Exhibit 2.1
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization is entered into on this day of
December, 1999, by and between Performance Interconnect Corp., a Texas
corporation. (hereinafter "PlC") and its undersigned shareholders
(hereinafter "Stockholders"); and Espo's Inc., a publicly traded New York
corporation whose trading symbol is SPOS and whose address is 00 Xxxx
Xxxxxx. Xxxx Xxxxxxx, XX 00000 (hereinafter "SPOS" or the "Company").
RECITALS:
WHEREAS, Stockholders own beneficially and of record in excess of 99% of the
shares of voting common stock of PlC; and
WHEREAS, SPOS desires to acquire 100% but not less than a minimum of 99% of
the issued and outstanding common stock of PlC, making it a wholly-owned
subsidiary of the Company, and FTC Stockholders desire to make a tax-free
exchange of their shares in FTC solely far shares of SPOS common voting
stock (the "SPOS Shares");
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto agree as follows:
Section 1
AGREEMENT
1.1 Plan of Reorganization. SPOS, PlC and Stockholders hereby agree that a
minimum of ninety nine (99%) percent of the issued and outstanding common
stock of PLC shall be acquired by SPOS in exchange solely for SPOS voting
common stock in a transaction qualifying as a tax-free, stock-for-stock
exchange pursuant to Section 368 (a)(1)(B) of the Internal Revenue Code of
1986, as amended.
1.2 Exchange of Stock. SPOS. PlC and Stockholders agree that all issued and
outstanding shares of common stock of PlC, equal to one hundred (100%)
percent, shall be exchanged for (5,500,000) Rule 144 restricted SPOS shares.
A list of the shareholders of PlC, the number of shares owned by each, and
the number of SPOS shares to be issued to them is attached hereto as Exhibit
"A" and by this reference is incorporated herein. In the event the
transaction contemplated herein is closed on the basis of less than 100% but
not less than 99% of the PlC common shares, then the proportionate number of
SPOS shares included in the (5,500,000) to be issued, shall be appropriately
withheld from distribution.
1.3 Delivery of Shares On or before the Closing, certificates representing
a minimum of 99% of the outstanding shares of PIC will be delivered duly
endorsed so as to make SPOS the sole holder thereof, free and clear of all
claims and encumbrances.
1.4 Capital Structure of PIC. As of November 19, 1999, PIC had authorized
(4,000,000) shams of common stock, $.001 par value per share, and
(2,000,000) shares of Preferred Stock, par value $10.00 per share, of which
(2,437,000) shares of common stock were issued and outstanding held by
approximately (90) shareholders and (2,452) shares of Preferred Stock were
issued and outstanding held by (4) shareholders. The issued Preferred Stock
is not convertible into any other security. There is one common stock
Purchase Warrant outstanding that allows the holder to purchase (400,000)
shares of common stock at five ($5.00) dollars per share. There are no
other securities, rights, options, or warrants outstanding to purchase
securities of PIC.
1.5 Present Capital Structure of SPOS. SPOS is a non-reporting New York
corporation, currently traded over-the-counter and quoted in the National
Quotations Bureau Pink Sheets under the symbol: "SPOS". The authorized
capital stock of SPOS consists of (25,000,000) shares of common stock, $.01
par value per share, with (2,356,250) shares issued and outstanding held by
approximately (33) shareholders. SPOS has no outstanding options to acquire
it's common shares and no other securities convertible into its common
stock.
1.6 Capital Structure and Status of SPOS at Time of Closing. SPOS shall
have (385,000) shares of common stock issued and outstanding at the time of
Closing, and no options or other securities outstanding convertible into its
common stock that would result in an increase in the number of issued and
outstanding shares. All of the liabilities of SPOS shall be satisfied in
full prior to or at the Closing. Necessary Corporate resolutions and actions
as required shall he adapted prior to the Closing in accordance with New
York law, to ratify and approve the following actions and amendments to the
certificate of incorporation:
(a) Approve this Agreement and Plan of Reorganization.
(b) Approve the cancellation of previously issued and outstanding
common shares so that the number of issued and outstanding shares at
the time of Closing is (385,000) shares, held by at least 30
individual shareholders, of which at least (350,000) shares shall be
free trading without bearing any restrictive legends.
