EXHIBIT 10.1
AGREEMENT
AND
PLAN OF REORGANIZATION
by and between
VPN COMMUNICATIONS CORPORATION
and
XXXXXX.XXX CORPORATION
This agreement and plan of reorganization made as of the 19th day of
April, 2000 between VPN Communications Corporation, a Nevada Corporation
(hereinafter called "Buyer" or "VPN"), party of the first part, and
XXXXXX.XXX Corporation, a Nevada corporation ("hereinafter called "Seller")
and the individuals whose name are set forth in the attached Exhibit A
hereto (hereinafter called "Selling Stockholders"), parties of the second
part,
WITNESSTH:
The parties desire that Buyer shall acquire all of the issued and
outstanding shares of capital stock of XXXXXX.XXX Corporation a Nevada
corporation (hereinafter called"Seller"), by an exchange of all of said
issued and outstanding shares of capital stock of Seller solely for shares
of the voting common stock of Buyer, on the terms and conditions
hereinafter set forth.
Accordingly, the parties hereto covenant and agree as follows;
1. Selling Stockholders, in order to indue Buyer to execute this
Agreement and to consummate the transactions contemplated herein, severally
represent and warrant to Buyer as follows:
(a) Seller is a corporation duly organized and existing under the
laws of the State of Nevada with authorized capital stock consisting of
25,000 shares of common stock with no par value of per share, of which
1,500 shares are duly issued and now outstanding, fully-paid and non-
assessable; Seller does not have issued or outstanding any other shares of
stock or any subscription or other rights to the issuance or receipt of
shares of its capital stock; all voting rights are vested exclusively in
such capital stock.
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(b) The balance sheet of Seller as of March 31, 2000 copies of which,
including accompanying notes, have previously been delivered to Buyer, has
been prepared from the books and records of the Seller and fairly present
the financial position of Seller at such date.
(c) All of the outstanding shares of capital stock of Seller are
owned beneficially and of record by the Selling Stockholders as follows;
NAME NUMBER OF SHARES
Individuals listed 1,5000 shares total
in Exhibit A attached
hereto and by this
reference incorporated
herein.
and each of the Selling Stockholders represents that he has full right and
title, without any lien or encumbrance whatsoever, to the number of shares
of capital stock of Seller set opposite his name and full unrestricted
right and power to exchange and deliver the same pursuant to the provisions
of this agreement and plan of reorganization.
(d) Seller is duly qualified and entitled to its respective
properties and to carry on its business all as and in the places where such
properties are now owned or such business is conducted.
(e) Seller has good and marketable title to all the property and
assets included in the balance sheet of Seller as of March 31, 2000
referred to in paragraph 1 (b) hereof, or purported to have been acquired
by Seller after said date, except, however, property and assets sold in the
ordinary course of business subsequent to said date; all the properties and
assets of Seller are free from any liens or encumbrances not disclosed.
(f) Seller is not a party to any pending or threatened litigation
which might adversely affect the financial condition, business or
properties of Seller, or interfere with the manufacture or sales of its
products, nor to the knowledge of the Selling Stockholders, is there any
threatened or pending governmental investigation involving Seller or any of
its products, including inquiries, citations or complaints by Federal
governmental agency, or any other federal, state of local administration;
and there are no outstanding order, decrees or stipulations affecting
Seller or any of its products.
(g) All returns for income taxes, surtaxes and excess profit taxes of
Sellers for all prior periods up to and including December 31, 1999 have either
been, or will be, duly prepared and filed in good faith and all taxes
shown thereon have been paid or accrued on the Seller's books.
(h) Seller has not since March 31, 2000:
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(i) issued any additional shares of stock or other securities,
other than that issued to Xxxxxxx X. Xxxxxxx, and Xxxxxxxx
X. Xxxxxx;
(ii) Made any distribution to its Stockholders, as Stockholders,
of any assets by way of dividends, purchase of shares or
otherwise;
(iii) Mortgaged, pledged or subjected to lien or encumbrance any
of its properties or assets beyond that disclosed in the
schedule delivered to Buyer as provided for in paragraph
1(c) hereof;
(iv) Sold or transferred any of its assets, tangible or
intangible, except in each case in the ordinary and usual
course of business;
(v) Incurred any extraordinary losses or incurred or become
liable for any obligations or liabilities except current
liabilities incurred in the ordinary and usual course of
business or made any extraordinary expenditures other than
for additions and betterments to existing plant, equipment
and facilities; or
(vi) Increased the rate of compensation of its officers.
