, 2000.
SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION AMONG EXODUS,
VHSN AND THE SHAREHOLDERS OF EXODUS.
IN WITNESS WHEREOF, the parties have executed this Agreement.
EXODUS ACQUISITION CORPORATION
By: /s/ Xxx X. Xxxxx
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Xxx X. Xxxxx, President
VHS NETWORK, INC.
By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx, Chairman and CEO
THE SHAREHOLDERS OF EXODUS
ACQUISITION CORPORATION:
BAC CONSULTING CORPORATION
By: /s/ Xxx X. Xxxxx
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Xxx X. Xxxxx, President
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SCHEDULE 4.1
TITLE TO SHARES
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SCHEDULE 6.4
Directors Options: 2,000,000
China e-Mall Exchangeable Shares: 4,015,000
Warrants: 975,000
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SCHEDULE 6.10
LITIGATION
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SCHEDULE 6.11
Acquisition of China e-Mall Corporation
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