(c) Approve the issuance of (5,500,000) Rule 144 restricted SPOS
Common Shares to PlC shareholders as listed in the attached Exhibit
"A".
(d) Approve the resignations of current SPOS management and directors
and appoint PlC directors as the new management and Board of
Directors.
1.7 Changes in Capitalization of SPOS, SPOS, between the date of this
Agreement and the Closing, shall not make any changes to its capital
structure except as required under section 1.6 herein above.
1.8 Capital Structure after Closing. After issuance of the SPOS shares
above, the capital structure of the merged company will be as follows:
Shareholders SPOS Shares %
---------------------------------- ----------- --------
FTC Shareholders (Rule 144 shares) 5,500,000 93.46
Current SPOS Shareholders 385,000 6.54
--------- ------
Total 5,885,000 100.00
Section 2
Closing, Effective Date, and Pre-Closing Actions
2.1 Closing. The Closing of the transaction contemplated herein shall be
held on December 15, 1999, or on such other later date as the parties hereto
may mutually agree, and shall be held at a location or under conditions as
may be mutually agreed by the parties hereto. In the event of a courier
telephonic closing, Xxxxxx X. Xxxxxxx, Attorney at Law and Bridgestone
Capital Group, L.L.C shall serve as agents to the parties to this
transaction in holding and redistributing the various original documents and
copies among the various parties following the closings. It is further
agreed that SPOS shall endeavor to perform its obligations hereunder such
that the Closing could be consummated as early as December 1,1999 and SPOS
does hereby grant PIC the option to schedule said Closing for any business
day between December 1, 1999 and December 15, 1999, upon PIC providing
notice 3 business days in advance.
2.2 Required of SPOS at Closing. At or prior to the Closing, SPOS shall
provide the following:
(a) a filed copy of the amended articles of incorporation as required
by the State of New York concerning the changes as detailed under
paragraph 1.6 above;
(b) all books and records of SPOS including all filed tax returns and
Company records supporting filings made and required to be made to
regulatory agencies through November 30, 1999;
(c) resignations of previous management and appointments of new
management chosen by PIC;
(d) a current shareholders list certified by SPOS's stock transfer
agent;
(e) corporate minute book containing all corporate minutes of
directors and stockholders;
(f) officer and directors certificate and indemnification notice:
(g) an original copy of the auditors report containing audited
financial statements for the fiscal year ended November 30, 1998:
(h) a copy of engagement letter with the Company's auditors covering
the audit for the fiscal year ending November 30, 1999;
(i) a current and certified lien and judgment search flee of any
adverse items;
(j) a release of any or all current real estate and personal property
leases to which SPOS is or may be subject;
(k) a release of the current bank loan and lien against all the assets
of SPOS;
(l) full disclosure of facts and information concerning the current
lawsuit against SPOS;
(m) an opinion of counsel, based on examination of articles of
incorporation, minutes, bylaws, documents related to this
transaction and such other matters as counsel deems necessary, to
establish that (i) SPOS is a corporation duly formed, validly
existing and in good standing under the laws of the State of New
York and has all requisite power, authority, licenses, permits,
patents, copyrights and trademarks material to the ownership and
operation of its properties and to the carrying on of its
business; (ii) SPOS has all requisite corporate power and
authority and the legal right to enter into this Agreement and to
carry out its obligations hereunder; (iii) no consent, approval or
authorization of, registration with or declaration to any tribunal
or any person or approval by the shareholders of SPOS is required
in connection with the execution and delivery of this Agreement or
in connection wit the performance of any covenant or agreement
contained herein; (iv) counsel has no knowledge of any legal or
administrative proceedings pending at threatened against or
affecting SPOS except as otherwise specifically disclosed; and (v)
this Agreement does not violate, conflict with, result in the
breach of, or constitute a default under the provisions of the
articles of incorporation, as amended, or the bylaws as amended,
of SPOS or any laws or, to the best of counsel's knowledge, any
contract to which SPOS is a party.
2.3 Effective Date. For accounting purposes, the effective date of this
reorganization shall be December 1, 1999.