(i) The business, properties and assets of Seller have not since
March 31, 2000 been materially and adversely affected as the result of
fire, explosion earthquake, flood, drought, windstorm, accident, strike,
embargo, confiscation of vital equipment, materials or inventory,
cancellation of contracts by any domestic or foreign government, or any
agency thereof, riot, activities of armed forces or acts of god or the
public enemy.
(j) Seller has no liabilities, contingent or otherwise, beyond those
stated in the balance sheet of Seller as of March 31, 2000 or described in
the notes accompanying said balance sheet, referred to in paragraph 1(b)
hereof, other than current liabilities incurred in the ordinary and usual
course of business since that date.
(k) Selling Stockholders, in acquiring shares of common stock of
Buyer as herein contemplated, are acquiring the same for the purpose of
investment only, with no present intention of selling or otherwise
marketing or distributing such shares, unless such sales or distribution is
made in compliance with the registration provisions of the Securities Act
of 1933, or unless an exemption from registration can be established, or
unless sold pursuant to Rule 144 under the Securities Act of 1933, as
amended.
(l) No representation by Selling Stockholders made in this agreement
and in statements made in any certificate or schedule furnished in
connection with the transaction herein contemplated contains or will
contain any knowingly untrue statement of material fact of knowingly omits
or will omit to state any material fact necessary to make any such
representation or warrant or any such statement or misleading to a
prospective purchase of all of the stock of Seller who is seeking full
information as to Seller and its affairs.
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2. Buyer, in order to induce Selling Stockholders to execute this
Agreement and to consummate the transactions contemplated herein,
represents and warrants to Selling Stockholders as follows:
(a) That it is a corporation duly organized and existing under the
laws of the state of Nevada with an authorized capital stock consisting of
50,000,000 shares of common stock of par value of $.001 per share, all
having full voting power, of which 7,373,080 shares have been duly issued
and are outstanding full paid and non-assessable.
(b) That the shares of Buyer deliverable pursuant to this agreement
will be shares of common stock of the same class of common stock presently
issued and outstanding, which shares Buyer shall have full and lawful
authority to deliver, and when so delivered to Selling Stockholders, will
have full and equal voting rights and will be fully paid and non-assessable
and will represent 1,500,000 shares of issued and outstanding stock of the
Buyer after this plan of reorganization takes place.
(c) That in acquiring the shares of stock of Sellers hereunder, Buyer
is acquiring the same for purposes of investment only with no present
intention of selling or otherwise marketing or distributing them.
(d) In regards to the stock of Buyer, Buyer acknowledges all rights
to the stock are vested exclusively in the capital stock, 1,500,000 shares
of which are being issued to the Selling Stockholder, pursuant to this plan
of reorganization.
(e) The audited financial statements as of December 31, 1999, a copy
of which including company notes have been previously delivered to Sellers,
had been prepared from the books and records of Buyer and fairly represent
the financial condition to Buyer as of such date.
(f) The Buyer is duly qualified and entitled to its respective
properties and to carry on its business all as and in the places where such
properties are now owned or such business is conducted.
(g) The Buyer is not a party to any pending or threatened litigation
which might adversely affect the financial condition, business or
properties of Buyer, or interfere with any manufacturing or sale of its
products, nor to the knowledge of Buyers' Stockholders is there any
threatened or pending governmental investigation involving Buyer or any of
its products, including inquiries, citations or complaints by any federal
governmental agency or any federal, state or local administration; there
are no outstanding orders, decrees or stipulations affecting Buyer or any of
its products or previous work done.
(h) That all returns for income taxes, surtaxes and excess profit
taxes of Buyer for all prior periods up to and including December 31, 1999
have been, or will be, filed and prepared in good faith and all taxes shown
thereon have been or will be paid and that there are no other outstanding
federal or state taxes of any sort including income taxes, sales taxes,
withholding taxes, etc.
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(i) The Buyer has not;
(i) Issued any additional shares of stock other than the
securities mentioned herein;
(ii) Made any distributions to the Stockholders of any assets
by way of dividends, purchase of shares of otherwise not
disclosed to Seller.
(j) The Buyer has no liabilities, contingent or otherwise beyond
those stated in this agreement and the balance sheets, copies of which are
attached hereto, reflects the financial condition of Buyer, have been
accurately prepared, in accordance with generally accepted accounting
principles.