Section 3
Representations and Warranties of SPOS
SPOS and Xxxxxxx X. Xxxxxxxx (who agrees that his execution of this
Agreement on behalf of SPOS is also an execution on his behalf individually)
represent and warrant to, and covenant with, the Stockholders as follows:
3.1 Corporate Status. SPOS warrants and represents to PIC that it is in
good standing in its state of New York, with approximately 33 stockholders
of record and beneficially, trading on the over-the-counter market and
quoted in the Pink Sheets, and has a currently active Corporation Records
Agreement with Standard & Poor's.
3.2 Capital Structure of SPOS. The authorized capital stock of SPOS
consists of (25,000,000) shares of common stock, $.01 par value per share,
with (2,356,250) common shares issued and outstanding just prior to the date
first above written, which shall be reduced at the time of the Closing to
(385,000) shares issued and outstanding. SPOS, at time of Closing, shall
have no outstanding options, rights or warrants to acquire it's common
shares and no other securities outstanding convertible or exchangeable into
its common stock that would result in an increase to the number of issued
and outstanding shares.
3.3 Financial Statements. The financial statements of SPOS furnished to
PIC, consisting of audited financial statements dated November 30, 1998, for
the one year period then ended (attached hereto as Exhibit "B"), are true,
correct and fairly present the financial condition of SPOS at such date and
for the periods involved; such statements were prepared in accordance with
S.E.C. practice standards and in accordance with generally accepted
accounting principles consistently applied. SPOS further represents that it
will have similar audited financial statements for the fiscal year ended
November 30, 1999, prepared by its auditor and delivered to PIC as soon as
feasible following the close of the fiscal year.
3.4 No Current Business Operations. At November 30, 1999, SPOS has divested
of its business operations. Except for audit fees related to the audit of
its November 30, 1999 fiscal year. SKIS has no liabilities of any nature
whatsoever as of the Closing hereunder, whether accrued, absolute,
contingent or otherwise, and including, without limitation, tax liabilities
and interest due or to become due
3.5 Regulatory Compliance and Listings. SPOS is a non-reporting New York
corporation currently traded over-the-counter and quoted in the National
Quotations Bureau Pink Sheets (under the symbol: "SPOS"). SPOS is in full
compliance with, and not in violation of, any state or federal securities
laws. All outstanding shares of common stock of SPOS have been duly
authorized and are validly issued, fully paid, and non-assessable and free
of preemptive tights, and there are no registration rights existing or
granted to any holders of restricted common stock of SPOS. There has been no
stop order issued by any regulatory authority including but not limited to
NASD, SEC, or any State regulatory authority and furthermore SPOS has not
received any notice of any investigation, which might result in any stop
order.
3.6 Title to Property. SPOS has good and marketable title to all properties
and assets, real and personal, reflected in the Balance Sheet of SPOS, and
the properties and assets of SPOS are subject to no mortgage, pledge, lien
or encumbrances, except for liens shown therein, with respect to which no
default exists.
3.7 Litigation. There is no litigation or proceeding pending, or to the
knowledge of SPOS, threatened, against or relating to SPOS, its properties
or business, except as set forth in a list certified by the President of
SPOS and attached hereto as Exhibit "C".
3.8 Books and Records Prior to or at the Closing. SPOS will provide to PlC
or their representative(s) any and all relevant documents regarding
securities filings, listing information with Standard & Poor's, offering
memorandums, information concerning the properties and affairs of SPOS and
give full access during normal business hours to all of its offices, books,
records, contracts and other corporate documents and properties so that PLC
may inspect and audit them.
3.9 Tax Returns. Prior to the Closing, SPOS will have filed all federal and
state income or franchise tax returns required to be filed at the time of
Closing except for returns for the tax year ended November 30, 1999, which
will be filed in conjunction with the completion of the audit for the fiscal
year then ended.
3.10 Confidentiality. Until the Closing (and thereafter if there is no
Closing), SPOS and its representatives will keep confidential any
information, which they obtain from PIC concerning the properties, assets
and business of PIC. If the transactions contemplated by this Agreement are
not consummated by December 31, 1999 or such other date as the parties may
mutually agree, SPOS will return to PIC all written matter with respect to
PLC obtained by SPOS in connection with the negotiation or consummation of
this Agreement.
3.11 Investment Intent. SPOS is acquiring the PIC shares to be transferred
to it under this Agreement for investment and not with a view to the sale or
distribution thereof, and SPOS has no commitment or present intention to
liquidate PIC or to sell or otherwise dispose of shares of its stock.
3.12 Corporate Authority. SPOS has full corporate power and authority to
enter into this Agreement, to carry out its obligations hereunder and will
deliver to PIC at the Closing a certified copy of resolutions of its Board
of Directors authorizing execution of this Agreement by its officers and
performance thereunder and which also contains approvals of all of the
conditions contained in Section 1.6 above.
3.13 Due Authorization. Execution of this Agreement and performance by SPOS
hereunder has been duly authorized by all requisite corporate action on the
part of SPOS, and this Agreement constitutes a valid and binding obligation
of SPOS and performance hereunder will not violate any provision of the
Articles of Incorporation, Bylaws, agreements, mortgages or other
commitments of SPOS. All matters described in Section 1.6 will have been
duly and properly approved as required under the laws of the State of New
York.
Section 4
Representations, Warranties and Covenants of PLC and Stockholders
PLC and Stockholders represent, warrant to, and covenant with,
SPOS as follows:
4.1 Corporate Status. PIG is a corporation duly organized, validly existing
and in good standing under the laws of the Statutes of Texas.
4.2 PlC Shares. The Stockholders executing this Agreement shall hold full
right, tide and interest in at least ninety nine (99%) percent of the PIC
shares, free and clear of adverse claims of third parties.
4.3 Capitalization. PlC has authorized capital stock of (4,000,000) shares
of common stock, $.001 par value per share, and (2,000,000) shares of
Preferred Stock, par value $10.00 per share, of which (2,437,000) shares of
common stock were issued and outstanding held by approximately (......)
shareholders and (2,452) shares of Preferred Stock were issued and
outstanding held by (....) shareholders. The issued Preferred Stock is not
convertible into any other security. There is one common stock Purchase
Warrant outstanding that allows the holder to purchase (400,000) shares of
common stock at five ($5.00) dollars per share. There are no other
securities, tights, options, or warrants outstanding to purchase securities
of PIC.
4.4 Financial Statements of PIC. The financial statements of PIC furnished
to SPOS, consisting of audited financial statements for the fiscal year
ending June 30, 1999, axe attached hereto as Exhibit "D", and are true,
correct and fairly present the financial condition of PIC at such date and
for the periods involved; such statements were prepared in accordance with
generally accepted accounting principles consistently applied; and no
material change has occurred in the financial condition of PIC since June
30, 1999 except as in the normal course of operations.
4.5 Undisclosed Liabilities, PIC had no liabilities at June 30, 1999,
except to the extent reflected or reserved against in the Balance Sheet as
of that date and no material changes have occurred except for liabilities
that may have been incurred in the normal course of business operations.
4.6 Interim Changes. Since the date of the latest financial statements,
there have been no material changes in financial condition, assets, and
liabilities except as incurred in the normal course of business; nor any
material increase(s) in compensation or other benefits to employees.
4.7 Title to Property. PIC has good and marketable title to all properties
and assets, real and personal, reflected in the Balance Sheet of PIC, and
the properties and assets of PIC are subject to no mortgage, pledge, lien or
encumbrances, except for liens shown therein, with respect to which no
default exists, except as otherwise detailed and set forth in letter form,
signed and certified by the President of PIC and delivered to SPOS or its
representative.
4.8 Litigation. There is no litigation or proceeding, pending, or to the
knowledge of PIC, threatened against or relating to the property or business
of PIC, except as set forth in a list certified by the President of PIC and
delivered to SPOS or its representative.
4.9 Tax Returns. PIC has filed all federal and state income or franchise
tax returns required to be filed or has received currently effective
extensions of the required filing dates.
4.10 Books and Records. From the date of this Agreement to the Closing, PlC
shall give SPOS or its representative full access during normal business
hours to all of its offices, books, records, contracts and other corporate
documents and properties so that SPOS may inspect and audit them, and
furnish such information concerning the properties and affairs of PIC as
SPOS may reasonably request.