(k) No representation by buyer or any of its Stockholders made in
regards to this agreement and no statement made in any certificate or
schedule furnished in conjunction with this agreement contains or will
contain any knowingly untrue statement of or material fact or knowingly
omits or will omit to state any material fact necessary to make any such
representation or warranty or any such statement not misleading to Selling
Stockholders or to Seller. Buyer acknowledges that Seller and Selling
Stockholders are relying on the statements and representations of Buyer as
to Buyer's financial condition including its liabilities, if any, and that
Seller and Selling Stockholders are being induced to enter into this
agreement with the understanding that Selling Stockholders will receive and
own, after the plan of reorganization contemplated herein has been
finalized, 1,500,000 shares of the outstanding and issued stock of Buyer.
(l) It is specifically agreed herein that if any of the
representations made by Buyer in this agreement are found to be untrue or
incorrect that in that case Selling Stockholders at their option may
declare this plan of reorganization null and void, and rescind this
transaction, thereafter taking back all stock of Seller.
(m) Buyer acknowledges that certain fees and costs will be incurred
in order to affect the plan of reorganization and that all such fees will
be disclosed in writing to Seller and Selling Stockholders.
(n) Buyer further represents to Sellers that it has not made any
statements which would prove to be untrue, false, or misleading to any
shareholder or investor of Buyer, that they have not violated or have its
agents violated any state or federal securities law in selling interests in
Buyer to prospective investors; that neither Buyer nor any representative
or agent of Buyer has made any representations concerning Buyer of Seller
to any investor or prospective investor which contain any untrue statement
of a material fact, nor have they omitted to a material fact, nor have they
omitted to state a material fact necessary to make such representations or
warranties or any such other statements nor misleading to prospective
investors or purchasers of the stock of Buyer of Seller, who are seeking full
information as to Seller and its affairs. Further Buyer specifically
indemnifies and holds harmless Seller and Selling Stockholders from any and
all liabilities to which Selling Stockholders or Seller could become liable
for because of any acts, statements, or omissions of Buyer or Buyers
agents. This indemnification and holds harmless specifically, although not
exclusively, applies to any securities violations, fraud, or other related
liabilities to which Seller of Selling Stockholders could become liable for
and which acts are caused by Buyer or its agents.
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3. Selling Stockholders shall not cause, suffer or permit Seller,
subsequent to the date hereof and prior to the delivery hereunder to:
(i) issue any additional shares of stock of other securities;
(ii) make any distribution to its Stockholders, as Stockholders, of
any assets by way of dividends, purchase of shares or otherwise;
(iii)mortgage, pledge or subject to Lien or encumbrance, any of its
properties or assets;
(iv) sell or transfer any of its assets, tangible or intangible,
except in each case in the ordinary course of business;
(v) incur or become liable for any obligations or liabilities except
liabilities in the ordinary course of business, or make any
unusual or extraordinary expenditures; or
(vi) increase the rate of compensation of its officers.
4. During the period prior to the closing date hereunder Selling
Stockholders shall cause Seller to conduct its business in the usual and
normal course.
5. Selling Stockholders shall cause Seller to grant to Buyer the right
and opportunity to make such examination and investigation of Sellers'
business, properties and affairs as Buyer may deem necessary or desirable
for all purposes relating to this agreement and to that end to open its
books of accounts and records for examination by Buyer's representatives,
accounts, and counsel.
6. Subject to the terms and conditions of this agreement the parties have
adopted and agreed to the following plan of reorganization to be performed
on the closing date hereinafter provided for. This exchange of shares shall
constitute an Internal Revenue Code Section 368 (a) (1) B Reorganization
and is intended to qualify under that said Code section or other applicable
Code section as a tax-free exchange of shares.
(a) Selling Stockholders shall transfer and deliver to Buyer all
shares of capital stock of Seller owned by them respectively, such shares
and the certificates representing the same to be free and clear of all
liens and encumbrances. The certificates representing such shares shall be
duly endorsed in blank for transfer or accompanied by separate written
instrument of assignment, with signatures guaranteed by a commercial trust
or bank company or by a member firm of the New York Stock Exchange and
shall be accompanied by such supporting documents as Buyer or its counsel
may reasonably require.