4.11 Confidentiality. Until the Closing (and thereafter if there is no
Closing), PlC and its representatives will keep confidential any
information, which they obtain from SPOS concerning the properties, assets
and business of SPOS. If the transactions contemplated by this Agreement are
not consummated by December 31, 1999 or such other date as the parties
hereto may mutually agree, PIC will return to SPOS all written matter with
respect to SPOS obtained by PIC in connection with the negotiation or
consummation of this Agreement.
4.12 Investment Intent. PlC Stockholders are acquiring the shares to be
delivered to them under this Agreement for investment and not with a view to
the sale or distribution thereof, and have no commitment or present
intention to liquidate the Company or to sell or otherwise dispose of the
SPOS stock. PlC Stockholders shall execute and deliver to SPOS at the
Closing an Investment Letter in the form attached hereto as Exhibit "E" for
the shares received by them under this Agreement.
4.13 Corporate Authority. PlC has full corporate power and authority to
enter into this Agreement, to carry out its obligations hereunder and will
deliver to SPOS at the closing a certified copy of resolutions of its Board
of Directors authorizing execution of this Agreement by its officers and
performance thereunder.
4.14 Due Authorization Execution of this Agreement and performance
hereunder has been duly authorized by all requisite corporate action on the
part of PIC, and this Agreement constitutes a valid and binding obligation
of PIC and performance hereunder will not violate any provision of the
Articles of Incorporation, Bylaws, agreements, or other commitments of PlC.
Section 5
Termination
This Agreement may be terminated (1) by mutual consent in writing; or (2) by
either the Board of Directors of SPOS or by the Board of Directors of PIC if
there has been a material misrepresentation or material breach of any
warranty or covenant by the other party hereto.
Section 6
General Provisions
6.1 Further Assurances. At any time, and from time to time, after the
Closing, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry
out the intent and purposes of this Agreement. Any failure on the part of
any party hereto to comply wit any of its obligations, agreements or
conditions hereunder may be waived in writing by the party to whom such
compliance is owed.
6.2 Expenses. Each party shall bear its own expenses in regard to this
transaction. PlC shall pay: the legal fees of its securities counsel: its
auditing firm; costs of the initial press release: cost of issuing stock
certificates; and duplication and mailing costs of the shareholders letter.
SPOS shall pay the following costs: its securities counsel; auditors,
including the cost of the audit for the fiscal year ending November 30,
1999; for other legal opinions required to consummate this transaction; New
York franchise fees and filing fees (to complete changes called for in
section 1.6 hereto); the cost of preparation of board minutes and
resolutions of SPOS; shareholder meetings and/or consent resolutions; and
articles of amendment to the articles of incorporation of
SPOS.
6.3 Brokers. Except as otherwise specifically stated herein, each party
represents to the other party hereunder that no consultants, advisors,
brokers or finders have acted for it in connection with this Agreement, and
agree to indemnify and hold harmless the other party against any fee, loss
or expense arising out of claims by consultants, advisors, brokers or
finders employed or alleged to have been employed by it.
6.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or
sent by prepaid first-class registered or certified mail, return receipt
requested, as follows:
PIC SPOS
------------------------------ ------------------------------
D. Xxxxxx Xxxxx, Chairman Xxxxxxx X. Xxxxxxxx, President
Performance Interconnect Corp. Espo's Inc.
00000 XX 000 Xxxx 00 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000 Xxxx Xxxxxxx, XX 00000
6.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties related to the transaction contemplated herein.
6.6 Headings. The section and subsection headings in this Agreement are
inserted for convenience only arid shall not affect in any way the meaning
or interpretation of this Agreement.
6.7 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York.
6.8 Assignment. This Agreement shall inure to the benefit of, and be
binding upon the parties hereto, and their successors and assigns; provided,
however, that any assignment by either party of its rights under this
Agreement without the written consent of the other party shall be void.
6.9 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts via facsimile, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. The
Parties hereto further agree to exchange original signature documents of
this Agreement prior to or at the Closing.
IN WITNESS WHEREOF, the parties have executed the Agreement and Plan of
Reorganization as of the date first above written.
ATTEST: ESPO's INC.
/s/
-------------------------- ---------------------------------------
Xxxxxxx X. Xxxxxxxx, President
ATTEST: PERFORMANCE INTERCONNECT CORP.
/s/
-------------------------- ---------------------------------------
D. Xxxxxx Xxxxx, Chairman
WITNESSETH
SHAREHOLDERS OF PlC:
Associates Funding Group, Inc.
By: /s/
-------------------------- ---------------------------------------
13:30 Corp.
By: /s/
-------------------------- ---------------------------------------
Xxxxxxxx Children's Irrevocable Trust
By: /s/
-------------------------- ---------------------------------------
BC&Q Corp.
By: /s/
-------------------------- ---------------------------------------
(Reorganization Agreement between Performance Interconnect Corp. and Espo's,
Inc.)
Summit Innovations, Inc.
By: /s/
-------------------------- ---------------------------------------
Touchstone Enterprises, Inc.
By: /s/
-------------------------- ---------------------------------------
Bridgestone Capital Group, L.L.C.
By: /s/
-------------------------- ---------------------------------------
Global Stock Exchange Corp.
By: /s/
-------------------------- ---------------------------------------
The Xxxxxxxx Organization
By: /s/
-------------------------- ---------------------------------------
Xxxxxxxx Xxxxxxxx Trust
By: /s/
-------------------------- ---------------------------------------
/s/
-------------------------- ---------------------------------------
Xxxxxx Xxxxxxxx
/s/
-------------------------- ---------------------------------------
Xxxx Xxxx
/s/
-------------------------- ---------------------------------------
Xxxx X. Xxxxxxxxxxxx
(Reorganization Agreement between Performance Interconnect Corp. and Espo's,
Inc.)
/s/
-------------------------- ---------------------------------------
Xxxxxxx X. & Xxxxxxx X. Xxxxx
/s/
-------------------------- ---------------------------------------
Xxxxx X. Xxxxxx
/s/
-------------------------- ---------------------------------------
Xxxxxx Xxxxxxx
/s/
-------------------------- ---------------------------------------
Xxxxx Xxxxxx
/s/
-------------------------- ---------------------------------------
Xxxxxxx Xxxxxxxx
/s/
-------------------------- ---------------------------------------
Xxxxxx Xxxxxx
EXHIBIT A
Performance Interconnect Corp./Espo's Inc.
Rule 000 Xxxxxxxxxx Xxxxxx Shares of Expo's to be Issued to Shareholders
of Performance
Sharehold Name & Address SS# or EIN
-------------------------------------------------------- ----------
Associates Funding Group, Inc. [ deleted for confidentiality ]
13:30 Corp. [ deleted for confidentiality ]
Winterstone Management, Inc. [ deleted for confidentiality ]
Xxxxxx company, Inc. [ deleted for confidentiality ]
Xxxxxxxx Children's Irrevocable Trust [ deleted for confidentiality ]
BC&Q Corp. [ deleted for confidentiality ]
Summit Innovations, Inc. [ deleted for confidentiality ]
Touchstone Enterprises, Inc. [ deleted for confidentiality ]
Xxxxxxx X. or Xxxxxxx X. Xxxxx [ deleted for confidentiality ]
Bridgestone Capital Group, L.L.C. [ deleted for confidentiality ]
Global Stock Exchange Corp. [ deleted for confidentiality ]
Xxxxxxxx Xxxxxxxx Trust [ deleted for confidentiality ]
Xxxxxx Xxxxxxxx [ deleted for confidentiality ]
Xxxx Xxxx [ deleted for confidentiality ]
Xxxxx X. Xxxxxx [ deleted for confidentiality ]
Xxxxxx Xxxxxx [ deleted for confidentiality ]
Xxxxxx Xxxxxxx [ deleted for confidentiality ]
Xxxxx Xxxxxx [ deleted for confidentiality ]
Xxxxxx X. Xxxxxxxx III Trust, [ deleted for confidentiality ]
The Hubinger Organization [ deleted for confidentiality ]
Xxxx X. Xxxxxxxxxxxx [ deleted for confidentiality ]