(b) Subject to the provisions of this paragraph 6 and paragraphs, 7
and 8, hereof, Buyer shall deliver, in exchange for all outstanding shares
of capital stock of Seller, to Selling Stockholders, prorata in accordance
with thier respective holdings of capital stock of Seller, certificates
representing 1,500,000 shares of common stock, $0.001 par value, of Buyer,
prior to any stock splits approved by existing Stokholders of Buyer.
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(c) If less than all of the shares of capital stock of Seller are
duly tendered for exchange, Buyer shall have the right, at its option,
either to withdraw from this agreement and plan of reorganization, or to
deliver to the respective Selling Stockholders duly tendering their shares
for the exchange the same number of shares of Buyer common stock for which
they would otherwise have recevied, without hereby being deemed to have
elected any remedy or to have waived any of its rights against any selling
stockholder failing to duly tender all his or her shares.
(d) All transfer fees payable in connection with the transfer of
shares of common stock of Buyer to be delivered to Selling Stockholders
pursuant to this agreement and plan of reorganization shall be paid by
Buyer, and taxes, including documentary and stock transfer taxes, payable
on the transfer or delivery to Buyer of shares of stock of Sellers shall be
payable by Selling Stockholders.
7. All obligations of Buyer under this agreement are subject to the
fulfillment, on or prior to the closing date, of each of the following
conditions in addition to the conditions set forth in paragraph 6 hereof.
(a) That the representations of the Selling Stockholders shall be
true at and as of the closing date as though such representations were made
at and as of such time.
(b) That Buyer shall have received a certificate dated on the closing
date, signed by the president of Seller, that since the date of this
agreement and plan of reorganization Seller has not done or permitted to be
done any of the acts of things forbidden in paragraph 3 of this agreement
and plan of reorganization.
(c) That no claim or liability not fully covered by insurance shall
have been asserted against Seller and that Seller shall not have suffered
any loss on account of fire, flood, accident or other calamity of such a
character as to materially adversely affect its financial condition,
regardless of whether or not such loss shall have been insured.
(d) That all covenants herein made by Selling Stockholders which are
to be performed at or prior to the closing date hereunder shall have been
duly performed.
8. Under no circumstances shall Buyer be required to register with the
Securities and Exchange Commission pursuant to the provisions of the
Securities Act of 1933, as amended, any shares of its common stock
deliverable to Selling Stockholders hereunder.
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9. All transactions contemplated by this agreement and plan of
reorganization as well as the form and substance of all legal proceedings
and of all papers and documents used or deliverable hereunder, shall be
subject to the approval at the election or Buyer and Sellers hereunder.
10. The closing under this agreement and plan of reorganization and all
deliveries hereunder shall take place on the 19th day of April, 2000.
11. All notices under this agreement and plan of reorganization shall be
in writing and any notice to Buyer shall be considered delivered in all
respects when it has been mailed, first class postage prepaid, addressed as
follows;
If to Buyer:
VPN Communications Corporation
0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
If to Selling Stockholders:
At the address which each Selling Stockholder has last provided to the
Buyer.
12. This agreement and plan of reorganization shall bind and insure to the
benefit of the parties hereto and their assigns, provided however, that
this agreement and plan of reorganization cannot be assigned by any party
except by or with the written consent of the others. Nothing herein
expressed or implied is intended of shall be construed to confer upon or to
give to any person, firm, or corporation other than the parties hereto and
their respective legal representatives, successors, and assigns any rights
or benefits under by or any reason of this agreement and plan of
reorganization.
13. This agreement and plan of reorganization may be executed in any
number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
14. The validity, interpretation of terms, and performances of this
agreement shall be governed by and construed under the laws of the State of
Nevada.
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IN WITNESS WHEREOF, the parties hereto have respectively executed this
agreement and plan of reorganization as of the day and year first above
written.
Buyer: VPN COMMUNICATIONS CORPORATION
/S/ E.G. Marchi
------------------------------
President
Seller: XXXXXX.XXX CORPORATION
/S/ E.G. Marchi
------------------------------
President
Selling Stockholders:
/S/ E.G. Marchi
------------------------------
E.G. Marchi
/S/ Xxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxx
/S/ Xxxxxxxx X. Xxxxxx
------------------------------
Xxxxxxxx X. Xxxxxx
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EXHIBIT A
----------
XXX.XXX CORPORATION STOCKHOLDERS:
Name: Shares Owned:
E.G. Marchi 1300
Xxxxxxxx X. Xxxxxx 000
Xxxxxxx X. Xxxxxxx 000
---------------
Total 1500
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